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Tuncay ÖZKAN
Customs Consultant
“Border Trade” essentially means that some of the needs of the provinces of Artvin, Ardahan, Kars, Iğdır, Ağrı, Van, Hakkâri, Şırnak, Mardin, Şanlıurfa, Gaziantep, Kilis and Hatay, located in the Eastern and Southeastern Anatolia regions, are supplied at a lower rate through imports from neighboring countries. It is the name of the international trade carried out in order to provide economic vitality to the provinces in question by covering the costs and increasing the exports from these provinces.
This trade is carried out in border trade centers, which are established on the common border line with the neighboring country and where border trade can be carried out. Trade can be carried out between these provinces that can carry out border trade and the cities with cross-border settlements. Tradesmen and traders who have been resident and active in the relevant provinces for at least one year can import and export within the scope of border trade.
The legal basis of Border Trade is Article 172 of the Customs Law No. 4458. The article aims to determine the scope of border trade between Turkey and neighboring countries, taking into account the geographical situation and regional needs, to establish border trade centers where border trade will be carried out, and to determine the procedures and principles of exports and imports from these places, or to show the taxes to be collected from goods that will be put into free circulation through border trade. The President is authorized to apply a single and fixed tariff, provided that it does not exceed the maximum limits specified in the relevant laws. Border trade centers are deemed to be outside the Customs Territory of the Republic of Turkey in the execution of customs procedures. The last paragraph of the article states that customs procedures regarding border trade will be determined by the Ministry of Commerce.
"Decision on the Regulation of Border Trade" numbered 2016/8478, prepared based on this article and published in the Official Gazette dated 18.03.2016. It is stated that a "Provincial Evaluation Commission" will be established. The Commission is chaired by the Governor or Deputy Governor, and consists of representatives of the Provincial Gendarmerie Command or Provincial Police Department, Treasurer, Customs Director, Provincial Director of Science, Industry and Technology, Provincial Director of Commerce, Provincial Director of Agriculture and Forestry, Provincial Chamber of Commerce and Industry and Chamber of Tradesmen and Craftsmen. is formed.
According to the provisions of the "Communiqué on the Implementation of Border Trade" numbered Export: 2016/11 published in the Official Gazette dated 13.12.2016, the Border Trade Bureau is established within the Provincial Directorate of Commerce within the Governorship, in order to ensure that border trade is carried out in coordination among the relevant institutions and organizations in the border province. The secretariat service of the Provincial Evaluation Commission is provided by the Provincial Chamber of Commerce and Industry.
Product entry and exit within the scope of Border Trade; It is done at the authorized customs gate or Border Trade Center. The name of the document that gives tradesmen and merchants the authority to rent a store in the relevant "Border Trade Center" and to import-export within the scope of border trade is "Border Trade Certificate". This document is issued by the governorships if deemed appropriate by the "Provincial Evaluation Commission", is valid for 3 years and cannot be transferred in any way. Tradesmen and traders who have a Border Trade Certificate apply for an "Import Conformity Certificate" to the Provincial Chamber of Commerce or Provincial Chamber of Commerce and Industry. The Import Conformity Certificate is also valid for 90 days and cannot be transferred in any way.
In the 1st paragraph of the 7th article of the said Decision, “Import value limits are for each neighboring country; The annual total is around 150 million US dollars, including 75 million US dollars for agriculture and 75 million US dollars for industrial products. The import value limit for each neighboring country can also be set at less than 150 Million US Dollars. The allocation of sectoral and total import value limits for imports from neighboring countries to the provinces within the scope of this Decision is made by dividing the import value limit determined for the neighboring country to the relevant border provinces in proportion to their population. "The allocated import value limit rates cannot be changed during the year."
In this context, for example, the total limit of 150 million US dollars determined for Iran is distributed to the provinces of Iğdır, Ağrı, Van and Hakkari in proportion to their population. The physical arrangement of Border Trade Centers, goods and stock controls, and the procedures and principles regarding entry and exit to these centers are determined by the Ministry of Commerce. There are 4 Border Trade Centers in active service today. These centers; These are Ağrı (Sarısu), Hakkari (Esendere), Van (Kapıköy) and Iğdır (Dilucu). Customs declarations are prepared for import and export transactions within the scope of Border Trade.
Since trade in border trade centers is for a special purpose, it is supported by some incentive elements compared to normal trade. One of these factors is tax advantage. A single and specific tax is applied to imports through Border Trade. Single and Specific Tax (Customs Tax) rate is zero, Value Added Tax and Special Consumption Tax rates are calculated exactly. Not every product is within the scope of border trade. It is possible to list these products as follows:
- Substances whose export and import are prohibited by the relevant legislation and whose import is left to certain institutions and organizations,
- Products subject to quota, protection, anti-dumping and anti-subsidy tax measures within the scope of trade policy measures,
- Products subject to control within the scope of the law No. 5201 on the Control of Industrial Establishments Producing War Vehicles and Equipment and Weapons, Ammunition and Explosives
- Petroleum and petroleum products,
- Tea, sugar, hazelnuts, pistachios, live animals, meat and meat products, milk and dairy products.
Within the scope of border trade, the import of products originating from third countries is not allowed, and transit trade is also not allowed. There are limitations in terms of quantity and time for the "Import Conformity Certificate" in Border Trade. The total value of Import Conformity Certificates cannot exceed 5% of the annual import value limit determined for the agriculture and industry sector based on the relevant border province. When we consider it in terms of time, the tradesman or trader can import goods worth a maximum of 75 thousand US Dollars within 30 days from the relevant customs gate or Border Trade Center.
Border trade, which aims to eliminate interregional development differences in Turkey and improve economic relations with border neighbors, is an important practice that contributes to the development of the economic welfare of those living in border provinces and regions. The types of products subject to trade are determined according to the needs of the regions. Local people are satisfied with this trade, especially in the underdeveloped provinces on our eastern and southern borders.
Source:
Customs Law No. 4458
“Decision on the Regulation of Border Trade” No. 2016/8478 (Official Gazette No. 29657 dated 18.03.2016)
“Communiqué on the Implementation of Border Trade” no. (Export: 2016/11) (Official Gazette no. 29917 dated 13.12.2016)
QUESTIONS AND ANSWERS
Question 1: What is the Border Trade Center?
Answer: Border Trade Center is designed to accelerate economic, industrial and commercial activities in the Eastern and Southeastern Anatolia regions, where living standards of our country are low and unemployment is at serious levels, to increase exports and provide tax facilities for tradesmen and merchants in the region by trading with neighboring countries through trade centers. They are places where an exclusive trade is carried out, allowing imports to be made within their needs.
Question 2. What is the "Import Conformity Certificate" and how to obtain it?
Answer: Import Conformity Certificate is issued on behalf of tradesmen and real and legal person traders (except foundations, associations and municipalities and companies established by them or in which they are partners) in order to purchase the goods imported from the neighboring country to the Border Trade Centers and distributed within the relevant provinces. document.
Tradesmen or traders apply to the Chamber of Commerce or Chamber of Commerce and Industry of the relevant province to obtain an Import Conformity Certificate. The chambers in question forward the requests to the Evaluation Commission. Tradesmen and traders whose applications are deemed appropriate are given a Certificate of Conformity for each product. In distributing the Certificate of Conformity, criteria such as the size of the business, the previous year's turnover, the field of activity of the tradesmen and merchants, the periods in which imports can be made specified in the quotas, and the provision of the targeted social benefit of the quotas are taken into consideration.
Question 3. How long is the validity period of the Import Conformity Certificate?
Answer: The validity period of the Import Conformity Certificate is 90 days from the date of issue and this period is not extended.
Question 4. Is a customs declaration issued for imports and exports from Border Trade Centers?
Answer: A customs declaration is prepared for import and export transactions to be carried out through the Border Trade Center. In addition, the signs and documents stipulated in the relevant legislation are also sought by the customs administrations when importing and exporting substances, whose compliance with the relevant legislation is required in terms of human health, life and property safety, environment and consumer protection, and whose standard and quality control is applied, are subject to trade in Border Trade Centers.
Question 5. Can the Border Trade Center be established with any country at any time?
Answer: In order for the Border Trade Center to function in accordance with its purpose, it must operate by observing the principle of reciprocity. Accordingly, meetings are held with the country neighboring our province where the Border Trade Center is planned to be established, the system is explained, mutual negotiations are made as to which goods will be allowed to be traded within this scope, and at the last stage, if it is agreed with the other party at every point, it is decided to establish a Border Trade Center. The most important aspect of this process is that the other country provides our border people with the same tax advantages that we provide them. Otherwise, it will not be possible for the system to function unilaterally.
