April 2021 - Draft legislation was submitted to Parliament on 2 April 2021 to provide for, among other matters, the establishment of a digitalised auction platform for the sale of properties subject to attachment during enforcement proceedings relating to public debts. The proposed changes are envisaged to be affected through amendments to the Law on the Procedure for the Collection of Public Receivables (Law No. 6183) (the "Legislative Proposal").
Details of the Legislative Proposal
A digitalised auction platform is proposed in the Legislative Proposal for the sale of both movable and immovable property. Sales will be held on the day and at the time specified in the relevant announcement and by means of an auction process. If movable property is to be sold electronically, the sale announcement, which is not obligatory for the physical auction of movable properties, will be mandatory. The Ministry of Treasury and Finance will be authorised to provide further details in secondary legislation regarding sale proposals prior to the auction date, the minimum auction sale price, the time period for the auction sale process, the provision of collateral, and other principles and procedures.
Further amendments proposed include that immovable property may be sold by the official sales committees through physical or digitalised auctions. The official sales committee will be established by the relevant public administration to which the debt is owed. The Ministry of Treasury and Finance will be authorised to determine the working principles of and procedures for the official sales committees. In addition, collateral by way of cash or letter of credit for 5% of the value of the movable property is required to be given by participants in the auction processes.
The explanatory legislative summary for the changes emphasises that the proposals are anticipated to ensure:
- maximum participation in auctions, and therefore better enable sales at a market value, and
- that sales are finalised in a shorter period of time compared to physical auctions.
Conclusion
The Legislative Proposal is an important first step in allowing for a digitalised auction platform for the sale of the assets of a debtor during enforcement proceedings. Although the Legislative Proposal currently covers only enforcement proceedings of public debts, if enacted, it will surely bring Turkey one step closer to several European jurisdictions that have successfully established such platforms both in the private and public spheres and pave the way for similar changes in enforcement proceedings relating to private debts. As in other European jurisdictions, digitalised auction platforms in Turkey will likely contribute to pricing transparency during enforcement proceedings and the maximisation of the sales of assets of insolvent debtors.
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