Turkey WT/TPR/S/125
Page 31
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) I NTRODUCTION
1. Since its last Trade Policy Review (TPR), in 1998, Turkey has continued to liberalize its trade
regime, with a focus on export promotion. The incentives system comprises duty and tax concessions,
finance, insurance, guarantee, promotion, and marketing assistance.  The number of free zones has
increased alongside various financial benefits.
2. The tariff structure has been somewhat simplified, and the simple average MFN duty rate
declined from 12.4% in 1998 to 11.8% in 2003 (Table III.1).  However, the tariff still comprises ad
valorem , specific, mixed, compound, and formula duties. This structure (the formula duties in
particular) has partially resulted from the ongoing harmonization with the EU's tariff. The average
MFN tariff rate continues to be substantially higher on agricultural than on non-agricultural products.Some 46.3% of total tariff lines are bound, and rates applied to certain products are below the bound
rates, leaving Turkey margins for tariff increases.  Furthermore, the imposition of non- ad valorem
tariffs (1.5% of total lines) may not ensure compliance by Turkey with its WTO binding commitments
made at ad valorem  rates.
Table III.1
Structure of MFN tariffs in Turkey, 1998 and 2003
(Per cent)
1998 2003
1.  Bound tariff lines (% of all tariff lines) 46.3 46.3
2.  Duty free tariff lines (% of all tariff lines) 13.6 20.0
3.  Non-ad valorem tariffs (% of all tariff lines) 1.7 1.5
4.  Non-ad valorem tariffs with no AVEs (% of all tariff lines) 0.8 0.6
5.  Simple average applied rate 12.4 11.8
Agricultural products (WTO def.)a42.8 43.3
Non-agricultural products (WTO def.)b6.4 5.4
Agriculture (Major Division 1 of ISIC Rev.2) 26.0 25.0
Mining and quarrying (Major Division 2 of ISIC Rev.2) 2.0 0.2
Manufacturing (Major Division 3 of ISIC Rev.2) 11.6 11.1
6.  Domestic tariff "spikes" (% of all tariff lines)c7.2 8.3
7.  International tariff "spikes" (% of all tariff lines)d16.7 15.5
8.  Overall standard deviation of applied rates 23.4 25.8
9.  "Nuisance" applied rates (% of all tariff lines)e6.5 11.2
a WTO Agreement on Agriculture.
b Excludes petroleum.c Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate (indicator 5.).
d International tariff peaks are defined as those exceeding 15%.
e Nuisance rates are those greater than zero, but less than or equal to 2%.
Note: Indicator 1 and 4 are calculated taking into account all tariff lines (i.e. in-quota and out-of-quota lines).
Source: WTO Secretariat calculations, based on data provided by the Turkish authorities.
3. Turkey provides tariff preferences to EU and EFTA member states, and under bilateral trade
agreements (currently 14, up from 6 in 1998); negotiations are continuing with seven other countries.In an effort to simplify and harmonize its tax system with the EU's, Turkey modified its excise duty
legislation; introduced the Special Consumption Tax (SCT), which replaced various taxes and
charges; and reduced the number of VAT rates from five to three.  The Mass Housing Fund (MHF)
still applies on some fish and fishery products.WT/TPR/S/125 Trade Policy Review
Page 32
4. In line with its commitments under the WTO a nd the EU, Turkey has redrafted or amended
legislation in many areas, including customs, anti-dumping and countervailing measures, standards
and technical regulations, and intellectual property rights.  It has also enacted two new laws on
government procurement, where supplies of Turkish origin are eligible for price preference of up to
15%.  In general, import licences are maintained on health, sanitary, phytosanitary, and environmental
grounds, under international conventions to which Turkey is a signatory, or to administer tariff quotasset on MFN or preferential basis.
5. The government has retained a direct and strong influence on the economy, mainly through its
control of public enterprises. Some of these are sheltered from competition and some remain a severe
drain on public revenue.  Recognizing the need to increase efficiency and reducing the pressure on
scarce resources, a reinvigorated privatization programme is in progress in many economic activities,including banking, transportation, energy, and telecommunications.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Customs procedures
6. Customs Law No. 4458, in force since 5 February 2000, replaced Customs Law No. 1615 of
19 July 1972, and introduced, inter alia , the following changes1:  (i) goods can remain under
temporary importation procedure for up to 24 mont hs (previously 12 months);  (ii) temporary
importation even with partial (instead of total) relief from import duties;  (iii) the monopoly for
warehouse keeping has been abolished;  (iv) goods may remain under the customs warehousing
procedure with "no limit of time" (previously five years);  (v) for the transportation of goods by road,
air, and sea, a "summary declaration" is used (in lieu of the three different manifests);  and (vi) a new
customs classification system (Binding Tariff Info rmation), similar to the EU system, to make it
easier for traders.
7. The GUMSIS (security systems for customs checkpoints) project was launched in November
2001 to improve facilities at customs posts, including controlling trade in motor vehicles and cultural
goods, and detecting nuclear materials.2  Moreover, Turkey has largely completed the automation of
all customs operations at customs gates through the customs automation project (GIBOS), following
the introduction in 2002 of the computarized customs activities system (BILGE), a software
programme developed to carry out all real-time customs formalities, such as electronic data
interchange (EDI) and internet.
8. As part of the reform programme to improve the investment environment, a technical
committee on customs has been established to streamline customs procedures by, inter alia :
(i) strengthening the institutional capacity of customs,  especially with respect to post-entry inspection,
                                                     
1 In order to comply with its obligations under the customs union with the EU, Turkey enacted
Customs Law No. 4458 (published in the Official Gazette  of 4 November 1999) and new Customs Regulations
(Circular No. 2000/40).
2 European Commission (2002) .Turkey WT/TPR/S/125
Page 33
risk management, and valuation auditing; (ii) modernizing the smuggling law3; and (iii) assessment of
the Free Zone Law, regulations and procedures.4
9. The format of the Turkish customs declaration has been aligned on the single administrative
document (SAD) used in the EU for customs procedures.  All imported goods must be presented to
customs through the SAD accompanied by pertinent documents. Form EUR1 is required for imports
from non-EU countries with which Turkey has free-trade agreements.  The fee is TL150,000 for theSAD, and TL120,000 for the EUR1. The customs authority may grant permission to simplify
formalities and procedures (Simplified Procedure Authorization), including by waiving the
requirement to present some of the documentation to customs.
5  The use of a clearing agent is not
compulsory.
10. It is obligatory to produce a summary declaration to the customs office before the end of the
working day following the submission of goods to customs. This declaration, for imported and
exported goods, contains all the information required for the description of the goods; it has a
predetermined layout, and can be found in Annex 9 of the Customs Regulations.6 The most common
method used for summary declarations is the comput erized data processing technique (using BILGE);
this requires a user code and a password, which are provided by the customs office.
11. Certain goods can be imported only through specialized customs offices. For example,
customs formalities for motor vehicles, tractors, motorcycles, and their spare parts and accessories are
carried out by Yesilkoy and Gebze Specialized Customs Directorates; textile fabrics, by Bursa and
Halkali Specialized Customs Directorates; some petroleum products, by Gebze Specialized Customs
Directorate; and plants and plant products, by Mersin Specialized Customs Directorate.7
12. Articles 23 to 31 of Customs Law No. 4458 provide for the value of goods for customs
purposes.8 The customs value of imported goods is the transaction value, that is, the price actually
paid or payable for the goods when sold for export to Turkey.9 If the transaction value cannot be
determined, the customs value is to be calculated by proceeding sequentially through:  (a) the
transaction value of identical goods sold for export to Turkey and exported at or about the same time
as the good being imported;  (b) the transaction value of similar goods sold for export to Turkey and
exported at or about the same date as the goods being valued;  (c) the value based on the unit price atwhich the imported good, identical or similar imported goods are sold within Turkey, in the greatest
                                                     
3 Law No. 1918 on Prohibition and Prosecution of Smuggling has been abolished with the
promulgation of Law No. 4926 on Combating Smuggling (published in the Official Gazette  of 18 July 2003).
Combating smuggling is under the responsibility of the Undersecretariat of Customs.
4 Undersecretariat of Treasury (2001). The harmonization of Turkish free-zones legislation with that of
the EU, and the assessment of the free-zones legislation are being conducted by the General Directorate of Free
Zones of the Undersecretariat of Foreign Trade.
5 The simplified procedures are based on Article 71 of Customs Law No. 4458, and Articles 20-61 of
Customs Regulations and General Customs Notification (Customs Procedures No. 15).
6 A manifest, a bill of landing, or other documents can also be accepted in lieu of the summary
declaration. The Undersecretariat of Customs may allow the use of another internationally approved commercial
or official document containing the details required for the identification of goods.
7 Exceptional circumstances for importation of these products through other Directorates are defined in
the legislation establishing such specialized customs Directorates.
8 WTO document G/VAL/N/1/TUR/2 of 18 May 2000.
9 The currency for customs value of goods is the Turkish lira (TL). Foreign currencies on invoices and
other documents are converted to TL using the exchange rate of the Central Bank of Turkey, on the date the
customs debt occurs.WT/TPR/S/125 Trade Policy Review
Page 34
aggregate quantity, to persons not related to the sellers;  and (d) a computed value.10 The order of
(c) and (d) can be reversed if the request is deemed appropriate by the customs administration.11
Under paragraph 3 of Annex III of the Customs Valuation Agreement, Turkey has reservedindefinitely the right not to reverse the deductive and computed valuation methods at the importer's
request.
12
13. Turkey intends to reduce physical inspection by its customs administration to no more than
15% of imports and 2% of exports.  Import clearance generally takes a maximum of 24 hours (if all
the required documents are in order), regardless of the mode of transportation.  Import duties must be
paid or guaranteed at the time of customs clearance.
14. Appeals against decisions of customs authorities are governed by Title XII of Customs Law
No. 4458.  Any person has the right to appeal against decisions regarding, inter alia , requests for
correction, administrative issues, customs duties, and penalties.  Appeals can be brought within seven
days before the relevant administrative judiciary of the Regional Directorate for Customs, where a
decision must be taken within 30 days and notified to the relevant person.  A decision taken in the
Regional Directorate can be appealed, within 15 da ys, before the Undersecretariat of Customs; the
decision and notification to the person concerned are made within 45 days.  Any person has the rightto appeal against decisions taken by the Regional Directorates for Customs and by the
Undersecretariat for Customs.
(ii) Rules of origin
15. Turkey applies two different sets of rules of origin:  non-preferential and preferential. As part
of its obligations under the CUD, since 1 January 1996, Turkey applies the same rules of origin as the
EU with respect to imports from third countries.  The non-preferential rules of origin, set out in
Articles 17 to 21 of Customs Law No. 4458, assign origin to the country where the good has been
wholly obtained or where it underwent its "last substantial transformation and an important stage of
manufacture".
13
16. Preferential rules of origin, under various trade agreements, are based on the degree of
processing or value-added criteria (Table III.2).14 One aspect of preferential rules of origin is the
scope for cumulation, which counts inputs from Turkey or from its partners in regional trade asoriginating materials. Bilateral cumulation applies, for instance, under GSP (donor-country content)
and in bilateral trade agreements. Since 1 January 1999, Turkey has been part of the diagonal Pan-
European Origin Cumulation System for industrial goods, which allows traders to use originating
material from any country within the zone (EU, EFTA, and central and eastern European countries) to
produce an originating product while retaining preferential origin. The Mediterranean OriginCumulation System is expected to be established in 2010 with the formation of the Euro-
Mediterranean free-trade area.
                                                     
10 The computed value consists of the sum of the cost or value of materials and fabrication or
processing of the imported goods, and an amount for normal profit and general expenses equal to that usually
reflected in sales of goods of the same class or kind as the goods being valued, and other costs or values of
specified goods (Article 27(1)(e) of Customs Law No. 4458).
11 If the customs value cannot be determined on the previous basis, it can be calculated using data
available in Turkey. According to Customs Law No. 4458, this has to be consistent with the Agreement onImplementation of Article VII of the GATT 1994 (Customs Valuation).
12 WTO document G/VAL/2/Rev.15 of 21 October 2002.
13 Article 19 of Customs Law No. 4458.
14 Article 22 of Customs Law and Article 34 of the Customs Regulations.Turkey WT/TPR/S/125
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Table III.2
Preferential rules of origin, September 2003
Agreement Rules of origin
Customs Union with the European Community Wholly obtained or sufficiently transformed products.a
Free-trade agreement with European Coal and Steel Community (ECSC) Wholly obtained or sufficiently transformed products.a
Free-trade agreement with the European Free Trade Association (EFTA) Wholly obtained or sufficiently transformed products.a
Economic Cooperation Organization (ECO) (Iran, Turkey, Pakistan) Minimum of 50% of the f.o.b. value.b
Israel Wholly obtained or sufficiently transformed products.a
Hungary, Lithuania, Romania, Czech Republic, Slovak Republic, Estonia,
Latvia, Slovenia, Bulgaria, Poland, Macedonia (FYR of), Croatia, and
Bosnia-HerzegovinacProtocols on rules of origin based on the "Pan European
Model" as concluded by   the EU with the country: wholly
obtained or sufficiently transformed products are eligible forpreferences.
a
a The criterion of sufficient transformation is centred on a change of tariff heading.  Imported inputs are considered as suffic iently
transformed if the four-digit tariff heading of the final product differs from that of the inputs.  However, the criterion is s ubject to
a wide range of product-specific qualifications specifying the use of certain inputs or value-added requirements.
b The minimum local content in the exporting country is expressed as a percentage of the imported product's factory cost.
c Macedonia (FYR of), Croatia, and Bosnia-Herzegovina are not currently parties to the Pan-European Cumulation System.
Source : WTO Secretariat, based on information provided by the Turkish authorities.
(iii) Tariffs, other duties, and taxes
(a) General features
17. As a result of the customs union with the EU, Turkey applies the EU common external tariff
(CET) to all industrial products and to the industrial component of processed agricultural products
imported from third countries (since 1 January 1996).  On 1 January 2001, Turkey eliminated its
tariffs that were above those specified in the CET on certain "sensitive" products (some 290 items at
the HS twelve-digit level), including motor vehicles, bicycles, leather cases and bags, footwear and
their parts, furniture, chinaware and ceramic ware, iron and steel wires and ropes not electrically
insulated, and paper or paperboard sacks and bags for cement or fertilizers.
18. Goods imported into Turkey may be subject to five types of charges: customs tariffs, excise
duties, the Mass Housing Fund (MHF) levy, the spec ial consumption tax (SCT), and the value-added
tax (VAT).  The 2003 tariff is based on the 2002 Harmonized Commodity Description and Coding
System (HS), and comprises 19,478 lines (19,590 in 1998) at the HS twelve-digit level
(Table AIII.2).15  The tariff has 372 bands, including ad valorem  equivalents.
19. Turkey accords at least MFN tariff treatment to imports from all trading partners, including
non-WTO Members.  Turkey does not have seasonal tariffs.
(b) MFN applied tariff structure
20. Turkey's tariff comprises ad valorem  (98.5%, compared with 98.3% in 1998) and non- ad
valorem  rates.  Moreover, although the tariff structure has been somewhat simplified since Turkey's
last TPR, it still contains specific, mixed, compound, and formula duties, applying to 284 items at theHS twelve-digit level, down from 337 in 1998 (Table AIII.1).  As can be seen in Table III.3, specific
duties are levied on 30 items (down from 75 in 1998), including some alcoholic beverages, salt and
cinematographic films.  Mixed duties apply to 58 goods (66 in 1998), such as carpets, glass and
glassware products, and watches.  Compound duties are levied on 112 items (113 in 1998), mainly
                                                     
15 See WTO (1998) for a full description of Turkey's national tariff.WT/TPR/S/125 Trade Policy Review
Page 36
processed agricultural products like yoghurt and pasta; whereas formula duties apply to 84 tariff lines
(83 in 1998), such as butter, sugar confectionary, chocolate, malt, and prepared potatoes.
Table III.3
MFN tariff distribution, by type of duty, 2003
Type of dutyNumber of lines
(12-digit HS)Examples (HS chapters)
Ad valorem 19,194 All chapters
Specific 30 22, 25 and 37
Compound 112 04, 07, 15, 17, 18, 19, 20, 21, 22, 35 and 38
Mixed 58 21, 33, 57, 70 and 91
Formula 84 04, 17, 18, 19, 20, 21 and 33
Total lines 19,478
Note: Table AIII.1 lists all products subject to non- ad valorem  tariffs.
Source: WTO Secretariat estimates, based on data provided by the Turkish authorities.
21. Since its last TPR, Turkey has reduced its simple average MFN tariff from 12.4% to 11.8%
(excluding the MHF levy and taking into account the ad valorem  equivalents of non- ad valorem rates)
(Tables III.1 and AIII.2)).  The coefficient of variation of 2.2 (up from  1.9  in 1998) reveals high
dispersion of the tariff rates that range from zero to 227.5% (compared with 0-365.4% in 1998).16
Overall, the distribution of MFN rates is skewed towards rates between zero and 5%, which cover55.7% of the tariff lines (up from 46% in 1998).  Duty-free items represent some 20% of all tariff
lines and include products under the Information Technology Agreement (358 items at the
HS eight-digit level), pharmaceutical products, pulp of wood, some cement, and products of animalorigin.  More than three quarters of the tariff lines are subject to duties of up to 10%, while 5.7% of
tariff lines have rates above 50% (Chart III.1).  The most tariff-protected products include meat
products and edible meat offal (227.5%; HS 02); and buttermilk, curdled milk and cream (170%;
HS 0403).
22. The average MFN tariff rate is substantially higher in agriculture (25%;  down from 26% in
1998) than in manufacturing (11.1%;  down from 11.6% in 1998), and in mining and quarrying
(0.2%;  down from 2% in 1998).  Using the WTO definition
17, tariff protection is 43.3% on
agricultural products (up from 42.8% in 1998), and 5.4% on non-agricultural products (down from
6.4% in 1998).
23. In aggregate, Turkey's tariff displays mixed escalation, negative from first-stage processed
products, with an average tariff rate of 19% (up from 18.4% in 1998), to semi-finished goods, with an
average rate of 6.4% (down from 7.9% in 1998); and positive from semi-finished to fully processed
products, on which tariffs average 13.6% (down from 13.9% in 1998).  This structure is strongly
influenced by the high tariffs on raw agricultural products, and to a lesser extent, by the tariff structure
in certain industries.  The simple average MFN tariff on raw materials is about three times higher thanon semi-processed products.  Tariff escalation is positive from first-stage processed goods to semi-
finished products, and negative from the latter to finished goods, in the following industries: wood
                                                     
16 If calculated only on the tariff lines that carry ad valorem  rates, the simple average MFN is 11.77%,
the range is 0-227.5% and the coefficient of variation is 2.2.
17 WTO definition of agriculture:  HS Chapte rs 01-24 less fish and fishery products (HS 0301-0307,
0509, 051191, 1504, 1603-1605 and 230120) plus some selected products (HS 290543, 290544, 290545, 3301,
3501-3505, 380910, 382311-382319, 382360, 382370, 382460, 4101-4103, 4301, 5001-5003, 5105-5103, 5201-
5203, 5301 and 5302).Turkey WT/TPR/S/125
Page 37
products; paper, paper products, printing and publishing; and petroleum, coal, rubber, and plastics.  It
is positive in all other industries, with escalation most pronounced in food, beverages and tobacco
products (Chart III.2).  Therefore, further tariff ra tionalization, through simplification of the structure
and reduction of rates, should introduce more transparency in the tariff regime and reduce the need for
concessions.
20.0
18.5
91.1
27.358.0
62.2
8.5
5.99.1
8.9
0.0
14.64.1
2.6
0.4
28.51.5
1.1
0.0
7.81.5
1.1
0.0
7.45.7
5.6
0.0
8.6
02,0004,0006,0008,00010,00012,000
All products
Manufacturing
Mining
Agriculture
Duty Free 0- 10% 10- 20% 20- 30% 30- 40% 40- 50% >50%Chart III.1
MFN tariff distribution by sector (ISIC1 definitions)a, 2003
Number of lines
a
Source:Labels are share of the total number of tariff lines, including non- ad valorem  duties, by sector. Due to the non-use of 
some of the non- ad valorem  duties in the calculations, the figures may not sum to 100%.
WTO Secretariat calculations, based on data provided b y Turkish authorities.
(c) MFN bound tariffs
24. As a result of the Uruguay Round negotiations, 46.3% of Turkey's tariff lines were bound (all
tariff lines for agricultural products (WTO definition), and some 36% of the lines for non-agricultural
products).  In 2005, final bindings will range from zero to 225% on agricultural products, and
from zero to 102% on non-agricultural goods.  For certain products, applied rates are well below the
bound rates, and even lower than the final bound rates, thus allowing Turkey margins to increase itsimport tariffs.  The simple average bound rate is set to decline to 33.9% by 2005, compared with a
simple average applied MFN rate of 11.8% in 2003.
18  Furthermore, the imposition of non- ad valorem
tariff rates does not ensure compliance by Turkey with its WTO binding commitments made at ad
valorem  rates.  In practical terms, Turkey's tariff rates are largely bound at the same level as the EU
bound rates, given that the CUD obliges Turkey not  to impose tariffs higher than the EU common
external tariffs except in areas where the CUD does not apply (mainly in agriculture).
                                                     
18 The reduction in bound tariffs is to be implemented in equal annual instalments between 1995 and
2004. GATT (1994), Schedule XXXVII.WT/TPR/S/125 Trade Policy Review
Page 38
0.010.020.030.040.050.060.070.0Chart III.2
Tariff escalation by ISIC 2-digit, 2003
Per cent
Source : WTO Secretariat estimates, based on data provided b y the Turkish authorities.
Raw materials Semi-processed Fully processed
(d) Duty and tax concessions
25. Duty and tax concessions on imports are granted through two main programmes: the General
Investment Encouragement Programme (GIEP)19; and Aids Granted to Small and Medium sized
Enterprises (SMEs) Investments (section (4)(i)).20  The Programme for Incomplete Investments and/or
Non-Operating Enterprises was abolished on 30 June 2001. In addition, the inward-processing (IP)
scheme benefits exporters.  Imports of certain products for disabled persons or certain state
administrations, financial leasing, project credit (from donors), and some temporary imports receive
tariff concessions.  All imports by the Ministry of National Defence in the context of the North
Atlantic Treaty Organization (NATO) are exempt from payment of customs duties (Table III.4).21
26. Under the GIEP and the Aids Granted to SMEs In vestments, feasible investment projects that
are found to be eligible (by the Undersecretariat of Treasury and the intermediary banks assigned to
receive SMEs' applications), can benefit from customs duty exemptions on all machinery and
equipment to be used in the physical plant.22  Imports and local purchases of machinery and
equipment within the scope of the approved global lists are also exempted from the VAT.
Furthermore, investors who are committed to realize US$1,000 of exports upon the completion of theinvestments are granted exemption (during the investment stage) from certain taxes, duties, and
                                                     
19 Decree No. 2002/4367 published in the Official Gazette  of 9 July 2002.
20 Decree No. 2000/1822 published in the Official Gazette  of 18 January 2001.
21 See WTO (1998) for a description of the exemption programmes eliminated up to 1998.
22 WTO document G/SCM/N/71/TUR, 25 October 2001. Once the exemption is listed on the
"certificate", the investor may import the machinery and equipment indicated on the approved list, i.e. the
"global list", only for the purposes of the investment in question.Turkey WT/TPR/S/125
Page 39
related fees for bank operations and other official dues such as land registration.23 There is no
difference between foreign and domestic invest ors in terms of the investment encouragement
programmes.
Table III.4
Key features of the concessional entry schemes in Turkey, September 2003
Scheme Eligibility IncentivesPerformance
requirement
1. (a) General investment
encouragement programmeExemption from customs and fund levies for
imported machinery and equipment that are part ofthe investment project, i.e. on the "list" approvedby the Undersecretariat of the Treasury
aNone
(b) Aids granted to small andmedium-sized enterprisesinvestmentFeasible investment projects that are found to
be eligible by the Undersecretariat ofTreasury and the assigned intermediary banksfor receiving SMEs' applications within theset framework of the related decreesaccording to the criteria of reducing regionalimbalances within the country, creating newemployment opportunities, increasingcompetitiveness while using technologies
with greater value addedVAT exemption for both imported and locally
purchased machinery and equipment that is part ofthe investment project, i.e. on the "list" approved
by the Undersecretariat of the Treasury
2. Inward processing regime
(a) Conditional
exemption for
importsAny exporter Intended for goods to be re-exported.  Suspension
of duty and VAT on raw materials, auxiliarymaterials, semi-finished and finished products,
and packaging materialsNone
(b) Use of equivalent goods Any exporter After the realization of exports with domestic
inputs, refund of VAT (but not customs duty)None
(c) Repayment of duties
collected on importsAny exporter After realization of exports with imported inputs,
refund of customs duty and VAT paid on importedinputs, based on a drawback methodNone
3. NATO North Atlantic Treaty Organization 0% on all imports None
4. Defence Ministry of National Defence or by public
institutions on behalf of the Ministry0% on all imports None
5. Donation imports State administrations Certain items to be used mainly for the public
interest approved by relevant Ministries.
Information on incentives not available.None
Disabled persons Vehicles produced especially for disabled persons
6. Financial leasing Vessels, air carriers, medical equipment, and
high-tech productsSuspension of all customs duties and taxes up to
the date the leasing contract is over;  VAT
reductions.None
7. Temporary imports Any importer Certain commercial or personal items:  tariff
suspension on temporary use in Turkey for 3 to12 months without any substantial transformationNone
8 Project credit (donor) Project evaluation criteria of Turk Eximbank Terms and conditions of the project loan are in
accordance with the provisions of the OECDConsensusNone
9. Encouragement of tourism .. .. ..
10. Private (special) laws
regarding exemptions.. .. ..
.. Not available.
a Goods imported at 20% duty: passenger vehicles, buses (excluding double-decker buses), tractors (excluding tractors conforming
to Euro-1 or Euro-2 norms and having environment friendly engines), trailers (except refrigerated trailers), televisions, video s,
mini-refrigerators, furniture, import of yachts (including motorboats), trucks, (excluding off-road truck types and rock type d ump
trucks that are not allowed on highways), mixers, and trans-mixers.Goods imported at 18% duty: expansion of or new investments that have a minimum capacity of 100,000 units per year of firms
that will manufacture automobiles considered as new models for a period of ten years after the date of their first production
worldwide;  the CKD components and parts within the scope of the product shall be subject to unlimited application for the firs t
two years and maximum 30% for the subsequent years.
Goods imported at 10% duty: raw materials, intermediary goods, and operating materials to be imported for operational needs.
Goods imported at 5% duty: construction material.
Source : WTO Secretariat, based on information provided by the Turkish authorities.
                                                     
23 Implementation is temporarily in accordance with Article 2 of the Law No. 3505 (of
3 December 1988).WT/TPR/S/125 Trade Policy Review
Page 40
27. As a result of the new Customs Law, some changes have been made to the IP system.24  This
regime allows Turkish manufacturers/exporters to import materials free of duties (including
surcharge) and other commercial policy measures.  Goods imported under the IP scheme are intended
for re-export from the customs territory of Turkey in the form of compensating products.25  T h e
system works through suspension of duties and VAT until exports are produced (the most frequently
used system), or re-imbursement based on a drawback method. The suspension system is usedwhenever there is a concrete intention to re-export the goods in the form of compensating products.
26
Under the drawback system, import duties and VAT ha ve to be paid when the goods enter for free
circulation into Turkey.27
(e) Tariff preferences
28. Since its previous TPR, the importance of tariff preferences in Turkey's trade has increased
due to new bilateral trade agreements with Estonia, Czech Republic, Slovak Republic, Latvia,
Slovenia, Bulgaria, Poland, Macedonia (FYR), Croa tia, and Bosnia-Herzegovina. In addition, Turkey
provides tariff preferences to EU and EFTA countrie s, Israel, Hungary, Romania, and Lithuania, and
agreements with other seven countries are under negotiation (Chapter II(4)).  As part of its obligations
under the CUD, Turkey is obliged to adopt all the preferential agreements concluded by the EU with
third countries, including the GSP.  The majority of  the agreements, which build on the design of the
CUD, have eliminated tariffs on all industrial products (HS Chapters 25-97) (Table III.5).
Table III.5
Preferential trading agreements, September 2003
Agreement/Country Coverage by Turkey Preferential margin
Customs Union with the European
CommunityAll industrial products
Fish and fishery products
Processed agricultural productsDuty free on industrial products and on the
industrial component of processed
agricultural products; 75% of MFN rates on
fish and fishery products
Agreement between Turkey and the European
Union on preferential trade in agriculturalproductsSome agricultural products (57 items at HS
six-digit level)Preferential tariff quotas, most with zero duty
Agreement between Turkey and the European
Coal and Steel Community (ECSC)Coal and steel products
(280 items at the HS eight-digit level)Duty free on all 280 items
Free-trade agreement with the European Free
Trade Association (EFTA)aAll industrial productsFish and fishery productsProcessed agricultural productsDuty free on industrial products and on  the
industrial component of processed agriculturalproducts; preferential specific and ad valorem
rates on fish and fishery products
Economic Cooperation Organization (ECO)(Iran, Turkey, Pakistan)36 items at the HS four-digit levelbNo preferential rates appliedc
GSP 2,884  items at the HS twelve-digit level 2,174 duty free items for developing countries
and 2,884 duty free items for least developed
countries
Israel All industrial products
Some agricultural and processed agriculturalproducts (20 items at the HS four-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Romania All industrial products
Some agricultural and processed agriculturalproducts (31 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Table III.5 (cont'd)
                                                     
24 Decree No. 99/13819 published in the Official Gazette  of 27 September 2002.
25 Compensating products are all goods obtained from processing operations. They are of two types:
main compensating products obtained under inward pro cessing, and secondary compensating products obtained
as a result of processing operations.
26 In the suspension system, manufacturers can use substitutes of the imported goods for the
manufacture of compensating products.
27 The goods are placed for inward processing subject to prior authorization. Repayment of the import
duty and VAT can be reclaimed when the compensating products are exported.Turkey WT/TPR/S/125
Page 41
Agreement/Country Coverage by Turkey Preferential margin
Hungary All industrial products
Some agricultural and processed agriculturalproducts (19 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Lithuania All industrial products
Some agricultural and processed agriculturalproducts (10 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Estonia All industrial products
Some agricultural and processed agriculturalproducts (62 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Latvia All industrial products
Some agricultural and processed agriculturalproducts (54 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Slovenia All industrial products
Some agricultural and processed agricultural
products (57 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processed
agricultural products
Bulgaria All industrial products
Some agricultural and processed agriculturalproducts (91 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Poland All industrial products
Some agricultural, processed agricultural, andfishery products (108 items at the HS six-digitlevel)Duty free on industrial products;  preferential
tariff quotas on agricultural, processedagricultural and fishery products
Macedonia (FYR of) All industrial products
Some agricultural and processed agriculturalproducts (40 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
Croatia All industrial products
Some agricultural and processed agricultural
products (53 items at the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processed
agricultural products
Bosnia-Herzegovina All industrial products
Most agricultural and processed agricultural
products, with a few exceptions (692 items at
the HS six-digit level)Duty free on industrial products;  preferential
tariff quotas on agricultural and processedagricultural products
a A number of agricultural goods are covered under bilateral agreements between Turkey and individual EFTA countries.
b Including, among others, certain marble, pharmaceuticals, detergents, leather products, paper and paperboard, canvas, centrifu gal
pumps for liquids, compressors, henna, and bentonite.
c Preferential margin is 10% reduction from the statutory rates.  As these rates are higher than MFN rates, preferential rates a re not
applied.
Note: Relevant rules of origin are detailed in Table III.2.
Source : Information provided by the Turkish authorities.
29. Tariff preferences on agricultural products granted under Turkey's trade agreements, are
generally subject to quota (Tables III.5 and III.6).  Turkey applies preferential tariff quotas to four
non-agricultural products: dimethyl terephalate, acrylonitryl, monoethylen glicol, and terephthalicacid.  The latter two were introduced after the last TPR of Turkey.
Table III.6
Preferential tariff quotas on agricultural and processed agricultural products, September 2003
Free-trade
agreement partnerNumber of items Products affected
European Union 34 items at the HS six-digit level Live bovine animals and their meat, butter, cheese, flower bulbs, live plants,
fresh cut flowers, potato seed, apple, peach, tea, wheat, rye, barley, rice, cottonseed, crude and refined soya bean oil, sugar, crude sunflower oil, crude rape,colza and mustard oil, tomato paste, vinegar, dog or cat food and other animal
feeds
Israel 20 items at the HS four-digit level Avocado, mango, carrot, sweet corn, citrus fruit, orange juice, coffee,
kosher-brandy, and vodka
Romania 31 items at the HS six-digit level Live bovine animals and their meat, natural honey, potato seed, wheat, barley,
crude sunflower oil, and apple juice
Hungary 19 items at the HS six-digit level Live bovine animals, wheat, corn, sunflower seed, crude oil, apple juice, and
sparkling wine
Table III.6 (cont'd)WT/TPR/S/125 Trade Policy Review
Page 42
Free-trade
agreement partnerNumber of items Products affected
Lithuania 10 items at the HS six-digit level Live bovine animals, meat, butter, cheese, potato seed, ice-cream, and beer
Estonia 7 items at the HS four-digit level Sheep meat, salted-dried or smoked meats, butter, cheese, egg yolk, prepared
or preserved meat, and canned mushroom
Czech Republic 17 items at the HS four-digit level Live bovine animals, salted-dried or smoked meats, buttermilk, butter, cheese,
crude rape, colza and mustard oil, margarine, sugar confectionery, chocolate,jams-marmalades, fruit and vegetable juices, soup, beer, sparkling wine,
spirituous beverages, and dog and cat food
Slovak Republic 13 items at the HS four-digit level Live bovine animals, butter, cheese, bean, crude and refined sunflower oil,
sugar confectionery, chocolate, jams-marmalades, fruit and vegetable juices,
soup, beer, sparkling wine, and spirituous beverages
Latvia 13 items at the HS four-digit level Butter, cheese, mushroom, prepared or preserved meat, sugar confectionery,
chocolate, bakers' wares, canned mushroom, tomato ketchup, mayonnaise, ice-cream, beer, and sparkling wine
Slovenia 13 items at the HS four-digit level Cheese, egg, potato seed, apple, pear and quince, sugar confectionery,
chocolate, pasta, bakers' wares, canned cucumber, jams-marmalades, fruit and
vegetable juices, and wine
Bulgaria 59 items at the HS eight-digit level Horse, fatty livers, meals and pellets of aquatic invertebrates, cheese, flower
bulbs, live plants, sweet corn, bean walnut, some fruits, seeds of coriander and
caraway, wheat-barley and maize for sowing, millet, canary seed, sunflowerseed, spores used for sowing, poultry fat, crude sunflower and maize oil, sugarconfectionery, pasta, bakers' wares, some canned vegetables (cucumber,mushroom, sweet corn, etc.), jams-marmalades, fruit and vegetable juices,
tomato ketchup, water, wine, wheat bran, tobacco and cigarettes
Poland 34 items at the HS four-digit level Live bovine animals, fish, buttermilk, whey, butter, cheese, potato seed, some
fresh vegetables (onion, shallots, cabbages, carrots, etc.), apple, strawberry,
rye, wheat, oat, crude rape, colza and mustard oil, prepared or preserved meat,
sugar confectionery, chocolate, pasta, some canned vegetables, jams-marmalades, fruit and vegetable juices, soup, beer, spirituous beverages, dog
or cat food and other animal feeds
Macedonia (FYR of) 15 items at the HS four-digit level Some fresh vegetables (tomato, onion, shallots, cucumber, etc.), bean,
watermelon, apple, rice, and canned vegetables
Croatia 18 items at the HS four-digit level Cheese and curd;  apples; maize;  sugar confectionery;  chocolate and other
food preparation containing cocoa;  malt extract;  pasta;  prepared foods
obtained by swelling or roasting of cereals or cereal products, bread, pastry,cakes, biscuits and other bakers' wares;  fruit and vegetable juices;  sauces andpreparations therefore;  mixed condiments and mixed seasoning;  soups andbroths and preparations therefore;  waters, including mineral waters andaerated waters, containing added sugar or other sweetening matter orflavoured;  beer made from malt;  wine of fresh grapes;  undernatured ethylalcohol of an alcoholic strength by volume of 80% vol or higher;  preparations
of a kind used in animal feed
Bosnia-Herzegovina 193 items All agricultural products classified under HS Code 1-24 with the exemption of
live bovine animals;  live sheep and goats;  live poultry (exclusively fowl ofthe species Gallus domesticus );  meat of bovine animals;  meat of sheep or
goats;  edible offal of bovine animals, swine, sheep, goats, horses asses, mulesor hinnies;  meat and edible offal of poultry (exclusively fowl of the species
Gallus domesticus )
Source : Information provided by the Turkish authorities.
(f) Other duties and taxes
30. In addition to customs tariffs, certain products are also subject to: excise duties, the Mass
Housing Fund (MHF) levy, the special consumption tax (SCT), and the value-added tax (VAT).  In
June 2002, the excise duty legislation was further aligned with the EU; a specific duty was introduced
on mineral oils, and ad valorem  duties on tobacco products.Turkey WT/TPR/S/125
Page 43
31. The Mass Housing Fund (MHF) levy applies to imports of fish and fishery products (3% of
the tariff lines or 555 items at the HS 12-digit level, up from 514 tariff lines in 1998).28  I t  i s  t h e
difference between the required tariff protection and the statutory tariff rate.29
32. With a view to simplifying and harmonizing the indirect tax system with the EU's, a new SCT
was put into effect as from 1 August 2002, abolishing the following taxes and charges: Petroleum
Consumption Tax, Liquid Fuel Price Stabilizat ion Fund, Motor Vehicle Purchasing Tax (MVPT),
Environment Fund, Supplementary Motor Vehicle Purchasing Tax, Supplementary VAT, Defence
Industry Support Fund, and Tax for Education and Health Care Services.30 The SCT is structured as a
single tax levied equally on both domestic production and imports of products such as alcoholic
beverages, cigarettes, motor vehicles, and petroleum products.31
33. The VAT is levied at 1%, 8%, and 18% (down from five rates ranging from 1% to 40% in
1998).32  Agricultural and basic goods are charged 1% and 8%, while some non-agricultural products
and "luxury" items (including cosmetics, furs, televisions, and automobiles) are charged 18%. The
VAT applies to the duty-inclusive customs value of import, and to the delivery value of locally
produced goods.
34. In December 2001, Turkey adopted a VAT law to eliminate double taxation of the supply of
services in connection with imports where the value of such services is included in the taxable
amount, thus providing for alignment with the relevant EU legislation.
35. For all products subject to binding commitments (except duty-free goods), Turkey bound
other duties and charges at: 15% of customs duty (for the "municipality share"); and 3% (road, rail or
air transport) or 4% (maritime transport) of the sum of the c.i.f value, customs duty, and other charges
(for the "transportation infrastructure fee").33
(iv) Import prohibitions, quotas, and licensing
36. The importation of 11 items, by broad category, is prohibited by law for reasons such as
environment, public security, health, public morals or the fulfilment of international obligations
(Table III.7).
                                                     
28 The MHF was introduced in 1984 to finance the Government's low-cost housing schemes for poor
and middle-income families. Customs duties collected on the agricultural component of processed goods are
also transferred to the MHF.
29 Turkey has not bound import duties on fish and fishery products.
30 See WTO (1998) for an overview of the coverage and rates of all previous charges and taxes.
31 In most cases, the SCT is charged at the factory gate, but in some cases, such as motor vehicles, it is
charged at the level of the dealer, and in others, such as tobacco, the SCT is charged on the consumer retail
price, but collected from the manufacturer.
32 In 1998, the VAT had five rates: 1%, 8%, 15%, 23%, and 40%. The 15% and 23% rates were
increased to 17% and 25% as from 13 December 1999. These rates were again increased to 18% and 26% on15 May 2001. With the introduction of the SCT, the rates of 26% and 40% were eliminated.
33 GATT (1994), Schedule XXXVII by Turkey in the Uruguay Round , Geneva. Turkey does not
currently impose these other duties and charges.  The "transportation infrastructure fee" and the "municipality
share" were abolished as from 1 January 1993 with the promulgation of Law No. 3284, published in the
Official Gazette  of 11 July 1992.WT/TPR/S/125 Trade Policy Review
Page 44
Table III.7
Import prohibitions, September 2003
Description of items Invocation of WTO Article Domestic/International legislation
Narcotics, hashish and prepared opium
(2 items)aHealth, IAb
(Article XX:b, h)Law No. 2313 on the Control of Narcotics, and the
International Agreement on Narcotics Goods (1961)
Ozone depleting substances
(1 item)a, cEnvironment
(Article XX:b, d)Montreal Protocol on Substances that Deplete the Ozone
Layer; London Amendments to the Montreal Protocol;
Kopenhag Amendment to Montreal Protocol; Import
Regime Communiqué No. 2003/14 (Lists I, II, and III)
Colouring matters
(1 item)Health
(Article XX:b)Law No. 1593 on the Protection of the Public Health;
Regulation on Special Conditions of Foodstuffs and
Supplies and Objects Concerning Public Health; Import
Regime Communiqué 2003/15 Add II (List)
Schedule I and II of the Convention(4 items)
cEnvironment(Article XX:b, d)The Convention on the Prohibition of the Development,
Production, Stockpiling and Use of Chemical Weaponsand their Destruction; Import Regime Communiqué
No. 2003/17 (List I)
Measurement instruments not conforming
to Turkish legal norms (non-metric or
double standard)(6 items)Compliance with domestic
law
(Article XX:d)Law No. 3516 on Standards and Accords
Arms and ammunition,  propellant
powders, prepared explosives, fuses, caps
igniters detonators a
(3 items)Security
(Article XXI:b(i),(ii))Law on Firearms (No. 6136 of 1953); Import Regime
Communiqué No. 2003/2
Gambling instruments (except for specified
tourism purposes)a
(1 item)Public morals
(Article XX:a)Law No. 1072 on Gambling Instruments like Roulette,
Tilt, and Pinball
Products making illegal use of a trade mark(all industrial products)Compliance with domestic
law; IA
b
(Article XX:d,h)
Public morals
(Article XX:a)Paris Convention 1883 annexed to the Law of 1930 on
Accession to 1925 Hague Agreement on InternationalIndustrial Property (1925); Statutory Decree No. 556 on
the Protection of the TrademarksCustoms Law (No. 4458 of 1999)
Soil, leaf, stem, straw, and natural manure
used for agricultural purpose (excluding
turf and perlites cultivated in culture
environment)Health
(Article XX:b)Regulation on Agricultural Quarantine
Spawn of silk-worm .. Law No. 859 on Cultivation and Sale of Silk-worm and
Silk-worm Spawn
.. Not available.
a Prohibited except when imported by authorized government bodies.
b IA:  Undertaken in pursuance of obligations under intergovernmental commodity agreements.
c Imports prohibited only from non-members of the international agreements.
Note: Number of items refers to the Harmonized System classification at the four-digit level.
Source : WTO Secretariat, based on information provided by the Turkish authorities.
37. Since 1996, the Ministry of Agriculture and Rural Affairs has not issued "control certificates"
to countries considered to be risks for diseases.  According to the authorities, the decision was made
"on sanitary grounds (to protect the domestic livestock industry from epidemic diseases such as
Bovine Spongiform Encephalopathy (BSE) and foot  and mouth disease (FMD))", and was based on
the Office International des Epizooties  (OIE) risk classification for live animals (dairy and beef cattle,
sheep, goats, and poultry) and meat (beef, sheep, goat, and poultry).
38. Tariff quotas have been opened on an MFN basis for flat-rolled products of iron or non-alloy
steel (hot and cold rolled).  Quota allocations are made on "first come, first served" or pastperformance basis.Turkey WT/TPR/S/125
Page 45
39. Since 1 January 1996, Turkey has been applying import quotas on certain textile and clothing
products as a requirement for harmonizing its import policy with that of the EU.34  If the exporting
country agrees to a bilateral understanding, the quota is balanced in response to needs. Turkey applies
quotas to products from ten countries under the double checking system (countries with which an
agreement has been reached) and to goods from nine countries under the single checking system
(countries with which an agreement has not been reached). It applies surveillance measures to importsfrom five countries under the double checking system and from 15 countries under the single
checking system (Table III.8). Detailed information on the number of quota categories per country as
well as the quota distribution system is provided in Chapter IV(4)(iii)(a).  In addition, Turkey applies
preferential quotas on certain products (section (iii)(e) above).
Table III.8
Quota and surveillance on certain textile and clothing imports, September 2003
Countries subject to quota Countries subject to surveillance
Under double checking Under single checking Under double checking Under single checking
Belarus Argentina Bangladesh Bosnia-Herzegovina
China (P.R.) Brazil Egypt Cambodia
Chinese Taipei Hong Kong, China Macedonia (FYR of) Croatia
Egypt India Moldova Kazakhstan
Indonesia Peru Vietnam Kyrgyzstan
Korea, Rep. of Philippines Laos
Macao Singapore Mongolia
Malaysia Thailand Nepal
Pakistan Uzbekistan Russian Federation
Vietnam Sri Lanka
Tajikistan
Turkmenistan
Ukraine
United Arab Emirates
Uzbekistan
Source : Information provided by the Turkish authorities.
40. Under the WTO Agreement on Textiles and Clothing (ATC), Turkey has submitted the list of
products included in the first, second, and third phases of integration into GATT 1994.35 The list for
the third phase covers 42.4% of the volume of imports in 1990, including 66 categories of textile and
clothing products.36 According to the authorities, in 2002, 15 (out of 402 restricted) categories of
products reached a quota utilization level of about 90%.
41. Prior import licences are required for 13 groups of items (201 items at the HS four-digit level,
from 183 items in 1998), including telecommunicatio ns equipment, some machinery, some motor
vehicles, transmission apparatus, some chemicals, and certain items related to civil aircraft
(Table III.9).  Importers of these items must obtain permission from the relevant authorities. Inaddition to security, safety, and environment reasons, the restrictions are intended to protect
consumers, assure that imported vehicles are suitable for domestic highways, and, for certain items
                                                     
34 WTO document WT/REG22/7, 24 November 1997, "Legislation on Surveillance and Safeguard
Measures on Imports of Certain Textiles Products".
35 For a description of the first and second integration phases, see WTO (1998).
36 WTO document G/TMB/N/364 of 5 January 2001.WT/TPR/S/125 Trade Policy Review
Page 46
(79 HS lines at the four-digit level) to prevent th e use of imported goods for other than their intended
purposes in civil aircraft.37
Table III.9
Imports requiring a licence, September 2003
Description of items Reason for licence
Radioactivity-related items  (11 items)
Uranium ores, isotopes, nuclear reactors, X-raysImports only permitted on approval by the Turkish Atomic Energy
Authority: to assure patient security against the probable harmful effects of
radioactivity
Telecommunications related items  (8 items)
Electrical apparatus for line telegraphy, telephone
answering machines, radar, transmission, and reception
apparatusImports only permitted with an Approval Document by the Institution of
Telecommunication:  to assure that imports are in conformity with thenational telecommunication network
Machinery and related items  (53 items)
Air-conditioning machines, household type electrical
refrigerators, clothes dryers, instantaneous gas water
heaters, sewing machines of household types, machine-tools for drilling etc., vacuum cleaners, telex machines,
some photocopying machines, certain motor vehiclesImports only permitted with a certificate issued by the Ministry of Industry
and Trade to the effect that after-sale services such as maintenance and
repair are warranted on a regional basis and that maintenance service
technicians and spare-part stocks are sufficient:  to protect consumers
Motor vehicles  (6 items)
Road tractors for semi-trailers, station wagons, racing cars,
trailers, special-purpose motor vehicles other than those
designed for the transport of persons or goodsImports only permitted with a pro forma invoice certified by the Ministry of
Industry and Trade:  to assure the suitability of imported vehicles for
highways
Fertilizers  (5 items)
Animal or vegetable fertilizers, and mineral or chemical
fertilizersImports only permitted on approval by the Ministry of Agriculture and Rural
Affairs:  to avoid damage to health of humans, animals or to the lifecycle of
plants
Banknotes and related items  (2 items)
Banknotes and the like, securitiesImports only permitted on approval by the Central Bank of Turkey or the
Board of Capital Markets:  to assure the continuation of administrative order
related to precious documents, e.g. shares, bonds
Explosives and related items  (14 items)
Technical ammonium nitrate, prepared explosives, some
fuses, fireworks, some astronomical instrumentsImports only permitted on approval by the General Directorate of Security
in the Ministry of Interior:  to assure national security and public safety
Chemicals and related items  (11 items)
Hexane, white spirit, xylene, toluene, solvent naphtha,
petroleum oils, benzeneImports only permitted on approval by the General Directorate of Petroleum
Affairs in the Ministry of Energy and Natural Resources.  Imports of toluene
require approval by both the Ministry of Energy and Natural Resources and
the Ministry of Health:  to protect consumers
Products affecting worker health  (13 items)
Asbestos, benzeneImports only permitted on approval by the Institute of Workers' Health and
Security in the Ministry of Works and Social Security:  to protect workers'
health
Civil aircraft related items  (79 items)
A wide range of items of a kind used on civil aircraftImports only permitted on approval by the General Directorate of Civil
Aviation in the Ministry of Transportation:  to prevent the use of imported
goods in areas other than civil aviation
Maps related items  (2 items)
Maps and hydrographic or similar charts of all kinds, anddigital maps and map information recorded on magnetic or
optical mediaImports only permitted on approval by the General Command of
Cartography in the Ministry of Defence, and the General Command of
Naval Forces:  national security
Items related to the manufacture of chemical weapons
(22 items)A wide range of chemical products used in the productionof weaponsImports only permitted on approval by the Undersecretariat of Foreign
Trade:  to comply with the Convention on the Prohibition of Chemical
Weapons
Energy
Electricity and Natural GasImports only permitted on approval by the Energy Market RegulationAuthority (EMRA):  to ensure effective operations in market activities andto comply with relevant EU Directives.
Note: Number of items refers to the Harmonized System classification at the four-digit level.
Source : WTO Secretariat, based on information provided by the Turkish authorities; and WTO document
G/LIC/N/3/TUR/4, 21 September 2001.
                                                     
37 The import licences for electricity and natural gas are regulated under the Electricity and Natural Gas
Market Laws and the complementary legislation enacted by the Energy Market Regulatory Authority (EMRA).Turkey WT/TPR/S/125
Page 47
42. The importation of old, used, renovated, faulty and obsolete goods is subject to permission by
the Undersecretariat of Foreign Trade.  Measuring and weighing instruments to be released for free
circulation in Turkey are subject to control by the Directorate General of Measures and Standards
(Ministry of Industry and Trade); carrying materials comprising cinematographic and musical works
are inspected and examined by the Directorate of Copyright and Cinema with the aim of combating
piracy.  Additional restrictions under Turkey's sanitary and phytosanitary regulations are discussedbelow (section (vi)(d)).
(v) Contingency trade remedies
(a) Anti-dumping and countervailing measures
43. In 1999, Turkey enacted new legislation on anti-dumping and countervailing measures aiming
to bring it into conformity both with the relevant WTO Agreements and its CUD obligations.  Thenew legislation comprises: (i) Law No. 3577 of 1989 on the Prevention of Unfair Competition in
Imports, as amended by Law No. 4412, which entered into force on 27 May 1999;
(ii) Decree No. 23861 on the Prevention of Unfair Competition in Imports, published in the
Official Gazette  dated 20 October 1999; and (iii) the relevant Regulation No. 23861 published in the
Official Gazette  dated 30 October 1999.
38  The provisions of the WTO Agreement on Subsidies and
Countervailing Duties and the Agreement on the Implementation of Article VI of GATT 1994 would
be observed in the case of any inconsistency between the domestic legislation and the WTO
Agreements (Chapter II(2)).
44. The new legislative framework introduces provisions on, inter alia : de minimis  dumping
margins and negligible import volumes39; like product40; anti-circumvention41; and computing normal
value in case of non-market economies.42 The new legislation also eliminated from the regime the
concept of "market impairment" as an additional category causing dumping, which is not provided forby the relevant WTO Agreements.
                                                     
38 WTO document G/ADP/N/1/TUR/3 and G/SCM/N/1/TUR/3 of 17 April 2000.
39 The dumping margin is the amount by which the normal value exceeds the export price. An
investigation shall not be initiated where it is determined that the dumping margin, the amount of subsidy or thevolume of imports is negligible. According to Article 28 of the Regulation, negligible rates as regards dumping
investigations refers to cases where the margin of dumping is less than 2% of the export price; or the volume of
dumped imports accounts for less than 3% of imports of the like product (when more than one country isinvolved, collectively the margin of dumping must be lower than 7% of imports of the like product). For subsidyinvestigations, negligible rates are when the amount of subsidy is less than 1% of the value of the productconcerned; or for imports from developing countries, the amount of subsidy does not exceed 2% of the value ofthe product concerned, or the volume of subsidized imports accounts for less than 4% of the like product (where
there is more than one developing country involved, collective imports must be lower than 9% of the total
imports). No actions are taken in case of negligible rates.
40 A like product is defined as a good that is similar to the product that is dumped or subsidized, or in
the absence of such a product, another good with similar characteristics.
41 "Cases where there is evidence that, a change in the pattern of trade between a third country and
Turkey, stemming from a practice, process or work for which there is insufficient due cause or economic
justification other than to avoid the antidumping or countervailing duty". Practices that constitute circumventionare identified in Articles 2(i) of the Decree and 4(i)  of the Regulation. See WTO document G/ADP/Q1/TUR/5
and G/SCM/Q1/TUR/5 of 10 January 2001.
42 In 2002, an amendment to the Regulation on non-market economies was put into force. Article 7 and
Article 1 (Addendum 1) of the Regulation describe the different methods for determining normal value in the
case of imports from non-market economies. See also WTO document G/ADP/N/1/TUR/3/Suppl.1 and
G/SCM/N/1/TUR/3/Suppl.1 of 7 May 2002.WT/TPR/S/125 Trade Policy Review
Page 48
45. Imports causing material injury to an industry, constituting a threat of material injury to an
industry, or causing material retardation of an industry to be established in Turkey may be filed for
investigation under Article 3 of the new Law. A dumped product is a product with an export price
lower than the "normal" value for the like product.43  The export price is the price that is actually paid
or payable for the product when sold for export, while the normal value is defined as a comparable
price paid or payable in the ordinary course of trade for the like product when destined forconsumption in the country of origin or export.
44
46. The Directorate General of Imports of the Undersecretariat of Foreign Trade is in charge of
preliminary examination upon complaint or ex officio45, where necessary; recommendations of
possible investigations; carrying out such investigations; and acts as the secretariat of the Board of
Evaluation of Unfair Competition in Importation.  The Board, headed by the Director General ofImports or the Deputy Director General assigned by the latter, consists of representatives of the
Ministry of Agriculture and Rural Affairs, Ministry  of Industry and Trade (MIT), the Undersecretariat
of the State Planning Organiza tion, Undersecretariat of Customs, the Union of Chambers of
Commerce, and Union of Chambers of Agriculture,  and the relevant head of department in the
Directorate General of Imports. The Board is responsible for deciding on initiation of investigation;submitting its decision on the adoption of provisional measures to the State Minister in charge of
foreign trade affairs for approval; evaluating the results of an investigation and submitting a decision
for definitive measures to the State Minister in charge of foreign trade affairs for approval; and
making proposals in the course of an investigation.
47. Examination of a complaint or ex officio  examination must be completed within 45 days
(60 days in the previous legislation), and decisions to initiate an investigation must be published in the
Official Gazette .
46  The complaint shall be considered to have been made by or on behalf of the
domestic industry if it is supported by domestic producers whose collective output constitutes more
than 50% of the total production of the like product, and not be less than 25% of total production of
the like good by the domestic industry in Turkey.  Th e interested parties are notified following the
initiation of the proceedings. They are sent questionnaires and have a maximum of 37 days to
respond47; the time-limit may be extended upon request, provided that due cause is shown.  The final
decision is to be taken within one year from the in itiation of the investigation, but, if necessary, this
period can be extended by up to six months (Article 30 of the Regulation).  Provisional measures shall
be imposed no earlier than 60 days from the initiation of an investigation, and their duration shall be
limited to four months.  However, according to Article 12 of the Law, provisional measures may be
extended to a period not exceeding six months upon request by exporters with a significant share ofthe exports of the product to Turkey.  Definitive measures shall remain in force for five years from the
date of the conclusion of the most recent review investigation that has covered both dumping and
injury examination or from the date of their imposition.
                                                     
43 Article 4 of the Regulation.
44 Articles 9 and 5, respectively, of the Regulation.
45 In the case of fragmented industries involvin g an exceptionally large number of producers, the
Turkish authorities may decide to initiate an investigation ex officio  (without having received a written
application by or on behalf of a domestic industry), provided there is sufficient evidence of dumping, injury, anda causal link (Article 4 of the Law and Article 20 of the Regulation).  According to the authorities, so far Turkeyhas not initiated an investigation ex officio .
46 Article 20 of the Regulation.
47 Including seven days for the postal procedures.Turkey WT/TPR/S/125
Page 49
48. Turkey reported initiation of anti-dumping investigations48, and imposition of 33 anti-
dumping measures during the period 1995-02. In terms of number of cases initiated, Turkey ranks
eleventh among WTO Members (eighth at the time of the previous TPR).49 As at 31 December 2002,
Turkey had 27 definitive anti-dumping duties in force (Chart III.3 and Table III.10), compared with
37 at the end of 1996.  During 1995-02, 25.6% of the anti-dumping investigations initiated by Turkey
were against China (P.R.), 16.2% against members of the EU, and 9.3% each against the Republic ofKorea, Thailand, and Chinese Taipei. Measures have affected mostly textiles and clothing, base metal
products, plastics and rubber articles, and other manufactures such as lighters and pencils.  Almost
half of the duties are levied on a specific basis.  Some ad valorem duties are as high as 100%.
Table III.10
Anti-dumping measures in force, September 2003
Country/customs
territoryProductDate of imposition
of final measureDuty
Belarus Polyester synthetic staple fibres (not processed) 29 May 1998 19%
Belgium Polyvinyl chloride 6 February 2003 US$25/ton –
US$45/ton
Brazil Fittings 27 April 2000 50%
China, P.R. Refillable pocket flint lighters 29 May 1998 US$0,12/piece
Fittings 27 April 2000 95%
Woven fabrics of synthetic and artificial staple fibres 15 February 2001 87%
Wall clocks (battery accumulator or mains powered) 7 November 2001 US$2,10/piece
Woven fabrics of synthetic filament yarn 13 February 2002 70,44%
Pocket lighters, gas-fuelled, non-refillable 8 May 2002 US$0,05/piece
Pocket lighters, gas-fuelled, refillable with electrical ignitionsystem8 May 2002 US$0,05/piece
Parts of lighter 8 May 2002 US$0,03/piece
Acrylic mink blankets 8 December 2002 US$4/kg.
Hook and loop 13 December 2002 US$3,86/kg.
Pencils with leads of graphite and pencils with leads of
crayons encased in a rigid sheath14 January 2003 US$3,16/144 piece
Bicycle tyres 30 April 2003 33%
Bicycle tubes 30 April 2003 50%
Motorcycle tyres 30 April 2003 37%
Motorcycle tubes 30 April 2003 100%
Door locks with cylinder 31 July 2003 US$1,6/piece
Other door locks 31 July 2003 US$1,77/piece
Padlocks, locks and cylinder for door locks only 31 July 2003 US$0,74/piece
Chinese Taipei Polyester textured yarn 28 June 2000 9.9% - 28.6%
Self-drilling screws 10 November 2000 55%
Woven fabrics of synthetic filament yarn 13 February 2002 13.91% - 30.84%
Hook and loop 13 December 20002 US$1,83/kg.
Finland Polyvinyl chloride 6 February 2003 US$45/ton
Germany Polyvinyl chloride 6 February 2003 US$25/ton –
US$45/ton
Greece Polyvinyl chloride 6 February 2003 US$45/ton
Hungary Polyvinyl chloride 6 February 2003 US$45/ton
India Polyester textured yarn 27 June 2000 6.8% - 20.3%
Bicycle tyres 30 April 2003 20%
Bicycle tubes 30 April 2003 64%
Indonesia Polyester synthetic staple fibres (not processed) 13 March 2000 6.2% - 37.4%
Table III.10 (cont'd)
                                                     
48 Excluding standard review or sunset review initiations.
49 WTO (2002).WT/TPR/S/125 Trade Policy Review
Page 50
Country/customs
territoryProductDate of imposition
of final measureDuty
Israel Polyvinyl chloride 6 February 2003 US$25/ton –
US$45/ton
Italy Polyvinyl chloride 6 February 2003 US$25/ton –
US$45/ton
Korea, Rep. of Polyester flat yarns 30 November 1999 0% - 21.2%
Polyester synthetic staple fibres (not processed) 13 March 2000 11.9% - 24.6%
Polyester textured yarn 28 June 2000 33.7%
Woven fabrics of synthetic filament yarn 13 February 2002 3.51% - 40%
Malaysia Woven fabrics of synthetic filament yarn 13 February 2002 3.23% - 15,93%
Moldova Steel billets, rolled or obtained by continuous casting 17 October 2001 US$7/ton
Netherlands Polyvinyl chloride 6 February 2003 US$45/ton
Rumania Polyvinyl chloride 6 February 2003 US$25/ton –
US$45/ton
Russian Federation Steel billets, rolled or obtained by continuous casting 17 October 2001 US$7/ton
Thailand Woven fabrics of synthetic filament yarn 13 February 2002 8.67% - 30.93%
Bicycle tyres 30 April 2003 100%
Bicycle tubes 30 April 2003 100%
Motorcycle tyres 30 April 2003 68%
Motorcycle tubes 30 April 2003 100%
Ukraine Steel billets, rolled or obtained by continuous casting 17 October 2001 US$4/ton
Pentaerythritol 4 September 2003 US$693/ton
United States Polyvinyl chloride 6 February 2003 US$45/ton
Source : Information provided by the Turkish authorities.
49. Turkey has never initiated or imposed any countervailing measures.
(b) Safeguard measures
50. There have been no changes to the legal and institutional framework relating to safeguards in
Turkey since its previous TPR.  The Undersecretariat of Foreign Trade has the authority to propose,
apply, and monitor surveillance and safeguard measures, as well as to determine the quantities and/orvalues of quotas, in order to protect domestic industries.
50  The Committee for the Evaluation of
Safeguard Measures and Surveillance for Imports decides whether to initiate an investigation, and to
adopt, review, extend, change or abolish any safeguard measure.
51. Under Articles 12.3 and 12.4 of the Agreement on Safeguards, following consultations
between the European Communities (EC) and Turkey (on 27 September 2002), on provisional anddefinitive safeguard measures imposed by the EC on certain steel products, Turkey stated, on
6 March 2003, via a joint notification, that it had reserved all its rights regarding the pursuit of
remedies provided under Article 8 of the Agreement.
51
52. Turkey has not so far taken any action under GATT Article XIX.
                                                     
50 Council of Ministers Decree No. 95/6814 of 30 April 1995 (as amended by the Decree No. 95/7432
of 24 October 1995), and the Regulation on Safeguard Measures and Surveillance for Imports of 1 June 1995 (asamended in 1 November 1995). See WTO documents G/SG/N/1/TUR/2, 14 December 1995 andG/SG/N/1/TUR/2/Rev.1, 11 July 1997.
51 See WTO document G/SG/N/12/TUR/1 of 12 December 2002. The EU measures were notified in
WTO documents G/SG/N/8/EEC/1 and G/SG/N/10/EEC/1 of 11 September 2002.Turkey WT/TPR/S/125
Page 51
010203040
1995 1996 1997 1998 1999 2000 2001 2002
Source :  Notifications to the WTO;  and information provided by the Turkish authorities. Indonesia 2.3United States 2.3
Malaysia 2.3EU
16.2
Base metals
 & products 
thereof
25.1
Korea, 
Rep. of
9.3Chinese Taipei 
9.3Japan 4.7Chemicals & products 
thereof
5.8Machinery, 
mech. appliances 
& electrical equip.
     4.5(b) Initiations by product
Per cent(c) Initiations by origin 
Per centChart III.3
Anti-dumping measures, 1995-02
(a) Number of cases initiated and measures in force
Plastics & rubber, 
products thereof
12.5
Textiles & 
articles thereof
30.2Other
17.0
India
4.7Thailand
9.3China, 
P.R. of
25.6Cases initiated 
Measures in forcea
a    Anti-dumping measures in force on 31 December.
Russian 
Fed. 2.3
Other 
Europe
4.7Glass and 
glassware
4.9Brazil 2.3Israel
4.7WT/TPR/S/125 Trade Policy Review
Page 52
(vi) Standards and other technical requirements
(a) Overview
53. Since its previous TPR, Turkey has continued transposing the various elements of the EU
technical requirements into its domestic legal system by enacting a new legislative framework.  This
new framework consists of the Law on the Preparat ion and Implementation of Technical Legislation
on Products, which entered into force on 11 January 200252; the Regulation on the Notification of the
Technical Legislation and Standards between Turkey and the EU, which entered into force on
3 May 200253; the Regulation on the Affixing and Use of the EU Conformity Marking on the
Products; the Regulation on Conformity Assessment Bodies and Notified Bodies; and Regulation
Relating to the Market Surveillance and Inspection of Products.54
54. The main provisions of the new legislation include: (i) producers can place only safe goods
into the market; (ii) goods complying with the tech nical regulations are presumed to be safe; (iii) in
the absence of technical regulations, the producer is  obliged to comply with voluntary international or
national standards, or with the codes of good practice in the sector concerned, or with the state of
science and technology, or with the safety that consumers may reasonably expect; (iv) pre-market
controls can be carried out by conformity assessment bodies designated by and responsible to thepublic authorities in relevant sectors; (v) post-market controls will be carried out by public authorities
to ensure the existence of only safe products in the market; and (vi) information on draft technical
regulations prepared outside the regulated area of the EU and on measures taken during market
surveillance activities will be exchanged between Turkey, the Commission, and its member states.
55. In the framework of the CUD, Turkey has harmonized 259 out of 560 EU directives regarding
technical legislation.
 The MIT expects to complete the transp osition of the remaining EU directives
into Turkish legislation that fall under its scope by the end of 2003. 55
56. There have been no changes in Turkey's inst itutional framework relating to standards and
other technical regulations since its last TPR. Technical regulations are for health, safety,
environment, and consumer protection.56  Turkey has accepted the Code of Good Practice for the
preparation, adoption and application of standards.  The national enquiry point for TBT, concerning
standards, is the Turkish Standards Institution (TSE); and for SPS measures, the General Directorateof the Protection and Control of the Ministry of Agriculture and Rural Affairs (MARA).
57
                                                     
52 The Framework Law No. 4703 published in the Official Gazette  No. 24459 of 11 July 2001.
53 Official Gazette  No. 24715 of 3 April 2002.
54 The last three Regulations were published in the Official Gazette  No. 24643 of 17 January 2002, and
entered into force on 11 January 2002.
55 The MIT has harmonized 152 out of 161 directives that are under its responsability. Some of the EU
directives already transposed by Turkey refer to pressure vessels, machinery and toy safety, motor vehicles and
their trailers, textiles, crystal glasses, and electrical equipment. The completion of alignment of other legislation,
for example, regarding pharmaceuticals and cosmetics is foreseen for 2003, while that on dangerous substancesand preparations is expected by 2005. European Commission (2002) .
56 In accordance with the Regulation on the Implemen tation of the Notifications Foreseen in the TBT
Agreement, which was put into force on 15 April 1997, the Undersecretariat of Foreign Trade, as the nationalenquiry point of TBT for notifications of technical regulations, is responsible for receiving and notifying the
WTO about draft technical regulations.
57 WTO document G/SPS/ENQ/2, 17 May 1995.Turkey WT/TPR/S/125
Page 53
(b) Standards, testing, and certification
57. The Regime for Technical Regulations and Standardization for Foreign Trade consists of a
Decree (No. 96/7794), a Regulation, and Communi qués. It was first put into force in 1995 and
continues to regulate standarization activities. It is a transitional regime and is revised annually in
light of the progress in the adoption of the EU's legislation.  The regime aims to increase the
competitiveness and quality of exports, and ensure that they do not harm the environment andconform to health and safety norms; and, in the case of imports, to ensure the same treatment to
imported and domestic products, and protect human health, safety, animal and plant life, and the
environment.
58. The Turkish Standards Institution (TSE) has been implementing standards for products
manufactured in or imported into Turkey since 1960. It is an independent institution (not funded bythe state budget), responsible for the preparation and publication of standards for all types of
materials, products, and services in the country, industrial metrology and calibration, and conformity
assessment and certification.  The TSE is a full member of the International Organization for
Standardization (ISO) and the International Electrotechnical Commission (IEC); it is also an affiliate
member of the European Committee for Standardization (CEN) and European Committee forElectrotechnical Sta ndardization (CENELEC).
58 The TSE is adopting and harmonizing its standards
with those of the EU on 41 product categories, in cluding foodstuffs, electrical equipment, and
machinery; this is to be completed by the end of 2003.  Recognition of testing procedures has been
assured by mutual agreements concluded between Turkey and EU member States.  In 1999, TSE
became a signatory to various mutual recognition arrangements (MRAs) under the Low Voltage
Directive (LVD), i.e. the CENELEC Certification Agreement (CCA), the Agreement on the use of
commonly agreed marking for cables and cords comp lying with harmonized specifications (known as
HAR), and the common mark of CEN and CENELEC (K eymark). According to the authorities, TSE
has already initiated operations in connection with these schemes, accepting applications for
certification. In 1998, TSE also joined the IEC System for Conformity Testing and Certification of
Electrical Equipment (known as the CB Scheme), to ensure mutual recognition of results of tests
performed in conformity with IEC standards on safety of electrical appliances.
59. Turkey has almost 23,790 standards (up from 16,930 in 1998), of which 1,264 are obligatory
(Table III.11).59  The compulsory standards, of which 25.6% are equivalent to international standards,
are most frequent in activities such as image technology, materials handling equipment, mining and
minerals, and paper technology.
60. Compulsory standards apply equally to imports (regardless of the origin) and locally
produced goods.  Testing and certification procedures are performed by the TSE on imported
industrial products, by the Ministry of Environment on environment-related products, and by the
Ministry of Health for medical products, cosmetics and detergents.  Controls of, inter alia , imported
animals, plants, foodstuffs, seeds, and veterinary products, are conducted through evaluation, based
on risk analysis methods, by the MARA. In addi tion, commercial quality controls of certain
agricultural products, such as fresh fruit and vegetables, dried fruits, edible oils, and cereals, are
performed by Inspectorates of Standardization for Foreign Trade (inspection units working under the
Undersecretariat of Foreign Trade) at the import and export stages.  Controls of agricultural products
                                                     
58 The TSE has applied for full membership of CEN and CENELEC, but these applications have not
yet been accepted. European Commission (2002) .
59 Since a standard may be classified under more than one International Standard Industrial
Classification (ISIC) code, the numbers of total and oblig atory standards that appear in Table III.11 are different
from those in the text.WT/TPR/S/125 Trade Policy Review
Page 54
at the export stage are carried out under the Decree No. 6/7677 concerning the implementation of
Turkish standards. Currently, 72 agricultural products (at the HS 12-digit level)  are subject
to compulsory export quality control. According to  the authorities, the standards applied for these
controls are in conformity with the UN-ECE standards, and the control procedures comply with the
OECD scheme. There are 56 groups of inspectors of standardization for foreign trade working under
eight regional directorates. UFT has also five commercial analysis and standardization laboratories,which perform the necessary laboratory analysis for export controls.
Table III.11
Official Turkish standards and their equivalence with international standards, September 2003
Area
(ISIC classification)Total
Turkish standardsCompulsory
standardsTurkish standards
equivalent to
international
standardsEquivalencea
(per cent)
Generalities, terminology, standardization 1,012 10 498 49.21
Sociology, services, company organization,
management, administration787 12 65 8.26
Mathematics, natural science 192 0 52 27.08
Health care technology 942 113 130 13.80
Environment and health protection, safety 1,513 40 287 18.97
Meteorology, measurement, physical phenomena 613 21 213 34.75
Testing 237 0 44 18.56
Mechanical systems and components for general use 581 133 148 25.47
Fluid systems and components for general use 1,031 122 242 23.47
Manufacturing engineering 954 33 288 30.19
Energy and heat transfer engineering 327 16 114 34.86
Electrical engineering 1,401 159 281 20.06
Electronics 714 2 209 29.27
Telecommunication 1,389 20 151 10.87
Information technology, office equipment 370 1 103 27.84
Image technology 175 0 133 76.00
Precision mechanics, jewellery 26 0 8 30.77
Road vehicle engineering 568 23 187 32.92
Railway engineering 100 3 12 12.00
Shipbuilding and marine structures 243 0 116 47.74
Aircraft and space vehicle engineering 935 2 117 12.51
Materials handling equipment 380 2 226 59.47
Packaging and distribution of goods 282 7 51 18.08
Textile and leather technology 833 50 256 30.73
Clothing industry 146 5 15 10.27
Agriculture 1,378 11 187 13.57
Food technology 1,409 104 408 28.96
Chemical technology 1,441 32 726 50.38
Mining and minerals 374 2 202 54.01
Petroleum and related technologies 829 36 178 21.47
Metallurgy 1,105 42 267 24.16
Wood technology 389 22 80 20.56
Glass and ceramics industries 351 31 65 18.52
Rubber and plastics industries 1,005 29 396 39.40
Paper technology 201 4 102 50.75
Paint and colour industries 306 20 102 33.33
Construction material and building 1,392 204 139 9.99
Civil engineering 209 26 6 2.87
Military engineering 139 0 0 0.00
Housekeeping, entertainment, sports 662 58 80 12.08
TOTAL 26,941 1,395 6,884 25.55
a Number of Turkish standards, equivalent to international standards, as a percentage of the number of Turkish compulsory 
standards.
Source : Information provided by the Turkish authorities.Turkey WT/TPR/S/125
Page 55
61. Importers must obtain an inspection certificate from the TSE (the TSE Mark) before
importing goods subject to compulsory standards for protection of human health, safety, animal and
plant health, and the environment.  The Quality Management Office of the TSE, set up in 1986, was
reorganized on 1 June 2001 as the Quality and System Certification Department to carry out
certification activities more efficiently.  It carries out TSE certification services related to TS-EN-ISO
9000/1-2-3:1994; TS-EN-ISO 9001:2000; TS-EN-IS O 14001; TS 13001 (HACCP); and TS 18001
(OHSAS).60  Producers with such certificates are exempt from inspection as long as they import for
their own needs.  Manufactured products bearing the TSE mark are also exempt from inspection if
these imported materials are used in their production.  About 29,800 TSE standard-marked product
certificates have been issued as of August 2003.  The Personnel Certification Department of the TSE
was founded in 2000 to train and certify personnel in quality, environment, health, and safety.
62. Under Law No. 1705, the General Directorate of Measures and Standards of the MIT is
authorized to implement the industrial standards se t by the TSE; it is also responsible for quality
control systems concerning legal metrology, establishment of calibration systems of test laboratories
and operating private laboratories in accordance with the law.61
63. The Turkish Accreditation Authority (TURKAK), established on 4 November 2000 through
Law No. 4457, started operations in March 2001. It is responsible for accrediting domestic and
foreign bodies and making sure that they carry out laboratory, certification, and inspection services, in
conformity with national and international standards. TURKAK is a full member of the European
Cooperation for Accreditation (ECA), and became an associate member of the International
Laboratory Accreditation Cooperation (ILAC).
(c) Marking, labelling, and packaging
64. There has been no major change in the marking,  labelling and packaging legislation in Turkey
since its previous TPR.  While almost all voluntary standards cover details on marking, labelling, and
packaging, there are three major obligatory standard s related to these issues, all complying with ISO
standards: TS 4331 on marking, labelling and  packaging of materials and products that are supplied
packaged into the market; TS 1418 on labelling of textile products; and TS 6429 on marking by
colours or alphanumeric system for electrotechnical purposes. It is obligatory to affix clearly legibleand visible labels on retail goods placed on the market, their packaging or their containers, displaying
their price, place of production, and distinctive characteristics. Where it is not possible to affix such
labels on a particular good, it is obligatory to prepare and display clearly visible and accessible lists
containing the same information.
62 All imported products must be labelled with their country of
origin, quality and price.63  Except for a few products, the operating, user, and maintenance instruction
manual must be in Turkish and accompany each industrial product.64 Moreover, shoes offered for sale
                                                     
60 Certificates under the scope of TS-EN-ISO 9000 and TS-EN-ISO 14001 standards have been granted
to 2,130 and 85 companies, respectively.
61 Measurement and Calibration Law No. 3516 of 1989.
62 Article 12 of Law No. 4077 on Consumer Protection, as amended by Law No. 4822 of 2003.
63 Article 5 of Implementing Regulation on Labels, Tariffs and Price Lists, and Article 12 of the
Consumer Protection Law.
64 Article 5 of Implementing Regulation on the Application Principles of Introductory Users Guide,
which was issued based on Article 14 (Law No. 4077) on Promotion and User's Guide. Exempted productsinclude:  certain kinds of metal, PVC, polyethylene, plastic pipes, connecting parts, bolts, handcuffs, screws,nuts, nails, pins, and similar connecting elements; paper, erasers, pencils, and similar stationary materials;shovels, pickaxes, rakes, barrows, and similar agricultural products;  towels, belts, trousers suspenders, buttons,
zip fasteners and similar clothing parts;  some construction materials;  some households appliances;  handicrafts,
jewellery and similar products; and the following products sold in a package with a usage description: mineralWT/TPR/S/125 Trade Policy Review
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must display information about their main parts.  For safety reasons, where goods and services offered
to consumers may constitute a threat to the consumer's physical or mental health or the environment,
it is obligatory to include information and warnings concerning this threat in a clearly legible and
visible manner on the good or in the attached users' guides.65  The same marking, labelling, and
packaging requirements apply to domestic and imported products. Marking, labelling, and packaging
of a product can be carried out at customs.66
65. The marking, packaging, and labelling of pharmaceuticals are regulated by the Decree on
Labelling and Packing referring to Law No. 1262.  Ma rking, packaging, and labelling of cosmetics are
regulated by the Decree referring to the Law No. 3977.  These regulations apply both to domestically
produced and imported goods and, according to the authorities, are based on international regulations.
(d) Sanitary and phytosanitary regulations66. The importation and production of pharmaceuticals, drugs, some consumable medical
products, cosmetics, detergents, foodstuffs, fishery products, and agricultural, animal, and veterinary
products are subject to health and sanitary controls. Turkey's main legislation in this area is contained
in: Sanitary Law No. 1593 of 1930, Agricultural Quarantine Law No. 6968 of 1957, the Law on
Animal Health Control (Law No. 3285 of 1986, as amended by Law No. 4648 of 2001), Decree
No. 560 on Production, Consumption and Control of Foods, and Fishery Law No. 1380 as amended
by Law No. 3288 of 1986.  No distinction is made between domestically produced goods and
imported goods.
67. Imports of agricultural products and foodstuffs require a control certificate issued by the
MARA; imports of pharmaceutical products, drugs, certain consumable medical products, cosmetics
and detergents require a control certificate issued by the Ministry of Health.
67  In order to obtain a
control certificate, depending on the type of produc t, the following documents must be presented to
the relevant Ministry: a  pro forma invoice, a health certificate, a certificate of analysis, a formula or
list of contents of the product, a pedigree certificate, and a radiation analysis report. All documents
should be obtained from and/or approved by the relevant authorities in the producer country.
Documents should be in the original language; a translation into Turkish is required for each
document.  Control certificates can be obtained pr ior to import and should be presented to customs
authorities upon import. The period of validity of the control certificates ranges from four to 12
months, depending on the product.
68. Since its previous TPR, Turkey has continued harmonizing its sanitary and phytosanitary
regulations with EU norms, as well as with those of the Codex Alimentarius Commission, the Office
International des Epizooties (OIE), and other interna tional norms. This has been done on the basis of
the Decree No. 560 on Production, Consumption and Control of Foods (published in the Official
Gazette  on 24 June 1995) and the Turkish Foods Codex Regulation (FCR) (published in the Official
Gazette  on 16 November 1997).  Turkey has transposed some of the EU acquis communautaire  by
adopting legislation on packaging materials and food for particular nutritional uses.68
                                                                                                                                                                    
oils, anti-freeze, hydraulic oil, matches, fertilizers, an d some chemical products; paints, cements, lime, and
similar products; food and drinks; cleaning products; and coal and similar products.
65 Article 18 of Law No. 4077 on Consumer Protection Law, as amended by Law No. 4822.
66 Article 102 of the Customs Law and Article 292 of the Customs Regulation.
67 In some cases, the certificate can be waived if the importer assures the authorities that the products
are destined for specified purposes or for the manufacturer's own use.
68 European Commission (2002) .Turkey WT/TPR/S/125
Page 57
69. Turkey has signed cooperation agreements to prevent animal diseases from entering the
country through trade in and transit of live animals and animal products, veterinary medications,
fodder, and other products that may affect animal health.69  Moreover, bilateral agreements on a
product by product basis have been signed with Be lgium, France, Germany, Italy, Netherlands, New
Zealand, the United Kingdom, and the United States in relation to the use of sanitary and
phytosanitary certificates.
70. According to the authorities, to prevent the expansion of epidemic diseases (including BSE),
Turkey maintains a temporary import ban on live animals (dairy and beef cattle, sheep, goats, and
poultry) and meat (beef, sheep, goat, and poultry) based on sanitary considerations (Article 7 of the
Law on Animal Health).  Since 2002, a new BSE surveillance system has been in place in Turkey.70
71. Since its last TPR, three concerns have been raised against Turkey in the WTO SPS
Committee.71  The first was on Turkey's import ban on livestock, related to foot-and-mouth disease
(FMD), raised by the United States in June 1998, and then by Hungary in June 2000.72 The second,
was raised by Hungary in March 2001, on Turkey's ban on pet food imports from all European
countries related to transmissible spongiform encephalopathy (TSEs) as a result of the BSE
epidemic.73 The third case was raised by Ecuador in March 2001 about Turkey's control certificates
for banana imports. This case has been settled bilaterally.74
(vii) Government procurement
72. Turkey enacted two new laws on government procurement (Public Procurement Law (PPL)
No. 4734 of 2002, and Law on Public Sector Procurement Contracts (No. 4735 of 2002), which
entered into force on 1 January 200375, replacing Public Procurement (State Adjudication)
Law No. 2886 of 1983. The new laws provide for,  inter alia,  additional transparency, and
accountability, competition, while ensuring a more effective and efficient utilization of publicresources in the country, and further harmonizing the domestic legislation with the acquis
communautaire .
73. The PPL (Article 53) established the Public Procurement Authority (PPA) as an
administratively and financially autonomous body with  a link to the Ministry of Finance.  The PPA's
main responsibilities are to ensure the effective execution of the PPL and the proper application of therules and procedures during tender proceedings.  The PPA is composed of the presidency, the Public
                                                     
69 Turkey has signed cooperation agreements with Algeria, Bulgaria, Germany, Iran, the Netherlands,
Syria, and Tunisia.  Negotiations continue with Albania, Azerbaijan, Croatia, Czech Republic, Georgia, Kuwait,Macedonia, Russia, Slovakia, and Ukraine.
70 It consists of inspection and monitoring of samples taken randomly from cattle that died or were
slaughtered after showing neurological symptoms, and cattle slaughtered at 30 months and above. In total, some
3,000 BSE diagnostic tests have been carried out (European Commission, 2002) .
71 WTO document G/SPS/GEN/204/Rev.3 of 26 March 2003.
72 This complaint was supported by Australia, EU, New Zealand, and Uruguay. In July 2001 the United
States reported that its concerns were resolved (WTO document G/SPS/GEN265), while in October 2001
Hungary indicated that its concerns were outstanding.
73 Hungary requested consultations under the DSU on 5 May 2002. Although some progress has been
made, the problem is still pending.
74 Formal consultations were requested by Ecuador on 10 September 2001. The notification to the
Dispute Settlement Body (DSB) of a mutually agreed solution is contained in WTO document WT/DS237/4 of
29 November 2002.
75 Certain articles of the new laws entered into force on the date of publication (January 2002) in the
Official Gazette .WT/TPR/S/125 Trade Policy Review
Page 58
Procurement Board (PPB), and service units.  The PPB is the main decision-making body of the PPA.
It also examines complaints and may take corrective action and determine the remedies, cancel the
tender decision, and terminate the tender proceedings, or decide that the complaint is irrelevant.76
Final decisions by the PPA/PPB are to be take n within 60 days after a complaint is made.
74. Other main changes introduced by the PPL refer to, inter alia,  the scope of public
procurement, exceptions to the regime, and the thresholds.  The scope (Articles 1 and 2) has beenextended to cover most public entities and institutions governed by public law or under public control
or using public funds. The new PPL also includes a separate section regulating the procurement of
consultancy services (Articles 48-52).  The exceptions to the PPL (public purchases not governed)
are: procurement of goods and services by certain public institutions (such as public banks
77;
operators in the energy, water, transportation, and telecommunications subsectors); procurementrelated to defence, security, and intelligence needs; procurement to be carried out through foreign
financing pursuant to international agreements; purchases of goods and services for research and
development projects; procurement related to agriculture and livestock; purchases by entities covered
by the PPL from the State Supply Office (DMO); and procurement by public entities abroad, such as
embassies and consulates. The thresholds above which foreign tenderers are entitled to participate intenders opened in Turkey (Article 8) are: TL 350 billion for procurement of goods and services by
contracting entities operating under the general or the annexed budget; TL 583 billion for purchase of
goods and services by other contracting entities within the scope of the PPL, and close to
TL 13 billion for constructions for administrations covered by the PPL.
78
75. Under Article 63 of the PPL, a 15% price preference is granted to all domestic tenderers in
the procurement of goods, services, and works, if the PPA, the MIT, and other relevant departments
are of the view that the supply is of domestic origin.  However, this provision is not applicable todomestic bidders who participate in the tender proceedings by forming joint-ventures with foreign
tenderers.
76. Three tendering procedures are specified in the PPL: (i) open tenders (Article 19), as the main
procedure, where all tenderers are allowed to submit tenders, and notices are published not less than
40 days prior to the receipt of tenders; (ii) restricted tenders (Article 20), where following an openinvitation to pre-qualify, tenderers are invited by the contracting entity to submit tenders
79; and
(iii) negotiated tenders (Article 21), applied under certain conditions, for example if at the end of open
or restricted procedures, no tender is submitted, and when it is impossible to define objectively the
technical and financial aspects.80  Direct procurement may be applied under certain circumstances, for
                                                     
76 The ten members of the PPB were appointed for five years (they cannot be re-elected) by the Council
of Ministers on 29 March 2002.
77 Procurement by public banks, for example, is subject to the Banking Act No. 4603. Nevertheless,
construction tenders by banks are within the scope of the PPL.
78 The thresholds and monetary limits specified in the PPL (with the exception of those below
TL 1 million) shall be updated by the Public Procurement Authority (PPA) on the basis of the Index ofWholesale Prices of the previous year. They shall be published in the Official Gazette  in February, and will be
effective as of 1 February of each year.  In cases of emergency, the thresholds may be further updated upon the
proposal of the PPA subject to approval by the Council of Ministers (Article 67).
79 Pre-qualification notices are published not less th an 14 days in advance of the deadline for the pre-
qualification application, and a letter of invitation to te nders is sent to all pre-qualified candidates at least
40 days before the submission of the tenders.
80 In these cases, the procurement process is conducted in two stages: initial proposals cover aspects
such as technical details and methods for fulfilling the requirements of the contract; and then final offers are
presented, including the tender price.Turkey WT/TPR/S/125
Page 59
example, if it is established that the needs can be supplied by only one real or legal person, or when
the contract does not exceed TL 5 billion.81
77. Where it is not possible to determine the most economically advantageous tender on the basis
of the price, other factors are taken into account such as operation and maintenance costs, cost-
effectiveness, productivity, quality, and technical merit (Article 40 of the PPL).  These factors are
expressed in monetary terms where possible and, if not, their relative weights are indicated in thetender documents. The contracting officer is required to notify the results of the evaluation to all those
who have submitted tenders (Article 41).  In the event that the wining bidder decides not to take the
contract, it is given to the second most advantageous bid.
78. The PPL specifies certain obligations for the contracting entities before opening a tender for
goods, services, or works (Article 62): financial planning to ensure that there is an appropriation in thebudget (on a yearly basis) regarding a particular tender, with the aim of completing the investment
projects within the planned period of time; and the allocation proposed cannot be less than 10% of the
cost of the project, while the allocation portions initially programmed for the following years cannot
be cut in the future.
79. The Public Sector Procurement Contracts Law sets out the principles and procedures
concerning the issuance and implementation of the contracts awarded according to the PPL, and deals
with contract issues such as required content, limitations to carrying-over, and regulations on their
annulment.
80. With the exception of certain products that it produces itself, the DMO procures goods (under
the PPL framework) from the domestic and foreign markets if necessary, and resells them to public
institutions at single prices applicable across the country.  The DMO was a central procuring entity
and reseller to other public institutions even before the enactment of Law No. 4734.
81. DMO's procurement procedures are covered by the new PPL;  they were not covered by the
previous legislation.  All public institutions covered by the PPL must purchase goods directly from
the DMO provided that the goods are on a list announced by the DMO at the beginning of each year.
82
The goods include paper and cardboard products, stationery and office materials, office machines andtools, furnishings, lighting and heating apparatus, cleaning equipment, vehicles and their apparatus,and other office stocks.
82. Since June 1996, Turkey has participated as an observer in the WTO Committee on
Government Procurement.
83
(viii) Local-content requirements
83. The authorities indicated that these are no local-content requirements for incentive purposes.
However, under the public procurement regime, supplies of Turkish origin are eligible for a price
preference of up to 15% (section (vii)). Moreover , in the automotive subsector, foreign investors
usually accept a certain share of local content, although it is not compulsory (Chapter IV(4)(iii)(d)).
                                                     
81 In the case of direct procurement, there is no requirement to publish a tender notice.
82 Article 3(e) of PPL No. 4734. Notice dealing with purchases from the DMO was published by the
Ministry of Finance in the Official Gazette  of 25 February 2003.
83 WTO document GPA/M/2, 23 July 1996.WT/TPR/S/125 Trade Policy Review
Page 60
(ix) Countertrade
84. Turkey continues to use two main types of countertrade practices: barter/counter-purchase,
and offset.84 Barter/counter-purchase is conducted through an official procedure, whereas offset is
managed by either the Undersecretariat of Foreign Trade (UFT) or the Undersecretariat of Defence
Industry (UDI). Countertrade arrangements are regulated by the Export Regime Decree, and
Communiqué No. 96/3 concerning Exportation Made through Counter-Purchase or Barter, published
in the Official Gazette  on 6 January 1996.  All companies are allowed to conduct barter and counter-
purchase in accordance with established procedures.  Applications are made to the Exporters' Union.
85. In 2002, barter/counter-purchase trade amounted to US$9.7 million.  Turkey has two offset
projects in operation in civil aviation; the projects will be terminated in 2008.
(xi) Other measures
86. Turkey has used restrictions for balance-of-payments reasons under Article XVIII:B of GATT
several times since 1967.  The last time Turkey disinvoked this Article was on 1 January 1997.
87. Turkey has no agreements with foreign governments or enterprises designed to influence the
quantity or value of goods and services exported to  Turkey. Furthermore, the authorities are aware of
no such agreements between companies opera ting in Turkey and foreign enterprises.
88. Turkey applies no trade sanctions, either nationally or internationally, other than those
endorsed by the United Nations Security Council or other regional organizations of which it is a
member.
89. Compulsory reserve stocks are set for beet sugar (Chapter IV(2)(ii)), and oil products
(Chapter IV(3)(iii)(b)).
(3) M EASURES DIRECTLY AFFECTING EXPORTS
(i) Registration and documentation
90. Similar registration and documentation requirements apply to exporters and importers in
Turkey (section (2)(i) above).  In addition, exporters are required to register with the Exporters Union
and their local Chamber of Commerce.  A fee of 0.05% of the f.o.b. value of exports is charged as a
service commission.
91. Exports of the following products continue to be subject to registration: goods for which
payments are made to the Support and Price Stabilization Fund (SPSF)85; re-exportation of natural gas
previously imported under the bilateral agreement with the Russian Federation86; goods subject to
international sanctions; goods with certificates under the Regulation on the Manufacturing of Vegetal
and Animal Products Using Ecological Methods, published in Official Gazette  No. 22145 of
                                                     
84 Barter/counter-purchase is used mainly with countries with an underdeveloped banking system or
facing foreign exchange difficulties. Offset compensates import expenditures with export revenues, and helps tobring in new technology and high-tech investment.
85 The SPSF extends concessional cr edits to the agriculture sector.
86 The agreement between Turkey and the former USSR, of 18 September 1984, on the delivery of
natural gas to Turkey, requires that 70% of the total value of natural gas is used for the purchase of Turkish
goods and services.  According to the authorities, this agreement has not been implemented since 1994.Turkey WT/TPR/S/125
Page 61
18 December 1994; certain electrical equipment listed in Communiqué No. Export 88/29; centrifuges,
motors, generators, rotary electrical converters, certain accessories and parts suitable for use in
machines, transformers, static converters, condensers, and electronic lamps, tubes, and valves; goods
covered by the Wassenaar Arrangement; goods covered by the Missile Technology Controlling
Regime; items included in annexed Lists 2 and 3 of the Convention on the Prohibition of the
Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction;
exports of goods covered by the Vienna Agreement regarding the Protection of the Ozone Layer as
well as protocols and amendments pertaining to that charter, only to the countries that are signatories
to the arrangements in question; chemicals used in chemical weapons manufacture; certain protein
materials and their derivatives; unprocessed olive oil, processed bulk or barrelled olive oil,
unprocessed olive in bags, sacks or boxes, liquorice root, raw meerschaum and sample pipe; originalbowel; and live sheep and cattle.  Registration is on a case by case basis at the time of each export
transaction.
92. In trade with EU member countries, the Unde rsecretariat of Customs may authorize exporters
to issue movement certificates (known as A.TR), without submitting them for endorsement to the
relevant authorities.  Such authorization can be granted to exporters frequently making consignments;not involved in any serious or repeated offences against customs or tax legislation; and with records
that can be checked by the customs authorities. This kind of authorization is not yet possible for trade
with Israel, Hungary, Romania, Lithuania, Cz ech Republic, Slovak Republic, Estonia, Latvia,
Slovenia, Bulgaria, Poland, Macedonia (FYR), Croa tia, and Bosnia-Herzegovina, due to lack of
detailed legislation, which is currently under preparation.
(ii) Export taxes
93. Three commodities are currently covered by export taxes: a Support Price Stability Fund
(SPSF) tax of US$0.50 per kg. on the exportation of raw skins (HS 41.01, 41.02, and 41.03) has been
introduced since the previous TPR of Turkey. Export taxes continue to apply to: hazelnuts (in the
form of deductions payable to the SPSF at the rate of US$0.04 per kg. for unshelled hazelnuts, and
US$0.08 per kg. for shelled hazelnuts)87; and semi-processed leather (US$0.50 per kg. for
environmental reasons).88  Moreover, a 0.01% fee is levied on the f.o.b. value of exports subject to
registration (section (i) above).
(iii) Export prohibitions, controls, and licensing
94. Since Turkey's last TPR, the introduction of a prohibition on orchis increased the number of
prohibited items (by broad category) to 15 (Table III.12).  Exports are prohibited under law for
various reasons, including environment, health or religious reasons or to give effect to obligationsunder international conventions.
                                                     
87 Decree of the Council of Ministers published in Official Gazette  No. 89/10306 of 23 July 1997.
88Decree of the Council of Ministers published in Official Gazette  No. 89/13904 of 23 March 1989.WT/TPR/S/125 Trade Policy Review
Page 62
Table III.12
Export prohibitions, September 2003
Description of itemInvocation of
WTO ArticleDomestic/International law
Angora goats (1 item)aEnvironment
(Article XX:g)Law on the Amelioration of Animals (No. 904 of 7.6.1926)
All game and wild animals (except wild pig, wolf, jackal,
fox, marten, badger, snake, turtle and lizard) meat or aliveand/or pieces and garments thereof (Ch. 1 and 2)aEnvironment(Article XX:g)Decision of the Council of Ministers (No. 234 of 8.3.1990)
Natural flower bulbs (1 item) Environment
(Article XX:g)Export Regime Decree (No. 7623 of 22.12.1995)
Tobacco seedlings and tobacco plant  (2 items)aEnvironment
(Article XX:g)Law on Tobacco and Tobacco Monopoly (No. 1177 of
9.5.1969)
Dates "Phoenix the ophrasti crenter" (1 item) Environment
(Article XX:g)Export Regime Decree (No. 7623 of 22.12.1995)
Indian hemp (1 item)aHealth
(Article XX:b)Law on the Controls of Narcotics (No. 2313 of 24.6.1933)
Pterocarya carpinifolia (1 item) Environment
(Article XX:g)Export Regime Decree (No. 7623 of 22.12.1995)
Liquidamber orientalis (1 item) Environment
(Article XX:g)Export Regime Decree (No. 7623 of 22.12.1995)
Plants of grapevine, fig, hazelnut, pistachio, and olive
(not available)Environment
(Article XX:g)Export Regime Decree (No. 7623 of 22.12.1995)
Ozone depleting substances (1 item) Health; IAb
(Article XX:b,d)Vienna Convention; Montreal Protocol on Substances that
Deplete the Ozone Layer; London Amendments to the
Montreal Protocol
Chemicals listed in Schedule I of the Chemical WeaponsConvention States, not party to the Convention (4 items)IAb
(Article XX:d)Convention on the Prohibition of the Development,
Production, Stockpiling and Use of Chemical Weapons and
on Their Destruction
Trunk, log, lumber and wooden beams of walnut, mulberry,
cherry, pear, plum, elm, ash, linden, and yew trees (Ch.44)aEnvironment(Article XX:g)Decision of the Council of Ministers (No. 8186 of
24.4.1974)
Wood and wood charcoal (Ch. 44) Environment
(Article XX:g)Export Regime Decree (No. 7623 of 22.12.1995)
Antiques and archaeological works (1 item)aNational treasures
(Article XX:f)Law on Ancient Works of Art (No. 2863 of 21.7.1983)
Orchis (dust, tablet or any forms) .. Export Regime Decree (No. 7623 of 22.12.1995)
.. Not available.
a Export prohibited in 1993.
b IA:  Undertaken in pursuance of obligations under intergovernmental commodity agreements.
Note: Number of items refers to the Harmonized System classification at the four-digit level.
Source : WTO Secretariat, based on information provided by the Turkish authorities.
95. An export quota limited to 35% of production by each firm applies to oil products
(Chapter IV(3)(iii)(b).  An export licence is required for 20 categories of products (Table III.13).Exporters of these items must obtain permission from the relevant authorities (Chapter IV(3)(iii)(a)).
96. The Decree on the Regime of Technical Regulations and Standardization for Foreign Trade
empowers the Government to make goods for export subject to quality control and inspection; to set
the type of quality control and inspection applicable to such commodities; and to prohibit exports of
these commodities unless accompanied by a Control Certificate issued by the Undersecretariat of
Foreign Trade. Within the framework of the Decr ee, the Undersecretariat is responsible for the
enforcement of quality control and any necessary inspection of these commodities. Some 72agricultural products (at the HS 12-digit level) are subject to compulsory export controls for quality
purposes.  The coverage, broadly unchanged since the previous TPR in 1998, includes citrus fruit,
apples, ground nuts, a variety of edible oils, dried apricots, dried figs, and some hazelnuts.Turkey WT/TPR/S/125
Page 63
Table III.13
Exports requiring a licence, September 2003
Description of items Authority responsible Legal basis
Military weapons and ammunitions
(excluding sporting and hunting shotguns)Ministry of National Defence Law 3763 of 3/1/1940
Opium and poppy seeds Ministry of Health Law 2313 of 12/6/1933
Addictive and psychotropic substances Ministry of Health Law 2313 of 24/6/1933
Addictive substances stated in the
Psychotropic Agreement dated 1961,revised in 1972;
Psychotropic Agreement dated 1971;
and UN Agreement (dated 1988) to
prohibit addictive substances
Products subject to Basel Convention on
the Control of Transboundary Movements
of Hazardous Wastes and their DisposalMinistry of EnvironmentaDecree 94/5419 of 7/3/1994
Living or non-living boars, wolves,
jackals, foxes, martens, badgers, snakes,turtles, lizards, and identifiable parts of
and clothing produced from themMinistry of Forest
aDecree 90/234 of 8/3/1990
Fertilizers (excluding chemical fertilizers) Ministry of Agriculture and Rural Affairs Decrees 2/1771 of 27/12/1924;  6/4090
of 19/12/1964
Seeds (except forest-tree seeds) Ministry of Agriculture and Rural Affairs Law 308 of 21/8/1963
Communiqué 96/31 of 19/09/1996
Fishing products subject to the prohibitionderived from the principles of fishery(including leeches)Ministry of Agriculture and Rural Affairs Law 1380 of 22/3/1971 (as amended by
Law No. 3288 of 28/05/1986)
Racehorses Ministry of Agriculture and Rural Affairs Law 904 of 7/6/1926
Feeds covered by the Feed Law Ministry of Agriculture and Rural Affairs Law 1734 of 29/5/1973
Agricultural medicine and equipments Ministry of Agriculture and Rural Affairs Law 6968 of 15/5/1957
Pharmaceuticals for veterinary purposes Ministry of Agriculture and Rural Affairs Law 3490
Export of natural flower bulbs subject toquota or any other kind restrictionsMinistry of Agriculture and Rural Affairs Decree 95/7623 of 22/12/1995
Live animals kept for breeding Ministry of Agriculture and Rural Affairs Decree 95/7623 of 22/12/1995
Sugar General Directorate of Sugar Factory Law 6747 of 22/6/1956
Natural mushroom (only exports to EU
countries)Ministry of Agriculture and Rural Affairs Decree 95/7623 of 22/12/1995
Export control list of Australian Group Undersecretariat for Foreign Trade (General
Directorate of Exports)Decree 95/7623 of 22/12/1995
Live tuna fish (Orcynus) Ministry of Agriculture and Rural Affairs Decree 95/7623 of 22/12/1995
Electricity Energy Market Regulatory Authority (EMRA) Law 4628 of 20/02/2001
Law 4646 of 18/04/2001
Endangered species of wild animals and
plants, samples of these species subject to
CITES agreementMinistry of Agriculture and Rural Affairs (I-A,
II-A, III-A Lists)Ministry of Forest
a  (I-B, II-B, III-B Lists)
Ministry of Environmenta (I-C, II-C, III-C
Lists)Decree 96/78125 of 27/04/1996
a Once separate Ministries, the Ministry of Environment and the Ministry of Forestry have been merged to form the Ministry of
Environment and Forestry with the adoption of the Law on the Organization and Responsibilities of  the Ministry of Environment
and Forestry (Law No. 4856 of 1 May 2003).
Source: Information provided by the Turkish authorities.WT/TPR/S/125 Trade Policy Review
Page 64
(iv) Export subsidies, finance, assistance, and promotion
97. In addition to duty and tax concessions (section (2)(ii)(f)), various incentives schemes are
available to exporters;  some have been eliminated.89  Under the Export Subsidy Programme for
Agricultural Products90,  export subsidies are granted for 16 agricultural or processed agricultural
products in the form of deduction of debts, on the basis of a percentage of the quantity of the product
exported, or in cash (a fixed amount per ton in US dollars) (Chapter IV(2)(ii)(a)).
98. The Export Credit Bank of Turkey (Turk Eximbank), a state-owned bank established in 1987,
and the sole official export credit agency in the country, still operates a large number of export credit,
guarantee, and insurance schemes. Through its credit programmes, the Turk Eximbank provided
support to 14% of Turkey's total exports in 2002 (down from 23% in 1998).91 Turk Eximbank
supports exporters, export-oriented manufacturers, and foreign investors with short-, medium-, andlong-term cash and non-cash credit programmes. Moreover, export receivables are discounted in order
to promote sales on deferred payment conditions, and to increase export trade volume. Turk
Eximbank regularly presents its annual programmes to the Supreme Advisory and Credit Guidance
Committee, chaired by the State Minister in charge of the bank's activities.  This Committee fixes
upper limits of credits to be extended by the bank, guarantees to be issued, and insurance transactionsto be effected, either as total amount or by country, sector, and programme-wise.
92
99. Since the previous TPR of Turkey, the Turk Eximbank has introduced six new export credit
programmes:  (i) the Short-term Pre-shipment Rediscount Programme, a finance facility put into
effect in 1998 (within the framework of an additiona l limit extended to Turk Eximbank by the Central
Bank of Turkey);  (ii) the International Transportation Marketing Credit Programme, consisting of
two sub-programmes, the first introduced in December 2001 regarding road transportation companies,
and the second in February 2002 for shipping companies;  (iii) the Credit Programme for ForeignCurrency Earning Services, introduced in July 2002 and aimed at contributing to Turkey's foreign
exchange earnings through financing companies resi dent in Turkey for both their foreign- currency-
earning services abroad and the export of services such as software projects and consultancy services;
(iv) the Letter of Guarantee Programme for Overseas Contractors' Services, introduced in July 2002
and aimed at strengthening the competitiveness of Turkish contractors in international markets;  (v)the Export Finance Intermediation Loan (EFIL), introduced in 1999, using a credit facility from the
World Bank;  and (vi) the Pre-export Small and Medium Scale Enterprises (SMSEs) Credit
Programme, introduced in April 2003, which is aimed at strengthening the competitiveness of SMSEs
in international markets by providing financial support in the preparatory stage of their exports. In
addition, the Performance Related Export Credit Programme was renamed as Pre-export CreditProgramme in April 2003, enabling new exporters to benefit from this programme.  Table AIII.3
provides the key features of Turkey's export credit programmes.
                                                     
89 In the Uruguay Round, Turkey committed itself to reduce export subsidies by 24% in value and by
14% in volume for 44 agricultural products (WTO definition) in equal instalments over a ten-year period
starting on 1 January 1995. See WTO (1998).
90 Decree No. 2000/5 of the Money-Credit and Coordination Council published in the Official Gazette
dated 25 March 2000, which replaced Decree 1998/30.
91 The Turk Eximbank reformed its short-term credit programmes in early 1996 to bring them into
conformity with the WTO Agreement on Subsidies and Countervailing Measures.
92 The programmes may be revised, eliminated, or extended according to the requirements by Turkish
exporters and international rules and regulations (WTO document G/SCM/N/71/TUR of 25 October 2001).Turkey WT/TPR/S/125
Page 65
100. The Turk Eximbank ensures that credits are available to small and medium-scale enterprises,
which may experience difficulties getting credits from commercial banks because of a lack of
adequate collateral, among other factors.  Credits are allocated through the Turkish commercial banks
or directly by the Turk Eximbank.93  In 2002, 64% of short-term credits offered by Turk Eximbank
were extended via intermediary Turkish commercial banks, and 36% directly.  The banks supported
approximately 6% of Turkey's exports through short-term credits in 2002.
101. The Turk Eximbank offers a variety of insurance policies for Turkish exporters, investors, and
overseas contractors against commercial and political risks (Table III.14). Commercial risk-based
losses, 70% of which is delegated to the reinsurance panel, are indemnified by Turk Eximbank from
its own resources, while political risks are, in principle, backed by the Government.  Since 2000,
short-term political risks have also been ceded to the reinsurance panel within certain country limits.The premium rates of insurance programmes range between 0.9% and 3.5%, and vary according to
the risk category of the buyer's country, the tenor and the payment term, and the status of the buyer
(private, public or sovereign).
Table III.14
Key features of the export insurance programmes, September 2003
Programme Coverage
Short-Term Export Credit Insurance  (SECI) Up to 90% of losses incurred as a result of commercial and political risks on
shipments made by an exporter within one year, with payments deferred up to360 days.  Premium rates vary according to, inter alia , the risk category of the
buyer's country, and the legal status of the buyer and the relevant payment term
and maturity.
Specific Export Credit Insurance Principally 90% of 85% of the contract value against commercial and political
risks on the export of capital and semi-capital goods with at least 60% domesticcontent for up to five years; both pre- and post-shipment coverage.  Premium rates
are specifically calculated taking into account the above-mentioned criteria.
Overseas Contractors' Services Insurance Up to 90% of 85% of the Turkish portion of the contract value against commercial
and political risks
Overseas Investment Insurance/Guarantee Up to 90% of losses against political risks of new direct investments by Turkish
firms in overseas  enterprises.
Specific Export Credit Insurance Post-shipmentPolitical RiskPrincipally 90% of losses incurred as a result of political risks in the post-
shipment stage for receipts from exports of capital and semi-capital goods with atleast 60% domestic content and with credit terms up to five-year maturity.
Premium rates are specifically calculated taking into account the above-mentioned
criteria.
Specific Export Credit Insurance Comprehensive
Post-Shipment Risk PolicySame as Specific Export Credit Insurance Post-shipment Political Risk, except
that both post shipment political and commercial risks are covered.
Source : WTO Secretariat, based on information provided by the Turkish authorities.
102. Under the Undersecretariat of Foreign Trade, the Export Promotion Centre (IGEME) remains
the main public organization for export promotion.  IGEME acts as an intermediary in establishing
business contacts between foreign importers and Turkish exporters.  Its activities can be grouped intofive main categories:  research and development training (training programmes, seminars and
workshops);  trade information (computerized trade information system, and library);  publicity and
promotion (organization of national participation in  international trade fairs, and other promotional
activities through publications and internet); project management; and international relations.
                                                     
93 If the credits are allocated thr ough commercial banks, the banks are responsible for the default risk of
the borrowers.  If they are allocated directly by the Tu rk Eximbank to the customer, then collateral and/or a bank
guarantee is required.WT/TPR/S/125 Trade Policy Review
Page 66
103. In parallel to IGEME's activities, the Undersecretariat of Foreign Trade has carried out trade
missions and buyers programmes since 1995.  The mark et and sectoral coverage of the programmes
are determined by considering Turkey's production and export-related capacity, potential markets, and
trade possibilities.  Until now, trade missions have been undertaken to 44 different countries, while
112 buyer missions programmes have been organized in Turkey.  The annual average budget for both
trade missions and buyer missions is about US$788,000.
104. The public agency for the development of SMEs (KOSGEB), established in 1990 as a non-
profit organization under the MIT, has several support schemes for improving Turkish SMEs' exports:
(i) the training aid scheme supports part of the cost of training in various fields including packaging,
standards for products and environment, and leadership and organizational management; (ii) the
foreign market research support for enterprises, sectoral unions or vocational unions involved in theContractual Package Support Programme (60% of fo reign market research expense should not exceed
specified amounts); (iii) support for participation in export-oriented business trips abroad for
enterprises and sectoral foreign trade companies; and (iv) support for participation in national or
foreign fairs by enterprises.  KOSG EB also offers to enterprises: participation support in a permanent
showroom abroad; support for participation in domestic and international industrial fairs; support forKOSGEB fairs; and support for export orientation, trade mark creation, and promotion campaign
activities.
105. As part of its obligations under the CUD, Turkey has been harmonizing its legislation with
that of the EU with respect to officially supported export credits (Article 12 of the CUD). Within this
framework, the OECD Consensus principles on offici ally supported export credits with a repayment
term of two or more years have been adopted.  Turk Eximbank is a full member of the Berne Union
(the international association of export credit insu rers), and represents Turkey in the Group on Export
Credits and Credit Guarantees (ECG) of the OECD Trade Committee.
(v) Free zones
106. The number of free zones increased from 14 at the end of 1998 to 21 in 2003.94  There are no
free points in Turkey.  The enterprises established in the zones are active in a wide range of areas,
including high-technology investments, leather products, and storage facilities.
107. The Free Zones Law No. 3218 of 15 June 1985, and the Turkish Free Zones Regulation
of 1993 set out the framework for operations and practices in the zones.  The legislation is designed to
promote foreign direct investment and joint-ventur es in export-oriented enterprises, provide easy
access to imports of raw materials and equipment on favourable terms, increase employment, and
promote international finance and banking. Free zones are also targeted at regional development andemployment creation.  The validity period of an operating licence is a maximum of ten years for
tenant users, and 20 years for users who wish to build their own offices in the zone; if the operating
licence period is for production, the terms are 15 and 30 years for tenant users and investors,
respectively. Subject to the foreign trade regime (including duty payment and a fee of 0.5% of the
transaction value), sales into the domestic market and barter trade are allowed without limitation.
                                                     
94 The free zones are: Mersin (1987), Antalya (1987), Ege (1990), Istanbul Ataturk Airport (1990),
Trabzon (1992), Istanbul Leather and Industry (1995), Eastern Anatolia (1995), Mardin (1995), ISE IstanbulInternational Stock Exchange (1997), Izmir-Menemen Leather (1998), Rize (1998), Samsun (1998), IstanbulTrakya (1998), Kayseri (1998), European (1999), Gaziantep (1999), Adana Yumurtalik (1999), Denizli (2001),
Bursa (2001), Tubitak-Marmara Research Centre (2002), and Kocaeli (2001).  The parentheses indicate the
years the zones began operation.Turkey WT/TPR/S/125
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108. A wide range of financial benefits are extended to the free zones.  These include exemption
from the payment of customs duties and fees; exemption from corporate, income, and value-added
taxes; no restrictions on profit transfer; and convertible currencies for exchange transactions. The
foundation and operation of the free zones are generally undertaken through a mix of government and
private partnership (often realized within the framew ork of "build, operate, transfer" schemes, such as
in the Aegean, Kocaeli, Adana-Yumurtalik, Samsun Free Zones). Investors are also free to constructtheir own premises, while zones have office space, workshops, or warehouses available for rental on
attractive terms.  Goods may be stored, assembled, repaired, tested, or repackaged for purchasing or
selling in the free zones.  In 2002, government-budgeted expenditure for free zones was
TL 340 billion, down from TL 1 trillion in 1998.  Data on the amount of forgone revenue attributable
to these fiscal benefits are not available.
109. There is no limitation on foreign capital particip ation in investment within the free zones, and
100% repatriation of capital is allowed without prior permission, tax, duty, or fee. Despite this,
Turkey's free zones consist mainly of domestic companies; in 2003, 562
 companies  out of 3,440 free-
zone companies in operation were foreign.  Total trade volume of Turkish free zones increased from
US$7.7 billion in 1998 to around US$11.1 billion in 2002, and almost 30% of this trade is with EUcountries.
95
(vi) Other measures
110. According to the authorities, Turkey does not participate in any arrangements designed to
curb or control exports to third countries at the request of foreign governments/companies.  However,
on the basis of bilateral agreements with the United States and Canada, Turkey maintains export
quotas on 39 textile and five clothing categories (Chapter IV(3)(iii)(a)).
111. According to the Decree No. 32 on the Protection of the Value of the Turkish Currency,
export earnings must be transferred to Turkey, through the banking system, within 180 days of the
date of exportation.
112. Export cartels are covered, but not exempted from general prohibition of cartels, under Law
No. 4054 on the Protection of Competition (section (4)(iii)).
(4) M EASURES AFFECTING PRODUCTION AND TRADE
(i) Incentives
113. Various public bodies/institutions and organizations in Turkey carry out state aid
independently.  State aid is aimed at investments (domestic and foreign), and is under the
responsibility of the Undersecretariat of Treasury. The eligibility criteria depend on the regional
development status and the size of the enterprise.  Since tax exemptions are the major instrument inthis system, it is difficult for an investor to quantify a priori  the value of the benefits.
                                                     
95 In 2002, free-zone companies were involved in the following activities (number of companies in
parentheses): purchasing-selling (2,296); production (523); renting (253); storage (92); underwriting (70);
banking-insurance (56); assembling-disassembling-maintenance (43); founder operator/operator (21); and others
(85).WT/TPR/S/125 Trade Policy Review
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114. Few changes have been introduced to the overall Turkish investment incentive programme,
which became region- rather than sector-specific in 1993.96  The Programme for Incomplete and/or
Operating Enterprises was abolished on 30 June 2001.  There are two main investment encouragement
programmes:  the General Investment Encouragemen t Programme (GIEP), and Aids Granted to Small
and Medium-sized Enterprises (SMEs) Investments. The purpose of these programmes is to
encourage and orient investments, in order to reduce regional imbalances within the country, andcreate new employment opportunities, while using technologies with greater value added. To qualify
for any of these programmes, potential investors have to apply for an investment incentive certificate,
which is non-transferable.  In addition, regional programmes, designed to address specific needs of
under developed regions, are put into force for specified periods as necessary.
115. In order to obtain an investment encouragement certificate under the GIEP, an investor should
present,  inter alia ,  a receipt for the deposit in the Central Bank, of an amount between
TL 200 million and TL 400 million depending on the developmental status of the location, and the
amount of fixed investment.  The incentives provided under the GIEP are:
(a) exemption from customs duties and fund levies for imported machinery and
equipment that are part of the investment project indicated in the "List" approved bythe Undersecretariat of Treasury;
(b) fixed assets used in production and subject to depreciation, with a value above
TL 5 billion, can benefit from investment allowance automatically under general tax
laws;
(c) VAT exemption for imported and locally purchased machinery and equipment;
(d) investors who are committed to realize at least US$1,000 of exports upon the
completion of the investment are granted, during the investment stage, an exemptionfrom taxes, duties and related fees for bank operations, and other official dues such as
land registration, and company registration
97; and
(e) credit allocation from the budget to encourage investments aiming at regional
development98, R&D, environmental protection, priority technology, and technology
development.99
116. Under the Aids Granted to SMEs, companies entitled to receive investment incentives are
those: operating in manufacturing, agri-industry, t ourism, education and health, mining, and software
industries; employing up to 250 workers; and holding assets not exceeding TL 600 billion.  The
incentives are the same as under the GIEP, except that different ceilings are set for the amount of
                                                     
96 Several incentive schemes run in parallel to the general investment aid programme.  These include
assistance provided to exporters (such as duty concessions, export finance, insurance, guarantee, promotion, andmarketing assistance) (section (3)(v)), to the agriculture sector (including input subsidy payments), to the energy
sector (such as subsidies for the production of hard coal), to maritime (tax incentives), and to tourism (including
corporate income tax exemption). See Chapter IV for details.
97 According to Law No. 4842, the obligation to have an incentive certificate and to realize
US$1,000 of exports to benefit from this measure will be abolished as from 1 January 2004.
98 In this case, the credit limit is 30% of the fixed investment (not exceeding TL 4.5 trillion), at an
interest rate of 20%, and a term structure of six years with a three-year grace period.
99 In these four cases the credit limit is 50% of the fixed investment (not exceeding TL 400 billion), at
an interest rate of 20%, and a term structure of five years with a one-year grace period.Turkey WT/TPR/S/125
Page 69
credit to be allocated and the interest rate to be applied depending on the regional location of the
investment.100
117. Turkey also offers five additional support programmes (two created since its last TPR).  First,
on the basis of regional development, organized industrial zones (OIZs) are offered subsidized
industrial plots101; infrastructure, including transportation and communication facilities; and
subsidized credits.  Since its establishment in 1962, 70 OIZs have been created, and the credit grantedduring 1962-02 amounted to US$546 million.
  By the end of 2006, it is aimed to increase the number
of OIZs to 80.
118. Second, the small-scale industrial estates scheme, which dates back to 1965, has provided
credit of US$1,228 million between 1965 and 2002, towards the construction of modern workshops
with sanitary conditions. At the end of 2002, 358 estates and 82,797 workshops had been constructed(by 2006 the target is to build 500 estates and 125,000 workshops); the main activities are car repair
works, metal manufacturing, and wooden industry.  On the basis of regional development, these
estates are granted, inter alia , infrastructure facilities and subsidized credits.
102
119. Third, with the objective of upgrading the effectiveness and expanding the SMEs' share of
total production, the KOSGEB provides services re lated to production, marketing, quality control,
machinery and equipment support, technology deve lopment, training, and information; it also
prepares and executes projects.  The KOSGEB has several support schemes for the improvement of
Turkish SMEs exports (section (3)(iv)).
120. Fourth, on 26 June 2001, the Technology Development Zones Law (No. 4691) was approved
by the Grand National Assembly of Turkey.  The legislation promotes the use of high/advanced
technologies and the development/production of te chnology or software in technology development
zones, and the related R&D capabilities, through cooperation between universities, researchinstitutions, and producers. Financial support is granted for, inter alia , land procurement,
infrastructure and construction of administrative buildings.  Income and corporation tax exemptions
are granted for five years;  the Council of Ministers can extend this time up to ten years for certain
technological areas and selective products. Researchers, software engineers, and R&D personnel
working in the zone are exempt from all types of tax for ten years.
121. Fifth, the Industrial Zones Law (No. 4737, published in the Official Gazette  of
19 January 2002), amended the previous Law on Industr ial and Organized Industrial Zones, aiming to
promote domestic and foreign investment by offering incentives and easing administrative procedures
(such as removing red tape) for investors.  Industrial zones (IZs) are established by the Council of
                                                     
100 The investment credit limit allocat ed to SMEs is TL 300 billion, with a 10% interest rate in priority
development regions and 15% in other regions, and maturity of four years. The operational credit limit for
SMEs is TL 120 billion, with a 15% interest rate in the priority development regions and 25% in other regions,and maturity of two years.  With the investment credits, no repayment is made in the first year.
101 A new Legislation on Organized Industrial Zones (No. 4562 published in the Official Gazette  of
15 April 2000) determines the principles for the establishment, structure, and administration of OIZs. The size
of industrial plots varies between 4,000 and 70,000 square metres. They are sold to industrialists at the cost of
the land and infrastructure, without profit. An advance payment of 10%-25% of the cost of the plot has to bemade, and the rest is paid between four and ten years. The Ministry of Industry and Trade pays up to 99% of theinfrastructure cost, depending on the level of development of the regions. The interest rate of the credit rangesfrom 10% to 20%, and the maturity between nine and 15 years depending on the degree of development of thearea.
102 The interest rate of the credit ranges from 10% to 20%, and the maturity is 11 years with a one year
grace period.WT/TPR/S/125 Trade Policy Review
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Ministers, upon proposals from the Ministry of Industry and Trade (MIT), at locations designated by
the Coordination Committee for Industrial Zones.  The acquisition of land and the preparation of the
infrastructure required for the construction of IZs are funded by the MIT.  The Council of Ministers
determines, within the framework of the investment incentives decrees, the incentives that will be
applied to investments in IZs.
(ii) Public enterprises and privatization
122. Since Turkey's previous TPR, the public sector has continued to exert a direct and strong
influence on the economy, mainly through public enterprises (PEs).103  Most of these still operate
under monopoly or hold exclusive rights in many sectors, including banking, transportation,
agricultural processing, energy, and telecommunications.  Table III.15 lists some of the most
important PEs in operation.  The contribution of PEs to Turkey's GDP was around 6.2% in 2002, onlyslightly less than at the beginning of the 1990s, and their share in total employment was about 2% in
the same year.
104 With World Bank assistance, Turkish authorities completed a study on PEs that
revealed overstaffing amounting to 45,800 employees (out of 385,000).105 Moreover, many of these
companies still run losses with the consequent budgetary transfers.
Table III.15
Public enterprises, September 2003
PE Activity State ownership Related law
Manufacturing
  MKEK Machinery and chemicals 100.00% DL No. 233a
  DMO Office supplies 100.00% DL No. 233a
  SUMER HALI Hand carpet 100.00% DL No. 233a
  SUMER HOLDING Textiles 100.00% Law No. 4046
  GERKONSAN Iron and steel construction Subsidiary Law No. 4046
  SEKA Pulp and paper 100.00% Law No. 4046
  DİVHAN Iron ore 100.00% Law No. 4046
  TDCI Iron ore 100.00% Law No. 4046
Mining
  ETI HOLDING Mining industry 100.00% DL No. 233a
  TTK Coal mining 100.00% DL No. 233a
  TKI Lignite mining 100.00% DL No. 233a
  KBI Copper 100.00% Law No. 4046
  ETI KROM Chrome mining 100.00% Law No. 4046
  ETI BAKIR Copper mining 100.00% Law No. 4046
  ETI GUMUS Silver mining 100.00% Law No. 4046
  ETI ELEKTROMETALURJI Metallurgy 100.00% Law No. 4046
  ETİ ALUMİNYUM Alimunium 100.00% Law No. 4046
Electricity
  TEIAS Electricity transmission 100.00% DL No. 233a
  EUAS Electricity generation 100.00% DL No. 233a
  TETAS Electricity contracting & wholesale 100.00% DL No. 233a
  TEDAS Electricity distribution & retail sale 100.00% DL No. 233a
  TEMSAN Electromechanic equipment Subsidiary DL No. 233a
  YENIKÖY  ELEKTRIK ÜRETIM A. Ş Electricity generation 100.00% Law No. 4046
  KEMERKÖY  ELEKTRIK ÜRETIM A. Ş Electricity generation 100.00% Law No. 4046
  YATAĞAN  ELEKTRIK ÜRETIM A. Ş Electricity generation 100.00% Law No. 4046
Table III.15 (cont'd)
                                                     
103 PEs in Turkey comprise both state economic enterprises (SEEs) and state-owned enterprises
(SOEs). In general, SEEs are part of the Government's budget and are obliged to report to the Treasury and the
SPO, whereas SOEs fall under the Commercial Code and have a more independent planning administration.
104 OECD (2002b).
105 This estimate excludes 15,000 workers who retired under a voluntary scheme introduced in
December 2001 (IMF, 2002).Turkey WT/TPR/S/125
Page 71
PE Activity State ownership Related law
Petroleum
  TPAO Crude oil exploration and production 99.98% DL No. 233a
  BOTAS Oil pipeline 100.00% DL No. 233a
  PETKIM Petrochemicals 95.86% Law No. 4046
  TUPRAS Petroleum refineries 65.80% Law No. 4046
  DITAS Maritime tanker transport Subsidiary Law No. 4046
  ESGAZ Natural gas distribution 100.00% Law No. 4046
  BURSAGAZ Natural gas distribution 100.00% Law No. 4046
Agriculture
  TSFAS Sugar processing 99.99% DL No. 233a
  TMO Soil products 100.00% DL No. 233a
  CAYKUR Tea processing 100.00% DL No. 233a
  TIGEM Agricultural production 100.00% DL No. 233a
  IGSAS Fertilizer Subsidiary Law No. 4046
  TUGSAS Fertilizer 100.00% Law No. 4046
  TEKEL Tobacco and alcoholic beverages 100.00% Law No. 4046
  EBAS Meat, fish processing 100.00% Law No. 4046
  KÜTAHYA ŞEKER FABRIKASI Sugar processing 100.00% Law No. 4046
Transportation
  TCDD Railway services 100.00% DL No. 233a
  TUDEMSAS Railway transportation equipment Subsidiary DL No. 233a
  TULOMSAS Railway transportation equipment Subsidiary DL No. 233a
  TUVASAS Railway transportation equipment Subsidiary DL No. 233a
  DHMI Airports administration 100.00% DL No. 233a
  KIYEM Cost security 100.00% DL No. 233a
  TDI Seaports administration 100.00% Law No. 4046
  THY Airlines 98.17% Law No. 4046
Communication
  PTT Post, telegraph 100.00% DL No. 233a
  TURK TELEKOM A. Ş. Telecommunication 100.00% Law No. 4046;  Law No. 4673
Banking
  ZERBANK Banking (agricultural support credits) 100.00% Law No. 4603;  Law No.  4389
  HALKBANK Banking 99.99% Law No. 4603;  Law No.  4389
  T.KALK.B. Banking (development) 99.08% Law No. 4456;  Law No.  4389
  EXIMBANK Banking (export credit) 100.00% Law No. 3332;  Law No.  4389
a Law Empowered Decree No. 233
Source: Information provided by the Turkish authorities.
123. Given this situation and building on international experience, which shows that countries with
more advanced divestiture and liberalization achievements have been enjoying significant welfare
gains deriving from productivity enhancement of privatized firms, a series of structural reforms were
launched in 2000. These include the downsizing of the public sector through privatization, aimed atrelieving the financial burden of PEs on the nationa l budget, ensuring a sustainable growth path, and a
market-based and competitive production system, while meeting the EU's pre-accession economic
criteria.
124. The privatization programme in Turkey started in 1984.  It involves not only the sale of the
companies but also their ex ante  restructuring in accordance with Privatization Law No. 4046 of
November 1994. The two institutions in charge are the Privatization High Council (chaired by the
Prime Ministry), which decides on the list of companies to be included in (or excluded from) the
privatization portfolio, and the Privatization Administration (PA), which carries out the programme.
However, privatization of some specific PEs is unde rtaken jointly with the relevant ministries and
public authorities, such as the Banking Regulation and Supervision Agency in the case of state banks,and the independent Tender Committee in the privatization of Turk Telekom.WT/TPR/S/125 Trade Policy Review
Page 72
125. Companies within the privatization portfolio are privatized through one or more of the
following methods: sale106; lease107; grant of operational rights; establishment of property rights other
than ownership; and profit sharing model and other legal provisions depending on the nature of the
business. In the case of privatization of public service organizations through a transfer of ownership,
separate laws (other than Law No. 4046) have to be adopted.108  Under Law No. 4046, Value
Assessment Commissions are established for the privatization of companies.  The Commissions mustuse at least two value methods
109, as well as various criteria such as industrial, commercial, and social
features, sector and market specifications, and technological structure.  If and when more than 49% of
the capital shares of the following entities are privatized, golden shares must be established due to
their "strategic importance": Turkish Airlines (THY), Ziraat Bankasi, Halk Bankasi, Soil Product
Office, Alcoholic Factory, and Turkish Refinery Corporation (Tupras).110
126. Turkey's privatization programme has proceeded much more slowly than in other emerging
countries, mainly due to the economic crisis of recent years and adverse international conditions.
Actual revenues of the Privatization Administration totalled around US$11.2 billion during 1986-02,
of which US$1.3 billion (18.6% of the total) from foreign investors; whereas total expenditures (such
as transfers to the companies and to the treasury, and capital increase) reached US$11 billion.
127. The State has withdrawn from certain activities such as animal feed, milk processing, cement,
petroleum distribution, and airport ground handling se rvices.  Furthermore, in other subsectors, such
as textiles, tourism, meat and fish products, and maritime transportation, the "decisive" role of the
State has also been transferred to the private sector;  some steps have also been taken to reduce State
influence in the financial sector.111
128. In January 2003, the Government announced an ambitious privatization programme for the
year, expecting the programme to yield sales of US$4 billion112, with cash proceeds reaching
US$2.1 billion by the end of 2003 (quarterly indicative targets have been set to monitor progress in
raising privatization proceeds).113  Some 130 companies (employing around 64,000 people) are in the
privatization portfolio (Table III.16).  Among the most important PEs listed for privatization in the
coming years are114: Turk Telekom, Tekel (the tobacco and alcohol monopoly), THY, Tupras, Petkim
                                                     
106 Sale is the transfer of ownership of units of goods and services of the assets of companies in full or
partially, or transfer of all or some of the shares of  these companies through domestic or international public
offerings, block sales to real and/or legal entities, block sales including deferred public offerings, sales to
employees, sales on the stock exchanges by standard or special orders, and sales to investment funds and/orsecurities investment partnerships, taking into consideration the prevailing conditions of the companies.
107 Lease is the grant of the right of use of all or some of the assets of the companies for a defined
period of time.
108 These include companies with national and supplemental budgets and their properties, such as
hospitals, ports, and highways; public economic enterprises offering public services under monopoly; and
enterprises with national and supplemental budgets that are in the form of an exclusive monopoly and/or publiceconomic enterprises that serve within the framework of their original establishment tasks.
109 The methods are: net present value, book value,  net asset value, depreciated replacement value,
liquidation value, price/cash flow ratio, price/profit ratio, market capitalization value, market/book value, and
expertise value.
110 Privatization Administration (2002).
111 Privatization of public banks commenced with Summerbank and continued with Etibank,
Denizbank, and Anadolu Bank. The international and domestic offering of the 12.3% state shares in Is Bank inMay 1998 has been the largest public offering in Turkey (Privatization Administration, 2002).
112 This figure is about half of the total privatization revenue of the past 17 years.
113 IMF (2003).
114 Some of the privatizations are expected to be finalized by end-2003.Turkey WT/TPR/S/125
Page 73
(petrochemical industry), Tugsas/affiliates and its subsidiary Igsas (fertilizer companies), National
Lottery (the relevant law was enacted recently), as well as some public banks (Halk Bankasi and
Vakiflar Bankasi), and the electricity generation and distribution facilities. The sugar industry as a
whole is being liberalized, and privatization is envisaged in the near future.  Tupras will be privatized
via block sale; Tekel through a combination of block sale and asset sale;  and in the case of THY a
tender announcement is planned for the first quarter of 2004, for privatization through block sale andpublic offering.  Preparations for the sale of Turk Telkom, which has long been in the privatization
portfolio, will continue, but a detailed schedule has not been disclosed.
Table III.16
Selected companies in the privatization portfolio, October 2003
Company nameShare owned by
privatization
administrationField of activity Privatization method
Companies in the privatization programmea
EBK Et ve Bal ık Ürünleri A. Ş.b100.00 Meat, fish, poultry Asset sale/block sale
SÜMER Holding A. Ş.b,c100.00 Textile, leather, ceramics,
carpetAsset sale/block sale
TDİ-Türkiye Denizcilik İşletmeleri A. Ş.b100.00 Maritime Transfer of management
rights for port and urban
lines. Asset sale of ferries
and lands, sale of maritime
lines
SEKA-Türkiye Selüloz ve Ka ğıt Fab. A.Ş.b100.00 Pulp and paper production Asset sale
TÜGSAŞ-Türkiye Gübre San. A. Ş.b100.00 Fertilizer Block sale
ETİ Bak ır A.Ş. 100.00 Copper Sale
ETİ Gümüş A.Ş. 100.00 Silver Block sale
ETİ Krom A. Ş. 100.00 Chrome Block sale
ETİ Elektrometalürji A. Ş. 100.00 Electrometallurgy Block sale
TDÇİ-Türkiye Demir ve Çelik İşletmeleri A. Ş. 100.00 Iron and steel In process of liquidation
TEKEL-Tütün, Tütün Mamülleri, Tuz ve Alkol İşl.
A.Ş.b100.00 Alcohol and tobacco
productionAsset sale/block sale
DİV-HAN/Divri ği Hekimhan Madenleri San. ve
T.A.Ş.100.00 Mining Sale, transfer of management
rights, hire and/or
combination of all
ESGAZ-Eski şehir Şehiriçi Do ğalgaz Dağıtım,Tic.
ve Taah. A. Ş.100.00 Gas distribution Block sale
BURSAGAZ-Bursa Şehiriçi Do ğalgaz
Dağıtım,Tic. ve Taah. A. Ş.100.00 Gas distribution Block sale
YEAŞ-YENİKÖY Elektrik Üretim ve Tic. A. Ş. 100.00 Electricity generation Sale
KEMERKÖY Elektrik Üretim A. Ş. 100.00 Electricity generation Sale
KBİ-Karadeniz Bak ır İşletmeleri A. Ş.b99.99 Copper Sale
ETİ Alüminyum A. Ş. 99.99 Bauxite ..
GERKONSAN-Gerede Çelik Konstrüksiyon ve
Teçhizat Fab. San. ve Tic. A. Ş.99.95 Iron and steel construction Block sale
THY-Türk Hava Yollar ı A.O. 98.17 Air transport Block sale/public offering
PETKİM Petrokimya Holding A. Ş.b88.86 Petrochemicals Block sale
TÜPRAŞ- Türkiye Petrol Rafinerileri A. Ş.b65.76 Petroleum refining Block sale
ATAKÖY Turizm Tesisleri ve T.A. Ş. 58.59 Tourism Block sale
ATAKÖY Otelcilik A. Ş. 56.49 Tourism Block sale
Baha Esat Tekand Kütahya Şeker Fab.A. Ş. 56.00 Sugar processing Block sale
KTHY-K ıbrıs Türk Hava Yollar ı Ltd. Şti. 50.00 Air transport Sale
Türkiye- Libya Ortak Tar ım ve Hayvanc ılık A.Ş. 49.70 Agriculture and livestock Block sale
GÖNEN G ıda Sanayii A. Ş. 49.00 Food In process of liquidation
Table III.16 (cont'd)WT/TPR/S/125 Trade Policy Review
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Company nameShare owned by
privatization
administrationField of activity Privatization method
ERDEMİR-Ereğli Demir ve Çelik Fabrikalar ı
T.A.Ş.b46.12 Iron and steel Block Sale/Public Offering
ÇAYELİ Bak ır İşletmeleri A. Ş. 45.00 Copper Sale
Yeni Çeltek Kömür ve Madencilik A. Ş. 16.00 Coal and mining Block sale
ATAKÖY Marina ve Yat İşletmeleri A. Ş. 15.07 Tourism Block sale
Amasya Şeker Fabrikas ı A.Ş. 15.00 Sugar processing Block sale
Companies in the scope of privatizationa
TŞFAŞ-Türkiye Şeker Fabrikalar ı A.Ş. 99.99 Sugar processing Sale of the plants arranged in
groups
TİGEM Tar ım İşletmeleri Genel Müdürlü ğü .. Agriculture ..
Entities in the privatization programme
YATAĞAN Elektrik Üretim Tesisi .. Electricity generation ..
Araç Muayene İstasyonlar ı .. Motor vehicle inspection ..
Entities in the scope of privatization
Manavgat Çay ı İçme Suyu Tesisi .. Fresh water production ..
Edirne-İstanbul-Ankara Otoyolu .. Highway ..
Pozant ı-Tarsus-Mersin Otoyolu .. Highway ..
Tarsus-Adana-GaziantepOtoyolu .. Highway ..
Toprakkale İskenderun Otoyolu .. Highway ..
İzmir-Çeşme Otoyolu .. Highway ..
İzmir-Ayd ın Otoyolu .. Highway ..
Boğaziçi Köprüsü .. Bridge ..
Fatih Sultan Mehmet Köprüsü .. Bridge ..
Thermal power plants (11) .. Energy ..
Hydroelectric power plants (16) .. Energy ..
Stream power plants (55) .. Energy ..
Distribution areas (19) .. Energy ..
Companies to be privatized according to their
own laws
Türk Telekomünikasyon A. Ş. 100 % state-
ownedTelecommunications ..
Milli Piyango İdaresi Genel Müdürlü ğü .. Lottery ..
.. Not available.
a Organizations in the scope of privatization, which are to undergo financial and legal preparatory work for privatization, will
retain their existing status and remain associated to the related Ministries or institutions until the completion of the restru cturing
process. The related financial and legal restructuring process for privatization will be carried out by the organization(s) to be
designated by the Privatization High Council. Upon completion of restructuring for privatization, organizations will then be
included in the privatization programme through a new decision of the Council. Organizations that are taken directly into theprivatization programme and organizations that are restructured for privatization (excluding the capital shares and assets of t heir
subsidiaries and the capital shares and assets of the organizations that are not in the nature of a subsidiary, but have a majo rity of
the capital owned by the state) will be deemed to have been transferred to the Administration as of the date of the Council'sdecision without any further transaction or payment of any consideration. Organizations taken into the privatization programme
and transferred to the Administration will be deemed to have been disassociated from their related Ministry or organization and
brought within the range of the Administration, as of the date of the Council's decision.
b Some of the shares/assets of these companies have been privatized.
c Fifteen Participation Shares were transferred to Sümer Holding on 12 March 2001.
Source: Information provided by the Turkish authorities.
129. The authorities hope that the privatization process will contribute to Turkey's fiscal
consolidation programme. However, if past trends continue, privatization may reduce public liabilities
only marginally. According to the OECD, to encourage the privatization programme, Turkey should,
inter alia , remove all obstacles for wider involvement of foreign investors, such as existing limits toTurkey WT/TPR/S/125
Page 75
their participation in some PEs; give greater operational autonomy to the PA; and broaden its mandate
to include the privatization of major PEs currently carried out by ministries and subject to political
stalling.115
130. Since its previous TPR, the number of product s that can be imported only by specific state
trading enterprises (STE) in Turkey has dropped from  nine to three (at the HS four-digit level).  The
exclusive rights of the Turkish state monopoly (TEKEL), on the importation of ethyl alcohol, andcertain spirits and beverages containing alcohol, including beer, wine, liquors, and other spirituous
beverages, were terminated by Law No. 4619 (published in the Official Gazette  of
20 January 2001).
116 Three pharmaceutical products (cinchona bark, used to fight malaria and
syphilis, potassium iodide, and alkaloids of cinchona and their derivatives (quinine))  continue to be
imported only by the Turkish Red Crescent (TRCS), which is one of only two STEs still operating inthe country;  the other is TEKEL
(iii) Competition policy and price controls
131. No major changes have been made to the competition policy framework in Turkey since its
last TPR.117  The Law on the Protection of Competition (No. 4054 published in the Official Gazette  of
13 December 1994) remains the main legal basis covering competition in both goods and services; itsmain objective is to create an efficient competitive environment in the country.  Moreover, Turkey has
adopted secondary legislation with a view to aligning its legislation on the EU's acquis
communautaire .  Since October 1997, the Competition Authority (CA) has been responsible for the
implementation and the enforcement of the law.
118
132. The law addresses three main categories of issues: (i) agreements, decisions, and concerted
practices that hinder, distort or restrict competition among enterprises (Article 4);  (ii) abuse of
dominant position by enterprises (Article 6);  and (iii) mergers and acquisitions that distort thecompetitive structure of the market (Article 7). Pursuant to Article 4, all agreements that distort,
restrict or prevent competition are prohibited, except where an exemption is granted by the
Competition Board in accordance with Article 5 of the Act.  Without regard to the place of operation,
any agreement, decision, concerted practice, abuse of dominant position, merger or acquisition that
impairs the Turkish market falls within the scope of the law.  Thus, agreements between Turkish andforeign companies or even between foreign compan ies may fall within the scope of the law if they
affect market conditions in Turkey, even when the agreements are concluded outside Turkey.
133. The CA still consists of an eleven-member Boar d; it is financed mainly under the total budget
of the MIT and from a 0.04% levy on capital increases of companies. The Board may grant negative
clearance (Article 8), which confirms that the behaviour concerned is not considered to be contrary tothe competition rules.  It may request information (A rticle 13), open investigations (Article 15), and
impose penalties (Articles 16, 17, 18, and 19). All sectors are treated equally under the law.  However,
                                                     
115 OECD (2002b).
116 In addition to this, a new autonomous board, the Tobacco, Tobacco Products and Alcoholic
Beverages Market Monitoring Boards, was established by  Law No. 4733 ( Official Gazette  of 9 January 2002,
No. 24635) for monitoring and supervising the production, sale, and trade of alcoholic beverages.
117 The substantial provisions of Turkey's competition law are described in detail in WTO (1998).
118 The CA was constituted by a Decree of Council of Ministers published in Official Gazette
No. 22918 of 27 February 1997. It has a total staff of 319 (7 managers, 90 experts, and 222 auxiliary staff). The
decision-making body of the CA is the Competition Board.WT/TPR/S/125 Trade Policy Review
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Article 5 empowers the Board to issue notifications granting block exemptions, for a period of up to
five years, to certain categories of agreements.119
134. Some of the independent regulatory institutions that exist in Turkey date from 1981
(Table III.17).  Steps are being taken to coordinate the activities of the CA with those of regulatory
authorities such as EMRA120, and the Telecommunications Authority.121 Apart from energy and
telecommunications, regulatory bodies have been set up for the capital market, radio and televisionbroadcasting, banking, sugar, and tobacco and alcoholic beverages, with the aim, inter alia , of
regulating and supervising markets, and protecting consumers against monopolistic behaviour. The
regulatory body for telecommunications was set up specifically to regulate the market during the
privatization process. Likewise, the regulatory body for energy has been set up to regulate and
monitor the electricity and natural gas markets during and after the privatization process throughmechanisms such as licensing, price controls, and dispute settlement.
Table III.17
Independent regulatory institutions in Turkey, September 2003
Institution Law  No./Year Sectors Task
Capital Market Board 2499/1981 Capital markets Regulating and supervising the capital markets and protecting the
rights and interests of investors.
High Audiovisual Board 3984/1994 Radio and television
broadcastingRegulating radio and television broadcasting.
Competition Authority 4054/1994 Goods and services
markets (all sectors)Preventing agreements, decision and concerted practices, and
abuse of dominant position by undertakings which hinder, distortor restrict competition in goods and services markets;  facilitatingthe regulation and supervision to protect competition;  controlling
mergers and acquisitions.
Banking Regulation andSupervision Agency4389/1999 Banking Protecting the rights and interests of depositors;  laying down the
principles regarding the establishment, management, operation,
acquisition, merger, liquidation, and supervision of banks in orderto ensure efficient operation of the credit system with due regardto the requisites of economic development, and confidence and
stability in financial market.
TelecommunicationsAuthority4502/2000 Telecommunications Constituting a dynamic and strong market based on fair
competition;  contributing to the sectoral policy-making process;taking measures to protect consumer rights;  ensuring efficient and
productive use of scarce resources in the sector such as frequency
and number.
Table III.17 (cont'd)
                                                     
119 Article 4 (outlining certain prohibited practices) can be declared inapplicable if an activity
(a) contributes to the improvement of production or distribution of goods, and provides services or promotestechnical or economic progress;  (b) allows consumers a fair share of the resulting benefit;  (c) does not
eliminate competition in a substantial part of the relevant market;  and (d) induces a restraint on competition that
is more than necessary for the attainment of the objectives referred to in (a) and (b) above.
120 In 2001, the Electricity Market Regulatory Authority was renamed Energy Market Regulatory
Authority (EMRA) and its powers were extended to include natural gas.  EMRA seeks advice and opinion of theTurkish Competition Board for its regulatory legal instruments, and the latter provides it with technical
assistance in competition-related matters. In general, the competition authority is responsible for general
competition issues (e.g. mergers, collusion), while technical and specific issues are handled by the relevantregulatory bodies.
121 The Telecommunication Authority and the CA signed a Protocol to inform each other and seek
respective opinions about competition-related cases. However, because of the overlapping responsibilitiesarising from the Telecommunications Law and Law No. 4054 concerning competition investigations, further
clarification is needed to determine who holds the real power in matters involving competition concerns.
OECD (2002).Turkey WT/TPR/S/125
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Institution Law  No./Year Sectors Task
Energy Market Regulatory
Authority4628/2001
4646/2001Electric energy
Natural gasConstituting a financially strong, stable and transparent energy
market operating under private law in a competitive environmentto provide adequate, refined, continuous and environment-friendlyelectricity and natural gas;  ensuring independent regulation and
supervision in the market.
Sugar Board 4634/2001 Sugar, starch-based
sweetenersRegulating the sugar regime through establishment of procedures
and principles regarding sugar production, and the conditions and
methods of price setting and marketing.
Tobacco, Tobacco Productsand Alcoholic Beverages
Market Regulation Authority4733/2002 Tobacco, tobacco
products, and
alcoholic beveragesRegulating the procedures and principles regarding production,
domestic and external purchase and sale of tobacco and tobacco
products.
Public ProcurementAuthority4734/2002 All public institutions Determining the procedures and principles to be applied in public
procurements;  examining the complaints concerning all public
procurements.
Source:  Information provided by the Turkish authorities.
135. From 1997 to May 2003, 2,218 cases were handled by the CA and 1,822 (82.1%) were
resolved (Table III.18).  Cases of competition infringements represented 58.5% of all cases during the
period, followed by mergers and acquisitions (22.1%), and exemptions and negative clearance(19.4%).
Table III.18
Cases handled and resolved by the Competition Authority, 1997-May 2003
1997 1998 1999 2000 2001 2002 2003aTotal
Competition infringements
  Investigations 22 177 220 255 213 265 146 1,298
  Cases resolved 9 44 306 262 211 217 112 1,161
Mergers/acquisitions
 Investigations 8 59 80 103 82 115 43 490
 Cases resolved 5 52 76 101 88 102 44 468
Negative clearance/exemption
 Investigations 0 245 44 41 42 35 23 430
 C a s e s  r e s o l v e d 01 26 42 35 23 5 7 1 9 3
Total
 Investigations 30 481 344 399 337 415 212 2,218
 Cases resolved 14 108 446 386 351 354 163 1,822
aU p  t o  3 1  M a y .
Source: Information provided by the Turkish authorities.
136. Certain products, such as cereals, energy, and services, mainly utilities, are subject to price
controls. For electricity, tariffs for transmission, distribution, and wholesale (for TETAS, state-owned
wholesale company), and for retail to "eligible cons umers" are subject to EMRA Board approval.  The
pricing method under the EMRA regulation (with pr ice subject to approval by EMRA Board) is
"revenue cap" for transmission tariff, "hybrid" for distribution tariff, and "cost based" for TETAStariffs; the "price cap" method is used for the retail sale tariff applicable to non-eligible consumers.
For natural gas, wholesale, retail sale, transmission, storage, and city distribution tariffs are subject to
approval by EMRA Board; a price cap is determined in accordance with principles and procedures set
by EMRA.  Petroleum products subject to price contro l are gasoline, kerosene, diesel oil, heating oil,
fuel oil (1% sulphur), fuel oil (3.5% sulphur), and LP G.  Coal prices are set by SEEs operating in the
industry; the prices may be influenced by the Go vernment (Chapter IV(3)(iii)(b)).  The "opening"
price of locally produced tobacco for sale outside contracts and/or auction is determined by TAPDK.WT/TPR/S/125 Trade Policy Review
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(iv) Protection of intellectual property rights
(a) Overview
137. As part of its harmonization efforts towards adopting EU's legislation on intellectual property
rights (IPRs), and in accordance with its commitments under the WTO TRIPS Agreement, Turkey has
introduced some changes to its intellectual property regime since its last TPR.  The changes include:
(i) extension of patent protection to pharmaceutical products (since 1 January 1999); (ii) enactment ofLaw No. 4630, which entered into force on 3 March 2001 and amended Law No. 5846 on intellectual
and artistic works
122; (iii) establishment (in 2001) of two courts specialized in intellectual property
matters in Istanbul, where infringement cases are re latively larger than in other Turkish cities; and
(iv) establishment of 81 Anti-piracy Inspection Commissions in March 2002.123  In recognition of
Turkey's progress in the TRIPS area the United States removed Turkey from its Special 301 PriorityWatch List, in 2001, and placed the country on its Watch List.  However, the same year private
industries reported piracy of 58% in software and 30% in music.
124
138. Intellectual property rights legislation in Turkey is composed mainly of:  the Establishment
and Functions of the Turkish Patent Institute D ecree (No. 544), Patent Rights Protection Decree (No.
551), Industrial Design Decree (No. 554), Geograph ical Indications Decree (No. 555), Trade Mark
Protection Decree (No. 556), Amendi ng Law of Patent, Design, Geographical Indications and Trade
Mark Decrees (No. 4128), Law on Intellectual and Artistic Works (No. 4630), and Law on Cinema,
Video and Musical Works (No. 3257).  The Bill on Breeder Protection Rights for New Plant
Varieties, and the Bill  on the Protection of Layout-Designs of Integrated Circuits are awaiting
adoption.125 The Turkish intellectual property legislation was reviewed by the WTO TRIPS Council
on 27-30 November 2000.126
139. The main institutions responsible for intellectual property matters are: the Turkish Patent
Institute (TPI) for issues related to industrial property, such as patent, trade mark, geographical
indications, designs, and chip topographies; the Directorate-General of Copyrights and Cinema in the
                                                     
122 The amended Law No. 4630 provides for retroactive protection; rearranges the right of
communication to the public; rearranges provisions related to the rights of authors, and financial and moralrights of related right owners, and fundamental and excluded rights, such as protection and transmission (filmproducers have also been accepted among the related ri ght owners); protect codes representing information
contained in works specified by authors or right owners during communication and transmission of works of artto the public (additional Article 4) in accordance with the WIPO Treaties; and increases penalties against piracy.
WIPO Copyright Treaty, Articles 11 and 12, and WIPO Performances and Phonograms Treaty, Article 18 and
19.
123 These Committees consist of ministry, local government, and police staff, and representatives of the
professional associations, which monitor piracy cases with in individual districts. An information campaign has
also been launched to raise awareness of the need to combat fraud and piracy. European Commission (2002) .
124 European Commission (2002) .
125 Other laws and regulations that contain provisions on intellectual property law are: Contract Law
(No. 818), Turkish Commercial Code (No. 6762), Regulation on Pharmaceutical Products, Civil Servants Law(No. 657), Customs Law (No. 4458), Civil Procedure Law (No. 1086) and Criminal Procedure Law (No. 1412),and the Turkish Constitution (regarding provisions on judiciary). See WTO document IP/N/1/TUR/2 of3 July 2000.
126 WTO document IP/Q-Q4/TUR/1 of 12 April 2001 contains the introductory statement made by
Turkey, as well as the questions posed and answers given during the review.Turkey WT/TPR/S/125
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Ministry of Culture and Tourism for issues related to copyright and related rights127; the Directorate-
General of Customs in the Undersecretariat of Customs for issues related to border measures; the
Ministry of Agriculture for plant breeders' rights; and the Ministry of Justice for enforcement before
the courts.128
140. Table III.19 indicates the status of Turkey in international agreements, conventions and
treaties related to intellectual property rights.  In November 2000, Turkey acceded to the EuropeanPatent Convention (EPC). The process of accession to the WIPO Copyrights Treaty and the WIPO
Performances and Phonograms Treaty is not completed yet but it is on the agenda of the Ministry of
Culture and Tourism. This also applies to industrial property rights with respect to accession to the
Geneva Text of the Hague Agreement on Internati onal Registration of Industrial Designs, and WIPO's
Trademark Law.  Draft laws for participation in such agreements, as well as on protection of thetopographies on the integrated circuits, are currently under consideration by the Prime Minister.
Adherence to the International Union for the Protection of New Varieties of Plants (UPOV)
Convention is to be made after promulgation of th e Bill on the Protection of Plant Breeders' Rights.
Table III.19
Turkey's participation in international agreements, conventions, and treaties, September 2003
Name Turkey's status
Paris Convention on the Protection of Industrial Property (1883) Member since 1925
Berne Convention for the Protection of Literary and Artistic Works (1886) Member since 1952
Convention establishing WIPO (1967) Member since 1976
Rome Convention for the Protection of Performers, Producers of Phonograms  and
Broadcasting Organizations (1961)Member since 1995
Nice Agreement concerning the International Classification of Goods and Services for the
purpose of Registration of Marks (1957)Member since 1 January 1996
Patent Co-operation Treaty (1970) Member since 1 January 1996
Vienna Agreement Establishing an International Classification of the Figurative Elements
of Marks (1973)Member since 1 January 1996
Strasbourg Agreement Concerning the International Patent Classification (1971) Member since 1 October 1996
Budapest Treaty on the International Recognition of the Deposit of Micro-Organisms for
the Purpose of Patent Procedure (1977)Participation from 1998
Protocol relating to Madrid Agreement (1996) Participation from 1999
Locarno Agreement Establishing an International Classification for Industrial Designs
(1968)Participation from 1998
European Patent Convention (1973) Participation from 1 November 2000
Source : Information provided by the Turkish authorities.
141. Parallel imports of goods and services containing any form of intellectual property rights are
prohibited in Turkey.  Turkish legislation on copyright, trade marks, designs, and patents provide for
national exhaustion of distribution rights, which enables the right holders to prevent parallel
importation of protected products put on the market in other countries.129  In 2000, the Competition
Board of Turkey decided that parallel imports cannot be prohibited. This decision was laterchallenged and the case is before the Council of State, the body of last instance.
                                                     
127 The Ministry of Culture and the Ministry of Tourism have been merged into the Ministry of Culture
and Tourism with the adoption of the Law on the Organization and Responsibilities of the Ministry of Cultureand Tourism (Law No. 4848 of 16 April 2003).
128 For details, see WTO (1998).
129 Article 6 of the TRIPS Agreement provides that, for the purposes of dispute settlement, nothing in
the Agreement shall be used to address the issue of exhaustion of intellectual property rights, provided that the
national treatment and MFN treatment obligations are met.WT/TPR/S/125 Trade Policy Review
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(b) Patents
142. Decree Law No. 551 on the Protection of Patent Rights, which entered into force on
27 June 1995, is the main legislation.  It provides for the possibility of converting a patent application
into a utility model, and vice-versa130;  the granting of patents by examination and non-examination;
patentability criteria (novelty, inventive activity/step, industrial applicability);  publication of
applications;  opposition by third parties; non-renewable protection periods of seven years fornon-examined patents, ten years for utility model certificates, and 20 years for examined patents;
employee inventions; penalties against infringement;  and the establishment of special courts.  An
applicant not living in the country has to appoint a lo cal patent agent. Subject to this, foreigners are
entitled to the same rights and privileges and are subject to the same obligations as nationals.
143. Micro-organisms and microbiological processes are patentable in Turkey.  Pharmaceutical
products and processes have had patent protection since 1 January 1999, in accordance with Turkey's
commitments under both the TRIPS Agreement and the CUD.
131
144. Provision is made for granting compulsory licences on the grounds that a patent was not put
into use or that the delay in the use thereof was not due to justifiable/legitimate reasons or that the use
has been suspended during an uninterrupted period of three years (Article 100 of Decree LawNo. 551). Articles 39 and 40 of the Implementing Regulation set out the provisions related to proof of
use, which also includes the importation of patented products.
145. New patent legislation is currently under preparation, and is aimed at completing
harmonization of the Turkish patent system with th e EU system.  During the preparation of the new
patent legislation, provisions of the European Pate nt Convention and Patent Law Treaty are also taken
into consideration.
(c) Trade marks146. Decree Law No. 556 on the Protection of Trademarks, which entered into force on
27 June 1995, is the main legislation, and includes a registered trade mark protection system for goods
and services, guarantee marks, and collective marks.  The protection is effective for ten years from the
date of registration and can be renewed for similar periods.  A licence may be exclusive or non-
exclusive, and, unless otherwise provided in the contract, the licence shall be understood to be non-exclusive.  Turkey does not require the trade mark to be registered in the home country or in any other
country.
(d) Copyright
147. The main legislation on copyrights is Law No. 4630 on Intellectual and Artistic Works, which
entered into force on 3 March 2001 and amended Law No. 5846. The main aim of the Law is to fulfilTurkey's obligations under both the acquis communautaire  and the TRIPS Agreement by increasing
the penal provisions (from three months to three years imprisonment and maximum fines of
TL 600 million) previously to 2-6 years imprisonment and TL 10-150 billion, and by amending the
rights of the author and related rights, such as performers having neighbouring rights, producers of
                                                     
130 Utility models differ from inventions of patents in two respect: first, less technological progress is
required for invention of a utility model; and, second, the maximum term of protection provided by the law for autility model is generally much shorter.
131 Because of its developing-country status, Turkey had five years from the entry into effect of the
TRIPS Agreement to apply the provisions of the Agreement.Turkey WT/TPR/S/125
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phonograms and broadcasting organizations, and rights of film producers. Protection is for lifetime of
an author plus 70 years.
148. The law includes software as a literary work, and provides for the establishment of more than
one professional union in the same area. Right of communication to the public has been added
through the amendment to Article 25 of the Law.  This arrangement will enable electronic commerce
of a work of art, upon permission by the author. An amendment to Article 80 of the Law hasrearranged provisions related to the rights of authors, and financial and moral rights of owners and
fundamental and exclusive rights such as reproduction, and transmission. Within this arrangement,
film producers have been accepted as related right owners.
149. An additional Article 4 to the law aims to protect information related to works and the codes
representing this information, as specified by the authors or right owners, during communication ofthese works to the public. Furthermore, mechanisms and penalties have been set up to combat piracy.
Within this framework, anti-piracy inspection commissions have been set up in 81 cities.  Specialized
courts have been set up, penalties for the repetition of crime related to piracy have been increased, and
arrangements have been put in place allowing for closure businesses that reproduce pirated copies;
sanctions range from 2-6 years imprisonment and fines of TL 10-150 billion in case of infringement.
(e) Industrial designs
150. Decree Law No. 554 on Industrial Designs, which entered into force on 27 June 1995, is the
main legislation; it provides for the protection of designs that are new and distinctive. A design is
considered new if, before the date of application, no identical design has been made available to the
public anywhere in the world.  A registered design is protected for five years from the filing date, and
protection may be renewed for periods of five years, with a total protection period of 25 years.
Protection for unregistered designs is provided through the unfair competition provisions of theTurkish Commercial Code.
(f) Other areas
151. Turkey also provides protection for geographical indications through the Decree Law No. 555
on the Protection of Geographical Signs, which entered into force on 27 June 1995. Protection is
based on registration and covers all goods, in addition to wines and spirits. Protection for unregisteredgeographical indications is provided through the unfair competition provisions of the Turkish
Commercial Code.
152. Draft laws on the protection of semiconductor chip topography and on the protection of plant
breeders' rights were introduced to Parliament in 2001, and are expected to enter into force in 2004.
153. The Turkish legislation on intellectual property rights does not provide for anti-competitive
practices in contractual licences.  This subject is governed by the Protection of Competition Act
(section (iii) above)).
(g) Enforcement
154. Infringements of patents (Part X of Decree Law No. 551), copyrights (Part V of Decree Law
No. 4630), trade marks (Part VIII of Decree Law N o. 556), industrial designs (Part VI of Decree Law
No. 554), and geographical indications (Part IV of Decree Law No. 555) can be challenged in a
domestic court of law.  Foreigners can also challenge patent holders in Turkish courts. There are four
specialized penal courts and three specialized civil courts.  Persons making false statements during the
process of granting an industrial property right, or those removing, without authority, the signWT/TPR/S/125 Trade Policy Review
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indicating an industrial property right on a product, or falsely presenting themselves as the owner of
an industrial property right are subject to a maximum fine of TL 1 billion and imprisonment for up to
four years (in case of copyright, the maximum fine is TL 150 billion and imprisonment for up to six
years).
155. The Turkish Constitution stipulates that cases should be dealt with expeditiously and with the
least possible cost.  The party who loses a case pays the costs including the attorney's fees.  The Statebears the cost of carrying out criminal proceedings, but the convicted person pays the expenses at the
end of the procedure.
 The number of penal actions brought under IPR legislation increased from
1,837 in 2000 to 4,318 in 2001, and the number of civil actions rose from 1,308 to 2,558.
Approximately half of total actions were in Istanbul.
156. Article 57 of the Customs Law sets out a procedure to enable the right holder or his/her
representative apply for the suspension by customs authorities of the customs procedures for goods
complying with the description counterfeit trade mark or pirated copyright goods.132 Customs
authorities may also suspend the procedure on their own initiative, where solid evidence is available.
Article 57 also authorizes Customs to secure the value of goods in question from the applicant and
regulates the liability of customs authorities, obligation of the right holder to initiate a legalproceeding leading to a decision on the merits of the case or precautionary measures by a duly
empowered authority, destruction or disposal of the goods after suspension of the related customs
procedures. The Article does not apply to goods bearing a trade mark with the consent of the trade
mark holder or protected by a patent, or by a copyright which have been manufactured by the consent
of the right holder but are going through customs procedures without the right holder's consent, or to
goods of a non-commercial nature, and travellers personal luggage or goods sent in small
consignment.
157. A public anti-piracy campaign was begun in 1998 and efforts have continued towards
educating businesses, consumers, judges, prosecutors, and others regarding the implications of the
IPR legislative framework.
                                                     
132 The customs procedures of the goods infringing intellectual property rights regarding trade marks,
geographical indications, and industrial designs and the rights covered by the Intellectual and Artistic Works
Law are regulated by Article 57 of the Customs Law No. 4458, and entered into force on 5 February 2000.