The Energy Market Regulatory Authority in Turkey (“EMRA”) has introduced certain amendments on the auditing principles of the companies operating in oil market through the “Regulation Amending the Regulation on Procedures and Principles to be Applied to Auditing, Preliminary Survey and Investigation in Petroleum Market” (the “Regulation”). The Regulation came into force as of 30.08.2014.

According to the Regulation; the legal entities and real persons acting in petroleum market on which/whom EMRA initiated investigation are notified about such investigation in which a fifteen day cure period is granted in order to cure their breach of respective laws, if any. In such notification a warning stating that in the event that such breach is not remedied within the stated cure period, their respective market activities will be ceased temporarily or their licenses will be directly cancelled is also included.

In case EMRA determines efficient information and documentation concerning the breach of legal entities and real persons acting in petroleum market of respective laws, the EMRA may rule to initiate the investigation procedure directly through obtaining written defenses of such legal entities and real persons without the necessity of entering into any preliminary survey and investigation reporting process. In that respect, written defenses of such legal entities and real persons are obtained through the head of department within minimum 15 days.

In case it is determined that such breach of law is in respect to the paragraphs 2, 5 and 8 of Article 20 of the Petroleum Market Law numbered 5015; the licenses are cancelled without complying the notification process which grants a cure period to such persons. Furthermore, in case a final court order is ruled in relation to smuggling actions; the licenses shall be cancelled directly by the respective department which carries the licensing activities.

EMRA carries its examination based on the written defenses and considering the concerned matter and makes its’ decision accordingly. In case EMRA determines that the acts of the legal entities and real persons are in contrary to the respective legislation; such persons shall be sentenced to sanctions and penalties regulated under the respective laws. The matters concerning the administrative penalties are ruled by EMRA within latest 3 months as of the date that EMRA receives the respective file.