COLLATERAL OF CROSS-BORDER CREDITS

The number of mortgages created for the security of credit facilities abroad has increased in recent years. The regulations in this area are very extensive. Credit facilities abroad can be designed in any kind and any form (e.g. currency, goods, guarantee, etc.) and have to be recorded in the register of foreign debts of the Governmental Secretary for Treasury. The credits are:

• Credits received from abroad with a term of more than one year (foreign credits);
• Credits based on collateral security (machines, equipment) and granted by public.

By registration of a mortgage referred to a foreign credit, the land registry demands a certification about the registration in the register of foreign debts. In some exceptional cases, mortgages securing cross-border credits do not have to be registered in the register of foreign debts and the land registry records the mortgage in the land register without the written confirmation of the governmental Secretary for Treasury.
The above mentioned mortgages can be created in Turkish currency or – if the conditions are fulfilled – in foreign currency. The conditions for the creation of a mortgage in a foreign currency are as follows:

• The credit being the object of a mortgage has to be provided from abroad;
• The time limit for the repayment of the credit has to be 5 years or longer.

By credit operations of banks and financial institutions from abroad with Turkish citizens being resident abroad for more than one year, mortgages which burden the real estate of a debtor need to be registered in the Turkish Register of Foreign Debts.