International Trade Law: Customs Regulations and Practices in Turkey

Turkey plays a key role in global trade due to its strategic location and growing economic potential. As part of its international trade regime, Turkey has developed a comprehensive system of customs regulations that govern the import and export of goods. This guide provides an overview of the essential customs procedures, trade agreements, and compliance measures that foreign investors and businesses need to know when conducting international trade with Turkey.

The customs regulations in Turkey are primarily governed by the Turkish Customs Code (No. 4458), which aligns closely with the EU Customs Code due to Turkey's membership in the EU Customs Union. This legislation covers all aspects of customs procedures, including the import and export of goods, customs duties, and procedures for temporary admission.Key customs regulations include:

1. Import and Export Procedures: Importers and exporters must submit a customs declaration electronically through the BİLGE system. This declaration includes detailed information about the goods, their value, and origin.
2. Customs Duties and Taxes: Imported goods are subject to customs duties, which vary depending on the type of goods and their country of origin. Turkey applies Most Favored Nation (MFN) tariff rates, in line with the WTO agreements. Additionally, VAT and Special Consumption Tax (ÖTV) may also apply.
3. Tariff Classification: Goods must be classified under the appropriate Harmonized System (HS) Code to determine the applicable tariffs and duties.
4. Customs Valuation: The value of the imported goods is determined based on their transaction value, which includes the price paid for the goods, transportation costs, and insurance.

Turkey is a member of several international trade agreements, which facilitate trade by reducing tariffs and providing market access:

1. EU Customs Union: Turkey is part of the Customs Union with the European Union, allowing goods to circulate between Turkey and EU member states without tariffs. However, agricultural goods and services are excluded from this agreement.
2. Free Trade Agreements (FTAs): Turkey has signed numerous FTAs with countries such as South Korea, the United Kingdom, and Singapore, providing preferential tariff treatment for a wide range of products.
3. World Trade Organization (WTO): As a member of the WTO, Turkey adheres to the Most Favored Nation (MFN) principle, ensuring non-discriminatory treatment of imported goods from other WTO members.

To ensure smooth customs clearance, importers and exporters must provide the following documents:

• Commercial Invoice: Contains detailed information about the transaction, including the value of goods.
• Bill of Lading or Airway Bill: Provides details on the shipment and the means of transport.
• Certificate of Origin: Verifies the country of origin of the goods, required for preferential tariff treatment under FTAs.
• Packing List: Specifies the contents of the shipment.
• Insurance Certificate: Confirms that the goods are insured during transit.

Turkey enforces strict customs compliance measures to prevent fraud, smuggling, and illegal trade activities:

1. Risk-Based Inspection: Customs authorities use a risk-based inspection system, where high-risk shipments are subject to thorough inspection, while low-risk shipments may be cleared more quickly.
2. Penalties for Non-Compliance: Non-compliance with customs regulations can result in penalties, including fines, confiscation of goods, or delays in customs clearance.
3. Customs Audits: Turkish customs authorities conduct post-clearance audits to verify the accuracy of customs declarations and ensure compliance with tariff and trade regulations.

Foreign businesses operating in Turkey may face several challenges in international trade:

1. Customs Delays: While Turkey's customs procedures are generally efficient, delays can occur due to incorrect documentation, complex valuation processes, or high-risk inspections.
2. Tariff Barriers: Although many goods benefit from preferential tariffs under FTAs or the Customs Union, some sectors, such as agriculture, still face significant tariff barriers.

Turkey’s customs regulations and international trade practices are designed to facilitate trade while ensuring compliance with national and international standards. By understanding the key regulations, documentation requirements, and trade agreements, businesses can navigate the complexities of international trade with Turkey. It is advisable to work with customs brokers and legal experts to ensure smooth customs clearance and avoid penalties for non-compliance.