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TURKEY Legal Provisions Compiled by: Swiss Business Hub Turkey Istanbul, October 2015 GENERAL REMARKS Turkey, officially the Republic of Turkey is a parliamentary republic in Eurasia, largely located in Western Asia, with the smaller portion of Eastern Thrace in Southeast Europe. Turkey is bordered by eight countries: Syria and Iraq to the south; Iran, Armenia, and the Azerbaijani exclave of Nakhichevan to the east; Georgia to the northeast; Bulgaria to the northwest; and Greece to the west. The Black Sea is to the north, the Mediterranean Sea to the south, and the Aegean Sea to the west. The Bosporus, the Sea of Marmara, and the Dardanelles (which together form the Turkish Straits) demarcate the boundary between Thrace and Anatolia; they also separate Europe and Asia. Turkey's location at the crossroads of Europe and Asia makes it a country of significant geostrategic importance. Turkey is a member of various international political, economic and military organisations including the Council of Europe, the Organisation for Economic Co-operation and Development (OECD), the International Bank for Reconstruction and Development (World Bank), International Monetary Fund (IMF), Black Sea Economic Co- operation Zone (BSEC), Economic Co-operation Organisation (ECO), Southern-European Cooperative Initiative (SECI), Organisation of Islamic Conference, the Islamic Development Bank, the Standing Committee for Economic and Commercial Co-operation (COMCEC), the Islamic Centre for Development of Trade (ICDT) and the North Atlantic Treaty Organisation (NATO). Turkey was granted candidate status to the EU in December 1999. The Accession Partnership was approved by the EU Council in February 2001. On October 6, 2004, the EU Commission recommended to start negotiations with Turkey for full membership. As a result, in December 17, 2004, the European Council decided to start accession talks with Turkey on October 3, 2005. The official negotiations have been started and the process covers 35 chapters in different fields. Switzerland Global Enterprise – Legal Provisions 1/25 CUSTOMS A Customs Union came into force on 31 December 1995. The Customs Union covers all industrial goods but does not address agriculture (except processed agricultural products), services or public procurement. Bilateral trade concessions apply to agricultural products. http://www.avrupa.info.tr/fileadmin/Content/Downloads/PDF/Custom_Union_des_ENG.pdf In addition to providing for a common external tariff for the products covered, the Customs Union foresees that Turkey is to align to the acquis communautaire in several essential internal market areas, notably with regard to industrial standards. Following the Commission's proposal on "extending and deepening" the Customs Union, in November 1996 the Council agreed to negotiating guidelines on the liberalisation of services and public procurement between the EU and Turkey. Negotiations were, however, suspended in 2002. Turkey and the EU have recently agreed to revise the Turkey-EU Customs Union. The increase of complaints over the past few years regarding its functioning was a clear indication that the revision of the Customs Union was long overdue. Turkey is a candidate country, and accession negotiations to the EU are ongoing. The enhancement of bilateral trade relations is not an alternative to the accession negotiations of Turkey, but complementary to it. Turkey is also a very important trading partner for the EU: Turkey is the EU's sixth biggest trading partner, whereas the EU is Turkey's biggest trading partner. There is huge potential, however, to further develop these trade relations and this is precisely what the new commercial framework will make possible. Please refer to - http://trade.ec.europa.eu/doclib/press/index.cfm?id=1307 In addition to the Custom Union with the EU, Turkey has signed Free Trade Agreements with the European Free Trade Association (EFTA) countries in 1991. Moreover, Turkey finalised free trade agreements with many European, North African and Middle East countries1. The legal framework of the economic relations between Switzerland and Turkey are the following arrangements: − Trade Agreement (entered into force on 13.10.1930) − Agreement on the Organisation of Commercial Exchange and Payments (entered into force on 28.03.1942) − Agreement on the Reciprocal Promotion and Protection of Investment (entered into force on 03.03.1988) 1 Please visit http://www.dtm.gov.tr to see the final status of the free trade agreements. Switzerland Global Enterprise – Legal Provisions 2/25 − Free Trade Agreement EFTA-TURKEY (entered into force on 10.12.1991). − Memorandum of Understanding of Joint Economic Commission (KEK) (signed on 06.02.2001) − Memorandum of Understanding on High Level Commercial and Economical Consultation between the Government of Republic of Turkey and the Government of Swiss Confederation (signed on 28.01.2002). − Agreement on the Avoidance of Double Taxation with Respect to Taxes on Income and Property. The agreement has been signed on May 20 in Bern. It is going to be in force after its ratification by both countries’ competent authorities by 2009. Please refer to - Ministry of Foreign Affairs www.mfa.gov.tr for more information on the Turkish foreign policy - The Secretariat General for EU Affairs (www.abgs.gov.tr) and the Delegation of the European Commission to Turkey (www.avrupa.info.tr ) for the Turkey-EU relations. IMPORT AND EXPORT REGULATIONS Import Regulation Goods imported into Turkey may be subject to various charges: customs taxes and levies (customs tariffs, and the mass housing fund levy); and internal taxes (excise duties also known as the Special Consumption Tax, the VAT, and the stamp duty). As a result of its participation in the customs union with the EC, Turkey has, since 1996, based its tariff on all industrial products and the industrial components of processed agricultural products (imported from third countries), on the EC common external tariff. Aside from the EC, Turkey provides tariff preferences to EFTA member states, and under nine bilateral trade agreements; negotiations are continuing with several other countries. It is also part of the Euro-Mediterranean Partnership aimed at establishing a free-trade area in the region by 2010. Turkey revised its tariff regime substantially after signing the Customs Union agreement with the EU. Turkey now applies common external tariff (CCT) of the EU for imports from third countries and imposes no duty and fund on industrial products imported from the EU and the EFTA countries. Agricultural products are not included in the Customs Union Agreement; however, processed agricultural goods are covered. Turkey also harmonised its legislation in the textile and clothing sector in order to comply with the EU policies. Turkey is a member of the GAAT/WTO and regulates its customs in line with the GATT requirements. Consistent with WTO commitments, Turkey maintains high border protection on many agricultural goods and food products. The existing import regime has been in force since 2012. The Import Regime of 2012, reflecting both Turkey's international rights and obligations and the country's economic needs, has been prepared by taking into account the agreement establishing the World Trade Organization (WTO), the Customs Union Agreement between Turkey and the European Union, the free trade agreements signed with various countries, the preferential Switzerland Global Enterprise – Legal Provisions 3/25 treatments granted by Turkey to the least developed countries and some developing countries within the framework of generalized system of preferences and also the specific needs and requirements of the agricultural and industrial sectors. The Import Regime is published in the Turkish Official Gazette on the 31st of December and enters into force on the 1st of the subsequent year. The Import Regime for the year 2012 is published in the Official Gazette No. 28159 (bis) dated 31 December 2011 and entered into force on 1 January 2012: (http://www.resmigazete.gov.tr/main.aspx?home=http://www.resmigazete.gov.tr/eskiler/2011/12/201112 31m1.htm&main=http://www.resmigazete.gov.tr/eskiler/2011/12/20111231m1.htm) The consolidated version of the Turkish Import Regime with all the amendments made since 1995, on the other hand, can be reached here. The Import Regime for 2012 consists of a Council of Ministers Decree and 6 Lists, 6 Annexes, and 19 Communiqués attached to this Decree. The 6 Lists attached to the Import Regime Decree indicate the rates of customs duties applied to the agricultural and industrial products on the basis of the country or country groups where the imports come from. These lists and products covered by them are as follows. - List I: Agricultural products - List II: Industrial products - List III: Processed agricultural products - List: IV: Fish and fishery products - List V: Industrial products whose customs duties are suspended in line with Council Regulation (EU) No 1344/2011 temporarily suspending the autonomous common customs duties on certain industrial and agricultural products and Regulations amending this Basic Legislation - List VI Goods used in civil aircraft eligible to relief from customs duties The changes made by the Ministry of Customs and Trade on the tariff nomenclature and/or descriptions of the items have been reflected into all these Lists and Communiqués annexed to the Import Regime. Along with the Lists of products and Annexes associated with those Lists, the Import Communications are also important
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