 WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/125/Add.1 
9 February 2004 
 (04-0497) 
Trade Policy Review Body 
17 and 19 December 2003 Original:  English/ 
                 anglais/                  inglés 
  
 
TRADE POLICY REVIEW 
TURKEY  
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Ms Mary Whelan (Ireland) 
 This document contains the advance writte n questions, and replies provided by Turkey.1 
__________________________________________________________________________________ 
 
Organe d'examen des politiques commerciales 
17 et 19 décembre 2003  
EXAMEN DES POLITIQUES COMMERCIALES 
TURQUIE 
Compte rendu de la réunion
 
Addendum  
Présidente:  S.E.  Mme Mary Whelan (Irlande) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par la Turquie .1 
__________________________________________________________________________________  Órgano de Examen de las Políticas Comerciales 17 y 19 de diciembre de 2003  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
TURQUÍA 
Acta de la reunión
 
Addendum  
Presidente:  Excma. Sra. Mary Whelan (Irlanda) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por Turquía.1 
  
                                                     
 
1 In English only./En anglais seulement./En inglés solamente.  WT/TPR/M/125/Add.1 
 Page 3 
 
 
ADVANCE WRITTEN QUESTIONS BY MEMBERS AND 
REPLIES PROVIDED BY TURKEY 
 
 
I. ECONOMIC ENVIRONMENT 
INVESTMENT  
Question (Switzerland):  
 
The Swiss Government welcomes the efforts (a series of new laws and decrees in the fields of 
foreign direct investment) made in recent y ears by the Turkish authorities concerning the 
improvement of the investment environment in Turk ey, in particular the new law on "Foreign Direct 
Investment" of June 2003. Switzerland is pleased to learn that the new law on "Foreign Direct 
Investment" includes a number of key elements for i nvestors such as (investor-friendly) definitions of 
foreign direct investment and foreign investors in  accordance with international standards, a policy 
shift from ex-ante control to a promotion approach  with minimal ex-post monitoring and reassurance 
of existing guarantees with regard to foreign inv estor's rights such as national treatment, protection 
against expropriation etc. However, Switzerland w ould appreciate if the Turkish authorities could 
provide it with some additional information rela ting to their experiences made under the national 
strategy to increase the overall level ... of firms ope rating in Turkey, particularly the experiences made 
by the Coordination Council for the improvement of Investment Environment (CCIIE). 
 
Question (Australia):  
 
 Australia welcomes Turkey’s intention to intr oduce new legal and administrative measures to 
attract foreign direct investment.  When does Turk ey envisage that this process will be complete, and 
what opportunities will the process afford foreign companies? 
 
Answer:  
 
 Turkey has already a private sector driven econom y; however, we believe that we still need to 
take further steps that will drive our domestic ma rkets to operate efficiently in a competitive, 
transparent and predictable environment. To this end, the government policy is oriented towards 
creating a small but an efficient public sector to provide more room for private sector activities. We 
are deepening this transmission process through  public sector reforms to decentralize the 
administration; fiscal reforms to better manage the expenditure policy; tax reforms to create an equitable tax system; banking reform to consolidate th e gains achieved in bank restructuring; judicial 
reforms to enhance corporate restructuring, and ag ricultural reforms to modernize agricultural system 
and support policies. 
 
The Government of Turkey in 2001 has launc hed a reform process in order to improve the 
investment climate since complex and time-cons uming administrative procedures could discourage 
investors despite other attractive features that a country might have. 
 
 Taking into account the findings and recommenda tions of a diagnostic study and the project 
on administrative barriers to investment conducted jointly by the Government of Turkey and the 
Foreign Investment Advisory Service (FIAS), a join t facility of the International Finance Corporation 
(IFC) and the World Bank, the Government enacted a “Decree on Improving the Investment Climate in Turkey” on December 11, 2001 as a part of a national strategy to increase the overall level of 
income and productivity and to raise the level of competitiveness of firms operating in Turkey. WT/TPR/M/125/Add.1 
Page 4  
 
The challenge facing the government was how to  implement the reform vision in the most 
efficient manner that would streamline administra tive procedures while incorporating private sector 
feedback on the measures to be taken. As observed by the FIAS project team there was certainly a 
need for the Turkish national, regional and municipa l authorities to seek increased participation of the 
private sector in the reform process. 
 
Within this framework, a three-phase strategy w as designed and started to be implemented to 
facilitate the reform process.   
First, a clear vision and a consistent direction for the reform were embodied in the December 
2001 ministerial decree in order to demonstrat e political commitment and consensus behind the 
reform scheme. The decree established a coor dinating body, Coordination Council for the 
Improvement of the Investment Environment (CCI IE), with the mandate to identify and remove 
regulatory and administrative barriers to bot h domestic and foreign private investments. 
 
Second, a clear and precise action plan defini ng the priorities, the timing and responsibilities 
was formulated. Last but not the least, the CCIIE ha s been holding regular m onthly meetings in order 
to monitor the progress made by the technical co mmittees and  the eventual  changes in private 
investors’ needs.  
The CCIIE convened each month while the tec hnical committees held several meetings to 
discuss existing problems and to submit necessary ac tions to be taken for solution to the CCIIE, 
concerning the following issues:  
• Company registration and reporting 
• Employment 
• Sectoral Licenses 
• Land Acquisition and Site Development 
• Taxes and Incentives 
• Customs and Standards 
• Intellectual Property Rights 
• Promotion of Investment 
• Foreign Direct Investment Legislation  
 
The first CCIIE meeting was held in March 2002, and set targets and timelines for these 
technical committees. Monthly reports of the t echnical committees have been quite positive. The 
Government has taken several steps in complia nce with the recommendations of the technical 
committees.  
 
The new government has also identified this pr ogramme as a priority issue and decided to 
head CCIIE by a minister. Moreover, the Governme nt amended the Council of Minister’s Decree to 
include another technical committee on small and medium enterprises.  
 The reform program has proved to be effective and various legislative changes has been made 
or draft laws has been prepared. Enacted laws as a direct result of the CCIIE process to-date include: 
 
• Law on employment of foreign personnel;  
• The law on the investment allowance system wh ich enables a shift to an automatic state 
aid system became a general tax measure in line with EU requirements;  
• The law that redesigns company registrati on process, which diminishes the prior 19 
required steps to 3 steps and reducing turnaroun d from two and a half months to one day.  WT/TPR/M/125/Add.1 
 Page 5 
 
 
The company registration procedures which prev iously were taking almost two and a half 
months and requiring excessive documentati on and approvals from several authorities 
have been simplified and streamlined. Now the registration can be done in a day. All that 
is required is to fill out a standard form at one point without applying to several different 
authorities for necessary approvals;  
• The labor Law arranges the rights and respons ibilities of workers in working conditions 
and working climate,  
• And, the new up-to-date FDI law that serves as a declaration to foreign investors of their 
rights and will enable a shift from an “investment permission system” to an “investment monitoring system” in conformity with international best practices.  
 
With the new FDI legislation notification based system instead of screening and approval 
system will be in effect.  Also this law defines i nvestment and investor in line with the international 
standards and abolishes minimum capital requireme nt of USD 50,000 per real or legal person for 
foreign investors.  The foreign investors are free to  make foreign direct investments in Turkey and 
also they shall be subject to equal tr eatment with the domestic investors.  
 
The necessity of establishing a concerted and focused investment promotion effort in order to 
compete effectively with other countries was very well perceived by the policy makers who decided 
to include investment promotion in the reform pro cess. The technical committee in charge of building 
an investment promotion institution appropriate fo r the needs and expectations of Turkey made 
substantial progress toward setting up a new entity th at will be supported by both public and private 
sectors. The draft law for establishment of the inv estment promotion agency was submitted to the 
prime ministry at the end of April 2003. 
 
Furthermore, the CCIIE efforts have created pos itive results in several other areas such as 
sectoral licensing, customs and intellectual and indus trial property rights. With respect to customs 
reform, the Undersecretariat of Customs has been  implementing an ambitious reform program to 
improve its administrative efficiency and effec tiveness. The customs auto mated system has been 
rolled-out to 99% of all customs offices and furt her enhanced to assist customs in controlling 
movement of goods. Important steps taken incl ude modernizing customs laws, regulations and 
procedures in line with the EU legislation, and simplifying and harmonizing forms, procedures and 
control techniques in line with those recommended by the World Custom Organization. 
Necessary legislation to strengthen the capacity and infrastructure of the Turkish Patent Institute has 
been submitted to Parliament.   
Finally, land acquisition and site  development for investment as a critical issue for both local 
and foreign investors have been discussed within the relevant technical committee. 
 
With this process various laws ha ve been enacted and several draft laws were submitted to the 
Grand National Assembly of Turkey and to the Prime Ministry. The process will not be completed 
with the ratification of these draft laws. It is planned to be a continu ous process to address the 
problems that would arise in the future.   
Abolishing the complex and time-consuming administrative procedures affords several 
opportunities to the foreign companies. Avoiding cu mbersome, unclear, informal and time-consuming 
administrative procedures could create a transparent and stable business environment, and could lower 
the initial and operational costs for investors.  WT/TPR/M/125/Add.1 
Page 6  
 
Question (Chinese Taipei):
 
 
As indicated in the government report, Turkey  is drafting a law to establish the “Investment 
Promotion Agency of Turkey”. While we understa nd that the law is still pending review by the 
Turkish Parliament, we would like to know at this stag e: (1) whether the agency is going to be official 
in nature or supported by the private sector, (2 ) how would it coordinate  with other government 
agencies, and (3) will investment promotion activities focus on specific sectors?  
 
Answer:  
 
The Law on the establishment of Investment Prom otion Agency of Turkey has already been 
drafted by the Undersecretariat of Treasury in c ooperation with the representatives of public and 
private sector in the relevant technical committee of the Coordination Council for the Improvement of 
Investment Environment. 
 The institutional framework and the powers of th e Agency to be established is designed with 
a view to ensuring effective fulfillment of functions  such as investor servicing,  investment generation, 
image building and policy advocacy.  
The draft law laying down the details of ins titutional framework establishes an agency that 
will be a related institution of the Ministry of State responsible for the Treasury. It will have 
administrative and financial autonomy and not ca rry on regulatory functions such as issuing 
permissions.  
Mainly the Agency will be responsible and have the power for formulation and 
implementation of national investment promotion st rategy in line with Turkey’s foreign direct 
investment policy. It will also play an active role  in the ongoing reform process to improve investment 
environment.  
The agency will be governed by a board com posed of private sector representatives and 
representatives of relevant government bodies.  
The Agency will be empowered to establish re lations with relevant government bodies in 
order to solve specific and general problems of the investment environment.   
 The Agency will carry on both general and sector specific promotion programs according to 
priorities of promotion strategy that will be elaborated after its establishment.   
Question (Canada):
 
 
Paragraph 37 states, “A company can be 100% foreign owned in almost all sectors of the 
Turkish economy. The exceptions are: (i) broad casting, where foreign shareholders' equity 
participation is restricted to 25%; and (ii) aviation,  maritime transportation, ports, fish-processing and 
telecommunications services provided under concession agreements, where it is restricted to 49%. Acquisitions of over 30 hectares by foreigners  are subject to permission from the Council of 
Ministers. Establishments in the financial, petr oleum, and mining sectors require special permission, 
according to appropriate laws (Table II.5).”  
 If the Council of Ministers does not grant permissi on of an acquisition of over 30 hectares, is 
there a right of recourse or re-submission?   WT/TPR/M/125/Add.1 
 Page 7 
 
 
Answer:  
 
In accordance with the Article 125 of the Cons titution of the Republic of Turkey, recourse to 
judicial review shall be open against all actions a nd acts of the administration in Turkey.   Therefore 
foreigners can apply to the Council of State for re viewing the decision of the Council of Ministers.  
 
II. TRADE AND INVESTMENT REGIMES 
WTO  AND DDA  NEGOTIATIONS  
Question (Canada):  
 
In the event that multilateral trade talks do not resume in a timely manner, what does Turkey 
see for the future of its trade strategy? Specifically , which existing arrangements will receive the most 
emphasis? Will Turkey be seeking new a rrangements - regionally or bilaterally? 
 
Question (EU):  
  Bilateral, regional and global trade liberalizati on is vital for promoting prosperity, growth and 
development to the benefits of the world at larg e. The EC considers that the WTO and multilateral 
liberalization is the most certain way for promotin g global interests for industrialized countries and 
developing countries at large.   
• How does Turkey judge the importance a nd possibilities for furthering multilateral 
liberalization and the development of the WTO system in terms of its own trade and development needs? 
 
Answer:
 
 
The WTO and the multilateral trading system since the GATT era proved its validity and 
indispensability to open up mark ets and maintain trade liberalization in a transparent manner.  
 Turkey is convinced that an international trade system embodied within the WTO on the 
principles of reciprocity, equity, mutual understandi ng and non-discrimination can serve the interests 
and welfare of the whole global community. Having this in mind, Turkey has always been a 
proponent of smooth functioning of the multilate ral trading system where all members equally 
participate. Turkey continues to support the priori ty of the multilateral trading system especially for 
those countries lacking necessary bargaining power, technical or human capacities to compete in the 
world markets.  
 Turkey further believes that liberalization of trade at regional or bilateral level can also 
contribute to liberalization and trade expansion in th e global context. From this point of view, Turkey 
as a country bridging different regions of the world with wide range of economic, cultural, social and 
political features considers establishing bilateral and regional trade relations as valuable opportunities 
to further enhance trade liberalization. Regional or  bilateral trade liberalization are complementary 
tools to the multilateral trading system provided that they are fully in compliance with the WTO rules.  
 
Turkey while being fully committed to the multila teral trade liberalization, has been actively 
taken part in many regional in itiatives and continued to expand its economic and trade relations 
bilaterally.  WT/TPR/M/125/Add.1 
Page 8  
 
 As long as the basic principles of the multilate ral trading system are fully respected, trade 
liberalization on both fronts will consolidate th e benefits of the multilateral trading system. 
  Turkey, while carrying out its economic and tr ade relations both bilaterally and regionally on 
the basis of the WTO Rules, will continue its effo rts in the re-launching of the multilateral trade 
negotiations. 
 
R
EGIONAL TRADE AGREEMENTS  
Question (Australia):  
  We note that the Secretariat report (para 17, page 21) states that there is no firm timetable for 
the integration of agriculture into the Turkey -EU Customs Union.  Can Turkey advise whether 
discussions have taken place on a tentative timetable?  
Question (Chinese Taipei):
 
 
The Secretariat Report mentions that the agricu ltural sector is excluded from liberalization in 
the customs union between Turkey and the EU, and th ere is no firm timetable for the integration of 
agriculture.  Could Turkey provide the timetable for its agricultural liberalization policies to be finally 
integrated with those of the EU?  Furthermore, could Turkey please explain how this exclusion is 
consistent with the relevant provisions of Ar ticle XXIV of GATT 1994, which requires a customs 
union to cover substantially all the trade between and among members, within a transition period not 
exceeding 10 years? 
 
According to the Secretariat Report, Turkey h as been following closely the position of the EU 
in WTO negotiations on non-agricultural products.  However, when it comes to agricultural products, 
Turkey takes the position that further tariff reductions  can be considered provided that the developed 
countries substantially reduce or eliminate their export  subsidies and domestic support.  In view of the 
fact that a customs union has been established be tween Turkey and the EU since 1995, could Turkey 
please explain how it intends to move towards harmoni zing its position on agriculture with that of the 
EU while their respective positions on agricu lture negotiations appear to be divergent? 
 
Answer:  
 
Originally, the Ankara Agreement of 1963 that had formed an association between Turkey 
and the EC had foreseen the establishment of a cu stoms union in between covering all sectors of the 
economy. Therefore, in principle, agricultural pr oducts were covered by the Customs Union.  
 
However, during the negotiations of the Custom s Union, the Parties agreed to postpone the 
free movement of agricultural products until Turk ey’s adoption of the EU's Common Agricultural 
Policy (CAP). Nevertheless, Article 24 of the Asso ciation Council Decision No. 1/95 establishing the 
Customs Union between Turkey and the EC included inter alia,  the Parties intention to move towards 
the free movement of agricultural products.    Until the attainment of this objective, which requires the adaptation of agricultural policy of 
Turkey to the Common Agricultural Policy of the EC, the parties committed themselves to improve 
market access conditions. In this regard, the preferences granted in  trade in agricultural products 
already accounted for a large portion of total agricultu ral trade as a result of a separate Decision of the 
Association Council which entered into force on 1 January 1998.   WT/TPR/M/125/Add.1 
 Page 9 
 
 
 With its implementation, in 2002, approximately  97% of Turkey's agricultural exports to the 
EU benefited from preferences while the preferentia l access of EU constitutes to 45% in the Turkish 
market.   Therefore, the time frame required for alignm ent with the CAP will serve as a preparatory 
stage where the current level of agricultural pr eferential trade will gradually be expanded in 
conformity with the requirements of the Ankara Agreement, relevant Protocols and Association 
Committee Decisions.  
As yet, there has been no fixe d plan for the full alignment. 
 
Turkey’s current negotiating position within th e DDA, however, which is primarily based on 
the experience gained since the entry into for ce of the Agreement on Agriculture as well as the new 
requirements under the agricultural reform pr ogramme, aims to improve and increase the 
competitiveness of its agricultural sector. EC’s pos ition in the negotiations, on the other hand, is 
followed closely from the full membership perspective.  
 
Question (Switzerland):
 
 
While § 21 explains that the CUD has strengthened trade relations between Turkey and the 
EU, showing that trade has greatly in creased in absolute terms, Chart II on p. 24 appear s to provide no 
clear indication that the RTAs with EU, EFTA and EC O partners have contributed to the creation of 
mutual trade beyond the level of trade with the rest  of the world. What is the evaluation of the 
Government of Turkey as to the effects of the RTAs concluded in the 90ies? 
 
Answer:  
 
Turkey has implemented a wide range of reform s within the framework of the Customs Union 
between Turkey and the EC, taking it significan tly beyond its Uruguay Round commitments as well 
as generating improved and more sec ure trading opportunities for third countries.  In addition to 
reducing its manufacturing tariffs to the levels of  the EC’s Common Customs Tariff (CCT), Turkey 
has also harmonized much of its legislation with that of the EC in areas such as competition policy, 
customs provisions, intellectual property rights and standards. 
 
With the completion of the Customs Union, Turkish economy has integrated with an 
important economic bloc of the world. Obviously , it has become the biggest impetus to Turkish 
economy since the adoption of liberalization measures of the early 1980’s. With the Customs Union, 
Turkey has opened its internal market to the competition of the EC and third countries, while 
guaranteeing free access to the EC market. Accordingly, in the course of its six-year implementation, both positive and negative reflections of the Customs Union have been experienced. 
 
The EC is clearly the biggest trade partner of  Turkey. In 2002, the EC accounts for 51.3% of 
total exports and 45.4% of total imports. Turkey is an important trade partner of the EC as well. The 
foreign trade statistics of the EC for the year 2002 de monstrate that Turkey ranks eleventh at imports 
and tenth at exports of the EC with shares of 2.13% and 2.47% respectively.  
The Customs Union has strengthened the trad itionally comprehensive trade relations. The 
volume of trade between Turkey and the EC reached to the level of US$41.5 billion in 2002 from the 
level of US$27.9 billion in 1995. 
 
Even though imports from the EC has fluctuated in parallel with internal and external macro 
economic developments, increase rate of imports ha s exceeded increase rate of exports following the WT/TPR/M/125/Add.1 
Page 10  
 
customs union. During the period of 1995-2000, imports from the EC has increased by 57.8%, while exports to the EC has experienced an increase of 30.9%. Yet, this trend reversed in 2001 and some 
positive developments were observed in trade balance with the EC. 
 Following the completion of the customs union in 1996, imports have experienced a sharp 
increase, while increase in exports was moderate. A ccordingly, Turkey faced a large trade deficit. 
Substantial reductions in protection rates and la ck of appropriate macroeconomic measures to 
compensate the revenue loss played an  important role in this process. 
 
To the large extent, the increase in foreign trad e deficit is attributed to the customs union. 
Nevertheless, it should be noted that Turkey, during that period, has experienced a growth 
performance of 7%, which is above the OECD averag e, and imports of investment and intermediate 
goods has displayed a great increase accordingly. In contrast, in 1999 and 2001 where national income experienced substantial declines, imports  from both the EC and third countries decreased 
significantly. Therefore, the role played by internal and external economic factors should not be 
ignored while considering the increase in imports observed after the Customs Union. 
  On the other hand, exports to both the EC a nd third countries have exhibited an increasing 
trend. Despite the fact that this increase was far below the expectations before the customs union, a 
stable market share in the EC has been guaranteed . During the period of 1995-2000, the imports of the 
EC from the third countries decreased by 19%, yet Tu rkey maintained its share of 1.7% in the EC 
imports. 
 
A general observation for the post-customs union pe riod is that imports have expanded faster 
than the exports. The composition of imports, whic h depends heavily on interm ediate and investment 
goods for the needs of the manufacturing industries, has been shaping the volume of imports. Hence, 
any internal or external macr o economic development has had a direct effect on the volume of 
imports. Imports decline in the periods of economic  contraction, while improves in the periods of 
economic recovery.   When it comes to exports, the expected increas e has not been realized. This development can 
be attributed largely to contraction in extern al markets and challenging competition conditions 
resulting from Asian and Russian financial crises. Mo reover, adverse shocks experienced in Turkey 
with respect to exchange rates, interest rat es and investment have played role as well.  
 
In sum, the Customs Union locked in refo rms towards liberalization in Turkey and 
accelerated the regional integration process, which will shape the external trade relations in the future. 
The openness rate of Turkey, which is the share of  total trade volume in GNP, increased to 48.3% in 
2002 from 30.6% in 1994.   Developments experienced so far indicate that the Customs Union exposing Turkish industry 
to intense international competition, has launc hed a challenging process, which will ensure the 
integration of Turkey to the new world order. Ou r sectors have adapted themselves to the competition 
environment thanks to their dynamic structures and flexible production structures. 
  On the other hand, as a result of the “Trade  Development Strategy with Neighboring and 
Region Countries” initiative of the last three years, Turkey is looking for new ways to improve its 
trade and create a fair trading environment in the Middle East, South East Europe, Black Sea, 
Caucasus and Central Asia. In this respect deepen ing trade relations with ECO countries and BSEC 
countries are on the agenda of Turkey in order to identify and simplify trade documents to facilitate 
movement of goods.  WT/TPR/M/125/Add.1 
 Page 11 
 
 
Members will find the detailed Table comprising trade figures under the relevant regional 
agreements in the Annex.  
O
THER PREFERENTIAL TRADE ARRANGEMENTS  
Question (EU):  
 
According GSP-treatment to least developed countries is rather important to improve the 
trading conditions of these countries and to give them  the possibility also to benefit from international 
trade. What are Turkey’s plans for enacting a GSP-regime?   
 
Question (India):
 
 
Turkey was expected to align itself with EU GSP as of 1-1-2001 but this has now been 
postponed to November 2004.  Whether the Governme nt of Turkey would kindly indicate the reason 
for this delay and an assessment as to whether th e obligation would be complied with by November 
2004.   
Question (Chile):
 
 
According to information available through  UNCTAD, approximately 2.500 tariff lines 
receive GSP treatment in Turkey.  We understand th at these products belong mainly to Chapters 28, 
29, 37, 38, 82, 84 and 85 of the Harmonized System.  
 Chile would like to request Turkey the list, if possible in electronic format, of products that 
benefits from its GSP scheme.  We would appreciate that this information be made available in HS 
2002 nomenclature if already available in that format.  
  Chile would also like to know if Turkey's list of GSP beneficiary products coincides with that 
of the European Union; and, if that is not the case, whether and when it is foreseen that this will 
happen.   Answer:
 
 
In accordance with Article 16 of the Association Council Decision No. 1/95 setting out the 
rules and procedures of the Customs Union betw een Turkey and the EC, Turkey commenced to 
introduce the EC GSP from 1 January 2002 onwards.   
 
The preferences, granted in this regime are classified basing upon the sensitivity of the 
products as "sensitive" and "non-sensitive" similar to  the EC's current regime and the same rate of 
duties are charged accordingly.  
All the countries covered by the EC GSP are accorded preferential treatment. And, 2884 12-
digit tariff lines are included within the scope  of the current GSP scheme of Turkey.  
 
Turkey is also endeavoring to align its tariff rates for the rest of the products under the EC 
GSP depending upon the improvements recorded  in the prevailing economic situation. 
 
Further alignment to the EC GSP will be  continued depending upon the improvements 
recorded in the economic performance of Turkey, th e effects of the GSP Regime on Turkey’s foreign 
trade and the impact of the implementation over the industry. WT/TPR/M/125/Add.1 
Page 12  
 
 In this regard, within the framework of th e 2004 Import Regime, it is envisaged that the 
“Everything but Arms (EBA)” initiative will be adopted which means that  EC GSP will be fully 
operational for the Least Developed Countries for the products under the Customs Union. 
 
Meanwhile, further improvement will be done in favor of the developing countries where it is 
foreseen that approximately 51 % of all industria l products covered by the EC GSP regime will be 
included in Turkey’s own regime for this country  group by 1 January 2004. In other words, from 1 
January 2004 onwards, we will be  covering 5660 12-digit HS lines which constitutes 50.9 % of the 
current EC GSP.  
Turkey’s efforts towards adopting EC’s GSP fully by 2006 are continuing. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
C
USTOMS PROCEDURES  
Question (Japan):   
 
 The Secretariat Report states that certain goo ds can be imported only through specialized 
customs officers.   
Please explain why Turkey imposes such a system. 
 
Answer:
 
 
The intention in establishing specialized cust oms offices is first to render the customs 
formalities by customs officers who have long been dealing with the release of the same good and 
have developed expert knowledge on the customs formalities of that good. Secondly, Turkish 
Customs Administration, when determining the sp ecialized customs offices,  takes into account the 
trade volume of that office with regard to that speci fic good to be specialized at . Therefore, the offices 
that turned into specialized cu stoms offices are usually the ones, which had been carrying out the 
customs formalities of the very same good. This me ans that the specialized customs offices would not 
impede the trade, on the contrary accelerate the tr ade and diminish the time release of goods at 
customs. Thirdly, the specialized  customs offices also serve the needs of the companies and their 
production. The companies established at the vicinity of the specialized customs office are using those 
goods as input, which is therefore crucial for them that the input enters into the production without any time loss at customs. The infrastructure is a nother factor when establishing specialized customs 
offices. These offices are equipped with technical in frastructure necessary for that special good, such 
as laboratories, weighing stations, lo ading-unloading availability…etc.   
 
Question (USA):
 
 
The Secretariat’s report notes that Articles 23 to 31 of Customs Law No. 4458, in force since 
5 February 2000, address the va luation of imported goods.   
 
• Would Turkey please provide us with a copy of this law?  We would also encourage 
Turkey to respond to the Valuation Questionnaire identifying specifically how the law implements the WTO Valuation Agreement. 
 
Under paragraph 3 of Annex III of the WTO Va luation Agreement, Turkey has reserved 
indefinitely the right not to reverse the deductive and computed valuation methods at the importer’s 
request.    WT/TPR/M/125/Add.1 
 Page 13 
 
 
Would Turkey explain how the right to reverse the deductive and computed valuation 
methods at the importer’s request gives rise to real difficulties?   The Secretariat’s report notes that appeals against decisions of customs authorities are 
governed by Title XII of Customs Law No. 4458.   
 
How does Title XII implement the provision in Article 11 of the WTO Valuation Agreement, 
which specifies that the right of appeal shall be  without penalty to a judicial authority?  
  Additionally does Customs Law No. 4458 provide that the notice of the decision on appeal 
shall be given to the appellant in writing, along with the reasons for such decision?   
  The Secretariat’s report notes that any person h as the right to appeal against decisions taken 
by the Regional Directorates for Customs and by the Undersecretariat for Customs. 
 
 Does the notice of the decision on appeal specifi cally inform the appellant of such rights of 
further appeal? 
 
Answer:
 
 
The English version of the Turkish Customs Law No: 4458 can be found at the official 
website of the Undersecretariat of Customs. The address is the following: http://www.gumruck.gov.tr/ 
Turkish_Customs_English/toctum.htm 
 Furthermore, Turkey is ready to respond to any kind of questionnaire to clarify the 
implementation of the Agreement. 
 
Turkey, bearing the status of a developing state that has the right of using such a reservation 
as stated in the para. 3 of the Annex 3 to the WTO Valuation Agreement, has the discretionary right to 
agree with the request of the importer to reve rse the deductive and computed valuation methods. 
Actually, the effects that might arise in real term s if Turkey granted the right of reversing the two 
methods have not been assessed. However, up until now, there has been no case that Turkey received 
such a request from the importers. Since Turkey has not faced any co mplaints from the traders due to 
that implementation, we deem that neither the flow of trade nor the interests of traders get negatively 
affected. Therefore, as Turkey’s right of reservati on does not seem to hamper the trade to Turkey it 
would be retained.  
Article 242 of the Turkish Customs Law no: 4458 explains the appeal procedure and foresees 
the right of the traders to apply to a judicial aut hority against a decision of the customs administration. 
The customs authorities may decide penalty if they  establish that the declared customs value on the 
customs declaration does not confirm the value that cu stoms officers determine. If there is a penalty, it 
is given because of under valuation and has nothing to  do with the right of appeal, therefore does not 
impede the right of the traders to appeal judicial authorities. 
 
Every application for a correction of a customs ac t is dealt by customs within the time limits 
mentioned in Article 242 of the Turkish Customs Law No: 4458. The customs authorities in question 
notify their decisions in writing to the applicant indicating the reasons by underlying the related provisions of the Law that legitimate such a decisi on. When the applicant is not satisfied with the 
decision of the customs offices and regional customs directorates on the application of correction, he 
can forward his petition to Undersecretariat of Custom s, which is the last resort in administrative 
hierarchy. The Undersecretariat of Customs has to reply within 45 days, after which he can bring his 
petition to the attention of judicial authorities.  WT/TPR/M/125/Add.1 
Page 14  
 
Appealing against an administrative decision in  front of judicial authorities is also a 
constitutional right. Therefore, Article 242(7) of th e Turkish Customs Law No: 4458 grants this right 
to the interested parties. Since Article 242(7) ensures that an applicant, after using up the 
administrative steps, can always go for an appeal in  front of judicial authorities, the notices sent to 
applicants do not comprise any extra information reminding them their right of further appeal.  
 
Question (Canada):
 
 
With reference to Article 11 of the Valua tion Agreement, paragraph 14 states, Appeals 
against decisions of customs authorities are govern ed 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 re levant person. A decision taken in the Regional 
Directorate can be appealed, within 15 days, before the Undersecretariat of Customs; the decision and 
notification to the person concerned are made with in 45 days. Any person has the right to appeal 
against decisions taken by the Regional Director ates for Customs and by the Undersecretariat for 
Customs.” 
 Please explain further the number of levels of “internal appeals” and the process and 
procedures an importer must follow to file an appeal ?  As well, is there in Title XII of Customs Law 
No. 4458 a right of appeal, without penalty, to an inde pendent judicial authorit y (i.e., at “arms-length” 
from Customs)? If so, what process must an importer fo llow to file a judicial appeal (i.e., regarding 
decisions by the Undersecretariat for Customs)?  
 
Answer: 
 
 
The relevant provisions of the Turkish Cust oms Law, written below, clearly indicate the 
appeal process to be followed by the declarant against the decision of a customs authority.  
 
There are 3 internal appeals that we can call ad ministrative steps, before one can appeal to 
judiciary authority. The first appeal has to be ma de to the local customs office that is taking the 
decision; the second, if the declarant was not satisfied  with the last decision of the customs office, has 
to be brought to the attention of the regional custom s office that is in admi nistrative hierarchy above 
the initial customs office; and the third one has to  be made to the Undersecreteriat of Customs 
(Director General of Customs). After using up the administrative steps, one could always apply to 
judicial authorities. The process that an importer must follow is explained in the provisions below. 
The more detailed information could be found in Article 741-753 of the Customs Code Implementing 
Provisions of Customs Law 4458, which is on the Turkish Customs Website, www.gumruk.gov.tr. 
 
TITLE XII 
 
Appeals  
ARTICLE 242-1.  Within 15 days from the notification of the customs duties, the debtors 
shall reserve the right to apply to the customs admini stration with a petition concerning the correction.    
 
2. The relevant customs administration shall deci de on the request for the correction within 30 
days, and shall notify the debtor hereof.   
  WT/TPR/M/125/Add.1 
 Page 15 
 
 
3. Any person shall have the right to appeal, within 7 days, before the Regional Directorate 
for Customs to which the decision making customs ad ministration is affiliated, against the decisions 
regarding the requests for correction, administ rative decisions, customs duties and penalties. 
 
 4. Appeals received by the regional customs directorates shall be decided within 30 days and notified to the relevant person.  
 
 5. Where the first decision has been taken in the regional directorate of customs, it shall be 
appealed, within 15 days, before the Under secretariat for Customs against that decision. 
  6. Appeals received by the Undersecretariat fo r Customs shall be decided within 45 days and 
notified to the relevant person.  
  7. Any person shall have the right to appeal  before the administrative judiciary bodies where 
the Directorate for Customs or Regional Directorat e for Customs are located in which the formalities 
relating to the decisions of the Regional Directorates for Customs and Undersecretariat for Customs are carried out.  
 
 ARTICLE 243-1. Within 15 days as from the notification, any person shall have the right to appeal in writing before the Regional Directorate for Customs against the chemical analysis results 
taken as a basis in the calculation of the customs du ties notified to the releva nt persons in accordance 
with Article 197.   
 2. Upon an appeal, second analysis shall be made by two chemists other than the chemist who 
works in the laboratory where he made the first analysis. Upon request, the customs administrations 
shall authorize an observer chemist who is not a customs chemist, to be involved in the second 
analysis.   
Where an appeal has been lodged against the an alysis made in the customs laboratories in 
which not more than three chemists work, the sec ond analysis shall be made in the laboratory in 
which at least two chemists work and which is a ffiliated to the nearest customs administration.  
 
On condition that it will be returned if they are proved right, an analysis charge shall be 
received from those who apply for a second analysis. Through consultation with  relevant institutions, 
analysis tariffs shall be determined by the Minist ry to which the Undersecretariat is affiliated.  
 3. The result of the second analysis shall be precise in respect of the determination of 
technical features and nature of the goods.  
 
ARTICLE 244- The appeal of the relevant pers ons shall not be considered; where the customs 
administration has been notified in writing that the fi nes hereunder have been paid or shall be paid by 
the relevant person within 15 days as from the notifi cation of the penalty decisions, without appealing 
before the administrative judiciary bodies against the mentioned fines; and where the amount of the 
fines has been paid within 2 months as from the notification of the penalty decisions.  
 
In such a case, the fines shall be collected  at a deficiency rate of one third. 
 ARTICLE 245-1. On the basis of the declarati on presented to the customs administration and 
the information and documents attached therein; the debtors shall not have the right to appeal against 
the customs duties directly calculated by themselves.   
 WT/TPR/M/125/Add.1 
Page 16  
 
2. No documents and data other than tho se used in appealing before the customs 
administration, shall be used in the appeals before the administrative judiciary bodies.  
 
 3. Appeals before the administrative judiciar y body against the decisions, shall not preclude 
the implementation of this decision by the administration.   Question (Switzerland):
 
 
Swiss Exporters informed us and this was conf irmed by the Turkish administration that an 
additional Form was required as a proof of origin fo r import of Textiles originating in Switzerland in 
order to survey textiles imports from Asia ("wove n fabric fiber detailed sheet", since 5 April 2003). 
What is the legal basis of this measure, its objec tive and its scope, knowing that it implies in some 
cases considerable added costs for the exporters?  
Answer: 
 
 
The Communiqué published by Undersecretariat of Customs on 5 April 2003 requires the 
importers of woven fabric fi ber to make out the form annexed to the Communiqué.  
  Turkey has been facing with certain difficulties in the trade of the goods in question due to the 
under-valuation that the customs authorities suspect ed on import declarations. Turkish Customs 
Administration, in order to overcome this difficulty,  issued this Communiqué to find out the technical 
details of the goods and establish whether the decl ared customs value is an abuse of customs 
authorities or not. Therefore, the intention is to determine the actual customs value of the goods by 
evaluating its technical details when being imported to Turkey and to avoid unfair competition in the 
internal market. It goes without saying that, the said Communiqué was issued by taking into 
consideration of all relevant WTO provisions, and in our view it is not burdensome for the importers. 
 
T
ARIFFS , OTHER DUTIES AND TAXES  
Question (Switzerland):  
 
According to the Report, Turkey has bound onl y 46.3% of its tariff lines. How does Turkey 
ensure the predictability of its unbound tariffs? How often and who has the authority to modify the 
tariffs? 
 The Report of the Secretariat indicates that Turk ey's tariffs show a high level of dispersion 
and have a mixed escalation. Does Turkey have pl ans to further rationalize its tariff structure and 
make it more transparent? 
  § 24 indicates that the imposition of non-ad va lorem tariff rates does not ensure compliance 
by Turkey with its WTO binding commitments made at ad valorem bound rates. Which steps does Turkey intends to take to ensure the complian ce by Turkey with its WTO binding commitments and 
in which time frame? Given the fact that Turkey is obliged by the CUD not to impose tariffs higher 
that the EU common external tariffs except in ar ea where the CUD does not apply and taking into 
consideration that Turkey has only bound 36% of its tariff lines for non-agricultural products, are there differences between the level of bounds tariffs in Turkey's schedule and in the common external 
tariff for certain products? If yes, please indicate which are the products affected (tariff line and 
product description). By which mechanisms does Turk ey ensure that for the unbound tariff lines it 
only applies the rates of the EU common external ta riff and that the duties levied on goods originating 
from territories not Member of the customs union are substantially the same? Can we assume that the  WT/TPR/M/125/Add.1 
 Page 17 
 
 
rates of the EU common external tariff  represent th e maximum that Turkey is entitled to levy for the 
unbound tariff lines, i.e they represent de facto  the bound rates of Turkey? 
 
Question (Indonesia):  
 
According to paragraph 2 of the Secretaria t’s Report (WT/TPR/S/125, the imposition of non-
ad valorem tariffs (1.5% of the total lines) ma y not ensure compliance by Turkey with its WTO 
binding commitments made at ad valorem rates.  Indonesia wishes to have further explanation 
regarding Turkey’s strategy to hold the remain 1, 5% of total tariffs lines at non-ad valorem rates. 
 
Answer:  
 
As a result of the Uruguay Round, Turkey bound 36% of its duties on industrial goods and 
100 % on agricultural products. In total, the bound ra tes constitute 46.3% of all tariff lines. On the 
other hand, with the Customs Union in 1996, Turkey adopted the EU’s Common Customs Tariff 
(CCT) for the imports from third countries. Th e Customs Union covers all industrial products 
excluding European Coal and Steel Community (ECSC)  products, which constitute 2.6% of total tariff 
lines, namely 509 products in 12-digit HS tariff lines. In practice, Turkey applies the CCT on all of its unbound tariffs except ECSC products. Turkey has no binding commitment on these products and 
normally applies its statutory duties. 
 We are aware of the fact that Turkey's tariff displays mixed escalation. This structure is 
mainly affected by the high tariffs on raw agricu ltural products. Another reason for this is the CCT. 
For instance, the simple average ra te of the CCT is about 4 percent in 2003. Therefore, while tariffs 
are high on raw materials, tariffs of most semi-finish ed products are very low as a result of application 
of CCT.  
As it is mentioned in the Secretariat’s report, on ly 372 distinct tariff rates exist in our tariff 
structure. However, if we take into account the large number of tariff lines (19,478) in the Turkish 
tariff nomenclature at the HS 12-digit level, we ar e of the view that, such a tariff structure is 
transparent and predictable. Nevertheless, simplif ication of the tariff system can be considered 
especially within the context of current negotiations  on non-agricultural products. Similarly, members 
will recall that Turkey’s proposal within the NAMA  negotiations provides 100% consolidation for all 
non-agricultural products for all members.  
With regard to non-ad valorem application of ad valorem bound rates, in 1995 Turkey 
consolidated its tariffs on the ad-valorem basi s. However, following the Customs Union Decision 
between Turkey and the EU that entered into force in 1996, Turkey harmonized its tariff system with 
that of the EU to provide free trade in industria l components of processed agricultural products. Thus, 
Turkey has to apply non-ad valorem tariff rates as a Customs Union obligation. 
 
As it is known, a tariff schedule provides the upper limits of duty that may be imposed. 
However, there is no clear requirement for the app lication of the same type of duty provided in the 
schedule.  
The applied rates are published in the Official Gazette at the beginning of every year and 
become effective throughout the year. The said Import Regime is endorsed by the Council of 
Ministers. Furthermore, each year, the ad-valorem eq uivalent of the applied (non-ad valorem) rates is 
calculated and included in the Import Regime to ma ke sure that the applied rates do not exceed the 
bound rates.   WT/TPR/M/125/Add.1 
Page 18  
 
 As a last comment, due to the Customs Union, Turkey practically applies the bound rates of the EU for almost all the industrial products except ECSC products. Although Turkey bound 36.3 
percent of its industrial products, it cannot ex ceed the EU bound rates on the unbound industrial 
products pursuant to the commitments under the customs union. Therefore, CCT represents de facto  
bound rates of Turkey on the products covered by CUD. 
 
Question (Switzerland):
 
 
Please give the reasons why for fabricated me tal products the column representing the raw 
materials is characterized by "not applicable"? What is the meaning of this "not applicable"? 
 
Answer:   
 
We think that there is no missing data provided by the Turkish Government. “Not applicable” 
does not make any sense to us. Probably the pr oblem is stemming from the different calculation 
method used by the Secretariat, which can provide further clarification on the issue. 
 
Question (Japan):  
 
The Government Report states that Turkey adop ted the EU’s Common Customs Tariff for the 
imports from third countries. 
 
− Please explain the reason for adopting such policy. 
− Please also indicate whether the applied tariff ra tes for all the imports from third  countries  
coincide with those of the EU’s Common Customs Tariff.  
− If so, please explain how the applied tariff rates of Turkey match up with those of 
 EU’s Common Customs Tariff in such a case where the EU’s tariff rates alter. 
 
Answer:   
 
Turkey adopted the EU’s Common Customs Tari ff in 1996 and has been applying it since 
then. The reason for this is the establishment of a Customs Union between Turkey and the EU, which 
requires the application of common tariff rates to imports into the Customs Union area from third countries.   
 
The Customs Union includes almost all indus trial products and industrial components of 
processed agricultural products. Currently, agricu ltural products are excluded from the product 
coverage of the Customs Union. Therefore, the a pplied tariff rates for impor ts of products covered by 
the Customs Union are the same as tho se of the EU’s Common Customs Tariff . 
 
Turkey is informed of any modification that takes place in the EU’s Common Customs Tariff 
pursuant to the consultation mechanism established by the CUD. Then the modification is reflected in 
Turkey’s tariff rates by the competent authorities. Parties act simultaneously and avoid any time lag 
for the application of the modifications.  
 
Question (Japan):
 
 
According to the Government Report, products originating from least developed countries are 
imported to Turkey as duty-free, excluding two products.  
− Please provide the exact names of the two excluded products. 
− Please explain why these two products are excluded.  WT/TPR/M/125/Add.1 
 Page 19 
 
 
Answer:  
 
a) As mentioned in the Government Report, in line with the decisions taken in the High Level 
Meeting for the LLDC’s, which was held in Geneva  in 1997, and the relevant provisions of the 
Singapore Ministerial Declaration, Turkey has launche d its unilateral preferential treatment. It covers 
556 products originating in the least developed coun tries to be imported into Turkey as duty-free, 
excluding two products. These two products are caffeina ted and decaffeinated coffee. Since coffee is 
arranged under two different HS codes as caffeinated and decaffeinated (namely 0901.11 and 0901.12), it is counted as two different products. 
 
b) The unilateral preferential treatment of Turkey vis-a-vis  LLDC’s has been covered by the 
GSP regime of Turkey since 1 January 2002. In th is context, 2884 tariff lines (including 556 products 
mentioned above) originating in the least develope d countries could be imported into Turkey as duty 
free. On the other hand, although coffee is not im ported duty-free from least developed countries, we 
have a preferential rate for the least developed c ountries. While the coffee originating from the least 
developed countries is subject to 11% tariff rate, th at originating from third countries is subject to 
13%, meaning a 2% percent preference for least deve loping countries over the others. Furthermore, it 
should be noted that Turkey will provide duty-free treatment to LDCs for all industrial goods from 1 
January 2004 onwards. 
 
Question (Hong Kong, China):
 
 
We note that apart from customs tariffs, some  goods imported into Turkey are subject to 
excise duties, the Mass Housing Fund Levy, the speci al consumption tax and th e value-added tax. All 
these duties and taxes may prevent other trading partne rs from enjoying the full benefits of Turkey’s 
tariff liberalization. We would like to know if Turk ey has any plan to remove such duties and taxes. 
 
Answer:  
 
 The Mass Housing Fund (MHF), which was levied on 87 percent of tariff lines in 1993 and 3 percent of the tariff lines in 1998, has now been curbed  further down. Currently it is applicable to only 
a certain number fish and fishery products, which make up only 2.8 percent of the total tariff lines. 
The Mass Housing Fund levy is calculated on the basi s of Turkey's statutory duties. The difference 
between the statutory duty rates and the applied prot ection rates needed by the sector is levied as Mass 
Housing Fund. It is important to note that fish a nd fishery products are not included in the Turkey's 
Schedule of Concession to the WTO. Therefore, Tu rkey does not have any WTO commitment for fish 
and fishery products.  
 
Question (USA):
 
 
We note that in January 2003 the Special C onsumption Tax (SCT) on distilled spirits was 
increased from 212% to 275.6%.  On October 14, 2003, we understand from our industry that the 
government introduced minimum excise tax rates per category of spirit, effective immediately.   
 
While distilled spirits continue to be subject to  the 275.6% excise tax, the law stipulates that 
minimum tax payments must be paid per liter of spir its in each category. Furthermore, if the 275.6% 
tax results in a tax bill above the required minimum specific amount, the higher rate applies. We are 
concerned that the effect of the new system is to discriminate against imported spirits.   
 
Could the Representative of Turkey explain how the government of Turkey will ensure this 
tax does not discriminate against imported distilled spirits? 
 WT/TPR/M/125/Add.1 
Page 20  
 
Question (EU):
 
 
On 14 October 2003, Turkey introduced a new law (2003/6257) introducing a notion of 
“minimum tax take” per category of  alcoholic beverage. For spirit drinks, while the actual excise tax 
rate of 275.6% is not changed, the law stipulates that different specified minimum amounts of taxation 
must be paid depending upon the type of spirit. Th e “minimum tax takes” are substantially higher for 
those spirits, which are mainly imported than for those spirits, which are mainly produced 
domestically.  
 
Does Turkey have plans to revise this legislation in the short term to bring it into line with 
both its WTO obligations and its other international commitments? 
 
Answer:  
 
The Ministerial Decree promulgated in Octobe r 2003 on Special Consumption Tax introduced 
minimum rates per category of alcoholic beverages;  however, the tax rates on beer, wine and distilled 
spirits remained at the same level as indicated in SCT in January 2003. The minimum rates are 
determined on the basis of product category, not th e source. Therefore, implementation of the new 
system does not create any discrimination between the domestic and foreign producers, which is in 
accordance with the national treatment principle of the WTO.  
 
Question (Australia):  
 
We note that Turkey continues to apply an almost total ban on imports of meat and live 
animals.  Does Turkey intend to review this polic y, which reinforces inefficiencies in the domestic 
industry and inflates the price of domestic product?  
We note that Turkey's duty system is complex, including, for example ad valorem rates of up 
to 227.5% on meat products and edible meat produ cts.  Does Turkey have a plan to decrease such 
high tariff rates and simplify and rationalise its tariff system. 
 
Answer: 
 
 
Under the WTO rules, Members are permitted to impose a duty that is less than or equal to 
that provided for in its schedule. Each year, tariff rates are revised taking into account the WTO 
commitments and the need of the domestic sector s. The applied tariff rates do not exceed those 
mentioned in Turkey’s schedule.  
On the other hand, except for detailed tariff lines that are used for statistical purposes, 
Turkey’s tariff system is transparent, simple and easy to understand.   
The import tariff system is applied on the MF N basis without any discrimination among the 
source countries for imports.  
Question (Australia):
 
 
 Australia notes that imports of wheat and sugar into Turkey are administered generally within 
the framework of EU customs regulations.  We unde rstand that the Undersecretariat for Foreign Trade 
plays a major role in decisions regarding source co untries for such imports.  Does Turkey intend to 
provide competitive exporters with the opportunity to service the market?   WT/TPR/M/125/Add.1 
 Page 21 
 
 
Answer:  
 
Regarding sugar importation, Turkey provides comp letely equal treatment to all importers on 
condition that quality requir ements are fulfilled. The Undersecretariat for Foreign Trade does not play 
a role in decisions regarding source countries on sugar imports. 
 
Likewise, the Undersecretariat for Foreign Trade does not play a role in decisions regarding 
the wheat importation on the basis of source of imports. Furthermore, there is no limitation on the participation to the international tenders ne ither for foreign nor domestic companies. 
 Question (Australia):
 
 
Australia welcomes Turkey’s efforts to deregul ate alcohol imports through the establishment 
of a framework incorporating a new regulatory body and the passage of a new law pertaining to wine 
imports.  While the new bureaucratic and legal arrang ements have the potential to result in a genuine 
opening of the market, Australia notes that the im port tax imposed on wine, currently at 70 per cent, 
as well as domestic taxes, represent a considerable impediment to market penetration.  Does Turkey intend to review the level of the import tax? 
 
Answer:
 
 
 There will be no change in our application. We are fully in compliance with our WTO 
commitments.  
 
IMPORT PROHIBITIONS , QUOTAS AND LICENSING  
Question (USA):  
 
The report states that, “In general, import licenses are maintained on health, sanitary, 
phytosanitary, and environmental grounds, under in ternational conventions to which Turkey is a 
signatory, or to administer tariff quotas set on MFN or preferential basis.”    
Are there any other grounds, other than ones stated above, that Turkey maintains import 
licenses? 
 
Answer:
 
 
Currently, there exists a list of goods subject to approval before importation takes place. The 
reasons behind the licensing of these goods are to protect public security, safety, the environment, 
consumer rights and, for a number of items, prevent the use of imported goods for purposes other than those intended for the use in civil aircraft. Import licenses are required for a limited group of products including, inter alia, telecommunication equipmen t, some machinery, some motor vehicles, 
transmission apparatus, some chemicals, and a number  of items related to civ il aircraft. Importers of 
these items must obtain permission from the relevant authorities. 
 
Turkey’s application of licensing is in full conformity with the provisions of the WTO 
Agreement on Import Licensing. The system is automa tic in the sense that once an applicant meets the 
pre-established conditions the license is issued automatically.    WT/TPR/M/125/Add.1 
Page 22  
 
Question (USA): 
 
 
How does Turkey ensure that import licenses  required for phytosanitary concerns for 
numerous agricultural products (for example, rice and corn) do not become unjustified barriers to 
trade? 
 
Control Certificate, which is required at the im portation of certain agricultural products, is not 
a kind of import license but just a reference doc ument needed at customs proceedings for SPS 
purposes. Control Certificate system is not intended in any way to restrict the imports. As it is stated in the Secretariat Report, Section III, Pr. 67, impor t of agricultural products and foodstuffs require a 
control certificate issued by the Ministry of Agriculture and Rural Affairs.   
 
Question (EU):
 
 
To the knowledge of the EC, Turkey adopted an 'implementation decree' (ID) for its 2001 
Alcohol Act in June 2003. While the ID containe d some positive aspects for th e liberalisation of the 
Turkish market for alcoholic beverages, it neve rtheless increased the already burdensome import 
licensing requirements, by introducing the need to  obtain an import permit from the newly created 
Tobacco and Alcohol Board, in addition to the re quirement to obtain a certificate of compliance from 
the Ministry of Agriculture and Rural Affairs. Wh en and how does Turkey foresee the simplification 
or removal of these restrictions?  
 
Answer:  
 
 The state monopoly over the production and distribution of alcohol and distilled spirits in 
Turkey has been abolished with the Law No. 4619 promulgated in January 2001. With the 
establishment of the Tobacco, Tobacco Products and Alcoholic Beverages Market Regulatory 
Authority (TAPDK) in 2002 with the Law No. 4733 to restructure the 70-year-old monopoly market in accordance with free ma rket principles, significant improvement s have been achieved to introduce 
open market conditions for the alcoholic beverag es market. The legislative framework has been 
accomplished with the enactment of the latest  implementation legisl ation in June 2003. 
 
It should be noted that the certificate of conformity issued by the TAPDK for the imports is 
based on the notification of the companies. The notification requirement has the sole purpose of 
accurate registry destined to e ffective market surveillance, whic h is among TAPDK’s duties. This 
practice does not cause any discrimination between domestic and foreign companies and their products since domestic companies are no exception to the registry.  
 
In line with the accomplishment of technical legislation harmonization under the National 
Programme for the Adoption of the EU Acquis, phasing out of these administrative formalities can be 
envisaged.  
Question (Chinese Taipei):
 
 
As indicated in Table III.9, the import of m achinery and related items (53 items, including 
air-conditioning machines, household t ype electrical refrigerators, clothes dryers, instantaneous gas 
water heaters, vacuum cleaners, telex machines, etc.…) is only permitted if the importer/exporter 
demonstrates that after-sales services, such as maintenance and repair, are warranted on a regional basis and that maintenance service technician s and spare-part stocks are sufficient. 
 
In our view, these measures could become barriers to such imports. Furthermore, they do not 
seem to be consistent with Articles 2 (Automatic  Import Licensing) and 3 (Non-Automatic Import  WT/TPR/M/125/Add.1 
 Page 23 
 
 
Licensing) of the Agreement on Import Licensing Pr ocedures, which state that these measures shall 
not have trade-restrictive or -distortive effects on imports.  
 
Answer:  
 
It is well known that under World Trade Orga nization Agreements “no country should be 
prevented from taking measures necessary to ensure th e quality of its exports or for the prevention of 
deceptive practices”. In addition, Article 2(1) of th e Agreement says that “Members shall ensure that 
in respect of technical regulations, products impor ted from the territory of any Member shall be 
accorded treatment no less favourable than that accorded to like products  of national origin and to like 
products originating in any other country.” Furthermore under Agreement on Import Licensing 
Procedures, Article 1(3) states that, “The rules for import licensing procedures shall be neutral in application and administered in  a fair and equitable manner”. 
 
The aim of this practice is protection of cons umer. In respect of consumer protection it is 
obligatory that both domestic manufacturers and impor ters provide repair a nd maintenance services 
by making available adequate technical staff a nd spare parts inventories for the industrial goods, 
which they sell, produce or import, during the life of goods. In addition, domestic manufacturers or importers shall issue warranty cer tificates for the industrial goods they manufacture or import. For 
warranty certificates manufacturers or importers provide after sale services. The aim of this regulation is to protect consumer against deceptive practices.  
 
Question (Hong Kong, China):
 
 
We note that Turkey is still applying quotas, on a unilateral basis, on imports of textile and 
clothing products from HKC in 2003, notwithstanding th e rulings of the Appellate Body in the India-
Turkey dispute settlement case on textiles QRs that Turk ey’s QR restrictions imposed as a result of its 
customs union with the EU, were inconsistent with  the relevant WTO provisions.  We would like to 
know if Turkey has any plan to bring its textile and clothing regime into conformity with the GATT 
1994 and the ATC, and to remove the quantitativ e restrictions on all concerned WTO members. 
 
Answer:  
 
One of the commercial policy instruments wh ich, pursuant to Decision 1/95 of the 
Association Council (CUD), Turkey was required to implement as part of the common regulation of 
commerce of the Turkey-EC Customs Union were quan titative limitations on imports of certain textile 
products which the EC maintained pursuant to th e WTO Agreement on Textiles and Clothing (ATC) 
vis-à-vis certain third countries. 
 In a communication dated 2 February 1998, I ndia requested the Dispute Settlement Body 
(DSB) to establish a panel to examine the matter in  the light of GATT and the ATC, in accordance 
with Article 6.2 of the DSU. On 13 March 1998, th e DSB established a panel pursuant to the request 
of India. The Panel submitted its fina l report to the parties on 26 March 1999. 
 
With this report the panel concluded that “the  measures adopted by Turkey on 19 categories 
of textile and clothing products ar e inconsistent with the provisions of Articles XI and XIII of GATT 
and consequently with those of Article 2.4 of the ATC. Hence, The Panel recommended that DSB 
request Turkey to bring its measures into conform ity with its obligations under the WTO Agreement. 
Afterwards, Turkey appealed from certain issues of la w and legal interpretations  in the Panel Report.  
 WT/TPR/M/125/Add.1 
Page 24  
 
At the end of the proceeding, Turkey declared its intention to implement the decision of the 
DSB and agreed with India on a 15 months-time period to allow her to make the necessary adjustments for that purpose. This “reasonabl e period of time” ende d on 19 February 2001. 
 This case put Turkey in a very contradictory s ituation. First, it had to comply with the CUD 
and therefore applied the Comm unity’s Common Trade Regime vis-à-vis  India. Secondly, it also had 
to comply with the WTO ruling and bring its me asures into conformity with the WTO rules. 
Consequently, Turkey, especially towards the end of  the reasonable period of time held intensive 
bilateral consultations with the Commission and India. As a result  of these consultations, possibility 
of reaching an agreement between India and Turkey emerged that parties agreed to extend the time 
granted for implementation on 8 March 2001. Eventually, India and Turkey agreed upon a 
compensation that includes increases in the existing q uota levels of 17 categori es, early integration of 
remaining two categories that are 24 and 27 with respect to India, and certain tariff concessions covered by the forthcoming GSP Scheme of Turkey as far as 17 chemical items are concerned and MFN reductions from the applied rates of bl ack pepper (090411) and castor oil (151530). 
 
Turkey’s recognition of the WTO ruling with this  respect should not be questioned. We have 
devoted the reasonable period of time for searching the best possible way of compliance that is not detrimental for textile and clothing sector of Turkey and eventually for the Customs Union. 
Unfortunately, compensation is the only so lution to the matter for the time being.  
 
As to the question regarding the effectiveness of quantitative restrictions vis-à-vis certain 
textile and clothing products; since Turkey is maki ng quota allocation in a flexible manner, basically 
relying upon the past performance and ensuring quota transfers the figures concerning the quota 
utilization levels denote that only 15 out of 402 cat egories reached to 90% quota utilization level in 
2002.  
 
C
ONTINGENCY TRADE REMEDIES  
Question (Indonesia):  
 
 Paragraph 60 of the Government’s Report st ates that “since increasing number of safeguard 
measures by the WTO members, safeguards Agreem ent and its implementation have become main 
trade policy instruments in the world”. Does this statement indicate Turkey’s intention to enforce 
safeguard measures as the main instrument of trade remedy? Please clarify.  
Answer:
 
 
Turkey put into force its safeguard investiga tion, which is fully in conformity with the 
Agreement on Safeguards. In this legislation it is cl early stated that what conditions are necessary to 
enforce a safeguard measures when  there is properly documented saf eguard application lodged by 
domestic producers. Turkey shall look into the ma tter and enforce safeguard measures only following 
an investigation as stipulated by the Article 3 of SA. 
 
Question (Indonesia):  
 
Paragraph 47 of the Secretariat Report states that trade remedy investigation might be 
initiated ex-officio . Under Law on the Prevention of Unfair Competition in Imports 
(G/ADP/N/1/TUR/3) the Directorate General of Import may initiate and/or reopening new 
investigation. How does Turkey authority ensure that  this ex-officio initiation would not be abused? Is 
there schedule or time frame arrangement available before the reopening inves tigation being initiated? 
  WT/TPR/M/125/Add.1 
 Page 25 
 
 
Answer:  
 
i) The criteria for initiating ex-officio is stat ed in Article 20 of the Regulation on the 
Prevention of Unfair Competition in Imports. In acco rdance with this Article, the initiation of an ex-
officio investigation requires the presence of suffici ent evidence of dumped or subsidized imports and 
existence of injury on the domestic industry caused by such imports, as defined in Article 19.  The 
existence of this clear requirement prev ents the abuse of ex-officio initiations. 
 ii) The conditions for “reopening of the inves tigation” are laid down at Article 39 of the 
Regulation on the Prevention of Unfair Competition in  Imports. Pursuant to this Article the reopening 
of an investigation is due when the domestic i ndustry submit a written request to the Directorate 
General alleging that the definitive duties were neut ralized due to a fall in export prices. Following the 
request, if the Board decides to reopen an inves tigation, exporters, importe rs and producers of the 
product concerned are provided with the opportunity to submit comments on the sales prices of the product. 
 
S
TANDARDS AND OTHER TECHNICAL REQUIREMENTS  
Question (Japan):  
 
The Secretariat Report states that the TSE is adopting and harmonizing its standards with 
those of the EU on 41 product categories, including  foodstuffs, electrical equipment and machinery, 
and that this is to be completed by the end of 2003. 
 
− Please confirm whether this schedule is correct. 
− Is Turkey planning on increasing the number of such product categories in the future? 
− If so, please indicate the categories on which TSE will adopt or harmonize. 
− The Secretariat Report states that compulsory st andards apply equally to imports  (regardless 
of the origin) and locally produced goods. 
− We would like to know whether foreign en terprises are appropriately informed of the 
 long-term prospect regarding such standard s as well as of any modifications to such 
 standards, in order to ensure transparency. 
 
Answer:  
 
TSE is constantly harmonizing and adopting its st andards with those of the EU not only in 41 
product categories as mentioned in the referenced pa ragraph, but also in other product categories 
about which there is an EU standard. The "41 produ ct categories" listed in Table III.11 are prepared 
according to ISIC classification.  
Since standardization is a continuous and d ynamic work, the current schedule for completing 
the harmonization process till the end of 2003 is only valid for the existing EU standards. However, 
the harmonization process for the new standards w ill continue according to the work programme 
which is prepared in parallel to the work progra mme of the two European standardization bodies, 
CEN and CENELEC, with new standards being added to the list of standards to be harmonized as 
soon as they come into force in the EU.  
As explained above, the standards to be adopt ed are not chosen according to their product 
categories. Therefore, there is no specific product group for the standards to be adopted. Eventually, 
every EU standard will become a Turkish standard according to the work programme. 
 WT/TPR/M/125/Add.1 
Page 26  
 
 TSE is obliged to follow the Decree of Regime  for Technical Regulations and Standardization 
for Foreign Trade published by the Undersecretariat for Foreign Trade. Within the context of The 
Decree, The Undersecretariat for Foreign Trade al so publishes a list of products that should be 
certified according to the related standards before being imported to Turkey. TSE is responsible for 
carrying out conformity assessment for these products. The Decree and the said list relating to 
products and standards are available on the official website of the UFT. 
 
Question (Hong Kong, China):
 
 
We note that among the 1,264 obligatory standards in Turkey, only about a quarter of them 
are equivalent to international standards.  We would like to know how Turkey ensures that its 
standards are not more trade restrictive than necessar y where relevant international standards are not 
adopted.  We would also like to know if Turkey  has taken any steps to allow a wider use of 
international standards, on top of ha rmonization with the EU directives. 
 
Answer:   
 
Within the context of the Decree of Regime for Technical Regulations and Standardization 
for Foreign Trade, imported products which are c overed by standards are subject to conformity 
assessment in respect of health, safety and protecti on of environment according to their standards by 
the TSE. Upon importers’ request, these conformity  assessments can be carried out according to 
international standards as well.  
 
Question (USA):  
 
In notification G/LIC/Q/TUR/2, Turkey stated  that “[r]egarding the controls within the 
context of SPS measures, the quantity of the goods to be imported is determ ined by the importers 
since there are temporary constraints in the capacity of the laboratory infrastructure.  However, these 
constraints will be eliminated soon since the Turk ish Government has already started implementing a 
comprehensive laboratory modernization programme.”    
Could the representative of Turkey please provide  an update on the comprehensive laboratory 
modernization programme? 
 
Answer: 
 
 
Turkish Government has started up grading the control laboratories of MARA to increase the 
effectiveness of food control and food safety. Within  the framework of modernization of laboratories, 
many sophisticated laboratory equipments were su pplied to laboratories and laboratory staffs were 
trained. Furthermore, EU supported MEDA project “Support To Food Inspection Services In Turkey” has started in 2002, accelerating the upgrading pr ocess of 15 Control Laboratories of MARA. This 
project has three components: supply of laborator y equipments, training of laboratory staff and 
establishment of a computer network. 
 
Another priority of MARA is accreditation of c ontrol laboratories, within this context, four 
laboratories applied to Turkish Accreditation Body.    
 
Question (Canada):
 
 
The Secretariat Report makes no reference to re gulatory measures with respect to products 
derived through biotechnology. Please provi de any information on this matter.  
  WT/TPR/M/125/Add.1 
 Page 27 
 
 
Answer:  
 
There is no specific legislation on biotechnology in Turkey. 
 
Question (Canada):  
 
Paragraph 68 states that “Turkey has conti nued harmonizing its sanitary and phytosanitary 
regulations with EU norms, as well as those of the Codex Alimentarius Commission, the Office 
International des Epizooties (OIE), and other international norms.” 
 
 Canada notes that “norms” adopted by the EU do not constitute “international standards, 
guidelines and recommendations, for the purposes of the WTO Agreement on Sanitary and 
Phytosanitary Measures (SPS Agreement).” Canada  requests assurances from Turkish authorities that, 
in harmonizing its SPS regulations with EU norms, Turk ey will do so in a manner consistent with its 
WTO SPS obligations.  
 
 Canada further notes recent examples in whic h Turkey has not abided  by the transparency 
obligations of the WTO SPS Agreement. In this re gard, over the past 18 months, Turkey has changed 
its phytosanitary import regulations three times. Turkey did not notify the WTO on any of these occasions, nor did Turkey inform Canada bilaterally. In June of this year, Turkey banned imports of 
all live animals from Canada due to Severe Acute Respiratory Syndrome (SARS). Again, Turkey did 
not notify the WTO or Canada bila terally. Canada requests Turkey’s assurances that it will provide 
notification on future changes to impor t requirements relating to SPS matters. 
 
Furthermore, Canada notes that Turkey has impo sed measures that, in Canada’s opinion, have 
not been based on science. With reference to the above mentioned SARS example, action was taken 
despite clear advice from the World Health Organiza tion (WHO) that any goods, products, or animals 
arriving from SARS-affected areas did not pose a risk  to public health. Canada does not understand 
the rationale for Turkey’s 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. Please explain 
the ban. What steps are Turkey proposing to take to ensure that future measures will be based on 
science? 
 
Answer: 
 
 
Turkey is following closely the internationa l standards set by the Codex Alimentarius 
Commission, IPPC and OIE referred in the SPS Agreem ent. Pursuant to the provisions of the Turkey-
EC Customs Union, Turkey has been endeavoring to  harmonize its regulations with those of the EU. 
This is also a requirement under the National Progra mme of Turkey on the way of full membership to 
the EU.  
 Ministry of Agriculture and Rural Affairs did not ban imports of live animals from Canada 
due to Severe Acute Respiratory Syndrome (SARS) in June this year. However Ministry of Health has 
taken temporary measures 
 
Question (USA):
 
 
 We understand that since 1996, the Ministry of Agriculture and Rural Affairs has not issued 
“control certificates” to countries considered to be  at risk for diseases such as BSE and FMD.  Many 
countries are free of BSE and FMD (for example, th e United States) and yet are not granted control 
certificates to export red meat.  We are concerned that  your regulations are being used as a barrier to 
trade.  WT/TPR/M/125/Add.1 
Page 28  
 
Does Turkey allow the import of red meat from countries free of BSE and FMD?  Does 
Turkey allow the import of live cattle from count ries free of BSE and FMD other than for breeding 
purposes?   
Has Turkey allowed the import of live cattle or beef from the European Community?  If so 
from what countries?  Have any of these countries had instances of FME or BSE?    
 
Answer: 
 
 
Turkey has been implementing an impressing ag ricultural reform program, having very high 
costs in social terms. The overall objective of th e program is to comply with the WTO rules and 
principles. 
 Livestock farming in Turkey is in subsistence level and small sized, and it is also the main 
livelihood source of people. The liv estock production is not competitive; therefore it is sensitive and 
vulnerable to importation. Previously, we faced with mass importation of meat stemming from high 
level of subsidization. In addition, Turkey has lo st one third of its national livestock capacity in the 
last two decades, and it is in a state of rebuildin g its national livestock herd. The sector needs to be 
protected and promoted for a while due to both social and economic reasons.    We have a relatively high rate of tariffs  on livestock and livestock products except for 
breeding animals. The tariffs are within the limits  of our binding commitments. We haven’t got any 
other instruments in order to protect our livestoc k sustainability from the steadily decreasing world 
prices resulting from high level of subsidies given by the developed countries.   Turkey has not allowed the import of live animals and meat in the risk groups due to BSE 
disease from the European Community according to OI E animal health code and notifications.   
  We took note of all the concerns raised by the members and this will be conveyed to the 
attention of policy setting authorities.  
G
OVERNMENT PROCUREMENT  
Question (Switzerland):  
 
Does the legislative framework in Turkey for esee a remedy system specific for government 
procurement with a review body or a Court?   Answer: 
 
 
Turkey has designed its own challenge mech anism by the new Public Procurement Law 
(PPL), which entered into effect by January 2003. By  this Law, an administratively and financially 
autonomous Public Procurement Authority as a review body has been established. It is envisaged that 
the Public Procurement Board (PPB) will also perform the review of the complaints submitted to it in 
conformity with the procedures stated in the PPL. Th e review of the complaints is applicable for the 
phase prior to the signing of the contract.  
The final decisions taken by the PPB are under the jurisdiction of the Turkish Administrative 
Courts.  
 
If yes, can a procedure be suspended until final decision by the review body or the Court? 
  WT/TPR/M/125/Add.1 
 Page 29 
 
 
Answer:  
 
Yes it can. According to the PPL (Public Procurement Law), Following the submission of a 
complaint, the contracting entity shall not sign the contract unless the contracting officer certifies that 
urgency and public interest considerations require the tender proceedings to continue. 
 
In case the contracting entity notifies that th e tender proceedings may continue and the 
contract may be signed, then the complainant can didate or tenderer may apply the Authority for 
protested complaint within three days following the date of the aforementioned notification.  
What are the most frequently cases brought for complaints? 
 
Answer:
 
 
 Notices, evaluation criteria, qualificatio n criteria, and unreasonably low tenders. 
 
Why are the operators in the energy, water, transportation and telecommunications sectors not 
subject to government procurement rules?  
 
Answer:  
 
As well known water, energy, telecommunicati on and transport sectors need more flexible 
rules rather than the other government procuremen t practices. Hence Turkey has decided to regulate 
these sectors with a specific Law on utilities. And the new law on that is under way by using EU 
directives as reference.  
 Do purchasing entities use permanent list of suppliers? 
 
Answer:
 
 
No, there’s not a permanent list of su ppliers used by the purchasing entities. 
 
If yes, how do they proceed for the qualification process?  
 
 __ 
  Are tenders available on electronic means? 
 
Answer:
 
 
The tenders are not available on electronic means yet. 
 
But as from 1 January 2004, Public Procurement Authority is going to issue a bulletin for 
tender notices. This bulletin will be issued as hard copy and electronic means. The contracting entities 
will be able to send their notices to be published electronically.   
Does Turkey envisage to join the GPA in the near future? 
 Question (Norway):
 
 
As mentioned in par. 82 in the report by th e Secretariat, Turkey has, since June 1996, 
participated as an observer in the WTO Committ ee on Government Procurement.  Against this WT/TPR/M/125/Add.1 
Page 30  
 
background it might be expected that Turkey becomes a party to the Government Procurement 
Agreement.  What are the intentions of Turkey in th is regard - is Turkey considering to accede to the 
Agreement? 
 
Answer:
 
 
In line with the internationally accepted governme nt procurement standards, Turkey passed a 
new Government Procurement Law from the Parliament and it has gone into effect at the beginning of 
this year. Within the framework of the aforemen tioned Law, public procurement system and Public 
Procurement Authority, which is the review body fo r complaints in the public procurement area, have 
been newly established. However, this is not th e final step for improving the public procurement 
system in Turkey. As a consequence, Turkey may co nsider becoming a party to the GPA in the future. 
 
Question (EU):  
 
 Government procurement is vital for ensuri ng that the state utilizes government spending as 
efficiently as possible and that the market is not undesirably curbed. The EC has had good gains from 
using various tools in this field and should like Turk ey to have similar gains. Consequently, the EC 
should like to pose the following questions:  
• To the knowledge of the EC the Turkish P ublic Procurement Law excludes some entities 
and sectors from the scope of the Law. These are, amongst others and according to the 
Secretariat’s report, operators in the energy , water, transportation and telecommunication 
sectors, procurement related to defense, security and intelligence needs, procurement 
related to agriculture and livestock.  
 
• Could Turkey provide references to the appr opriate legislation that governs procurement 
in these excluded sectors and elaborate on the treatment to foreign goods and suppliers 
under this separate and specific legislation? 
 
Answer: 
 
 
As well known water, energy, telecommunicati on and transport sectors need more flexible 
rules rather than the other government procuremen t practices. Hence Turkey has decided to regulate 
these sectors with a specific Law on utilities. And the new law on that is under way by using EU 
directives as reference.  
Not all kind of purchases related to defense, se curity and intelligence needs are out of scope 
of Public Procurement Law. According to the Law “W ith regard to defense, security and intelligence 
pursuant to legislation requires to be treated conf identially as approved by the contract official for 
each tender; procurement of tools, arms, milita ry materials and equipments, systems and war 
materials such as aircraft, helicopter, ships, su bmarines, tanks, panzer, rockets, missiles and 
procurement of their research, development, traini ng, manufacturing, modernization, software and 
ammunition biddings and their related goods and services aiming at military expedition stocks, 
maintenance, operation and maintaining,  and proc urement of services, tools, equipment and systems 
within the scope of state security and of inte lligence shall not be governed by this Law except 
prohibition and criminal provisions”. 
 
 And not all kind of purchases related to agricultu re and livestock are out of scope of the Law. 
According to the Law  “Procurement of products  relating to agriculture and livestock, by entities 
included within the scope of this La w, directly from the producer or its partners in order to process,  WT/TPR/M/125/Add.1 
 Page 31 
 
 
utilize, improve or sell pursuant to the establishment purpose or regulations of such entity shall not be 
governed by this Law except prohibition and criminal provisions  
Question (EU):
 
 
Turkeys State Supply Office (DMO) acts as a ce ntral procuring entity that re-sells goods to 
public institutions at single prices. Are these single prices higher than the price paid by the DMO? How are these prices established? What is the purpose of these single prices? Is there any exception to 
the obligation for public entities to purchase from the DMO? What products are produced by the 
DMO by itself?  Answer:
 
 
Turkey’s State Supply Office (DMO) sells goods at single prices applicable across the 
country. The selling agencies of the DMO deliver goods , which are sold to customers in city and 
district without demanding extra fee for transporta tion. These single prices are higher than the price 
paid by the DMO. 
 
The selling price is set through taking into account a cost of warehouse, transportation, 
insurance, amortization, etc. 
 
Turkey’s State Supply Office as a central pr ocuring entity procures goods from domestic and 
foreign markets, through opening tenders and to the extent possible directly from manufacturers in the 
most economic way, and therefore provides all public  institutions prices set in accordance with the 
cheapest prices achieved through this mechanism.  
There’s no obligation for public entities to purchase goods from the DMO. The DMO 
produces paper, office materials and stationery, etc.  
Question (EU):
 
 
Domestic price preference and local-content requirements in government procurement is 
sometimes used to promote local industry and set-asi de some sectors from foreign competition. To the 
knowledge of the EC this is also sometimes the case  in Turkey. Following, will Turkey re-consider 
this policy and the cost in terms of budget expenditu re (better value for money) as well as the need to 
introduce healthy competition between Turkish and fo reign bidders?  If the aim is to promote some 
industrial sectors, why is such a preference granted to any tender irrespectively of the industrial 
sector? 
 
Answer:  
 
The only purpose to arrange provisions in pub lic procurement law, related to domestic 
tenderers and domestic goods is to protect them. In view of the ne wly established public procurement 
system, it may be too early to abolish all domestic pr otections. It should not be ignored that Turkey is 
still a developing country.  
According to Public Procurement Law “In tende rs held under the Law, the contracting entities 
may establish some provisions to the tender documents  with regard to; only do mestic tenderers shall 
be able to participate in tenders of which estimat ed costs are below the thr eshold values, and in cases 
where the estimated costs are above the threshold values, in procurement of services and works, a 
price advantage shall apply to all domestic tenderers , up to 15%, and in procurement of goods, a price 
advantage up to 15%, shall apply to domestic te nderers, who offer products  which are accepted as WT/TPR/M/125/Add.1 
Page 32  
 
domestic products by the Authority by taking the opin ions of Ministry of Industry and Trade and of 
other relevant organisations and institutions”. In other words price advantage is not compulsory for 
contracting entities to be provided.  
 
 There is no restriction to foreign tendere rs except for tenders under threshold values. 
 
Also with an amendment on Public Procur ement Law in August 2003, definition of the 
domestic tenderer has been arranged in fa vour of foreign tenderers as below. 
 
Domestic Tenderer: Real persons who are the c itizens of Republic of Turkey and [any] legal 
entity established in accordance with the Laws of Republic of Turkey . 
 
L
OCAL CONTENT REQUIREMENTS  
Question (USA):  
 
This report indicates that, although not legally required, “foreign companies setting up a joint 
venture in the motor vehicle industry typically agree to incorporate a certain share of local content in 
their production.”   
In what way do foreign companies “agree” to inco rporate local content into the production of 
automobiles?  For example, do companies sign cont racts that make such an agreement binding?  
 
 Please also explain whether companies ar e provided incentives when they agree to 
incorporate a share of local content.  
Question (Chinese Taipei):
 
 
Turkey has indicated that there are no local-c ontent requirements for incentive purposes in the 
automotive sub-sector. At the same time, according to the Secretariat Report, foreign investors usually 
accept a certain share of local content on a non-comp ulsory basis.  Please could Turkey provide more 
details on the situation as it exists and indicate the measures, if any, that may be involved.  
 Answer: 
 
 
Motor vehicle manufacturers are neither legally  nor practically required to meet a local 
content requirement. 
 
Since such a requirement does not exist, co mpanies are not provided with supplementary 
incentives in return for local content requirement.  
E
XPORT RESTRICTIONS , CONTROL AND LICENSING  
Question (USA):  
 
As a member of the WTO and under the Agreem ent on Textiles and Clothing (ATC), Turkey 
has agreed to textile and apparel quotas with the United States.  Could Turkey provide a list of the “41” textile a nd apparel categories in which Turkey believes quotas 
are still in effect?  
  WT/TPR/M/125/Add.1 
 Page 33 
 
 
Answer:  
 
Regarding the question of quotas in the tex tiles and apparel sector, a list indicating the 
categories which Turkish exporters face quotas in the US market is provided below. Each number in 
the list demonstrates a different product group and the sum of the product groups is 41. 
 
Categories of textile and apparel quotas in the U.S. market  
Categories 
 219 DUCK FABRIC 
 313-0 COTTON SHEETING FABRIC 
 314-0 COTTON POPLIN&BROADCLOTH FABRIC 
 315-0 COTTON PRINTCLOTH FABRIC 
 317-0 COTTON TWILL FABRIC 
 326-0 COTTON SATEEN FABRIC 
 617 MMF TWILL AND SATEEN FABRIC 
 625 MMF POPLIN&BROADCLOTH STAPLE 
 626 MMF PRINTCLOTH 
 627 SHEETING STAPLE  
 628  TWILL/SATEEN STAPLE           
 629 OTHER MMF FABRICS OF STAPLE 
 200 YARN FOR RETAIL SALE SAVING THREAD 
 300/301 CARDED/COMBED COTTON YARN 
 335 COTTON COATS 
 336/636 COTTON/MMF DRESSES 
 338/339/638/639 KNIT SHIRTS/BLOUSES 
 340/640 COTTON SHIRTS NOT-KNIT 
 341/641 COTTON/MMF SHIRTS/BLOUSES NOT-KNIT 
 342/642 COTTON/MMF SKIRTS 
 347/348 TROUSERS, BREECHES, SHORTS 
 347/348-T TROUSERS 
 351/651 COTTON/MMF NIGHTWEAR AND PAJAMAS 
 361 COTTON SHEETS 
 369-S OTHER COTTON MANUFACTURES  
 410/624 WOOL/MMF WOVEN FABRIC 
 448 WOOL SLACKS, TROUSE RS, BREECHES, SHORTS 
 604 YARN, SYNTHETIC STAPLE FIBER 
 611 WOVEN FABRIC, ARTIFICIAL STAPLE 
 
FREE ZONES  
Question (Japan):  
 
The Secretariat Report states that in 2002, government-budgeted expenditure for free zone 
was TL 340 billion, down from TL 1 trillion in 1998.  
 
− Please provide the reason for such decr ease in government-budgeted expenditure. 
 
Answer:  
 
Despite the fact that in the budget of the 1998 financial year 1 trillion TL has been allocated 
for the Free Zones Establishment and Development Fund,  the amount of total realized expenditure has 
registered as 376.9 billion TL for the given year. This  difference is stemming from the fact that some 
planned investments and expropriations  could not be realized during 1998. WT/TPR/M/125/Add.1 
Page 34  
 
On the other hand, for the year 2002 the rela ted figures have been recorded as 1 trillion and 
992 billion TL of total amount of budget allocati ons; and 340.4 billion TL of realized total 
expenditures.   
 
Question (EU):
 
 
Turkey has established certain advantages exte nded to companies operating in Free Zones in 
order to promote foreign direct investment and join t ventures in export oriented enterprises. What are 
the eligibility criteria for a company to be able to locate in a Free Zone? Are there any export 
requirements? 
 
Answer:  
 
According to Article 1 of Turkish Free Zones Act No: 3218, the objectives and scopes of the 
free zones are not only to promote foreign direct investment and joint ventures in export oriented 
enterprises but also, to accelerate the entry of fore ign capital and technology and most important of all 
to procure inputs of the economy in an economic and orderly fashion. Thus, importing from free 
zones to Turkey plays a vital role for our econom y and there exits no limitation to sales to domestic 
markets from free zones and a condition to export.   
The operating licenses are not granted neither upon the export performance nor use of 
domestic products in the export goods. Any firm can obtain an operating license by fulfilling the 
application procedures explained below:  
An application form for Operating License can be  obtained from Directorate General of Free 
Zones, Zone Directorates, or Zone Operator, Foun der/Operator Companies and has to be completed 
and the documents mentioned below have to be  attached to the copy of the said form.  
 
1- Descriptive information about the Ap plicant and its Free Zone operation, 
2- Authorization document and specimen signature of the signatory and power of attorney and 
specimen signature of the representative of the firm (if any), 3- Turkish Trade Registration Gazette that a nnounces the establishment of the Applicant Firm 
showing its current capital composition (For foreign firms Trade Registration Document 
ratified by the related Turkish Consulate), 4- Last three years’ balance sheets and income statements, 5- The original receipt of application fee de posited to the Central Bank of Turkey, and its 
copy, 
6- Documents related to the foreign currency broug ht into Turkey in the last three years, (If 
any).  The above mentioned documents have to be sent to Undersecretariat for Foreign Trade, 
Directorate General of Free Zones directly, or th rough Zone Operator or Founder/Operator Firms. 
 
According to the article 32 of the Free Zones G overning Regulation, the entry of the firearms 
and their ammunition, radioactive substances, dangerous  and toxic wastes to the Zones is prohibited.  
Also, inflammables, explosives, combustibles, fire-inducing substances or materials which are 
dangerous to other substances when put all toge ther, can only be brought into the Zones on the 
condition that there is a special arrangement or cons truction serving for that purpose in that Zone. In 
the same article, it is also stated that the moveme nt of narcotic substances,  psychotrop substances and 
the related chemical substances, and their prepara tions in and out of the Zone are subject to the 
provisions of the national and international la ws carried out by the Ministry of Health. 
   WT/TPR/M/125/Add.1 
 Page 35 
 
 
INCENTIVES  
Question (US):  
 
Regarding incentives provided under the Gene ral Investment Encouragement Programme 
(GIEP): 
 
Would Turkey please explain whether tax exemptions for imported goods, such as textiles, 
apparel, machinery, and equipment are taxed at th e same rate as domestically produced goods, given 
the GIEP tax exemption?  Answer:
 
 
In the page 68 of Secretariat Report at pa ragraph 115 the encouragement measures granted 
within the GIEP are enlisted and there is no measu re called “tax exemption” among them. However, 
as we have understood, the measure “Value Adde d Tax (VAT) Exemption” is implied there.  
 
Pursuant to Article 59/d of the Law No: 4369 and dated: 22/7/1998, both imports and 
domestic purchases of machinery and equipment within the scope of approved machinery and 
equipment lists attached to the investment enc ouragement certificate are exempted from the Value 
Added Tax.   
In addition, according to Article 1 of the Law No: 3065 on Value Added Tax, deliveries of 
goods and services provided in the framework of co mmercial, industrial, agricultural activities and 
activities of self employed persons and imports of a ll kinds of goods and services are subject to VAT. 
Moreover, a unique good or service, whether it is impor ted or not, is subject to VAT at the same rate. 
(For VAT rates, please refer to page 43, pr. 33 of the Secretariat Report.) 
 
Hence, we can say that both domestically obtai ned and imported machinery and equipment is 
subject to same ratio of exemption resulting with a benefit provided to the investor on equal basis 
under the GIEP. In other words the measure does no t make any differentiation between domestically 
obtained and imported goods.  Question (USA):
 
 
This report also states that in centives under the GIEP program are also granted in the form of 
tax and duty exemptions for investors who are “c ommitted to realize at least $1000 of exports upon 
the completion of the investment.” 
 
Please explain how this program complies with Turkey’s commitment under Article 3 of the 
Subsidies Agreement, not to provide prohibited export subsidies.    
Answer:
 
 
The investors who are committed to realize 1.000 US Dollars of exports to be realized two 
years after the completion of the investment are granted an exemption during the investment stage 
from the taxes, duty and related fees, for opera tions and processes of obtaining standard credits 
through banks and land registration in accordance with  the related Laws (Law No:  488 dated 1 July 
1964 and Law No. 492 dated 2 July 1964). The im plementation shall be done in accordance with 
Temporary Article 2 of the Law No. 3505 (dated 3 December 1988), which are all general Tax Laws. 
The measure, as it has been stated, is not conti ngent upon export performance in nature, because the 
benefit obtained with this measure is not lin ear and not increasing with the amount of export WT/TPR/M/125/Add.1 
Page 36  
 
commitment or performance. The export commitme nt requirement of the measure comes from the 
Law and not to contradict with our obligations to  WTO/ASCM requirements and temporary nature of 
the Law (amendment in the Law would take too mu ch time and bureaucratic formalities), which will 
expire at the end of 2003, the export commitment re quirement has been kept  in the Decree at a 
symbolic amount which is only 1.000 USD of export to be realized two years after the completion 
visa of the investment has been done.  
 
In addition, according to the Law No: 4842, as stat ed in the page 68 of the Secretariat Report 
at footnote 97, investors will start to benefit from this measure without the obligation to have an 
encouragement certificate and without having to r ealize 1.000 US Dollars of exports starting from 
January1
st, 2004.   
 
Question (USA):  
 
How does Turkey reconcile the GIEP with its WTO commitments? 
 
Answer:  
 
The purpose of the general investment encourag ement program is to; encourage, support and 
orient investments, in-line with international commitments, in conformity with the objectives of 
Development Plans and Annual Programs, in order to reduce regional imbalances within the country, 
create new employment opportunities, while taking  the advantage of advanced and appropriate 
technologies with greater added value and to realize international competitiveness. 
  The program covers all investment activities related to the production of goods and services, 
research and development (R&D), environmenta l protection and improvement of quality and 
standards.  In summary, no matter which sector th e investor shall be operating in, all investors who 
have prepared their investment feasibility studies and proposals, who believe that they shall be 
eligible for evaluation, within the set framework of the Decree, apply to the Undersecretariat of 
Treasury for the evaluation of their investment projec t to be considered for encouragement. In more 
practical way, it can be said that the program is based upon the regional and horizontal (research and 
development, environmental protection) objectives. 
 
As far as the mechanism is concerned, domestic  and foreign investors are equally treated; the 
foreign investment companies can benefit from al l encouragement measures  granted to domestic 
companies.  
Therefore, objectives of the program, the encouragement measures covered within 
mechanism and eligibility criteria;  
a) do not make any distinction betw een domestic and foreign investors, 
b) are not contingent upon export performance, c) are not contingent upon use of domest ic investment goods over imported ones  
d) do not allow sectoral selectivity, 
e) are not limited to access of certain enterprises, f) are based upon objective rules and automatically implemented after having the certificate and those criteria are strictly adhere d within a transparent mechanism. 
  WT/TPR/M/125/Add.1 
 Page 37 
 
 
PUBLIC ENTERPRISES AND PRIVATIZATION  
Question (Japan):  
 
 Please inform where there exists any other priv atization programme than those listed in Table 
III.16 of the Secretariat Report. 
 
Answer:  
 
There is no other privatization programme exis ting than those listed in Table-III.16 of the 
Secretariat Report. 
 
Question (Canada):  
 
On May 23, 2001, Law No. 4673 freed up 100% of Turk Telecom for privatization, except for 
one “golden share” that would be maintained by the Government of Turkey in order to address 
national security and public interest concerns. Is this still the structure that the privatized Turk 
Telecom will have? How will the Government of Turk ey use this “golden share”? What criteria will 
be used by the Government of Turkey to determin e if national security or public interest is being 
threatened?  Question (Chinese Taipei):
 
 
Paragraph 117 seems to indicate that, according to Law No. 4673, Turk Telecom may be 
entirely privatized. But the system of a “golden shar e” that carries the right of veto may be exercised 
to protect national security and public interest. We w ould be grateful if Turkey could provide details 
of this “golden share” system and explain what protection is afforded to foreign investors. 
 
Answer:  
 
According to the “Long-term Strategy” and “8th Five Year Development Plan” of Turkey, 
telecommunication market is going to be opened up to  full competition, and in order to enable Turk 
Telekom to compete within market conditions and in this market, the role of the State to regulate and 
provide a competitive environment will gain significance. 
 In this policy context, it is obvious that the use of golden share in  Turk Telekom will not 
distort competitive market conditions and will not r esult in expropriation of private shares in Turk 
Telekom. 
 
Question (Japan):
 
 
 The Secretariat Report states that the Turkish energy subsector (over 90% state-owned) has been a primary target of the privatization programme for years. 
 
Please indicate to which degree Turkey will finall y carry out the privatization of the energy 
sub sector.  
Answer: 
 
 
Turkey has already reaffirmed its commitment to  liberalize and privatize its electricity sector. 
The Electricity Market Law (No. 4628) lays out th e objective to be achieved regarding privatization WT/TPR/M/125/Add.1 
Page 38  
 
of electricity sector. According to the Law, di stribution and generation facilities will fully be 
privatized. However, the transmission system will continue to be a State monopoly.   
 
One distribution region has been operated by private sector. As of December 2003, two big 
power generation companies and one power plant (t otal installed capacity is 1600 MW) have been 
transferred to Privatization Administration’s portfo lio. Assets, which have been taken into the scope 
of privatization, consist of 11 thermal power plan ts, 16 hydro-electric & 55 river/stream plants as well 
as 19 distribution region out of 32 regions. These assets will be taken into the privatization 
programme in due course. In the meantime, preparatory works are being carried out by the PA in 
collaboration with the Ministry of Energy and Natural Resources and Energy Market Regulatory 
Authority. 
 
The Natural Gas Market Law, enacted in 20 01, has been based on a liberalized market 
structure. After 2009, state operations in the sect or will be limited to the transmission activity. 
Therefore, in natural gas market the current public  ownership, except existing transmission network, 
will be privatized until 2009.  
 The oil sector is also under the restructuring programme. The Petroleum Market Law has just 
been enacted on 4
th of December, 2003. 
 
There is no barrier for foreign investors to i nvest in petroleum sector in Turkey. TÜPRA Ş, 
which is the only state-owned company is currently  under privatization process and the tender is 
expected to finalize soon. So, the refinery sector is e xpected to be completely privatized by the end of 
January 2004.   Currently, distribution and marketing of Petr oleum products have been carried out by 22 
distribution companies and 56 LPG companies. There is no state owned company in distribution and 
marketing sector.  
Question (Japan):
 
 
According to the Secretariat Report, there are a number of regulations imposed on oil 
industries by the Government of Turkey. We consid er that such regulations will create high energy 
prices, such as that for electricity, and ma y obstruct the activities of private sectors. 
 
 Please explain why such regulations are enforced.  Answer: 
 
 
 Turkey has initiated a heavy restructuring progr amme in the energy sector. The aim of this 
programme is to increase efficiency and to bring comp etition through liberalization. It is expected that 
in the long-run the energy prices will decrease within the competitive market mechanism and the 
quality of energy will increase. 
 
In achieving this objective, as stated in the releva nt parts of the report, Electricity Market Law 
and Natural Gas Market Law have been enacte d at the beginning of 2001. Recently, Turkish 
Parliament has also passed the Petroleu m Market Law on December 4, 2003.  
 Question (Japan):
 
 
The Secretariat Report states th at under the 2001 Electricity Market Law, the vertically 
integrated, state-owned undertaking has been unbundled.  WT/TPR/M/125/Add.1 
 Page 39 
 
 
 Please indicate what measures are taken to ensure third party access to transmission. 
 
Answer:  
 
There are no obstacles for third party access to the transmission and distribution systems, 
which is secured under the Electricity Market Law. Third party access to transmission and distribution 
systems is regulated under the complementary legisl ation such as Licensing Regulation, that requires 
no additional interpretation.  
Turkish Electricity Transmission Corporation (TEIAS) or the Distribution Companies sign 
Connection and Use of System Agreements with the users of the transmission and distribution 
systems. These are standard agreements regulat ed by EMRA under The Communiqué Regarding 
Connection and Use of System, March 2003. 
 The Law clearly defines the minimum common provisions applicable to all licenses and 
among these, obligation of the holder of a dist ribution or transmission license to provide non-
discriminatory system access and use of system right s to all real persons and legal entities is listed. 
 
When new generation facility applications for generation license are received, EMRA 
requests TEIAS or distribution company views/opinions in terms of system connection. The Article 38 of the Electricity Market Licensing Regula tion, August 2002, regulates the System access and 
system use rights. For the details of this regulation, please see EMRA website at www.emra.gov.tr.  
 
Question (Chinese Taipei):
  
 
Tariffs on energy products and services are heavily regulated by the Turkish government, a 
situation that might not be in line with the go vernment aim of encourag ing new investment and 
creating a competitive market.  With this in mind, we  are interested to know  whether the government 
has any plan to deregulate the sector?  
Answer:
 
 
Electricity and Natural Gas Market Laws pr ovide provisions for liberalization of the 
electricity and natural gas markets. Since the main  players in these markets are currently state owned 
entities, there will be tariff regulations for the trans itional period until the competition in the market is 
fully established.    
As an example, for Electricity Market, EMRA  regulates wholesale, retail sale, transmission 
and distribution tariffs. 
 The wholesale tariff is regulated only for the sales of TETAS (which is a state owned 
wholesale company and trades 80% of the generated electricity), as a transitional period implementation. The prices of the other wholesalers (privately owned) in the market are not regulated. 
As the generation and distribution assets owned by th e State are privatized the TETAS trade share of 
the market will be reduced and eventually will be  eliminated. Then, the wholesale tariffs will be 
totally determined in the market.  
The retail sale tariff will be regulated by EMRA  (only for sales to captive consumers) until all 
consumers become “eligible consum ers”. The annual consumption thres hold for eligibility is currently 
9 million KWh which is to be revised by EMRA annually.  WT/TPR/M/125/Add.1 
Page 40  
 
The transmission and distribution tariffs will be the only tariffs continued to be regulated by 
EMRA. 
 
Question (Chinese Taipei):
  
 
It seems that electricity trading systems in Tu rkey are bilateral-contract based and include 
complementing balancing and settle ment mechanisms. We would like to know which agency is in 
charge - TEIAS and/or others - and how the system works.  
Answer: 
 
 
TEIAS thru Financial Reconciliation Cent er (FRC) will be in charge of the  balancing and 
settlement implementations.   
Currently, The Balancing and Settlement  Regulation is being worked on by TE İAS and 
EMRA and plans are full implementation of this regulation by the end of the year 2004.  
 
For the transitional period until then, the ge nerated and consumed quantities of electricity 
will be compared by the end of each month based on three (night (valley), peak and daytime (shoulder)) periods and the variations will be billed to the party that created the imbalances based 
on the 
loading and de-loading prices offered.  
 
Currently,  the loading and de-loading prices are basica lly determined by TETAS (state owned 
wholesaler which has a dominant position in the market by trading 80% of the ge nerated electricity in 
the market). TETAS prepares monthly loading and de-loading price proposals for EMRA Board approval.  
 
However, the physical balancing rules are e xpected to be implemented beginning March 2004 
in addition to the current financial se ttlement (reconciliation) implementations. 
 As the negotiable excess of supply quantities increase in the market and the metering 
infrastructure is improved, 
the loading and de-loading prices will star t to be determined by the bid and 
offer prices of the other market participants. 
 
PROTECTION ON INTELLECTUAL PROPERTY RIGHTS  
Question (Switzerland):  
 
In WT/TPR/S/44 (TPR 1998, §170), it is men tioned that the new law on patent protection 
(Article 83.3) also provides for protection for test data submitted to the Institute to support marketing 
approval of pharmaceutical and agricultural chemi cal products that utilize new chemical entities, as 
required by Article 39.3 of the TRIPS Agreement. Switzerland would very much appreciate to receive detailed information on how Turkey implements Arti cle 39.3 of the TRIPS Agreement in its internal 
law. In particular, we would like to know to what  extent, if any, a second applicant can rely on, or 
refer to the original data of the first applicant, when applying subsequently for market authorization 
for a similar product.  
Question (EU):
 
 
When marketing a pharmaceutical product, pharm aceutical companies ar e also in Turkey 
required to submit extensive documentation in orde r to receive authorization for marketing the 
product. This rather sensitive doc umentation is subject to protection against disclosure, also when  WT/TPR/M/125/Add.1 
 Page 41 
 
 
regulatory authorities are considering the approval of  generic products, and it prevents authorization 
of generic products for a certain period of time. Thereby ensuring the continued research and development of new drugs to combat deceases and inv estments in all countries to the benefits of the 
populations of those countries and their population at large . To the knowledge of the EU, Turkey is 
not fully respecting this principle of data protec tion and exclusivity for the patented product. When 
will Turkey revise its data protection / exclusivity le gislation in order to meet the requirements of the 
relevant obligations under the WTO agreements? 
 
Answer: 
 
 
We agree to the fact that protection of conf idential business information is important to 
support a friendly foreign investment environment in the pharmaceuticals sector in Turkey.   
In this context, we would like to point out th at Turkish legislation on data protection is in 
accordance with Turkey’s WTO/TRIPS commitments and it is in line with Article 39.3 of the TRIPS 
Agreement. 
 
Protection of undisclosed information is provide d by four legislations: 1-Turkish Commercial 
Code, 2- Regulation on Pharmaceutical Products, 3- Civil Servants Act, 4- Patent Decree. 
 
1- Protection under Commercial Code is pr ovided through unfair competition provisions. 
Article 57/7-8 Describes the acts incompatible with  good faith and the acts, which constitute unfair 
competition. Among those: 
 
• Deducing the employees, agents or other assist ants and getting them to divulge or obtain 
the trading and manufacturing secrets of their employer or of his agents, 
• Taking an illicit advantage from trading or manufacturing secrets obtained or learnt 
incompatible with good faith or divulging them  to others are the acts constitute unfair 
competition. 
 
Articles 58-63 provide civil remedies such as prevention of the infringement, compensation 
for damages for those unfair competition related to inter alia undisclosed information. Additionally 
Article 64 stipulates criminal sanctions within the form of imprisonment and/ or fine against unfair 
competition related to undisclosed information.  
 
2- Article 36 of the Regulation on Pharmaceuti cal Products brings responsibility on Ministry 
of Health not to divulge the information disclosed by the applicant during the application of marketing 
permission.  
3- Additionally Civil Servants Act Article 31 brings responsibility on civil servants employed 
in the Ministries and in the public institutions not  to divulge secret business information related to 
their service. 
 Infringing acts against those last two legislation brings responsibility of the public 
administration in accordance with Article 125 of th e Constitution. (Article stipulates that recourse to 
judicial review shall be available against all actio ns and transactions of pu blic administrations.) 
Through those judicial review the public administ ration may be obliged to pay compensation in the 
Administrative Court to the persons whose secret in formation divulged by th e civil servants in the 
administration. 
 
4- Article 83/3 of Patent Decree states that “Whe re an application for patent has been filed for 
pharmaceutical or veterinary produc ts/drugs and for chemicals destin ed to agriculture, the authorities WT/TPR/M/125/Add.1 
Page 42  
 
issuing authorizations/licenses for the manufacture and sale of such products and requesting for this 
purpose information and test results, that were not disclosed to the public and the realization and accumulation of which requires considerable expenses and efforts, shall keep such information and 
test results secret/confidential. The authority asking fo r such information and test results shall take the 
necessary measures to prevent unjus tified/illegitimate use thereof.” 
 
Data protection, as it appears to be understood by  some of our trading partners, could be seen 
as complementary to the patent protection system. Therefore, after the expiry of patent protection period, if onerous da ta protection expectations ar e implemented, as a conseque nce, this could pave the 
way for the consolidation of the market power of some large pharmaceutical companies, in a way not 
envisaged by the IPR system under the TRIPS Agreement. 
 
Therefore, it would be fair to state that discussions in the WTO on the scope of data 
protection under the Article 39.3 of the TRIPS Agreement have not yielded an authoritative 
interpretation of the said article.  
 
Nevertheless, it is hoped that ec onomic, financial, social, and political circumstances that 
have been affecting Turkey would be appreciated by our trading partners, particularly the public debt 
of Turkey, which has increased significantly, partly due to the unsustainable social security deficits 
that were incurred by the Turk ish social security agencies. 
 
It is Turkey’s aim to streamline its IPR regime to  that of the EU. To this  end, relevant Turkish 
authorities have started to consider the issue with al l its aspects. This task would be carried out in 
parallel to Turkey’s accession process to the EU, and once achieved; this streamlined regime will be 
implemented on an MFN basis, in line with the WTO rules. 
 
Question (Hong Kong, China):
 
 
It is noted that parallel imports of goods and services containing IPRs are prohibited in 
Turkey. In 2000, however, the Competition Board of  Turkey decided that parallel imports could not 
be prohibited. The decision was later challenged a nd the case is now before the Council of State. We 
would like to know if further details of the case could be provided. We are also interested in Turkey’s 
views on the issue of parallel imports. 
 
Question (Canada):  
 
It is noted in this paragraph that althoug h parallel importation of goods and services 
containing intellectual property rights is prohibited in Turkey, the country's Competition Board held 
that such imports could not be prevented. Canada understands that this decision was challenged before 
the Council of State. Please comment on the process for reviewing this decision and when such a 
review will be completed. 
 
Answer:  
 
With the amendment made by Law No. 4110 in 1995, on the Law no 5846 on Intellectual and 
Artistic Work, article 23, which is entitled as Right of Distribution, of the Law no. 5846 has been 
changed and the parallel imports of  goods containing intellectual property rights has been prohibited. 
For fulfilling our responsibilities in accordance with the GATT-TRIPs text and with in the framework 
of harmonisation with the EU legislations, a r earrangement made with in the Law no. 5846 on 
Intellectual and Artistic Works, and Law amending some articles of the existent law entered into force 
as no 4630, and the arrangements related to the afor ementioned article has been preserved. Within this 
context, in accordance with the article 23 entitled as “Right of Distribution” and article 80 entitled as  WT/TPR/M/125/Add.1 
 Page 43 
 
 
“Rights Related to the Rights of Author” of the Law no. 5846, parallel imports of goods containing 
intellectual property rights is prohibited. It shoul d be mentioned that presently these arrangements 
related to parallel import are in force, and there is no intention of making any amendments within 
these articles.     
 
Competition Authority has a different perspectiv e to interpret the cases regarding parallel 
import. In two specific cases involving conflict of laws (Competition Policy  versus  Intellectual 
Property Rights regime) brought before the Comp etition Board, the Board has adopted a more 
"competition oriented" approach. On the above-men tioned cases brought before the Council of State, 
it is expected that in the final decision TRIPS Agreement as well as the competition policy will be 
taken into account. The authorized department of  the Council of State has still been reviewing the 
Competition Board Decision. The duration of the re viewing process depends upon the workload of the 
relevant department.  
Question (USA):
 
 
What is the status of Turkey's efforts to stem the unreasonably high rates of piracy of 
copyrighted works in Turkey?    
Please describe in detail new legislative or other action being taken. 
 Question (Canada):
 
 
Canada applauds Turkey on its wide-ranging ch anges to its intellectual property regime since 
the last trade policy review. Among these changes, we recognize and support the creation of 81 Anti-
piracy Inspection Commissions in March 2002 an d the launch of an information campaign on fraud 
and piracy. However, we note that piracy in musi c and software appears to still be on the rise in 
Turkey. What measures are being considered by the Government to combat this problem? 
 
Answer:  
 
Ministry of Culture and Tourism combats with  piracy in a consistent and strong manner. 
Therefore within the framework of combating with pi racy, it is aimed to make legal arrangements in 
the Law on Municipality, Law on Municipality Re venue, Law on Combat with Smuggling, Law on 
Rights and Duties of the Police Officials, Law on Co mbat with Organizations of Organized Crime, 
and Law on Cinema, Video and Musical Works;  
1-With the legal arrangement that will be ma de in the Law on Municipality and Law on 
Municipality Revenue; it is aimed to ban the sale of intellectual and artistic works on the 
streets.  
 
2-With the legal arrangement that will be made  in the Law on Combat with Smuggling; it is 
aimed to stop the exportation and importation of the pirated copies of intellectual and artistic 
works.  
 
3-With the legal arrangement that will be made  in the Law on Rights and Duties of the Police 
Officials; it is aimed to make police officials take action by confiscating the pirated copies of intellectual and artistic works and sending them to the public prosecutor with the notice of 
crime. 
 WT/TPR/M/125/Add.1 
Page 44  
 
4-With the legal arrangement that will be made  in the Law on Combat with Organizations of 
Organized Crime; it is aimed to name to dup licate and disseminate the copies of intellectual 
and artistic works without the consent of the right owner as organized crime. 
 
5-With the legal arrangement that will be ma de in the Law on Cinema, Video and Musical 
Works; it is aimed to abolish the provisions of  ineffective penalties wh ich are far away from 
being deterrent. 
  Moreover, Law on Intellectual and Artistic Work s will be amended, studies on Draft Bill has 
not yet finished but with this amendment it is aimed; 
 
1-To make compulsory the usage of internati onal standard codes such as SID Code or ISRC 
or ISBN etc. for copies of intellectual and artistic works. 
 
2-To create a system of applicable penalties such as stepped penalties. 
 
3-To control the places which duplicate or disseminate or distribute or sell the copies of intellectual and artistic works by classifying a nd  giving  them certificates and inspecting 
these places frequently. 
 
Besides these legal arrangements it is aimed; 
 
1- To revise the existing registration system, wh ich is still applied to the cinematographic and 
musical works. It is planned that all the forms and documents used during the registration will be rearranged and the registration system will be planned in terms of the direct right 
ownership. 
 
2- To form the on-demand registration system in other intellectual and artistic work groups. 
With this system, all the information related to  the works and to the authority of usage of 
financial rights of authors and other right owne rs will be taken under registration in detail. 
The Turkish Ministry of Culture and Tourism established enforcement committees in all 81 provinces of Turkey in 2002 and these committees combat with piracy in a strong and 
consistent manner. Anti-piracy inspection co mmissions detected great number of pirated 
materials including tangible copies of entert ainment and business software, cinematographic 
and musical works and books in the year 2003 and also hundreds of people have been prosecuted.  
It is also  aimed; 
 
1- To overcome the need for financial resour ces such as technical equipments, office rents, 
expenses of inspection etc. paying special attenda nce to the cities where piracy is widespread. 
 2- To establish a Provincial Inspection Coor dination Unit in which the representatives of 
cinema, music, software and publication sectors are included as well as the representatives of 
Ministry of Culture and Tourism and the collecting societies.  3-To provide cooperation and instant informati on access by developing the software used and 
spread the usage of this software in the cities. 
 
The awareness raising campaigns in the field of  copyright and related rights have led impact 
on society. Regarding that it is necessary to in form the public opinion about the importance of 
copyright and related rights;  WT/TPR/M/125/Add.1 
 Page 45 
 
 
1-Ministry of Culture and Tourism has prepared  several spot movies within the framework of 
combating against piracy. These movies are s hown in TV channels and in cinema saloons. 
 2-Several meetings realized by Ministry of Culture and Tourism with the title of combating 
against piracy in which representatives of coll ecting societies and related sectors attended. 
 
3-Ministry of Culture and Tourism continues to support the infrastructure and technical equipment projects and to strengthen the coll ecting societies by means of administrative, 
financial and legal ways.  
4-It is aimed to continue the studies to inform judicial milieu. 
 5-Ministry of Culture is planning to have pr epared entertainment so ftware for the children 
within the framework of combating against piracy.  
Question (USA):
 
 
The United States has received reports regarding the high cost and complexity of the 
banderole system in Turkey.   
Please describe the banderole system and any other certification system for copyrighted 
materials in Turkey? 
 
Answer:
 
 
The 81th article of the applicable law rega rding incision intellectual rights has been 
rearranged in order to prevent illegal reproduction of intellectual and artistic works and providing 
efficiency in combating against piracy. Procedures and merits related to the use of banderoles as a 
significant determination instrument in differentiation of the original copy from the pirated copy were 
laid down within the article, and c onditions of infringement were stated  in paragraphs. Punishments of 
imprisonment, and fines to be im posed against infringement have been increased. Furthermore, ex 
officio follow up of the banderoles were establis hed through a commission to be made up by 
territorial administration governors of representatives of Ministry of Internal Affairs, Ministry of 
Finance and Ministry of Culture and Tourism and collecting societies. 
 
 The amended article number 81 entitled as “The In tervention of the Intrusion to Rights” of the 
Law number 5846 which should be prepared again by the Ministry of Culture and Tourism, entitled as 
“The Regulation on the Principles and Procedures for the Implementation of Banderoles” was 
publicized at the Official Gazette on November 8, 2001 no: 24577 and came into force.   Thanks to the serial number and codes, the above mentioned regulation comprises the principles and procedures for the usage of the Bandero les as a label which is to be a quality of the 
Banderoles accepted to be an effective technical mean s against pirate activities that is compulsory for 
the copies of cinema and musical works and non- periodical publications whereas it can be used 
voluntarily for other work groups which are easy to be copied and comprises the principals and procedures for the foundation and operation of the commission which will control the mentioned 
implementation of the Banderole. According to the above mentioned Regulation Provisions, the 
Notification determining the Procedures and Princi pals for the Functioning of these Supervision 
Commissions, came into force on January 27, 2002 with the number of 24653 on the Official Gazette. 
 WT/TPR/M/125/Add.1 
Page 46  
 
Question (USA):
 
 
What efforts are being made to ensure certification of copyrighted materials is not 
unnecessarily complicated, costly, or entails unreasonable time limits or delays?  Answer:
 
 
The banderole implementation is made accordi ng to the above mentioned provisions. This 
implementation is neither costly nor complicated . For example Banderoles for non-periodicals are 
easily given to the authors or to the publishers by only filling a covenant. In cases of conflict, the 
Ministry can claim documents (such as contracts) from the ones who make a declaration. The 
banderoles used for the non-periodicals cost 20.000 TL. 
 A similar procedure is also made for the cinematographic and musical works’ copies. 
 
It is also aimed;  
 
1- to revise the existing registration system, wh ich is still applied to the cinematographic and 
musical works. It is planned that all the forms and documents used during the registration will be rearranged and the registration system will be planned in terms of the direct right 
ownership. 
 
2- to form the on-demand registration system in  other intellectual and artistic work groups. 
With this system, all the information related to  the works and to the authority of usage of 
financial rights of authors and other right owne rs will be taken under registration in detail. 
 
On the other hand, The Law number 5846 “ Intellectual Property Rights” and the Law 
number 3257  “Cinema, Video and Musical Works” and the related legislation is within the 
responsibility of the General Directorate of Copy rights and Cinema. In order to strengthen the 
intellectual property rights system a software pr ogram has been prepared within the General 
Directorate. Thus, it will provide to reach to documents, archives and administration easily.  
 
By using this program; 
 
• The whole archive of the General Directorate will be transferred to electronic 
environment. 
• To carry out the procedures such as the regist ration of intellectual and artistic works, the 
implementation of banderoles or the document s that shall be arranged by the Ministry 
itself for the broadcasting of the work in radio and televisions. 
• In case there is a disagreement among right holders, it will be possible to reach the 
documents or information that is necessary. 
• To meet new necessities (document arrangement , forms, statistical information) within 
the framework of the amendments r ealized with the Law number 5846. 
• To provide transparency of procedur es within the General Directorate. 
 
Question (USA):
 
 
What steps is Turkey taking to stem the unreasonably high rates of counterfeiting of 
trademarked products?    
Please describe in detail new legislative or other action being taken. 
  WT/TPR/M/125/Add.1 
 Page 47 
 
 
Answer:  
 
Turkey is trying to establish effective enfo rcement system for fighting counterfeiting of 
trademarked products. It is proved especially by increasing the penalties and establishing specialized 
courts. 
 
Industrial property legislation promulgated in  1995 including trademark law put an end to 
bring revocation actions against the IP Rights before  the administrative court by giving jurisdiction 
only to specialized courts.  
The recent development on specialized court on th is issue reached up to 7 courts, specialized 
court system in Turkey started since the beginning of February 2001.  
We can also mention that EU financed Project related to the training of judges and 
prosecutors on IP Rights. 
 
Related with the border enforc ement, we can mention the 57
th Article of the Customs Law 
No.4458 entered into force 2000, is covered the IP  Rights. It enables the customs authorities to 
enforce the provisions of Article 57 of Customs Law No.4458. It regulates the form of application, actions to be taken by the customs authorities prio r to and after a suspension decision, action for 
goods found infringing. 
 
Turkish Patent Institute is also supporting in improving the enforcement of IP issues through 
informed training of judicial officials and increasing the awareness of the IP regime among consumers, industry, R&D managers and techni cal staff as well as academics through workshops, 
symposia, and distribution of document. 
 
One of our main objective is to disseminate i ndustrial property information effectively and in 
a lasting manner with projects such as; providing access to industrial property library via the internet, establishing on IPR’s help desk, tracking and arch iving publications electronically; publishing 
trademark data’s electronically and supplying sw ift access to information through on electronic 
medium for everybody who request, especially for customs officials, police and judges. 
 
Considerable amount of work was achieved in Turkey for last 5 years concerning the 
legislation passed and the awareness created among the public for industrial property rights. Anti-
piracy associations began to be formed.  
We believe that effective solutions fighting on counterfeiting requires not only updated or 
new legislation but also dissemination of knowle dge and especially co-operation not only among the 
national institutions but also co- operation in international fora.  
 
Final event in this field, Customs Administration are organizing workshop on IPR 
enforcement, on 7-8 January 2004 in  Ankara with the contribution of  EU for fighting counterfeiting of 
trademarked products and piracy. 
 
Question (USA):
 
 
What steps is Turkey taking to comply with its  obligations to protect undisclosed test data 
against unfair commercial use as required by TRIPS Article 39.3.   
 
Has Turkey halted the granting of registration to products of others that rely on data submitted 
by the originator of the data?   WT/TPR/M/125/Add.1 
Page 48  
 
Has Turkey taken any steps to revoke previously  granted registration of products to parties 
relying on such data?  
Question (USA):
 
 
Article 41 of TRIPS provides that "Members sh all ensure that enforcement procedures as 
specified in this Part are available under the law so as to permit effective action against any act of 
infringement of intellectual property rights cove red by this Agreement, including expeditious 
remedies to prevent infringements and remedi es which constitute a deterrent to further 
infringements."   
 
Please describe how in practice Turkey permits effective action and pr ovides for expeditious 
and deterrent remedies.  
We have read media reports that courts, in  cases involving IPR violations, do not hand down 
sentences sufficient to deter further violations and can  be subject to delays and procedural hurdles.  
 
Could Turkey comment on court practices in cases involving IPR? 
 
Question (USA): 
 
 
 Under TRIPS Art 50(2) "The judicial authorities shall have the authority to adopt provisional 
measures inaudita altera parte where appropriate, in particular where any delay is likely to cause 
irreparable harm to the right holder, or where there is a demonstrable risk of evidence being 
destroyed."   
Please describe under which Turkish laws civil ex parte  searches are permitted and how these 
orders are applied in Turkish courts.  
Answer:
 
 
Enforcement of Intellectual Property Rights Before the Turkish Courts 
 
In general and in particular on IPR cases, Turk ish judicial authorities has a general approach 
and  de jure  duty to practice of cases and legislation in the sphere of their judicial power in terms of 
all civil and penal cases. 
 
Besides this general approach, and of course as a part of this ge neral practice, Turkish judicial 
authorities also practice the intellectual property cases according to the various specific IP legislation, 
in particular. Furthermore, it can be said that the tr ial of IP cases have been being handled as an area 
which requires specific expertise by the judiciary.  As a result of this approach, we see that two 
specialized courts, one as civil, another as penal have  been established in Istanbul in 2002, in where 
more than half of these cases were brought before  courts in a countrywide context, as a first 
beginning(in 2003 seven more IP courts have b een established which shall be mentioned below). 
 
Obligations under TRIPs and EU integration process, elements of Ministry of Justice`s 
approach concerning enforcement 
 
Ensuring effective enforcement of IP rights is  an obligation under the TRIPS system. Having 
considered that the effective enforcement of IPR is more important than only adoption of  necessary 
laws, it can be said that Turkish Ministry of Justi ce which is only responsible of enforcement of IPR  WT/TPR/M/125/Add.1 
 Page 49 
 
 
rights before the courts has an approach  to fulfi ll its obligations on enforcement. The main elements 
of this approach are as follows; 
 a- Ensuring training to judges and public prosecutors in country, b- Ensuring training to judges and public prosecutors abroad, 
c- Participation to training activities of other institutions, 
d- Sending circulars on effective enforcement of  IPR rights to central and field organization 
of Ministry of Justice to be distributed to all judges and public prosecutors for giving/refreshing information, e- Publishing of new IPR legislation (includi ng ratified conventions) wh ich were entered in 
force in its monthly periodical intra-organizationa l bulletin which is distributed to each one of 
judges and public prosecutors ev ery month when such a new IPR legislation appears in the 
time being, f- Establishing specialised courts(two in 2001, seven more in 2003 recently), g- Preparing and conducting project focused onl y to effective enforcement of intellectual 
property rights. 
 
Ultimately Deterrent Sanctions 
 
While reviewing the developments in area since 1998, it can be said that, Turkey is focused to 
meeting the requirement of effective enforcement of  intellectual property rights stipulated by TRIPs 
Agreement. To that end, strengthening the effec tiveness of existing legislation could be achieved. 
 The strengthening the enforcement of intellectual property rights priorly became possible by 
raising the effectiveness of existe nt legislation by various adoptio ns. By adopting the Law numbered 
4630 which came into force on 3 March 2001 for the amendment of Law numbered 5846 on 
Intellectual and Artistic Works, penal provisi ons of the Law numbered 5846 became even to 
international standards considerably high as rangi ng from 4 to 6 years of imprisonment terms and for 
2003 year 121.794.000.000 TL (87057 USD) to 365.382.000.000 TL (261173  USD) as fines. Furthermore, it should be remembered that the Law numbered 4128 dated 7 November 1995 which 
brought penal sanctions to industrial property pr otection system (Thus, 551 Patent, 556 Trademark, 
554 Industrial Design, 555 Geographical Indications Le gislation.)  has also penal provisions ranging 
from 1 to 4 years of imprisonment terms and for 2003 year 13.871.420.709 TL (9915 USD) to 
46.238.069.030 TL (3 3050 USD) as fines (Conversion is made as 1 USD=1.399.000 TL. according 
the Central Bank of  Turkey  official excha nge rate on 2nd October 2003. The fines are raised 
annually subject to change in accordance with a re-evaluation ratio a nnounced per annum by the 
Ministry of Finance. The yearly repetition of rai se of fines ensures the continuous deterrence).  
 
As seen clearly, the imprisonment terms and fines enforced by Turkish courts in IPR cases are 
ultimately deterrent.  
Applications of the Deterrent Sanctions 
 
When a penal case is brought before a penal court on IPR violations, the abovementioned 
sanctions are subject to impose by the court. Wh en committing the crime is proved (according to the 
judge), it becomes a must to impose the penalty, so  there is no any discretion to impose or not to 
impose. That is why, without doubt, the provisions of  related laws which contai ns  deterrent sanctions 
entered into force for being enforced without any option. 
 WT/TPR/M/125/Add.1 
Page 50  
 
The Turkish Criminal Procedure Law  
 
The application of criminal law must satisfy the requirements of due process prescribed by 
the Code of Criminal Procedure (as we ll as the principles of the Constitution). 
 
In general, criminal procedure is, as the term  suggests, concerned with the enforcement of 
criminal law. It deals with such matters as the id entification and the collection of evidence of crime, 
the apprehension and indictment of criminals, and finally the procedure of criminal trials. Although 
criminal procedure is concerned with form, it is in fact closely related to the substantive law. 
 
There are three basic systems of criminal pro cedure as accusatorial, inquisitorial and mixed 
systems.   
Turkey follows a procedure which is a mixtur e of the inquisitorial, with its emphasis on 
effective investigation, and the accusatorial system, wi th its respect for the defendant’s personal rights 
and freedoms. 
 
As for an information, it can be added that th e Turkish Code of Criminal Procedure of April 
20, 1929 (in force today), is a translation of Germ an Code of Criminal Procedure of 1877, adopted 
with many changes. This Code has been amended many times. 
 
To satisfy the requirements by the judiciary stat ed in the Code of Criminal Procedure is a 
must for Turkey as a state governed by rule of la w. The evaluation of criminal procedures of each 
penal case should be made in the light of the principle of rule of law. 
 The IPR legislation prescribes different very de terrent punishments for different IPR crimes. 
(The judges are given some discretion in fixing punishment. They decide whether to impose the 
minimum or maximum punishment or something in between. The aggravating or mitigation reasons 
are stated in the Turkish Penal Code).  
The Law of Civil Procedure 
 
General Overview to Court Practices and its Legal Environment for Commenting  
 
The civil procedure is regulated by the Code of  Civil Procedure, Law No:1086, dated June 18, 
1927 and the Code of Execution and Bankruptcy. For understanding and commenting the court 
practices, giving outlined information herein after below of the legal base governing inter alia IPR 
cases may be beneficial. 
 
In civil cases, the procedures stated in the Code, must be followed by the judiciary .  
 
Bringing action:  The plaintiff must draft a petition and should file in the appropriate court. 
First of all, the court must be the competent c ourt and secondly the provisions of the Code of Civil 
Procedure on venue should be fulfilled. The petition must  be filed with the clerk of the court. The case 
is considered commenced when the petition is file d with the clerk and the necessary fees are paid.  
 Noticing to the defendant:  After the plaintiff’s petition has been filed, the clerk of the court 
prepares a summons which, together with a copy of the petition, is sent by the court to the defendant. 
The usual method of service in Turkey is by registered mail. 
 Defendant’s response:  A petition of reply should be submitte d within ten days(or other period 
permitted by law) after service of su mmons and petition on the defendant.  WT/TPR/M/125/Add.1 
 Page 51 
 
 
The petition of reply follows the same general structure as the plaintiff’s petition of the case. 
It may contain many legal defenses stated in the Code.   The defendants may dispute the facts stated by the plaintiff and may assert new facts.  
Possibility of counter-claim:  The defendant may include in his petition of reply a counter-
claim if it has some connection with the plaintiff’ s claim and if it requires no new parties, although 
what constitutes an adequate connection is not specia lly defined. The counter-c laim is considered as 
an independent suit. The defendant, therefore, n eed not assert his counter-claim in his petition of 
reply. He may, however, submit it in the form of  a separate petition within the time allowed for the 
petition of reply. He may also bring an independent action. 
 Burden of proof:  After the exchange of petitions, the f acts on which the claim is based must 
be proved.   
The general rule on the burden of proof is stat ed in Article 6 of the Code: Each party must 
prove the facts on which he has based his claim, unless the contrary is stated by law. 
 In some specific instances the law states who must prove the facts. There are also 
presumptions, which indicate the existence of certain facts.  
Means of proof:  There are different types of instruments of proof. Some of them, such as 
deeds, are binding on judges, and many others , such as testimony of witnesses are left to the 
discretion of the judge. Written instruments or deeds, books of account, witnesses, depositions (when 
the need for taking the testimony away from court arises during the course of trial, for instance the 
witness is in hospital, the judge himself/herself tak es it or a substitute judge take it; when a witness is 
living in another province, then the court issues an order to a judge of the province where the witness 
can be found and demands the testimony), oath, expe rt evidence, view and real evidence (if necessary 
in the case to take a view of the premises involve d in litigation, he/she may, at that time, take 
testimony on the spot)  are sorts of evidence which have their own characteristics and different value. 
 The expert evidence is worth to mentioned sep arately because of its importance in IPR cases. 
An expert is a person who renders a written report with respect to certain aspects of a case. He is not 
retained by one of the parties, but by the court; he is not limited as to the sources of his information or 
as to the nature of the opinion which he can express; he frequently as one member of a team of several experts (usually consisting of three persons). The obj ection to expert reports by parties to the case, 
may lead to appointment of different experts to pr epare a new expert report,  so this normal process 
lengthen the trial period. Enjoyment of this right depends on the will of the parties and envisaged and 
accepted in all of the modern legal systems. That is  why; these right enjoyments by parties during the 
trials may cause a length in time period but should not be regarded as an ``hurdle`` or ``delay``. Since 
case parties` enjoyment of rights on objection to e xpert reports cannot be prohibited, the alleged 
critics may be reviewed in the light of the right s of the parties to the case during the trial.  
 
Rendition of judgment:  After the reception of all the evidence the parties may submit final 
petitions arguing why judgment shoul d be rendered in their favor.  
 
The final decision necessarily embodies judge’s  conclusion on the evidence, on relevant 
substantive law, and on the application of such law to the facts found. It should be distinguished from 
the interlocutory decisions previously rende red throughout the course of the hearings. 
 After the decision is filed in the office of the cl erk, either party may secure a copy by paying 
the necessary fees. With the service of the decisi on the time for the appeal starts to run. WT/TPR/M/125/Add.1 
Page 52  
 
Appeal:  An appeal goes from the first instance cour t to the related Chamber of the Court of 
Cassation, which handles the type of the subject matte r involved. After rendition of the decision either 
party may ask the Court of Cassation to reconsider it for a variety of reasons. The competent Chamber may either approve or disapprove the lower court’s judgment. 
 
If the final decision of the Chamber is to affirm the judgment of the lower court no further 
review is possible. Only exceptionally a revisi on may be demanded. If the Chamber disapproves the 
judgment of the lower court, the case is returned to that court of action.  
When the trial court insists that the original  disposition was correct the case may be sent back 
to the Court of Cassation, where it is considered by all civil or criminal Chamber Members. The 
decision of this assembly must be followed by the lower court.  
The Court of Cassation reviews not only the f actual determination but also legal questions. 
 
A party wishing to appeal must file a petition of appeal within fifteen days after service of the 
judgment.   
The members of the Chamber and the rapporteur examine the file. Usually, there is no oral 
argument. Only in those cases where the subject matter  exceeds pre-defined monetary level in the law 
an oral argument may be demanded. 
 
The Turkish Code of Civil Procedure which w as prepared by greatly being affected from  
Switzerland`s Neuchatel Canton, Fr ance and Germany Civil Procedure Laws, adopted in the country,  
offers  the practitioners the same legal standards.  
The court practices should observe the legal requi rements which was stated  above with the 
outlines to reflect the functioning of the system and better understanding of  how the enforcement 
before court work.  
Turkey comments that a fair trial can be po ssible to meet the abovementioned standards on 
court practices involving IPR. 
 
Civil Ex Parte Searches 
 
Turkish Code of Civil Procedure permits the civil ex parte  searches in its provisions.  
 
The Articles 101-113/A of the Code affords the n eeds. If a delay is likely to cause irreparable 
harm to right holder or there is a demonstrab le risk of evidence being destroyed, civil ex parte  
searches can be requested with a petition fro m a court. Where the enforcement of ex parte  search is 
possible in terms of least expense and quickest, the re quest also may be directed to that place court.  
 To render an ex parte  search decision is not an obligator y issue for judge, he/she has the 
discretion to render or not.  
 
It is known in Turkey that, there is a wide practice in judiciary on civil ex parte  searches in 
general, and also on IPR in particular.   Independence and Impartiality of Judges and Courts and the Court Practices 
 
The Turkish Constitution and procedural laws  contain many provisions for securing the 
independence and impartiality of the judges and th e courts. Independence from the executive branch  WT/TPR/M/125/Add.1 
 Page 53 
 
 
of the government was secured mainly through the adoption of the separation of powers, which is 
stated in the Constitution and enforced by special statutes concerning the judiciary. 
 According to the Article 138 of the Constitution; 
 
“Judges shall be independent in the discharge of  their duties. They shall pass judgments in 
accordance with the Constitution, law, ju stice and their personal convictions.  
No organ, office, agency or individual may give orders or instructions to courts of judges in 
connection with the discharge of their judicial duty, send them circulars, or make recommendations or suggestion.” 
 
Since every penal or civil IPR case may vary in its characteristics and may carry different 
properties from another,  each one of the decisi ons rendered by these indepe ndent courts may be 
different. To evaluate a court decision should be ma de in the light of these facts by remembering the 
possibility of existence of different contents of each case that judge’s face. It is fact that the contents 
of the case files are not uniform. The diversity/variety of the contents of case files may lead to 
difference of the decisions at the end of trials. 
 
Increasing Number of Cases Before Courts 
 
It is observed that many factors cause to a significant increase in number of cases before 
courts. 
 
First of all, increasing awareness both in private and penal sectors affects it. The more they 
know their rights, the more they bring action before courts.  
The establishing of specialized IPR courts cont ributed the knowledge level of IP in country. 
 
Continuous training activities in private a nd public sectors triggered the sensitivity on 
protection of IPR.  
The increasing numbers of  IP attorneys which are taking certificates from Turkish Patent 
Institute also play important role in this increase  of number of cases. They may work in the client 
companies or may form specialized IP attorneyship  companies or  offices to involve in IP issues. 
Many of them have contracts with client comp anies for following the IP piracy or counterfeiting 
events, which are actionable against the pirates and counterfeiters, on behalf of  clients. This means 
that as right owners as legal or real persons genera lly show a tendency that they leave the traditional 
way to follow the piracy or counterfeiting by th emselves and preferring allowing to leave this 
business to the IP professionals. The more advanced techniques used by the IP professionals and/or 
specialized IP attorneys cause an increase on detecting existing undi scovered IPR violations or new 
piracy or counterfeiting events against right owne rs. The increase in detecting the IPR violations 
directly affects the numbers of IPR cases brought before the courts. 
 
The reactions and reports in Turkey to the increasing number of IPR cases are evaluated as 
positive signs of increasing level of IPR knowledge and specialized human resources in country and 
realizing more the effectiveness and deterrence of judgments.   
IPR Enforcement Projects  
 
“Effective enforcement of intellectual property rights project”  WT/TPR/M/125/Add.1 
Page 54  
 
A pilot project funded by European Union r eached the implementation stage on 2002. This 
project’s budget is 2,289,000 Euros. The overall objectiv e of the project is to enable Turkey to meet 
its commitments on intellectual, industrial a nd commercial property in accordance with the 
Agreement on European Community-Turkey Customs Un ion. It is known that the status of full 
harmonization of Turkey’s IPR legislation is decl ared by the WTO/TRIPs Council after the country 
review in 2000. After this stage, it is observed that the efforts on enforcement of IPR legislation 
gained much more importance. As one of these e fforts, the abovementioned project envisages in its 
structure of each separate sub-components: 
 1) The development of human resources by training specialized IPR judges, 
2) Creation of sustainable support infrastruct ure by establishing an IT network between 
Ministry of Justice, the specialized courts , the specialized IPR doc center and customs 
administration,  3) Establishing of a specialized IPR documentation center, 4) Creation of awareness in the public and private sector by organizing an international 
symposium.   
 
The trained specialized IPR judges and established specialized IPR courts 
 
The decision on the venues of new seven speciali zed IPR courts has been given by Supreme 
Council for Judges and Public Prosecutors. Accordi ng to the Supreme Council of Judges and Public 
Prosecutors’ decision, which is based on the dens ity and civil or penal natures of IPR cases 
throughout the country; the places of specialized courts are designated as İstanbul (in addition to 
previous two courts; two civ il and two penal as a plus), İzmir (one penal), Anka ra (one civil, one 
penal). The majority of these IPR cases are generally brought before the courts of these three biggest 
cities since the population, industry and trade are ge nerally gathered in (perhaps %90 per cent around) 
these areas. 
 The selected seven (7) judges who completed their 10 months abroad education in Europe has 
been appointed  to  their  posts in  October 2003.  Furthermore, these seven (7) specialized courts (for 
strengthening the enforcement of intellectual propert y rights, two specialized courts were set up in 
2001 in İstanbul city where IPR cases are relatively intensive in comparison to other cities- almost 
half of total number of IPR cases in country) have  been established legally, and other general purpose 
courts have been transferred the IPR cases to these specialized courts. 
 
The Enforcement of Intellectual Property Right Network 
  The IPR network, which was mentioned above  to work as an continuous and permanent 
inter/institutional specific IPR network is about to  be physically established after following current 
tender evaluation phase to designate the winner of tende r. It is apparently seen that this IPR network 
shall produce incredibly successful  results in IPR enforcement. 
 
The establishment of specialized intellectual property rights documentation center  
 
The specialized IPR documentation center has b een established and refurbished in the context 
of this project in Ankara University to contribute anyone on IPR issues.  
The intellectual property rights symp osium for public and private sectors 
  The symposium, which shall be organized with the collaboration of European Patent 
Organization to disseminate knowledge (Various tr aining activities were occurred before. Since the 
European Union gives great importance to the prot ection of intellectual property rights. The TAIEX  WT/TPR/M/125/Add.1 
 Page 55 
 
 
(Technical Assistance Information Exchange) o ffice of the European Union-DG Enlargement 
organizes various seminars both in Turkey and abro ad. In 2003, TAIEX organized an IPR seminar in 
April in Istanbul for Turkey and organized a semina r in December in Brussel s to which Turkey also 
participated in. In the beginning of 2004, on 7- 8th January, TAIEX shall also organize a seminar on 
many IPR enforcement issues in Ankara. These clearl y show the density of the training activities on 
enforcement of IPR in context of the EU-Turkey rela tions) to both public and private sector shall be 
held in May 2004 as the last sub-component of the project and lead to completion of last phase of the IPR pilot project.  
Arbitration as a Binding Option in IPR 
 
As known, arbitration (The application areas wh ere arbitration is possible  should be taken 
into consideration)  is legal in Turkey, inter alia  on IPR issues. Arbitration can  be used as an option in 
Turkey that a binding arbitration decision can be given. Since the recognition and execution of an 
arbitral award can enter in the enforcement area of judiciary; we may clarify some issues on 
arbitration. 
 
In the context of enforcement of intellectual pr operty rights before courts in Turkey, it should 
be noted that courts play role in different ar eas, civil actions, penal actions, on domestic arbitral 
awards and on recognition and execution of foreign civil courts judgments and arbitral awards on 
intellectual property issues. 
 
As regards enforcement of domestic arbitral awards on intellectual property rights issues, 
gaining execution capability of this award which is fina lized by not using the right to appeal by one or 
whole parties in appeal time limit depends on  an ad ministrative approval of a first instance court. But 
for appealed domestic awards, this can be done by  a first instance court by following approval of 
Court of Cassation. The provisions governing this i ssue and procedure are stated in Code of Civil 
Procedure (Art. 516-536). 
 The recognition and execution of the foreign ci vil court judgments and arbitral awards on 
intellectual property rights issues are also in the c overings of the enforcement of Turkish courts. The 
New York Convention on the Rec ognition and Enforcement of Forei gn Arbitral Awards dated June 
10 1958 (which is valid only between wide range of  signatories) is in force since 1 October 1992 in 
Turkey. The actions concerning recognition and execu tion of the foreign court judgments and arbitral 
awards on intellectual property rights issues can be br ought before the Turkish courts by plaintiffs 
according to this Convention as well as the La w numbered 2675 which is  mentioned below. 
 
On the contrary to abovementioned Convention which is valid only between signatories, as an 
option, plaintiffs may bring action for demandi ng recognition and execution of the foreign court 
judgments and arbitral awards on intellectual property issues according to the Law Numbered 2675 Concerning International Private and Procedural Law which is valid for every judgment or for foreign 
arbitral award.   Conclusion for Enforcement of IPR Cases  
 For future policies, it is a fact that, the Ministry of Justice   in charge of effective enforcement  
(Enforcement has a wide meaning. The applications in  the Turkish Patent Institute or in the Ministry 
of Culture, or by the Customs Administrations, pol ice application to IPR are different examples to 
enforcement of IPR. The enforcement of IPR before  courts forms the sole responsibility of Ministry 
of Justice) of IPR before the courts, is determin ed to ensure the effective enforcement of IPR in 
Turkey and to strengthen it. To that end, there is  a consensus in judiciary for settling and maintaining 
an effective and perfect functioning enforcement syst em on the issue. For that reason, Ministry of WT/TPR/M/125/Add.1 
Page 56  
 
Justice shall intensively continue to educate judges and public prosecutors on IPR issues both in 
country and abroad in future.  
Question (USA):
 
 
We understand that an optical disc law is curren tly being considered.  Could Turkey provide 
further information on this law?  When might it go into effect?  
Answer: 
 
 
If  “an optical disc law” means “Law on Cine ma, Video and Musical Works” which is in 
force, there will be an amendment within this Law.  With the legal arrangement that will be made in 
the Law on Cinema, Video and Musical Works; it is  aimed to abolish the provisions of ineffective 
penalties which are far away from being deterrent and to provide conformity within the Law on 
Intellectual and Artistic Works and this  Law in the scope of punishment. 
 
Question (EU):  
 
To the knowledge of the EC, piracy and counterfeiting remains a serious problem in Turkey. 
Some recent analysis’ from private industry suggests that the percentage of counterfeited products in 
the field of software is approximately 58% (2001) and 30% in the field of music piracy. What is 
Turkey’s strategy for reducing the production and use of piracy and counterfeited goods? Will this 
strategy i.e. entail a strengthening of Turkey’s bor der enforcement and a more existing enforcement of 
intellectual property rights, appropriate remedi es and sanctions in case of infringements of 
copyrights? 
 
Answer:  
 
The official instruction of the Directorate General of Customs addressed to the Regional 
Customs Directorates dated 10.09.2003 no: 23141, mainly explains what customs would do when counterfeited DVDs, which could be treated as comme rcial goods due to high volume in quantity, are 
seized at customs during their customs operations are being conducted. In that occasion, the 
counterfeited DVDs are not allowed to be re-exported, the customs authorities shall wait for the 
precautionary measures given by the court to the ri ght holder and shall act in line with the court 
decision reached following the precautionary measures.   
IV. TRADE POLICIES BY SECTOR 
M
ANUFACTURING  
Question (USA):  
 
Paragraph 84 provides information regarding st ate aid provided by the Turkish government to 
Turkish steel companies.  
Please provide details on Turkey’s state aid law, specifically, what conditions must be met for 
a steel company to qualify for state aid.    
Answer:
 
 
Since the GIEP makes no sectoral selection am ong the industrial sectors or services, 
applications for an investment encouragement certific ate in the steel sector is treated on an equal basis  WT/TPR/M/125/Add.1 
 Page 57 
 
 
with the others and the application procedure is the same for all investment projects. For that reason, 
general characteristics of the GIEP are mentioned below. 
 
I. The legislative basis for GIEP 
 
The legislative base and the title of the genera l investment encouragement program is “Decree 
Concerning State Encouragements to Investment s” (Decree No:2002/4367, dated: June 10th 2002, 
published on the Official Gazette da ted at 09.07.2002 and No:24810). 
 
II. The scope of the GIEP 
 
This program covers all investment activities re lated to the production of goods and services 
including steel sector, research and development (R&D), environmental protection and improvement 
of quality and standards.    III. Regional Classification of GIEP 
 
One of the main objectives of the system is to  eliminate inter-regional imbalances.  For this 
purpose the following regional classification is established with the Decree;  
 
• Developed regions:  Istanbul and Kocaeli city bounda ries.  Greater Municipality 
boundaries along with Ankara, Izmir, Bu rsa, Adana, and Antalya cities.  
 
• Normal Regions:  Cities situated outside of the Developed Region and Priority 
Development Region classifications.  
 
• Priority Development Regions:  Cities, which are determined as the Priority Development 
Regions by the Decision of the Council of Ministers. 
 
In summary, no matter which sector the investor shall be operating in, all investors who have 
prepared their investment feasibility studies and propo sals, who believe that they shall be eligible for 
evaluation, within the set framework of the Decree, apply to the Undersecretariat  of  Treasury for the 
evaluation of their investment project to be considered for encouragement. 
 IV. Application Authorities for an Investment Encouragement Certificate under GIEP  
Applications to be made for the issuance of an investment encouragement certificate to the 
relevant authority is as follows:  
All investments to be made by foreign inv estment companies and their branches will be 
received by  General Directorate of  Foreign Investment (GDFI) 
 
a- Investment encouragement certificate appli cations for investments in manufacturing and 
agro-industry sectors, which are specified in the Tabl e II attached to this document  (excluding those 
which can benefit from credit allocation measure) th at are not foreign capital investments and that 
have a fixed investment cost not exceeding four trillion Turkish Liras shall first be made to the 
specified Chambers
1 (Adana, Ankara, Bal ıkesir, Denizli, the Aegean Region, Eski şehir, Gaziantep, 
Istanbul , Kayseri Kocaeli, Konya Chambers of Indus try). In this way, it’s aimed to ensure the 
                                                      
1 “Chambers of Industry”, “Chambers of Commerce and Industry”, and “Chambers of Commerce that 
are members of The Union of Chambers of Commerce, Industry, Maritime Trade and Commodity Exchanges of 
Turkey.” WT/TPR/M/125/Add.1 
Page 58  
 
participation of local governmental  and non-governmental institutions in the state aid implementations 
and subsequently extend the level of decentr alization to include all other sectors.  
 b- For other investments, applications are made to General Directorate of Incentives and 
Implementation (GDII). 
 
V. Procedure to Obtain an Investment Encouragement Certificate 
 
An investor should complete and apply with the following documents for an encouragement 
certificate: 
 
• Investment application form  
• The receipt of the amount deposited in the Central Bank, varying between 200 Million TL 
and 400 Million TL according to  regional developmental status of the location.  
• A notarized copy of authorized  signatures of the company  
• A copy of the trade registry gazette in whic h the Articles of Association is published. 
 
Once the application is completed and presented for evaluation purposes, in conformity with 
the Decree and Communiqué's, eligible investment projects are evaluated and granted an 
Encouragement Certificate, after an analysis of each project proposal. 
 
As far as all the related procedures are concer ned for the investment encouragement system, 
there are no differences between foreign and domestic  investors.  The "Certificate" mentioned above 
contains specific encouragement measures,  which are granted to the investment.  
 
VI. Encouragement Measures 
 
Within the objectives and the scope of the progr am, eligible investments projects which are 
granted a certificate can benefit from the following encouragement measures: 
 a. Exemption from Customs Duties and Fund Levies b. Value Added Tax Exemption for importe d and domestically purchased machinery and 
equipment c. Exemption from certain taxes, duties and fees  d. Credit allocation from the Budget  
 
Question (USA):
 
 
Could you please also explain to what extent overcapacity is taken into consideration when 
the government makes the decision to provide state aid to a steel company?  
 
Answer:  
 
Today, with three integrated steel works a nd sixteen electric arc furnaces Turkey has 22 
million tons of total crude steel production capacity . In the year 2002, 84 % of this capacity was 
allocated to long products, 14 % to flat products , while the remaining 2 % was to alloy steel. 
 
Currently, the main problem of the Turkish steel  industry is the imbalance between the type 
of products produced and consumed domestically. Despite the surplus in the domestic production of 
long products, the output of flat steel produc ts is far from meeting the domestic demand. 
  WT/TPR/M/125/Add.1 
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In addition to that there is a free trade Agreement between European Steel and Coal 
Community and Turkey covering ECSC products, which entered into force on 1 August 1996. ¨ 
 
Article 7 of the Agreement states that   “The fo llowing shall be incompa tible with the proper 
functioning of this Agreement, in so far as they may affect trade between the Community and Turkey: 
(iii) public aid in any form whatsoever except deroga tions allowed pursuant to the ECSC Treaty.”  
Article 8 of the Agreement states that “The Parties recognize that during five years after the entry into 
force of this Agreement, and by way of derogatio n from Article 7, paragraph 1 (iii), Turkey may, 
exceptionally, as regards the products covered by this  Agreement, grant public aid on a case-by-case 
basis for restructuring or conversion purposes, provid ed that;  transparency is ensured by a full and 
continuous exchange of information concerning th e implementation of the restructuring program 
including amount, intensity and purpose of the aid and a detailed restructuring plan;  the restructuring program is linked to rationalizing not  involving an overall increase in capacity for hot-
rolled products;  the aid leads to viability det ermined according to th e usual viability criteria 
implying modernization with the sole aim to im prove efficiency of the benefiting firms under normal 
market conditions at the end of the restructuring period.” 
 
However, this 5 year grace period has expire d and taking into account of  restructuring 
process of Turkish steel industry  is incomplete yet,  Turkish authorities negotiated the extension of the 
grace period. For this purpose, studies on a “Nati onal Restructuring Program In The Turkish Steel 
Industry” has been launched jointly with the European Commission.  
 
Investment encouragement certificate applicati ons for investment project proposals in the 
steel sector have been evaluated under the aforemen tioned criteria and characteristics of the industry. 
In other words, the general appro ach to the industry h as been not to create an excess capacity with 
state aids from the starting date of the Agreement be tween two Parties, which has foreseen strict rules 
in the field of state aid. 
 
With this sole aim, during the evaluation studi es of the investment encouragement certificate 
applications in the steel industry, project proposal s satisfying the condition of not creation of capacity 
increase and targeting product conversion (long pr oduct to flat, long product and alloy steel), 
modernization, renewal, bottle-neck elimination,  quality improvement, envi ronmental protection, 
research and development, transfer have been gr anted an investment encouragement certificate. 
 After the completion of the studies “National Restructuring Program In The Turkish Steel 
Industry” and provided that the grace period is grante d, and also taking into account the results of the 
negotiations of “OECD Steel Subsid y Agreement” conditions to grant state aids in the steel sector 
may need to be reshaped.   
 
M
INING AND ENERGY  
Question (USA):  
 
This report refers to the creation of a Mining Fund under the supervision of MENR to provide 
financial credits for inter alia,  export activities.   
 
Could you please provide more information regard ing the Mining Fund?  For example, please 
explain what role export activities play in the provision of such credits and how this program complies with Turkey’s commitment under Article 3 of the Subsidies Agreement, not to provide 
prohibited export subsidies?  
 WT/TPR/M/125/Add.1 
Page 60  
 
How does Turkey reconcile credits provided by the Mining Fund with its WTO 
commitments?  
 
Answer:
 
 
The Mining Fund was abolished as of December 31, 2001. Although a new mechanism, 
which is called as “Commission for Support, Incentiv es and Credit for Mining”, was established in 
2003, the main purpose of this new mechanism is not supporting exports solely but supporting activities mainly in R&D, production and modernization of the facilities in mining sector.   S
ERVICES  
Question (Chinese Taipei):  
 
According to its Services Schedule and Initial Offe rs, Turkey has retained certain reservations 
with respect to the liberalization of its computer services, for example, in database services, CPC 844.  
As all sub-sectors of computer services are closely related, it has been suggested previously both by 
the EU, and us that Members use a two-digit CPC classification system in making their commitments. 
In addition, we believe that Members should not ma ke their commitment exclus ions for certain lines 
of computer services only, mainly because it woul d make it very difficult for foreign suppliers to 
provide complete lines of services.  We would therefore like to know why Turkey chooses not to liberalize its Data Base Services (CPC 844) and most Other Computer Services (CPC 849). We would 
also appreciate it if Turkey would consider tabling its initial offers using the two-digit CPC code for 
computer services. 
 
Question (Canada):
 
 
Canada notes that Turkey has not taken commitments for the following sub-sectors of 
computer and related services: (a) Data base services and (b) Other. Are there any particular concerns that make it difficult for Turkey to make commitm ents in this sub sector?  Does Turkey have any 
plans to commit to any of these services dur ing the current round of GATS negotiations? 
 Answer:
 
 
 With regard to the computer and related services, "Data base services" are not covered in Turkey's Uruguay Round commitment list and also in  its conditional offer which was circulated on 3 
September 2003. At this stage, Turkey does not have  any intention to include this sub-sector in its 
conditional offer, as the studies on the related regulati ons such as; confidentiality of the personal data, 
information security have not been completed yet. 
 
In Central Product Classification (CPC), "Other co mputer services" have  the broad coverage 
without any definition. As menti oned above, related regul ations regarding computer services have not 
been completed yet. Therefore, Turkey includes onl y "training services for staff of clients" in its 
conditional offer. 
 
With regard to the CPC coding of the computer and related services, for the time being, 
Turkey prefers to use the generally accepted CPC classification codes as it is stated in the CPC. 
However, pertaining to the changes in related regul ations, Turkey would consider using the two-digit 
CPC code for computer and related services. 
  WT/TPR/M/125/Add.1 
 Page 61 
 
 
Question (Hong Kong, China):  
 
It is noted that efforts have been made in th e privatization programme for Turk Telekom (TT) 
but certain restrictions on foreign direct investment  seem to deter a greater participation by private 
investors.  It is also noted that a reinvigorat ed privatization programme is in progress in the 
telecommunications sector.  We would appreciate it if  Turkey could share with us some more details 
of its initiative in this regard. 
 
Answer:  
 
We would like to take this opportunity to fu rnish the latest developments concerning the 
privatization of Turk Telekom. As of  April 2003 a Council of Ministers Principal Decree has been 
passed stipulating that the preparations as to the minimum 51 % block sale and/or Initial Public 
Offering (IPO) of the company will be undertaken  simultaneously. The decision pertaining to the 
selection of one of these two methods is to be made  in the framework of market conditions. In this 
respect, market analysis for Turk Telekom priva tization have been completed and the Council of 
Ministers Decree divulging the new privatization st rategy has been issued on November 13, 2003. 
According to this Decree, minimum 51 % of Turk Te lekom shares will be privatized through a block 
sale, while tender announcement for such sale will be  launched latest by May 31, 2004. Following the 
block sale, remaining shares will be offered to pub lic in accordance with the process set by the Tender 
Committee. Preparations as to hire sale advi sors for Turk Telekom project is underway. 
 
As regards with the aforesaid, certain restricti ons on foreign ownership, rather than the term 
used “foreign direct investment”, do not prevent the sale of controlling stake to a consortium of 
domestic and foreign investors.  
Needless to add that Turkey is determined to  enhance the investment climate and strives to 
attract much more foreign direct investment than its present level particularly through major privatization projects. 
 
Question (USA):
 
 
The United States welcomes Turkey’s d ecision to allow competition in basic 
telecommunications services by the end of 2003, two years ahead of the date that Turkey committed 
to under the WTO Agreement on Telecommunications Services.    
Would Turkey please comment on whether it believes that the liberalization described in this 
TPRM will suffice to establish a pro-competitive re gulatory framework that will fulfill Turkey’s 
commitments under that WTO Agreement?  If not, what remains to be done? 
 
Question (Canada):
 
 
Canada notes that, although there is curre ntly a public monopoly in the sector of 
telecommunications services, that monopoly is sch eduled to end on December 31, 2003. Canada 
would like to know more about the privatization process of Turk Telekom A.S., the publicly owned 
telecommunications company. Will the telecommun ications services market be fully liberalized on 
December 31, 2003 as originally planned?    Answer:
 
 
Turk Telekom's monopoly rights will expire by th e end of this year and to establish a pro- 
competitive framework, Telecommunications Authorit y of Turkey has already published clearly WT/TPR/M/125/Add.1 
Page 62  
 
defined and transparent rules for licensing, intercon nection etc., that are necessary prerequisites for 
competition.  Moreover, relevant legal framework h as been put into force for the prevention of anti-
competitive practices in telecommunications (respons ible institutions are Competition Authority and 
Telecommunications Authority). Hence, we believe th at in general terms, the liberalization described 
in this TPRM will suffice to establish a pro-competitive regulatory framework. 
 
The telecommunications services market will be fully liberalized on December 31, 2003 in 
accordance with the relevant Law no. 406 am ended by the Laws no. 4502 and no. 4673. 
 
Question (Canada):
 
 
Canada commends Turkey on the creati on of an independent regulator, the 
Telecommunications Authority. Canada is interested in how this regulator will consult all interested 
parties and how it will make its process and all re levant information leading to final decisions 
transparent and available to those interested parti es. Additionally, Canada notes that new entrants to 
the market must seek permission to build infrast ructure from the Telecommunications Authority. Will 
this permission be granted only when Turk Teleko m cannot provide the needed infrastructure? Is it 
possible for a foreign company to gain permission  to build infrastructure when sufficient capacity 
already exists?  Is this requirement intended to c oordinate rights of way questions or are there other 
issues that are of concern to the Government of Turkey?    Answer: 
 
 
Telecommunications Authority obtains the views of all interested parties on every regulation 
it prepares. Draft regulations are put on the web site of the Authority for consultation. In addition, the 
views of the interested parties are taken orally by arranging meetings if necessary.  
 
New entrants don't need to ask for permission to build infrastructure necessary for service 
provision if the establishment of the subject infrastructure is included in their licenses or 
authorizations.   
During the monopoly, the new entrants have to ask Turk Telekom for the infrastructure which 
is not covered by their licenses. If Turk Telekom cannot provide the needed infrastructure, 
Telecommunications Authority grants permissi on to the new entrant for establishing that 
infrastructure.   
After the end of the monopoly, in addition to Tu rk Telekom, new infrastructure providers will 
be authorized by Telecommunications Authority.  Therefore, the new entrants will build the 
infrastructure that is covered by their licenses and will  be able to obtain the infrastructure which is not 
included in their licenses, from the new infrastru cture providers in addition to Turk Telekom.  
 
Question (Canada):
 
 
Aside from tax breaks afforded to seafarers, ar e any other incentives provided to attract more 
ships to the Turkish Register? 
 
Answer:  
 
No, there is not any additional incentives. 
  WT/TPR/M/125/Add.1 
 Page 63 
 
 
Question (Canada):  
 
Many countries, including the US, Canada, a nd the EU, have adopted legislation governing 
activities of liner conferences. Is Turkey  considering similar legislation?  
 
Please explain why ships flying the Turkish flag are on the Paris MOU black list. 
 
Answer:  
 
A number of Turkish flagged ships have been detained over the last years following the Port 
State Control  (PSC) inspections held in accord ance with Paris Memorandum in foreign ports.  
 
It should be noted that despite the frequency of the detention of Turkish flagged ships, their 
involvement in maritime acc idents is very low, as the cause of th eir detention stem mostly from minor 
deficiencies.  
 
Nevertheless the Turkish authorities are aware of these deficiencies and exert every effort to 
improve the safety record of the commercial maritime fleet of Turkey. 
 The Maritime Undersecretariat is undergoing a new structural change, which also aims at   
establishing an efficient FSI (flag state implementati on) and PSC inspections in all Turkish Ports. 70 
additional PSC and FSI officers have been recr uited in October 2003 to increase the number of 
inspections of both Turkish and foreign flagged ship s. Moreover the said Secretariat is also taking a 
number of measures to increase the quality of the tr aining of Turkish seafarers in conformity with 
IMO standards.  
 
Turkey supports the international efforts and is committed to enhance the safety of maritime 
navigation and the protection of environment in the world seas.    This is a genuine approach, as Turkey has deep concerns regarding the safety of life, property, 
navigation and environment in the Turkish Straits, one  of which runs through the hearth of the largest 
city in the country, namely Istanbul.  
 
The increasingly congested maritime traffic in the Turkish Straits causes serious concern from 
various respects. An accident in the Strait of Is tanbul that involves hazar dous cargo has the potential 
of endangering the lives of tens of thousands, if not  millions, of people. Moreover, the effects of an 
environmental catastrophe resulting from such an ac cident would leave its scars for many decades. 
 
The number of oil tankers and other danger ous cargo vessels passing through the Strait of 
Istanbul rose by % 75 in the last 5 years alone from 4303 in 1997 to 7427 in 2002. Similarly, the amount of hazardous cargo increased from 63 million tons  in 1997 to 123 m illion tons in 2002.  
 
In view of these facts, Turkey is and will rema in vigilant regarding the assurance of safe and 
secure navigation through the Turkish Straits agai nst the backdrop of the safety and security risk 
conditions prevailing in the world seas.   
Question (Norway):
 
 
In relation to the information on preference fo r national flag vessels in relation to public 
cargoes and strategic raw materials, could Turkey specify which raw materials are considered strategic?   WT/TPR/M/125/Add.1 
Page 64  
 
To what extent is the restriction on the use of foreign flag vessels for transport of strategic 
materials still applied?  Could Turkey please provi de figures with respect to the market share of 
Turkish flag vessels on the shipment of such stra tegic import cargoes?  Could exports cargoes be 
shipped by foreign flag vessels free of restrictions?   Answer:
 
 
Iron ore, coal, acids, petroleum products, phos phate rock and fertilizers are considered 
strategic raw materials.   
Foreign flag vessels can transport strategic ma terials of public entities provided that their 
prices are more than 10 per cent cheaper than the transport  prices of  the Turkish flag vessels. 
 
Question (Chinese Taipei):
 
 
The major purpose of the Savings Deposit Insu rance Fund (SDIF) is to insure savings 
deposits and tackle the problem of insolvent banks. We would like to know (1) if all deposit-taking 
institutions are required by law to join the scheme, (2) does the SDIF offer a blanket guarantee or just 
partial coverage for depositors, (3 ) if foreign bank branches are included in the scheme, and (4) how 
the SDIF raises the funds needed for its effective operation.   Answer:
 
 
All deposit-taking institutions are required by law to join the deposit insurance scheme of the 
SDIF. 
 
Currently, savings deposit accounts are fully guara nteed by the SDIF. However, starting from 
July 5, 2004 a limited savings deposit insurance sch eme will apply under which a portion up to TL 50 
billion (around EUR 30.000) of savings deposit accounts (per person-per bank) will be under the 
guarantee of the SDIF.  
Foreign bank branches are also included in  the savings deposit insurance scheme.  
 
The SDIF`s resources are consisted of the following:  a. Insurance premium, b. Deposits, custody accounts and claims which have been subjected to prescription pursuant 
to the relevant provisions of the Banks Act, 
c. Entrance fee received from banks when they first enter into the deposit insurance system 
(the fee is equal to 10% of the minimum cap ital required for the establishment of a bank), 
d. Judicial and administrative fines charged ag ainst those violating the provisions of the 
Banks Act (50% of such fines collected goes to the SDIF). 
 
Apart from the ordinary revenues listed above , the SDIF may borrow in extraordinary 
circumstances provided that it takes consent of th e Treasury Undersecretariat, or it may borrow long-
term government securities from the Treasury if de emed necessary. Where assets of the Fund falls 
short of its commitments, advances may be receive d from banks in the amount of up to the total 
insurance premium paid by them in the previous  year (such advances are then deducted from the 
banks` future premium obligations). Finally, under extraordinary circumstan ces and where resources 
of the Fund turn out to be not sufficient the Central Bank provides advances to the Fund if demanded 
by the Banking Regulation and Supervision Agency. 
__________  