Problems relating to Trade and Investment on Turkey
9. Restrictive export/import trade, duty, and customs clearance |
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Issue |
Issue details |
Requests |
Reference |
| (1) High Import Duty | - Government of Turkey (GOT) levies Bandroll Tax of 30% in addition to the regular EU duty on DVD players, CD players, blu-ray players and products incorporating radio, making prices of these products extraordinarily expensive. - GOT levies 20% Turkish duty called OTV on amplifiers and speakers. - GOT implements a protective policy of levying special tax of USD 2.10 each on the products manufactured in PRC. - Members firms' subsidiary (MFS) profitability is suppressed by commodity consumption tax levied upon imported cosmetic products. |
- It is requested that GOT improves its taxation system. - It is requested that GOT improves its taxation system. - It is requested that GOT repeals the protective policy. - It is requested that GOJ takes step toward GOT's repeal of the import customs tariff. |
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| (2) Raised Import Duty | - In January 2009, GOT raised tariff rates on thick medium plate, cold rolled/hot rolled plates, and tin, galvanization, and surface-treated steel plates. - There was a case where tariff increase was announced and executed on the same day without notice. |
- It is requested that GOT makes it a point to provide "Grace Period" before enforcing the increased tariff rate. | |
| (3) Irrational Import Duty | - Additional Bandroll Duty of 30% is levied on the total cost of the hydraulic excavator, not for just the radio receiver, when the latter is mounted on the hydraulic excavator. It compels exporter to remove the radio receiver and ship it separately. | - It is requested that GOT and GOJ conclude FTA to remove the Customs Duty. | |
| (4) Compulsory Payment of Extra Duty (SUS Fund) for Settlement of L/C with Usance | - On 29 September 1995, as a part of the tight money policy, GOT levied KKDF equal to 6% on CIF price of goods, if imported by Letter of Credit with usance terms. Though the KKDF was reduced from 6% to 3% in 1998, GOT applied the reduced rate of 3% also in FY2007. | - It is requested that GOT repeals the KKDF system. | - Customs Act, etc. |
| (Action) - GOT imposes the Resource Utilization and Support Fund (KKDF) charge of 6% (which is additional import tariff in effect over the declared import amount apart from import duty) on foreign loans to finance imports under L/C with usance, unless proof of payment completion for the full amount of the imported goods is shown to the customs authority upon import of goods into Turkey. |
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| (5) Import Quota System | - Since 24 July 1998, in order to suppress import, GOT has applied the tax exemption quota (TEQ) on hot rolled coil, for 45 tons each, respectively, for thick and intermediate plates (HRC-T/M), and on cold rolled coil sheet (CRC/SHEET) for 10 tons. Users must file applications to Ministry of Commerce based on the past performance and capacity in order to obtain allocation for TEQ. Imports from non-EU countries outside TEQ were imposed 22.5% on HRC-T/M and 30% on CRC/SHEET. Due to the soaring prices and tightening of demand, TEQ system has not been applied in recent years. In 2006, Erdemir (semi-state-owned mill) was completely privatised. It is most likely that the quota system will not be applied in future, either. | ||
| (6) Delays in Import Customs Clearance | - There are cases where importers are unable to withdraw cargoes for a long time, due to the delay in import customs clearance procedures. On other occasions, products exported from EU port complete with customs declaration documents likewise get stuck at customs for the delay in customs clearance. - It takes about one-month for customs clearance on the first shipment of new products. Frequently, customs clearance delays due to the arbitrary judgement of individual customs employees in charge, or their personal conveniences. Each time customs clearance at Istanbul gets stuck, importer must individually negotiate with the Central Government in Ankara, while they sustain damage in business. The nebulous practice of customs clearance and high import tariff rates together cause increase in parallel imports. |
- It is requested that GOT: -- stipulate clear-cut Customs Clearance Rules, -- observes such rules, promptly publishes any changes, and -- materialises Expeditious Customs Clearance Procedures. - It is requested that GOT: -- resolves the customs clearance delays as soon as possible, and -- tightens its control on parallel imports. |
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| (7) Import Registration of Agrichemicals | - GOT has removed the Measures previously approved on Import Registrations from the G8 Countries including Japan so that they now apply restrictively only to the EU Member States. The Import Registration requirement as to Japan forms a kind of Non-Tariff-Barrier. | - It is requested that Ministry of Agriculture and Rural Affairs Turkey resumes the previous practice as to Japan. | - Regulation on Chemical Fertilizers Used in Agriculture |
| (8) Import Disallowed due to the Manufacturing Year Restrictions | - In order to stop inflow of used vehicles, GOT controls delivery / shipment of new cars by "Manufacture Year". For example, if a car manufactured in November 2012 arrives in Turkey after 1 January 2013, its import into Turkey is no longer possible, as it has passed the old year. GOT seems to deregulate this rule in some years. However, such information reaches exporters too late. It deprives them of the benefit from deregulation. - Under the going scheme, customs clearance is possible only during the production year for the construction machineries and equipment (the Products). On the other hand, VAT 8% Refund is available for the Products sold from the free zone to a lease company located outside the free zones (the lease company). Consequently, to receive the VAT 8% Refund, it is necessary to transport the products from the free zone and complete the customs clearance before the end of the production year of the products to the lease company. Then, the problem arises in receiving the VAT Refund of 8%, as the regulatory deadline has lapsed. |
- It is requested that GOT: -- deregulates restrictions or provides the moratorium period, -- accepts customs clearance of products manufactured in December 2012. - It is requested that GOT takes steps to repeal the going scheme based on the Production Year, or to enable import of the Products up to two-years to resolve the problems over the year-end stock adjustment of the VAT 8% Refund. |
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