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General Preamble of the Code

The role of small and medium-sized bussineses (SME) in the World economy, which have important functions for the development and protection of national economies, are increasing day by day with the globalization process.  SMEs have important functions as an important element of economic and social development. All countries are developing and implementing policies that will prepare the suitable economic environment for arising, development and protection of SMEs which are balance and stability element of social system with this functions. Especially SMEs operating in Anatolia have important contribution in the stable economic growth that our country has experienced since 2002. There are various problems which are adversely affect the development of SMEs and destabilize their activities. At the beginning of which is the strength of access to finance.

SMEs procure necessary sources of finance for commercial activities from the bank borrowings. Warranties that are specifically requested for credit, are significant difficulties for SMEs to access financing. This situation causes competition disadvantage for SMEs against large enterprises.

In this respect, this Draft Law has been prepared in order to  facilitate the access of SMEs to finance, to increase their competitiveness and thus to contribute to the balanced and stable growth of our country’s economy.


Regulations which are aimed at facilitating access to finance for businesses will be implemented with hereby Draft Law. In this direction, alternative factors are provided which can be used as assurance of access to finance by the SMEs. Also returns of intended wealths and movable wealths, which are planned to be provided by the businesses, are taken into account as items that can be pledged. The publicity and follow-up of the movable pledge are ensured with Pledged Movable Registry. An effective mechanism is envisaged for foreclosure in an attempt to guarantee pledge rights of the pledgee. It’s provide an opportunity distinctly current regulations in the movable pledge that pledged movable can hypothecate regardless of trade name and business name.



The Code of Movable Pledge which has numbers and Official Gazette information above has been prepared for the purposes of dissemination of the use of unsecured movable pledge as security essentially, extension of coverage of pledged movable, provision of publicity in the movable pledge and submission of alternative routes for foreclosure.


Applicable Legislation involve ;

1.      Establishment of the right of pledge in the transactions subject to movable pledge ,

2.      Enuring of pledge right against the third parties,

3.      Pledged Movable Registry,

4.      Determination of the preferential right between pledged creditors,

5.      The rights and obligations of the parties and third parties,

6.      Other procedures and principles related using of pledge right and pledged operations.


1.    Pledge Agreement

First of all, a pledge agreement must be signed between the pledger and pledgee in order to put lien on. In this context, Pledge Agreement can be made in accordance with Article 3 of the Code a) Between the credit institutions and tradesman, artisan, farmer, producer organization, between the freelancer natural persons and legal entities, b)  Between the tradesman and artisan. The pledge agreement signed between the parties must be recorded to Pledged Movable Registry “Registry” to be able to judge.

Pledge Agreement can be done as both electronically signed and written according to Article 4. Written agreements must be signed to be registered for registration that approval of the signatures of the parties or in the hearing presence of the Registrar’s.


It is obligatory to include the following particulars under the pledge agreement.

1.      The side of the pledge agreement;

a)     If  the Commercial Undertake, commercial name, central registration system’s (MERSİS) number, the name, surname and signature of the agent who is authorized for registration and bind,

b)     If the natural person or artisan, TCKN, name, surname and signature,

c)      If the farmer, TCKN, name, surname and signature with Farmer Register System Number,a)     If the Producer Organizations, producer organization voucher number  with the name, surname and signature of the agent who is authorized for registration and bind,

1.      The matter of debt, the amount of debt, if the amount of the debts is not certain, what the pledge is the assurance for the amount, payable sort of money, maximum amount.

2.      Asset that constitutes of subject matter of pledge and the serial number, trademark, manufacture year, chassis number, document serial number and if available GTİP or PRODTR industry product code.

Establishment a sub-pledge or rear–pledge above asset that constitutes of subject matter or adding records that restrict  power of disposition on the asset that constitutes of subject matter of pledge is invalid.


1.    Movable Assets That Can Be Pledged

Receivables, perennial produce trees, rights subjected to intellectual and industrial property, raw material, animal, every kind of incomes and rentes, every kind of licenses which have not been envisaged to register the other registry and have not the characteristics of administrative leave documents, rental income, tenancy right,  machine and equipment, tool, equipment, and included electronic communication devices every other electronic devices, consumable material, stocks, agricultural product, business name and/or company name, commercial undertake or craft business, commercial plaque and commercial line, commercial Project, waggon and movable assets, right and common ownership rights on the third partys’ ownership which are mentioned below.


2.    Establishing Pledge On The Whole Enterprise

When the pledge is established on whole commercial enterprise or tradesmen enterprise, it is supposed that pledge  is established on each and every asset which is allocated for the activities of enterprise. If the pledge of these assets requires registration of a trade register under other laws, the pledge must be reported to the relevant register. If a pledge right has already been established in accordance with other laws on these assets, the pledge established within scope of this Law shall be placed in the next order. Commercial enterprises and tradesmen ‘s pledges must be reported to the trade or trades registry.

If the assets which listed under the title  of  “Moveable Assets That Can Be Pledged” are enough to pay the debt, the pledge can not be established on the whole enterprise.


3.    Other Elements That Can Be Subjected To Pledge

Movable Pledge Law which is effectuated regulate  that pledge can be established on future moveable assets of the enterprices  and the power of disposition on the future movable assets  can only be used after that these assets are subjected to the right of property. Moreover, thanks to this regulation , it is possible to establish pledge on the fructus of future and available moveable assets of enterprise. Within the scope of this Law, a third party may establish a pledge to be carried on behalf of the Borrower without delivery.


1.    Degree System

The guarantee providing by pledge is limited amount of pledge and degree which have indicated in registry. By specifying the amount of the previous pledge in the registry, the pledge can be established on the second or other next degrees. Turkish Civilization dated 22.11.2001 and numbered 4721 the provisions of Articles 871 to 876 of the Law that are not contrary to this Law shall apply to the case.

The right to move on the empty degree can be given to the pledgee who has the right the pledge on the Pledge Agreement. However, if this right is given without Pledge Agreement, it can only be valid by registering to Trade or Trades Registry.

If pledge are established more than once on the same moveable asset without specifying degrees, the rights to priorities of pledgees are specified according to the moment of establishing the pledge. In case of degree is specified, the specified degree is grounded on.


If no further pledge has been established on the fructus  of the asset, the priority of them is the same as the priority degree of the actual pledge on the asset. It is intended with this regulation that, preventing the disagreements between creditors during the procedure of turning pledge into cash.


2.    Parties’ Rights and Liabilities

Article 12 of the Law stipulates that the rights and obligations of the parties may be regulated by an Agreeement, and that they are not in contradiction with the provisions of this Law. The rights and obligations stated below in the 2nd, 3rd, 4th, 5th and 6th paragraphs of the same article, respectively, are listed mandatorily:

·        Holder is obliged to take necessary measures for protecting the value of pledged. If Holder behaves like reducing the value of pledged assets; Pledgee can demand the forbid this kind of behaviours from judge. Pledgee can take the precautions with the authorisations coming from judge or in non-delayable case, Pledgee can take necessary precautions by oneself.

·        People whose rights have been violated may seek compensation for damages and shall demand the expenses for taking precautions from the people who have caused the damages.

·        The Pledgee has the surveillance right to assets of pledge which is Pledger’s or third parties’ possessions.

·        The Pledger is obliged to compensate for damages arising from behaviours that reduce the value of pledged asset against the   Pledgee.

·        The Pledger is obliged to register the transfer of the pledge and transfer of claim.



3.    Pledged Movable Registry

Within the scope of the law, Pledged Movable Registry has been established for the establishment of a pledge right and the provision of prejudice against third parties, the determination of the right of priority among the Pledgees, registration of the transfer of the pledge and transfer of claim.

Procedures and principles about establishing of the pledged movable registry and sharing of the datas recorded by other Registries that established according to other Laws are regulated within the scope of Movable Registry Regulations that published in the Official Gazette dated 31.12.2016 issued by the Ministry of Customs and Commerce. Pledged Movable Registry System which established in accordance with this regulation named as “TARES” .


  1. Registry Services
  1. Registration Services

The subject of registration services is pledge contract, alteration and cancelment, pledged asset and hand over by pledged with right of progress about to registered. If these matters are not registered in the Register in accordance with the law, this situation cannot be argued against the third party.

  1. Interrogation Services

Assets allocated to the operations of the enterprises is copyright, brand, patent, petty patent, industrial design, new plant varieties with integrated circuit topography; ship required to register for special records required by the legislation, aircraft, caterpillar, mining and ore and motor vehicles on the basis of the inquiry made within the scope of the TARES system, information of the pledger, type of pledge and It will be informed at the time and place of the pledge receivers whether or not they have the right of progress to the system and pledge lenders at an acceptable rate with the amount of the loan and / or the amount of the guarantee.

  1. Documents Required for the Registration of the Pledge Agreement

·        A pledge agreement prepared and signed in accordance with the laws and regulations issued by the parties of pledge agreement,

·        Information and documents identifying the movable assets subjected to pledge.

·        Original documents showing the identification number of the parties to the pledge agreement or their representatives and their authorized representatives.

·        Original or notarized copies of documents showing that the representatives authorized to represent and bind are authorized.


  1. Rejection Of Registration Request

The registry will reject the application in the following cases:

·        If the pledge agreement is signed by one of the parties.

·        In case of the absence of any obligatory matters to be included in the pledge contract.

·        If the requirements for registration are missing.

·        If the information and documents requested by the registry are not provided.

·        If the registration of the register is not in accordance with the full and true declaration of the parties or constitutes a violation of the public order.

·        If the progress system is accepted, the registration of the increase in the amount of the guarantee in the pledge agreement without the consent of the other receivers is requested.


  1. Abandonment Of Pledge

The pledge contract will be abandoned in the event that one of the following occurs:

·        Demand for cancelation by the Pledgee on the expiration of the claim.

·        A notification by the Pledgee on the judgment of the court confirming the end of the debt.

·        It is decided by the courts to abandon the pledge agreement.

In the event of the expiry of the claim v, the pledge is made by the Pledgee within three business days from the date on which the contract is terminated.

If the pledgee does not make a request for the abandonment of the pledge agreement, the pledger informs the Registry of this situation together with the verdict of the court confirming that the debtor has been terminated. The registry abandons the pledge agreement after the demand of abandonment arrives and reports this to the Pledgee.

One-tenth of this amount, if the amount of the debt is determined by the Ministry within the scope of the Regulation, upon the declaration of the Pledger, to the Pledgee  who fails to fulfil the obligation to notify the Register within three working days from the end of the receipt; If the amount of the debt is not fixed, it is envisaged to apply the administrative fine at one-tenth of the amount of the guarantee.


8.  Rights After Default

Under this law, it is regulated  that if the debt cannot be paid, the Pledgee may apply to the following ways:

·        The first-degree Pledgee may request the transfer of the property of the pledged movable property pursuant to Article 24 of the Execution and Bankruptcy Law No. 2004, dated 9.6.1932, from the debt enforcement office. In this case the debt enforcement office informs the register. If the value of the pledge is more than the total value of the first-degree Pledgee determined in accordance with the second sentence of Article 13 of the Law, the first degree Pledgee and the Pledger is severally liable for difference against the other Pledgees.

·        It may be transferred to asset management companies operating under Law No. 5411. In this case, asset management companies have the degree of the Pledgee. Priority shall be determined in accordance with Article 11 of this Law.

·        rental and license rights can be used for assets that are not subject to devolution.

In case that the money can not be collected by the means mentioned above, the follow-up will be done within the framework of general provisions.


9.  End Of The Claim

The law-stimulating Pledgee must apply for the abandonment of the pledge record within three working days from the date on which it ends. The administrative penalty shall be applied to the Ministry of Justice at the rate of one-tenth of the amount of the debt secured against the pledgee who does not fulfil this obligation.

In the event that current and future secured obligations, including contingent liabilities, are exercised by payment or other methods, the right of pledge shall be depreciated on the request of the creditor of the pledge.

If the pledgee does not apply to the Registry within the time limit for the abandonment of the pledge following the expiry of the receipt, the borrower who pays the borrower and documents it will be able to request the leave of the pledge.


10. Law Enforcement

Taking over pledge or taking possession of pledge;

·        The use of the pledged property contrary to this law,

·        Do not  transfer of ownership of a pledged asset in the case of debt payment,

·        Demolition or destruction of the pledge with intent to harm the Pledgee,

·        Do not register the registration of the transfer of the pledged asset with the transfer,

·        The fact that the act of misrepresenting the Registry,

In such cases, the judicial fine shall be imposed to pass the half of the amount of the debt secured upon the complaint of the Pledgees who can not collect the lump sum in whole or in part.

Subject to the provisions of the relevant law, a person who is in constant business of lending money by taking a movable pledge shall be punished in accordance with Article 241 of Turkish Penal Code No 5237 dated 26.09.2004.