SHOPPING CENTERS SUBJECTED TO NEW REGULATION (JANUARY 2015)

The Law on Regulation of Retail Commerce numbered 6585 (“The Law”) has been published in Trade Registry Gazette which entered into force on 29.01.2015. The purpose of the Law is to ease the establishment of retail enterprises and to ease commencement of their operations, to provide effective and sustainable competition conditions for retail commerce under free market economy conditions, to protect consumers, to provide  equal growth and development opportunities for retail enterprises and to regulate the relations between retail enterprises, producers and suppliers.

The “retail enterprise” has been defined under the Article 3 of the Law and “department stores, chain stores, dealers, private entities or other commercial enterprises operating in retail commerce Shopping centers have been included to the definition of retail enterprises within the scope of Law. Shopping center means an enterprise which have aggregated areas, centralized management and common use areas and which includes department stores and/or other offices for the need of dining, dressing, entertainment, rest, cultural and other similar requests.

Section two of the Law regulates applications for the business license and transactions regarding chance of the license. Pursuant to Article 5(7) of the Law, Metropolitan Municipalities are entitled to grant building license, business license, and residential usage license. However, the shopping centers, which are holding building license but which have not been granted for business license as of the enforcement date of the Law, shall be excluded.

Thankfully, the big uncertainty on “sale discounts” which was creating discrepancy for the consumers has been also regulated under Law. The Law foresees a restriction for uncertain discounted sale periods in favour of the consumers. Namely all of the stores, whether they have been placed in a shopping center or not, shall be obliged to fix the commencement and closing dates of the discounted sale periods explicitly as per Article 9/1 of the Law. The Law refers to the provisions of Consumer Protection Law numbered 6502 regarding the campaigns to be provided during the discounted sale periods.

The retail enterprises which are consistently offering discounted prices or ex-factory prices, due to export overruns, defected products, end of line products, end of season, are also obliged to announce the aforementioned type of sales inside the store or at showcases explicitly. Shopping centers are allowed to announce consistent discounted sales provided that all stores in the related shopping center should also provide discounted sales consistently. Enterprises offering consistent discounted sales shall fulfil the terms and conditions foreseen by Law within two years following the date which Law comes into force. Enterprises violating the provisions on discounted sales and consistent discounted sales shall be sentenced to administrative fine amounting to TRL 5000,00. The administrative fine foreseen for shopping centers is ten times of the mentioned amount.

 The shopping centers are obliged to reserve areas for social and cultural activities at least 5/1000 of the shopping areas of the shopping center as per Article 11 of the new Law.  Shopping centers violating the mentioned obligation shall be sentenced to administrative penalty which will be calculated as per square meter. In case of failure of fulfilment the obligations under Law within period which shall be notified by the Ministry; the administrative penalty shall be duplicated. Furthermore, shopping centers have to provide common use areas to the public such as prayer room, baby care unit, emergency medical intervention and playground which also meet the demands of the elders, disabled persons and children. Shopping centers violating the obligation regarding common use areas shall be sentenced to administrative penalty amounting to 50.000 Turkish Liras and the mentioned penalty shall be duplicated in case of failure of fulfilment the obligation regarding common use areas within the period to be notified by the Ministry. The Law foresees one year period to Shopping Centers for establishment of common use areas. Article 12 of the Law regulates merchants and craftsmen and the people who have profession in traditional, cultural or artistic values and who are facing extinction risk. The mentioned provision foresees reservation of areas in shopping centers for the above mentioned enterprises.

Working hours of the retail enterprises shall be determined by the Ministry at regional or territorial level pursuant to the scope of activities of the retail enterprises up on the proposal of professional organizations. Furthermore, the working hours of all or some of the retail enterprises shall be determined by the Governor. Retail enterprises violating the mentioned provision shall be sentenced to administrative penalty amounting to 50.000 Turkish Liras. Besides, Article 25 of the Law and the Law on Week-end Holiday numbered 394 shall not be applied to enterprises.

The Law serves for adjustment of the areas of the shopping center as per the needs of society and social life. Besides, the Law foresees provisions regarding small scale enterprises and the people who have profession in traditional jobs in order to provide sustainable and effective operation opportunity to aforementioned enterprises and people. Furthermore the Law aims to protect the consumer’s right. The Law entitles the Ministry to determine the working hours of the retail enterprises and the Law exclude the retail enterprises from the Law on Week-end Holiday numbered 394. Consequently, the mentioned situation not only effects the employees working at shopping centers but also effects the employees working at retail enterprises. Hence, the working hours to be applied in retail enterprises have to be determined as soon as possible in order to prevent prospective inconveniences.