“Politics are nowadays mostly behind the scenes, and there aren’t a lot of recent highlights about typical topics of tension,” says Dogan Eymirlioglu, Partner at the Balcioglu Selcuk Ardiyok Keki Attorney Partnership in Istanbul. “The entire focus is now on how to tackle the impact of the pandemic and deriving lock-down.”
"Making the political headlines recently," Eymirlioglu says, "is the tension between the Government and opposition controlled municipalities around aid programs and donations to support municipalities’ pandemic-fighting schemes."
The main question and all stakeholders’ focus, according to Eymirlioglu, is how to limit the hits on the economy. He describes several different mechanisms employed for that purpose. “In terms of corporate law, a new regulation temporarily prohibiting companies from distributing more than 25% of dividends that were previously undistributed has been adopted in order to maintain and solidify the cash positions and balance sheets of companies." He continues. "Stricter monitoring rules were also adopted by the Ministry of Finance in terms of transfers of funds to foreign countries in order to prevent weaknesses in policies against money laundering and illicit financing due to the increased use of online banking transactions as a result of the pandemic." In addition, Eymirlioglu says, “employers are prohibited from firing employees for the next three months but alternative measures such as reduced working hours backed by Government payments to the employees put on reduced hours."
Eymirlioglu says companies in industries such as construction and tourism that have been heavily impacted by the pandemic re allowed to delay paying taxes. Courts are closed – with the exception of urgent cases – and no pre-judgement collection procedures can be initiated until June 15th.
“Additional measures have been adopted in relation to possible manipulations in capital markets in order to limit the impact of the lock-down on the prices of financial products and the value of Turkish Lira,” Eymirlioglu says.
”Generally, people aren’t panicking. Most firms were able to get organized quite quickly and carry on working from home," he reports. There was no panic in the legal market either, he says, as “the measures that are being considered and applied are very similar to other markets – there have been no mass layoffs and the main principle is to keep the jobs. Use of accrued leaves, delay of 2019 bonuses, and salary cuts are on the table for some firms. While everyone acknowledges that this may not be the best year, there is also optimism that it might not be as terrible as the market initially thought.”
Indeed, he says, the legal market is still quite busy. “We haven’t yet seen any major drops in business. There are a lot of restructuring and refinancing projects, although some of the M&A deals are going through a slower negotiation process, as investors want to see the performance of companies in this new era."
Eymirlioglu says that the collective effort by all parties involved will help flatten the curve so the economy can eventually return to normal. “Plans of easing the lock-down are already in place and we expect a gradual opening of businesses in the second half of May," he says. "The pandemic made everyone realize that we can work differently and still be as productive. As more companies discover this through time, the future might hold colossal change to the ways we see things around us and surely a new normal will arise."