NEW IMPORT REGIME DECISION

Hüseyin Cahit SOYSAL
Board Member

 The new Import Regime Decision No. 3350 was published in the Official Gazette No. 31351, dated 31 December 2020. With the 17th article of the Decision, the Import Regime Decision and its annexed lists, which were put into effect by the Council of Ministers Decision No. 95/7606 dated 20.12.1995, were also abolished. With the regulation published in the same Official Gazette, the Import Regulation published in the Official Gazette dated 31.12.1995 and numbered 22510 was also abolished.

After the transition to the presidential system, it did not seem reasonable to implement the import regime with an old Council of Ministers decision. In this regard, the new regulation is appropriate. When the Import Regime Decision No. 3350 (Decision) is examined, it is seen that the repealed regime decision and the provisions of the regulation have been converted into a single text. Undoubtedly, there are changes in the taxes included in the lists annexed to the Decision. In this article, we will examine only the text of the Decision.

1. The new Import Regime Decision introduces a significant change in the 3rd article. The phrase "The Ministry is authorized to control the prices of imported goods when necessary" has been added. This could potentially mean a shift towards more stringent valuation research. However, if this is interpreted as an attempt to set a threshold price for imported goods, it could violate the provisions of the "Geneva Value Code," to which Turkey is a party.
2. The new Import Regime Decision also introduces the possibility of transferring duties and powers. In the second paragraph of Article 3, it is stated that these Duties, including the issuance of import permits and the control of imported goods prices, may be exercised by the Ministry, as well as by other public institutions and/or exporters, with the notification to be published or the instructions to be given based on this Decision. This could mean a potential shift of control to the general secretariats of the unions.

Article 4/A of the Civil Servants Law No. 657 states that "Regardless of the current form of establishment, those who are assigned to perform essential and permanent public services carried out by the State and other public legal entities by general administrative principles are considered civil servants in the implementation of this Law." In other words, transferring the primary and permanent duties of the state to exporters' associations with the status of "professional organization" would be a violation of general administrative principles. Moreover, it's crucial to note that the closure of Inland Processing Authorization Certificates by exporters' unions, as highlighted by EU experts, is a serious concern as it is against EU regulations.

1. The second paragraph of Article 5 of the decision states that "Importation of goods whose importation is reserved to certain institutions and organizations by law can only be carried out by these institutions and organizations or by those authorized by these institutions and organizations." Frankly, it is impossible to predict which goods group will be affected by this provision at this stage. It seems complicated to understand whether what is meant by this item is weapons and ammunition or whether the arrangement covers another group of items. The third paragraph of the same article states that "Provisions regarding goods whose import into the 4. country is subject to conditions and conditions by the current legislation or which are subject to special permission are reserved." This means that the goods within the scope of the second paragraph will not be goods subject to registration and conditions or subject to special permission.

1. The provision of Article 3 of the abolished Import Regulation is included in Article 8 of the Decision. In the first paragraph of the article, it is stated that "... every natural and legal person who is given a tax identification number in accordance with the provisions of the Tax Procedure Law, and partnerships of persons who have legal entity status and are authorized to make legal dispositions in accordance with the provisions of the current legislation, can carry out import transactions." Understanding the implications of this provision is of utmost importance.

However;

1. In imports based on special agreements,
2. In the import of books and other publications,
3. In the import of goods permitted for retail sale by the Ministry in international fairs and exhibitions opened in our country

It is stated that there is no requirement to have a tax identification number.

While the Import Regulation was in force, it was easy to determine which imports fell within the concept of "imports based on special agreements." Article 8 of the same Regulation, titled "Imports Based on Special Agreements," stated that "Transactions regarding imports based on special agreements are carried out by the principles set out below and the instructions to be given by the Ministry," and then NATO imports and imports related to NATO infrastructure projects were counted.

Article 15 of the New Decision titled "Imports within the scope of the North Atlantic Treaty Organization (NATO)" includes the following provisions:

 "(1) Transactions regarding imports within the scope of the North Atlantic Treaty Organization (NATO) are carried out by the principles stated below and the instructions given by the Ministry.

1. For NATO imports, applications are made to the customs authorities with three copies of the 'Application Letter' approved by the relevant public institutions and organizations.
2. "After the completion of NATO joint infrastructure projects, the release of goods, goods, materials, and vehicles to importers, provided that all financial obligations are paid after taking the opinion of the relevant authority, is subject to the permission of the Ministry."

From the current article title and provisions, it is no longer possible to understand that this import type is "Imports Based on Special Agreements." Those who, like us, do not have the opportunity to compare old and new provisions and who will make their commercial decisions according to the requirements in force today define "Import Based on Private Agreements" as "A purchase-sale agreement between an independent seller abroad and an independent buyer resident in Turkey by the provisions of private law." No clues to the decision text would prevent it from being understood.

5.The fifth paragraph of Article 9 of the decision includes a regulation favoring customs taxpayers. Accordingly, "In case the goods taken to free zones and warehouses or imported within the scope of the Inward Processing Regime are exported to the European Union as processed products, the import tax rate applied to the imported country and goods within the Scope of the Import Regime and the European Union in the calculation of the compensatory tax, if any, The lowest customs duty rate applied in the Common Customs Tariff is compared, and the lower tax rate is applied." According to provisional article 2 of the decision, "In the calculation of the compensatory tax, if any, on exports made to the European Union between 1/1/2018 and 31/12/2019 within the scope of the Inward Processing Regime, this tax will not be paid at all in the said period or if this tax is not paid by Article 9. Retroactive transactions were also clarified by stating that "provided that the payment is made within the framework of the fifth paragraph, the provisions of the said paragraph shall be applied."

6.Another innovation is in the regulations regarding public imports. Article 13 of the decision states: "(1) The permission of the Ministry is required for the registration of the customs declaration regarding imports to be made within the scope of the free circulation regime by the public institutions and organizations listed in Article 2 of the Public Procurement Law No. 4734 dated 4/1/2002.

 (2) Without prejudice to the obligations arising from the relevant legislation and exceptional provisions, the permits granted within the scope of the first paragraph do not replace the licenses and documents that must be obtained by other legislation.

Thus, instead of the "Communiqué on Permits to be Obtained for Imports by Public Institutions and Organizations" numbered 2018/2, the legal infrastructure is created for the Communiqué numbered 2021/15 of the same name published in the Official Gazette dated 31.12.2020, thus enabling public institutions to turn to domestic products in their purchases.

7.The 2nd and 3rd paragraphs of the 14th article of the decision titled "Exemption" are arranged as follows:

 “(2) The Ministry of National Defense or public institutions and organizations on behalf of which imports will be made are exempt from customs duties, funds and charges collected on imports.

 (3) All kinds of goods to be imported for exhibition in private or public museums, within the procedures and principles determined by the Ministry of Culture and Tourism, are exempt from customs duties, fees and funds.

The previous Import Regime Decision did not include the provision of paragraph 14/3 in the new Decision. Although the provision of paragraph 14/2 was included, the phrase "fund" added to the new Decision was not in the old text.

As it is known, the third paragraph of Article 73 of our Constitution contains the provision, "Taxes, duties, and similar financial obligations are imposed, amended or abolished by law." Since the government has a parliamentary majority, it has been difficult to understand why these provisions were put into effect by a Presidential Decree when they could have been put into effect with an exemption law to be passed by the Turkish Grand National Assembly in one day. Moreover, no opposition mentality in the country would block the exemption law by opposing the "national security" in the 14/2nd paragraph of the Decision or the "museum exhibition items" in the 14/3rd paragraph. In this respect, a situation arises as if a regulation has been made by a Decision in an area that should be regulated by law.

I hope that the new Import Regime Decision No. 3350 will be a fundamental text that brings regulations for the benefit of all sector stakeholders.