{"id":83,"date":"2012-11-17T15:30:02","date_gmt":"2012-11-17T20:30:02","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/luka\/?p=83"},"modified":"2012-11-21T16:42:38","modified_gmt":"2012-11-21T21:42:38","slug":"turkish-privatization-law-an-introduction","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/luka\/2012\/11\/17\/turkish-privatization-law-an-introduction\/","title":{"rendered":"Turkish Privatization Law: An introduction"},"content":{"rendered":"

Turkish Privatization Law: An introduction<\/p>\n

with Aykut Bakirci, Partner, Bezen&Partners, former Legal\u00a0Counsel of Turkish Privatization Authority<\/em><\/p>\n

Privatization, in its modern sense, started in Turkey with the establishment of the Privatization Authority in 1984 by the passage of a ministerial decree and with no legislation under the auspices of the Prime Ministry. During its early years, the work of the Privatization Authority (hereafter referred to as the PA) was limited to small \u201cfirst steps\u201d in form of IPO\u2019s and sale of small assets. Until the passage of the Privatization Law (No. 4046) in 1994, the PA\u2019s early years were marked with judicial challenges in the High Court of Turkey that repealed the legislation effort, stating the constitution did not allow for privatization and the PA\u2019s mandate. During its early years, the PA\u2019s 2 committees were also in charge of mass housing projects. However, with the passage of the 1994 privatization law, following constitutional amendments and High Court\u2019s approval, the PA was granted larger freedoms for starting a more fundamental privatization effort. Shortly thereafter, in 1997, the Constitution was yet again amended for EU compliance reasons and the word privatization is explicitly used in the amendment\u2019s text.<\/p>\n

<\/p>\n

The privatization law and the amendment allowed the PA to privatize with less red tape and issues. When the PA was founded, it\u2019s mission was to privatize all of the assets marked for privatization in 30 years but the PA had only a part of those assets under management. However, with the government\u2019s failure to address this issue, privatization efforts progressed much slower than anticipated.\u00a0 In 2002, the Justice and Development Party (AKP) came into power by winning a two-thirds majority of seats in the Grand National Assembly. The party\u2019s economic program included a dedication to increased privatization efforts resulting in the PA\u2019s efforts were increasing significantly. The official document by the PA entitled the \u201cPrivatization Endeavor in Turkey\u201d states that from 1985 until today, the total proceeds from the privatization implementations is recorded as USD 43.1 billion. Aykut Bakirci estimates differently, stating that from 1984 until 2002, the total value of all assets privatized is estimated at around $8 billion while the period after 2002 saw over $24 billion of assets privatized by the PA. The AKP led government insisted on comprehensive privatization and took many steps to ensure a faster process that resulted in a greatly increased number and value of assets privatized by the PA until 2007. In the aftermath of the 2007 global financial crisis, the privatization process came to a slowdown as a result of the global credit crunch yet the PA\u2019s mandate remained the same with many assets privatized in the period from 2007 till today. Recently, announcements have been made that the PA will push ahead again with new privatization processes.<\/p>\n

Onur\u00a0Ok\u015fan of\u00a0Bezen&Partners has contributed to this post.<\/em><\/p>\n

Excerpt from the PA\u2019s \u201c<\/strong>PRIVATIZATION ENDEAVOR IN TURKEY\u201d:<\/p>\n

LEGAL FRAMEWORK<\/strong><\/p>\n

Bodies Responsible from Privatization under Law No. 4046<\/strong><\/p>\n

Under the Privatization Law No. 4046, privatization process is carried out by two bodies:<\/p>\n