2022 AND AFTER IN TERMS OF LEGISLATION…

REMZİ AKÇİN
Chairman of UGM Board of Directors

In 2022, as every year, there were many changes regarding customs and foreign trade. However, it cannot be said that very radical changes have been made. No progress was made in 2022 on two basic regulations discussed, worked on, and mandatory for years in customs and foreign trade. These include updating the Customs Union and enacting a new Customs Law compatible with EU legislation. The cover topic of our first magazine, published in April 2021, was titled "Endless Effort: Updating the Customs Union". Considering the election, the Customs Law can't come to the agenda of the Parliament in the first half of 2023, and it will be weak thereafter. In today's conjuncture, the possibility of heating the issue of "updating the Customs Union" seems slim.

On a positive note, Türkiye has demonstrated its commitment to international trade practices by pledging to implement the provisions of the Trade Facilitation Agreement, approved by Law No. 6662 on 15/1/2016, in the near future. This includes two significant practices, namely "binding origin information" and "binding value information". Despite the inclusion of a provision for issuing a binding certificate of origin in the Customs Law, this practice has yet to be implemented after 22 years.

Customs administrations must implement many legislations as they are the implementing units. Although the exact number is unknown, nearly one hundred and forty pieces of legislation published in the Official Gazette are implemented by customs administrations. Most regulations are made by institutions other than the Customs Administration, and the obligation to implement them lies with the Customs Administration. The whole of the legislation applied in customs; It is possible to collect them under the headings of customs legislation, foreign trade legislation, anti-smuggling legislation, financial legislation (VAT, SCT, KKDF, AATUHK No. 6183), and other legislation (foreign exchange, agriculture, health, environment, etc.).

Customs legislation is also highly variable. We constantly and instantly inform our customers about legislative changes in circular form. The number of circulars we published in 2021 is 871, which shows that the customs administration implemented 871 changes in the legislation in one year.

ROUTINE CHANGES MADE EVERY YEAR

Although customs legislation changes are continuous, fundamental changes are implemented routinely at the beginning of each year and guide the implementation throughout the year. The Turkish Customs Tariff Schedule Divided into Statistical Positions is the most important of these changes. The customs tariff schedule to be applied in the following year is determined with the schedule published in the Official Gazette between 27 and 31 December each year. Following this, if there is a change, the import regime decision in which customs duties and additional customs taxes are determined is published. At the same time, import communiqués, export communiqués, and product safety communiqués in which the details of the foreign trade policy are determined are published.

Alongside the modifications in the tariff schedule, these regulations play a crucial role. They not only ensure the implementation of decisions but also effectively address correlation issues that may arise from changes in the tariff of goods, providing a sense of reassurance about the effectiveness of the changes.

IMPORTANT CHANGES IN 2022

In 2022, as every year, many changes were made regarding customs and foreign trade. However, it cannot be said that very radical changes have been made. It is not possible to mention all of them, But it is possible to list the ones we deem essential under headings as follows:

1-In foreign exchange legislation, A series of regulations were made that encouraged and required the use of ₺, such as bringing export proceeds to the country, issuing contracts and invoices in ₺, making payments in ₺, and restricting the amount of foreign currency in companies' balance sheets.

2-Some products have been removed from the additional customs duty lists.

3-Some measures taken to facilitate customs procedures due to COVID-19 have been terminated.

4-The list of goods that can benefit from pre-arrival customs clearance has been updated twice.

5-Complicating measures were taken to control vehicle imports by importers other than distributors.

6-Tax rates for goods arriving via mail and express cargo have been increased, goods over 150 euros have been subject to standard declaration, and union registration has begun to be required for exports within the scope of ETGB.

7-EU banned the export of some products to Russia.

8-The export of some goods that may have a supply shortage, especially food items, has been subject to prior permission or registration.

9-The export incentive system was reorganized and simplified. In parallel, decisions on supporting service exports and international logistics distribution networks were implemented.

According to current conditions, ten changes were made in the Decision on State Aid in Investments.

11-VAT rate of essential food products was reduced from 8% to 1%.

12-In order for customs consultants and assistants to be disciplined, the matter must be investigated by an investigator.

13-The corporate tax rate applied to exporters started to be used with a 1-point discount.

14-The expression "Turkey" began to be used instead of "Turkey" on the goods, on their packaging, and in international documents.

15-With the amendment made to the Customs Law, It has been regulated that the rightful owners of vehicles with foreign license plates for personal use will be subject to irregularity penalties if they go abroad without a car.

16-Proof of origin documents and concession lists regarding the Preferential Trade System Among the Organization of Islamic Conference Member States have been clarified.

17-Electric passenger cars were included in the additional customs tax list.

18- Postal administrations and fast cargo transportation companies have been authorized to submit customs declarations for their goods, and transportation organizers have been permitted to submit warehouse declarations.

19- Tightening regulations were made regarding importing and re-exporting agricultural products within the scope of the inward processing regime.

THE MOST IMPORTANT REGULATIONS WERE NOT MADE

No progress has been made in 2022 regarding the two essential customs and foreign trade regulations, which have been discussed, worked on, and required for years. These issues have been forgotten. These include updating the Customs Union and enacting a new Customs Law compatible with EU legislation.

The cover topic of our first magazine, published in April 2021, was titled "Endless Effort: Updating the Customs Union". In the article's introduction, "Hopes, which gained momentum in 2015 and faded away, have recently begun to flourish again upon Turkey's strategy to strengthen its relations with the European Union. Türkiye's statements that it will improve its relations with the European Union, and the statement made as a result of the meeting between European Council President Charles Michel, European Commission President Ursula von der Leyen, and President Recep Tayyip Erdoğan in Ankara on April 6, 2021, stated that the Customs Union Emphasizing that there is a common opinion on updating the Customs Union brought the issue of updating the Customs Union back to the agenda." We used the expressions. But today, there is no voice on this issue.

The Customs Law No. 4458, dated 19.11.2019, which is in force today, was prepared by the European Union Customs Code. The EU reorganized the Community Customs Code in 2008; These changes were reflected in the Customs Law in 2009. In 2013, the EU implemented the Community Customs Code, which is based on the principle of carrying out all customs transactions in a paperless environment. However, a time extension was made to prepare the electronic infrastructure of the member countries required for the implementation of some simplifications. Preparing the Customs Law draft using this code started in 2016, and the draft took its final form in 2019. We witnessed that no effort was made to enact this draft in 2022.

WHAT DO WE EXPECT IN 2023?

As we mentioned above, the legislative arrangements routinely made every year in customs and foreign trade legislation will also be carried out this year. As of the end of December, the Turkish Customs Tariff Schedule Divided into Statistical Positions will be published, followed by a series of import, export, and product safety communiqués. At the same time, Import Regime Decisions and Additional Customs Duty Decisions will be published.

Given the upcoming election, it is our assessment that the Customs Law is unlikely to be brought to the Parliament's agenda in the first half of 2023. Furthermore, we anticipate its potential influence to diminish in the subsequent period, a factor that should be taken into account in our strategic planning.

In today's conjuncture, the possibility of heating the issue of "updating the Customs Union" seems slim. If relations with the EU normalize and membership negotiations begin, this issue may be revived. However, there is no such possibility in the short term.

AT LEAST BINDING ORIGIN INFORMATION SHOULD BE IMPLEMENTED

On the other hand, Türkiye has committed to implementing the practices included in the Trade Facilitation Agreement, approved by Law No. 6662 dated 15/1/2016, in the short term. Two committed practices are "binding origin information" and "binding value information." Although the issuance of a binding certificate of origin is included in the Customs Law, it has not been implemented for 22 years. The Trade Facilitation Board is working on implementing binding origin and binding value information. From this perspective, regulations will be made in 2023 regarding implementing binding origin information.