Introduction

The Constitutional Court of Türkiye (the “Court”), by its decision dated October 15, 2025 and published in the Official Gazette with number 2024/193 E. 2025/136 K. (the “Decision”) annulled Articles 1, 2 and Additional Article 5 of Law No. 1567 on the Protection of the Value of Turkish Currency (the “Law”). You may access the full text of the Decision here.

Case Background

In a lawsuit filed regarding the revocation of an operating licence, the 13th Chamber of the Council of State stated that Article 1 of the Law does not contain any explicit provision stipulating that non-compliance with Presidential decrees concerning the protection of the value of Turkish currency would result in the revocation of an operating licence. The Chamber emphasized that leaving the scope and limits of licence revocation entirely to administrative regulatory acts—and the absence of any statutory framework setting out the boundaries of Presidential decisions—may lead to arbitrariness. Accordingly, it held that the provision was incompatible with the principles of legal certainty and foreseeability and requested its annulment on the ground that it violated the Constitution of the Republic of Türkiye (the “Constitution”).

The Court Annulled Articles 1, 2 and Additional Article 5 of the Law on the Grounds of Non-Delegability of Legislative Power and the Principle That Restrictions on Fundamental Rights and Freedoms May Only Be Introduced by Law

Article 1 of the Law, which has been annulled, vested the President with the authority to issue the necessary regulations for the protection of the value of the Turkish lira. Numerous regulations known in practice as the “Exchange Regulations” were issued pursuant to this authority. Among these are widely applied measures such as the Decree No. 32 on the Protection of the Value of Turkish Currency, Communiqué No. 2008-32/34 on the Decree No. 32 on the Protection of the Value of Turkish Currency, and the Capital Movements Circular of the Central Bank of the Republic of Türkiye.

The Court held that the authority granted to the President under Article 1 violated Article 7 of the Constitution, which sets forth the non-delegability of legislative power, as well as Article 13, which stipulates that restrictions on fundamental rights and freedoms may only be prescribed by law. On this basis, the Court annulled Article 1.

Since Article 1 was annulled, Articles 2 and Additional Article 5 -which derive their applicability from Article 1- were also annulled by the Court. Article 2 regulates the entry-into-force procedure for Presidential decisions issued pursuant to Article 1. Additional Article 5 provides that if a decision adopted pursuant to Article 1 is amended or repealed to the benefit of an offender, the more favourable provision shall apply.

The Decision will enter into force nine months after its publication in the Official Gazette, i.e., on July 15, 2026. Until that date, the Grand National Assembly of Türkiye (the “Parliament”) is expected to introduce a new statutory framework that will constitute the legal basis for the Exchange Regulations. Otherwise, the existing exchange regulations will lose their statutory foundation. In any event, pursuant to the principle of the legality of administrative acts, the current exchange regulations will remain in force unless they are annulled by an administrative court. If a court annuls any such regulation due to the lack of statutory basis, that regulation will no longer be applicable, and the corresponding exchange restrictions will be entirely lifted. Considering the increasingly restrictive exchange regime implemented since 2018, such a scenario would undoubtedly have a significant liberalizing impact on the market.