# ![](media/image1.jpeg){width="0.89375in" height="0.94375in"}   Doing Business in Turkey: 2008 Country Commercial Guide for U.S. Companies

# INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2008. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.

-   [Chapter 1: Doing Business In ...](#ch1)

-   [Chapter 2: Political and Economic Environment](#ch2)

-   [Chapter 3: Selling U.S. Products and Services](#ch3)

-   [Chapter 4: Leading Sectors for U.S. Export and Investment](#ch4)

-   [Chapter 5: Trade Regulations and Standards](#ch5)

-   [Chapter 6: Investment Climate](#ch6)

-   [Chapter 7: Trade and Project Financing](#ch7)

-   [Chapter 8: Business Travel](#ch8)

-   [Chapter 9: Contacts, Market Research and Trade
    Events](#chapter-9-contacts-market-research-and-trade-events)

-   [Chapter 10: Guide to Our Services](#ch10)

[[]{#ch1 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 1: Doing Business In Turkey

-   [Market Overview](#market-overview-return-to-top)

-   [Market Challenges](#marketchallenges)

-   [Market Opportunities](#makretopportunites)

-   [Market Entry Strategy](#marketentrystrategy)

## Market Overview [**Return to top**](#ch1)

Turkey's rapidly expanding economy, political and economic stability,
and the possibility of EU membership have attracted a large and varied
set of American companies, ranging from mining to high technology to
energy.

Double-digit growth in bilateral trade continued from 2002 through 2006,
when the total was \$11 billion. In 2007, U.S. exports to Turkey
continued to grow, from \$5.7 to \$6.4 billion, while Turkish exports to
the U.S. shrank. This was primarily due to an overvalued Turkish Lira.
However, Turkey's overall international trade has grown faster, so the
U.S. has lost market share, primarily to China and Russia (the latter
due to Turkey's dependence on Russian gas). Today the U.S. is Turkey's
sixth largest trading partner.

U.S. exporters have excellent prospects in this diverse market. Perhaps
the most important sector for the next decade will be energy.
Electricity demand is growing at 8% a year, and Turkey must quickly add
to its capacity to meet that demand. U.S. suppliers and service
companies should look into the sector as it relates to electricity and
gas distribution, power generation and renewable energies (wind and
hydro, particularly). In addition, there may be rapid developments in
the nuclear sector, and interested U.S. firms should keep an eye on
bilateral agreements and new legislation, as well as upcoming projects.
Among many other sectors where opportunities exist are:
telecommunications services and equipment; safety and security equipment
and services; the automotive aftermarket, medical devices, and higher
education services, where Turkey sends the largest number of students
among all European countries -- around 12,000 each year -- to U.S.
colleges and universities.

In recent years, Turkey's market reforms, strong growth and economic and
political stability have attracted large amounts of Foreign Direct
Investment. In 2006 and again in 2007, Turkey attracted almost \$20
billion a year in Foreign Direct investment. Cumulative American
investment in Turkey is officially about \$4.6 billion (a number which
is understated because of U.S. company investments through third country
affiliates). However, an area of concern is the low level of greenfield
investment -- less than 10% of the total. This reflects continuing
concerns by foreign companies about excessive bureaucracy, an
unpredictable legal system and weak intellectual property protection.

In 2005, the EU and Turkey began formal EU accession negotiations.
Turkey has adopted many European Union directives, regulations and laws
in anticipation of accession. While recent setbacks have cooled popular
interest in EU membership, and the process at best will be a slow one,
Turkey's political and business leadership remains committed to joining
the EU, and understands that the process itself contributes to Turkey's
global competitiveness.

2007 saw both parliamentary and presidential elections in Turkey. The
results -- based in large part on the AK Party's commitment to economic
reform -- reinforced the AK party's political dominance, and suggest
that the reforms and market liberalization that brought them widespread
support will continue for the next five years.

Politically, 2007 saw tension between the U.S. and Turkey over the
prospect of a non-binding resolution in the House of Representatives
characterizing as genocide the World War I massacres of Armenians by
Ottoman troops. This was exacerbated by Turkish concerns about U.S.
policy in Iraq, particularly with regard to the Kurdish PKK terrorist
organization. In late 2007 and early 2008, however, high-level visits to
the U.S. by both Prime Minister Erdogan and President Gul brought a new
spirit of cooperation, and tension has eased considerably.

## Market Challenges [**Return to top**](#ch1) 

The Republic of Turkey is a complex and challenging market requiring
adaptability and persistence. U.S. exporters face many of the same
challenges that exist in other medium-developed countries, such as
contradictory policies, regulations and documentation requirements, lack
of transparency in tenders and other purchase decision-making, and an
inconsistent judiciary and legal and regulatory framework. A strong
streak of protectionism still exists in many ministries and in the
courts. Careful planning and patience are the keys to succeed in Turkey.

## Market Opportunities [**Return to top**](#ch1)

The Republic of Turkey's movement toward membership in the European
Union is creating momentum to adopt European business regulations and
standards in Turkey, thereby ultimately making it easier to sell and
conduct business in this market. Similarly, reforms since 2001 have
created a strong and stable economy that attracts foreign investment,
which in turn will be followed by desperately needed capital
improvements and demand for new products and services. The Commercial
Service in Turkey has identified a number of market opportunities for
U.S. firms and continues to work with companies to either enter the
Turkish market or expand market share.

## Market Entry Strategy [**Return to top**](#ch1)

To enter the Turkish market, most U.S. companies first opt to have a
local representative or liaison office. As the business develops,
companies open up subsidiaries. Companies rely on local experience and
knowledge as to how business is done in this market. Knowing the
regulatory and business framework is a difficult task without the
support of a local business partner. The Commercial Service in Turkey
has a number of programs and services available to assist the U.S.
business community in establishing a presence in this market. In
addition, the Commercial Service in Turkey employs experienced
Commercial Specialists with industry sector expertise that can tailor
your business approach to the right audience and advise and steer your
company through the often less than transparent bureaucratic procedures
that are common in Turkey. To find out more about what we can do to help
you with one of our leading trading partners, please visit our web site
at [www.csturkey.com](http://www.csturkey.com/) and
[www.buyusa.gov/turkey/en](http://www.buyusa.gov/turkey/en).

Keeping in mind that Turkey is also the commercial hub of the region,
companies should also consider using Turkey or Turkish partners to
access business opportunities throughout Central Asia, the Caucasus, the
Middle East and even Africa. Turkish partners know these neighboring
markets well, and are ready to take risks to make sales.

[]{#marketchallenges .anchor}

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch2 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 2: Political and Economic Environment

For background information on the political and economic environment of
the country, please click on the link below to the U.S. Department of
State Background Notes.

> <http://www.state.gov/r/pa/ei/bgn/3432.htm>

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch3 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 3: Selling U.S. Products and Services 

-   [Using an Agent or
    Distributor](#using-an-agent-or-distributor-return-to-top)

-   [Establishing an Office](#establishinganoffice)

-   [Franchising](#franchising)

-   [Direct Marketing](#directmarketing)

-   [Joint Ventures/Licensing](#jointventures)

-   [Selling to the Government](#sellingtothegovt)

-   [Distribution and Sales Channels](#distributionandsaleschannels)

-   [Selling Factors/Techniques](#sellingfactors)

-   [Electronic Commerce](#electroniccommerce)

-   [Trade Promotion and Advertising](#tradepromotion)

-   [Pricing](#pricing)

-   [Sales Service/Customer Support](#salesservice)

-   [Protecting Your Intellectual Property](#protectingip)

-   [Due Diligence](#duediligence)

-   [Local Professional Services](#localprofessionalservices)

-   [Web Resources](#webresources)

## Using an Agent or Distributor [**Return to top**](#ch3)

Unless a U.S. firm\'s interests are large enough to warrant opening an
office in the country, the most effective means of selling in Turkey is
through a reliable and qualified local representative. Personal contact
is extremely important in Turkish business in both private and public
sectors. When dealing with government tenders, an agent is an absolute
necessity in view of complicated bureaucratic procedures and the
language barrier.

An American firm should carefully investigate the reputation and
possible conflicting interests of any prospective representative or
agent before signing contractual agreements. U.S. Commercial Service
Turkey can make background check on a selected company and prepare an
International Company Profile (ICP) report, which can be a useful tool
in the elimination of an agent or distributor candidate. More
information on the ICP service and other services provided by U.S.
Commercial Service Turkey can be found at:
<http://www.buyusa.gov/turkey/en/exporting_to_turkey.html>

Agency agreements under Turkish law are private contracts between two
parties and their stipulations vary according to mutual consent. There
are no fixed commission rates. It is recommended that sole manufacturer
representatives/distributors be appointed for the entire country, which
may include other countries in the region. Agency Agreements can be for
a period of a year to be renewed depending on the success of the agent.
In cases where a large volume of government business is expected, it is
essential either to appoint an Ankara firm or an Istanbul firm with a
branch office in the capital.

Commercial Service Turkey, through its offices in Ankara, Istanbul and
Izmir, provides a Gold Key Service, arranging custom-tailored
appointment programs for visiting American business people. The Commerce
Department\'s International Partner Search, the Matchmaker, Trade
Mission, and Catalog Show programs are other options for U.S. companies
looking for assistance in entering the Turkish market. The Foreign
Agricultural Service also provides information and assistance to firms
interested in marketing agricultural commodities in Turkey. For more
information on the Commercial Service in Turkey, please visit our web
site at [www.buyusa.gov/turkey/en](http://www.buyusa.gov/turkey/en).

## Establishing an Office [**Return to top**](#ch3)

Turkey's foreign investment legislation, which has been gradually
liberalized since the 1980's, was revised most recently in 2003 through
some structural reforms. The procedures for foreign investment are
simplified, some bureaucratic formalities are abandoned, and the
principle of equal treatment is reemphasized.

Turkey has reached a stage where the issue of foreign capital is
considered as a top priority issue and the latest reforms are the
initiation of a series of required course of action to improve the
investment climate. (See
[http://www.invest.gov.tr](http://www.invest.gov.tr/))

The major step that has been realized recently is the introduction of a
more investor-friendly ''Foreign Direct Investment Law''.

The new Law has changed Turkey's foreign investment policy from
screening system to monitoring system. The foreign investors are no
longer required to obtain permissions or approvals. Foreign investors
will only be asked to provide some statistical information to the
Undersecretariat of Treasury for the purpose of developing an
information system about foreign investment in Turkey.

The main elements of the new ''Foreign Direct Investment Law'' are:

-   All former FDI related screening and approval procedures have been
    abandoned for setting up a business (company or branch) and share
    transfers. Foreign investors will no longer be required to obtain
    prior approvals for these transactions, except for some critical
    sectors. The conditions for setting up a business and share
    transfers are the same as for comparable local investors.

-   Pre approval requirements for certain transactions- capital
    increase, change of field of activity, etc., of foreign investment
    companies have also been eliminated. Foreign capital companies will
    follow the same procedures as local companies.

-   Registration of license, know-how, royalty and technical assistance
    agreements to the General Directorate of Foreign Investment is no
    longer required.

-   The minimum capital requirement of \$50,000 per each foreign
    shareholder has been abolished.

-   Foreign investors will be able to form a partnership in Turkey. In
    the old regime, foreign investors were only allowed to form a joint
    stock company or a limited company. Now, any form of company
    included in the Turkish Commercial Code is acceptable for foreign
    investors.

-   Valuations of international credit agencies as well as courts or
    competent authorities of the investor's country will be accepted as
    valid in the determination of the share value for marketable
    securities that are contributed as capital in-kind.

The new ''Foreign Direct Investment Law'' also reassured the foreign
investors' existing rights:

-   The foreign investment legislation is based on the principle of
    equal treatment for the domestic and foreign investors. Foreign
    investors have the same privileges and obligations as the domestic
    capital.

-   Free transfer of profits, dividends, proceeds from sale or
    liquidation of an investment, fees and royalties, interest payments
    on foreign loans is clearly restated.

-   Foreign capital companies established in Turkey have the same rights
    to acquire a real estate as domestic investors. Foreigners may own
    real estate according to the principle of reciprocity.

-   National or international arbitration is allowed for disputes
    arising from contracts involving government concessions as well as
    for disputes arising from agreements subject to private law,
    provided that the conditions in the related regulations are
    fulfilled.

-   Foreign capital entities can employ foreign personnel in Turkey,
    provided that the work permits are obtained from Ministry of Labor.

The new Law retained the rights of Liaison Offices. Liaison offices are
special type of office whose main activity is to conduct market research
and feasibility studies and to accumulate investment opportunities in
the Turkish market on behalf of their head office. They are not allowed
to carry on any commercial activity. Foreign investors are required to
obtain permission from General Directorate of Foreign Investment under
the Turkish Treasury to open a liaison office in Turkey. The initial
permission is given for 3 years, which can be extended depending on the
activities performed in the last 3 years and future plans of the head
office.

A foreign company is free to choose between a corporation (Anonim
Sirket\--A.S., or \"Societe Anonyme\" type corporation), private limited
company (limited liability company), or branch office as the form for
its operations in Turkey. The \'A.S.\' form is more suitable for larger
enterprises, since corporations can attract a large number of
shareholders. The limited liability company form is more appropriate for
the establishment of sales and distribution entities.

Commercial Service Turkey suggests that an attorney be retained to
obtain additional details and handle the application process and entity
formation. Use of an accountant for tax planning is also recommended.
Listings of American and Turkish lawyers and accountants resident in
major Turkish cities are available from the Commercial Service in
Turkey.

## Franchising [**Return to top**](#ch3)

Since 1986, franchising has grown in the Turkish market. The Turkish
National Franchising Association, Ulusal Franchising Dernegi (UFRAD), a
member of the International Franchising Association (IFA), is
traditionally the first point of contact and is an excellent meeting
point for prospective franchisers and franchisees. Foreign franchises in
Turkey are concentrated in fast foods and apparel, but other areas are
increasingly represented as well.

The Block Exemption Decree (relief from the Free Competition Law) No.
1998/7 dated December 1998 is based on the European Community's Law No.
4087/88. If a franchise agreement meets the requirements of this decree,
it is exempt from the Free Competition Law, which is often in conflict
with certain aspects of the franchising concept. Until this decree, each
franchisee was obliged to obtain an individual exemption status by
applying to the Competition Authority.

Franchising Contacts:

National Franchising Association

(Ulusal Franchising Dernegi-UFRAD)

Ergenekon Caddesi

Pangalti Is Merkezi 89/15

80240 Pangalti

Istanbul, Turkey

Tel: \[90\] (212) 296-6628

Fax: \[90\] (212) 224-5130

Internet: [www.ufrad.org.tr](http://www.ufrad.org.tr/)

The International Franchising Association in Washington, D.C. (1350 New
York Avenue, NW, Washington, D.C. 20005-4709, tel. (202) 628-8000; fax:
(202) 628-0812), has been active in Turkey, organizing visits to Turkey
by potential U.S. franchisers and, in cooperation with UFRAD, putting
them in contact with potential local franchisees.

Most large U.S. accounting / auditing / consulting firms, many U.S.
banks, and several U.S. law firms also have offices in Turkey to assist
American firms interested in the Turkish market.

## Direct Marketing [**Return to top**](#ch3)

Unless a U.S. firm has established an office in Turkey, direct marketing
from the United States without an agent or representative is not
recommended. In fact, it is virtually impossible to surmount complicated
bureaucratic requirements, language obstacles, and purchasing
transactions without a competent local representative/agent. Especially
for those firms with sales potential large enough to warrant it, a local
affiliate is the best possible way of selling to this market without an
agent, representative or distributor. However, U.S. companies can
advertise its products and services through the web site of the U.S.
Commercial Service in Turkey. For further information on this, please
contact <Ozge.Cirika@mail.doc.gov>.

## Joint Ventures/Licensing [**Return to top**](#ch3)

Although 100 percent foreign ownership is permitted (except in the Radio
& TV Broadcasting), most U.S. investment in Turkey is in the form of
joint venture or licensing operations. Most Turkish companies prefer to
establish joint ventures with U.S. suppliers to overcome shipping costs
and European competition. Especially in view of customs duties applied
to U.S. products vis-à-vis zero customs charges for European-origin
goods (Turkey joined the European Customs Union in 1996), many U.S.
firms have chosen local production as a way to profitably penetrate the
Turkish market. Especially in large urban centers, a highly
sophisticated infrastructure exists (legal support, financial and
consulting services) which may be required by potential foreign
investors or joint venture partners. Major U.S. accounting/auditing
firms, law firms and banks also have established branches in Turkey.

## Selling to the Government [**Return to top**](#ch3)

The main law that regulates government procurement is the Public Tender
Law No. 4734 and Law No. 4964-the amending law to 4734. Though Law No.
4734 was omnibus legislation incorporating all public sector
enterprises, the amending legislation 4964 limited the Public Tender
Law's coverage such that the energy, water, transport and
telecommunications sectors would be exempted from the Public Tender Law.
State-owned corporations (state economic enterprises-SEEs) generate
revenues through sales of raw materials, semi-finished and finished
products and services. SEE procurement regulations are largely based
upon a government decree called \"the Decree on the Operations of the
State Economic Enterprises\" No. 233 of June 8, 1984, Turkey\'s Law of
Obligations No. 818, dated April 22, 1926, and the Turkish Commercial
Code No. 6762, dated June 29, 1956. Other exceptions are the
Undersecretariat of Defense Industries (SSM) and the Ministry of
National Defense. SSM procurement is financed off budget, through
special taxes, and is not subject to Law No. 2886.

An independent Public Procurement Authority was established as
stipulated in Law No. 4734, which approves public tenders. Any
objections to the tenders can be made to this Authority. It evaluates
the objections and makes decisions in accordance with the regulations.
In public tenders, company establishment certificate, letter of
authorizations, job completion certificates, any other certificates
required in tender specifications must have apostille. Otherwise,
bidders can be disqualified. Due to this kind of bureaucratic
procedures, tender evaluations can be cancelled and re-tendered or
sometimes can take months. Companies must submit their bids in original
form before the deadline date and time. See:
<http://www.ihale.gov.tr/Yayinlar_Dokumanlar/dokumanlar_english.htm>.

Price, quality, financial credit terms, and length of repayment period
are the most important factors in purchasing decisions. Other factors
that affect sourcing decisions are the suppliers\' reputation, the
reputation of the quality and reliability of their products, compliance
with the EU regulations and standards, references, qualifications of the
local partner and previous experience in dealing with particular
suppliers.

In Government of Turkey (GOT) tenders, state organizations give
particular importance to the way proposals are prepared and to their
adherence to administrative and technical terms and conditions.
Generally, the validity of the proposal must be three to six months from
the bid date and the same validity is expected for the bid bond
(generally a stand by letter of credit). If a company retracts its
offer, the bid bond is forfeited. The bid bond is usually obtained from
the actual supplier for three percent of the bid amount. The performance
bond is usually six percent of the contract amount and is valid
throughout the delivery or final acceptance beginning from the contract
date. All bonds have to be counter-guaranteed (confirmed) by a Turkish
national bank.

The GOT enacted the Electricity Market Law on February 20, 2001, which
envisages a market that is competitive, transparent, and operates in
accordance with provisions of private law. The law also established the
Electricity Market Regulatory Authority (EMRA).

The Turkish Parliament passed the Natural Gas Market Law No. 4646 on
April 18, 2001. This law liberalizes the trading of natural gas and
authorizes the same independent regulatory body for electricity trading
to also regulate the natural gas market (EMRA). Companies are free to
supply natural gas at wholesale to customers buying in excess of one
million cubic meters of gas per year. EMRA has been issuing the required
licenses. This law also permits the private sector to obtain license to
distribute gas in cities.

A Petroleum Market Law enacted on December 4, 2003, Law no. 5015 has the
objective to regulate the Petroleum Products Market pertaining to the
delivery of petroleum supplied from domestic and foreign resources to
consumers, directly or after processing, in a reliable, cost-effective
manner within a competitive environment. In accordance with this Law,
Holding a license is obligatory for the following petroleum activities:

a)  Performing refining, processing, lube oil production, storage,
    transmission, eligible consumer and bunker activities and to
    establish and/or operate facilities for the performance of aforesaid
    activities,

b)  Performing liquid fuel distribution, transportation and vendor
    activities. Energy Market Regulatory Authority may impose exemptions
    for holding licenses for transmission and processing activities in
    line with the principles and criteria to be developed. Licenses
    shall not be granted based on commitments.

## Distribution and Sales Channels [**Return to top**](#ch3)

Marketing of most foreign products in Turkey is through foreign
suppliers\' representatives or distributors. Depending on the location
of consumers/end-users, most distributors have a dealer network
throughout the country or in areas where the product is most used---in
the case of several industrial sectors; a dealer/repair network may be
required. Commission representatives/agents, on the other hand,
periodically visit their customers together with their foreign
principals to maintain strong personal contact, which is a very
important marketing tool in Turkey.

## Selling Factors/Techniques [**Return to top**](#ch3)

Once an American firm appoints a manufacturers' representative or agent,
the agent or distributor expects-and should receive-the principal\'s
full support with regard to literature, technical information,
advertisement and promotional materials. Possible government buyers and
potential private-sector importers should receive catalogs and other
literature clearly indicating the name and address of the local
representatives/distributors. A common and very effective support
practice by European principals is to invite the representative/agent to
the principal\'s country every year for an annual sales meeting. Both
agents and, if possible, their principals, should periodically visit
existing and potential customers since the importance of personal
contact in Turkey cannot be overemphasized.

Especially in larger Turkish cities, international trade promotional
events, such as fairs, exhibitions and seminars, are common methods of
sales promotion. These fairs are also opportunities for U.S. companies
to assess (and meet) existing competition, since all major foreign and
local suppliers participate in such events. The catalogs of the events
serve as \'trade lists\' on specific product categories. Currently,
there are about seventy international fair and exhibit organizers in
Turkey.

Commercial Service (CS) Turkey has been promoting attendance by
prospective Turkish buyers at exhibits in the U.S. and Europe. U.S.
Commercial Service sector specialists take Turkish business delegations
to the exhibitions in the U.S. or Europe and under the Showcase
Europe-Showtime program, sector specialists counsel U.S. companies
during the exhibitions. Likewise, the Foreign Agricultural Service (FAS)
organizes trade teams to U.S. agriculture and food shows. CS Turkey will
continue to coordinate with other U.S. Government posts and event
organizers to facilitate the visits of buyers to these events. The
events promoted by CS Turkey are usually announced in CS Turkey's web
site: <http://www.buyusa.gov/turkey/en/>

## Electronic Commerce [**Return to top**](#ch3)

The majority of E-commerce transactions in Turkey are in the field of
Internet banking. Local industry sources report that nearly 70 percent
of all electronic commerce transactions are in on-line banking and
financial services. The concept of Internet banking in Turkey is popular
given the very high cost of maintain physical bank branches throughout
the country. Apart from increasing customer service, the commercial
banks realized that charging substantially less transaction cost for
Internet banking than the traditional brick and mortar enterprise of the
past, made the Internet banking more attractive to the consumers.

**Other E-Commerce Business Activity**

Apart from the significant on line banking segment of the Turkish
E-commerce industry, Turkish companies in ticketing, travel, food
delivery, entertainment, clothing, and consumer products are also active
in promoting goods and services via the Internet. The majority of
commercial sites were developed without focusing on IT integration of
overall corporate operations and instead focused on order taking and
transaction clearance. Turkish E-commerce companies generate only a
small percentage of gross revenue from electronic transactions. Turkish
Government also gives importance to e-government activities such as tax
payment over Internet, application for a passport, and many other
application type procedures are being widely used.

## Trade Promotion and Advertising [**Return to top**](#ch3)

Chambers of Commerce and Industry, various associations, and specific
sector publications serve as potential channels for advertisement.
Television commercials or ads in major newspapers are also highly
effective. In Turkey, there are over 20 national TV channels. Major
newspapers include Cumhuriyet, Dunya, Hurriyet, Milliyet and Sabah, all
of which have their headquarters in Istanbul with branch offices in
Ankara. The country\'s foremost commercial/economic daily newspaper is
Dunya. The leading English language newspaper is the Turkish Daily News.
Major weekly periodicals are: Anka Haber (economy); Barometre (economy);
Briefing (weekly inside perspective on Turkish political, economic and
business affairs); Detay (economy-also publishes tenders on equipment
procurement and infrastructure projects); Eba Newsletter
(economy/English daily); Eba Report (a weekly special survey of Turkish
business, industry and business contacts); and Tebanews (weekly
magazine\--in English\--on tenders, investment projects and the
economy). There are many periodicals issued monthly. The most important
publications in this category are Bilgisayar (computer and related
equipment); Bilisim (computer and related equipment); BT/Haber
(weekly/computer and related equipment); Dunya Insaat (construction
machinery); Finans Dunyasi (finance and economy); Telekomunikasyon
(telecom); Turkey (economy) and Yazilim Donanim (software). Most of the
media links are available at
[www.gazeteler.com](http://www.gazeteler.com/).

## Pricing [**Return to top**](#ch3)

Price has traditionally been the most important consideration in
government tenders. Private sector buyers emphasize quality, but price
remains a significant issue. In both public and private sales, creative
financing which reduces up front cash outlays can mitigate this. While
imports from European Union and EFTA countries are exempt from duties,
American firms can still be competitive by offering financing
alternatives to credit-hungry Turkish buyers. Financing also includes
GSM-102 export credit guarantees, which is available for most
agricultural products. The Commercial Service urges U.S. suppliers to
utilize instruments like letters of credit and U.S. EXIM Bank products
when establishing a new relationship with a Turkish importer.

## Sales Service/Customer Support [**Return to top**](#ch3)

U.S. suppliers should identify local agents/distributors with the
necessary service and maintenance capability. Depending on the level of
business activity, a U.S. firm may also consider establishing its own
office in Turkey to set up servicing facilities in the country's major
business centers.

## Protecting Your Intellectual Property [**Return to top**](#ch3)

# Introduction

Several general principles are important for effective management of
intellectual property rights in Turkey. First, it is important to have
an overall strategy to protect IPR. Second, IPR is protected differently
in Turkey than in the U.S. Third, rights must be registered and enforced
in Turkey, under local laws. Companies may wish to seek advice from
local attorneys or IP consultants. The U.S. Commercial Service can often
provide a list of local lawyers upon request.

It is vital that companies understand that intellectual property is
primarily a private right and that the US government generally cannot
enforce rights for private individuals in Turkey. It is the
responsibility of the rights\' holders to register, protect, and enforce
their rights where relevant, retaining their own counsel and advisors.
While the U.S. Government is willing to assist, there is little it can
do if the rights holders have not taken these fundamental steps
necessary to securing and enforcing their IPR in a timely fashion.
Moreover, in many countries, rights holders who delay enforcing their
rights on a mistaken belief that the USG can provide a political
resolution to a legal problem may find that their rights have been
eroded or abrogated due to doctrines such as statutes of limitations,
laches, estoppel, or unreasonable delay in prosecuting a law suit. In no
instance should USG advice be seen as a substitute for the obligation of
a rights holder to promptly pursue its case.

It is always advisable to conduct due diligence on partners. Negotiate
from the position of your partner and give your partner clear incentives
to honor the contract. A good partner is an important ally in protecting
IP rights. Keep an eye on your cost structure and reduce the margins
(and the incentive) of would-be bad actors. Projects and sales in Turkey
require constant attention. Work with legal counsel familiar with Turkey
laws to create a solid contract that includes non-compete clauses, and
confidentiality/non-disclosure provisions.

It is also recommended that small and medium-size companies understand
the importance of working together with trade associations and
organizations to support efforts to protect IPR and stop counterfeiting.
There are a number of these organizations, both Turkey or U.S.-based.
These include:

-   The U.S. Chamber and local American Chambers of Commerce

-   National Association of Manufacturers (NAM)

-   International Intellectual Property Alliance (IIPA)

-   International Trademark Association (INTA)

-   The Coalition Against Counterfeiting and Piracy

-   International Anti-Counterfeiting Coalition (IACC)

-   Pharmaceutical Research and Manufacturers of America (PhRMA)

-   Biotechnology Industry Organization (BIO)

-   Directorate General of Copyrights and Cinema at Ministry of Culture

-   Turkish Patent Institute

**IPR Resources**

A wealth of information on protecting IPR is freely available to U.S.
rights holders. Some excellent resources for companies regarding
intellectual property include the following:

-   For information about patent, trademark, or copyright issues \--
    including enforcement issues in the US and other countries \-- call
    the STOP! Hotline: **1-866-999-HALT** or register at
    [**www.StopFakes.gov**](http://www.StopFakes.gov/).

-   For more information about registering trademarks and patents (both
    in the U.S. as well as in foreign countries), contact the US Patent
    and Trademark Office (USPTO) at: **1-800-786-9199**.

-   For more information about registering for copyright protection in
    the US, contact the US Copyright Office at: **1-202-707-5959**.

-   For US small and medium-size companies, the Department of Commerce
    offers a \"SME IPR Advisory Program\" available through the American
    Bar Association that provides one hour of free IPR legal advice for
    companies with concerns in Brazil, China, Egypt, India, Russia, and
    Thailand. For details and to register, visit:
    **<http://www.abanet.org/intlaw/intlproj/iprprogram_consultation.html>**

-   For information on obtaining and enforcing intellectual property
    rights and market-specific IP Toolkits visit:
    **[www.StopFakes.gov](http://www.StopFakes.gov/).** This site is
    linked to the USPTO website for registering trademarks and patents
    (both in the U.S. as well as in foreign countries), the U.S. Customs
    & Border Protection website to record registered trademarks and
    copyrighted works (to assist customs in blocking imports of
    IPR-infringing products) and allows you to register for Webinars on
    protecting IPR.

-   The U.S. Commerce Department has positioned IP attachés in key
    markets around the world. You can get contact information for the IP
    attaché who covers Turkey at: <Jennifer.Kane@mail.doc.gov>

**IPR Climate in Turkey**

In 1995, as part of Turkey's harmonization with the EU in advance of a
customs union, the Turkish parliament approved new patent, trademark and
copyright laws. Turkey also acceded to a number of multilateral
intellectual property rights (IPR) conventions. Although the new laws
provide an improved legal framework for protecting IPR, they required
further amendments to be consistent with the standards contained in the
WTO Agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPS). The Turkish Parliament passed amendments to the Copyright Law
in June 2001, further strengthening IPR enforcement and making Turkish
IPR law TRIPS compliant. Parliament further amended the Patent Law in
June 2004. The new law provides for penalties for infringement of up to
3 years imprisonment or 47,000 New Turkish Lira (approximately USD
32,000), or both, and closure of the business of up to one year.

Turkey continued to show evidence of poor IPR enforcement practices, and
as a result, the U.S. Government has again placed Turkey on the Priority
Watch List in 2004.

A recent report issued by the Government of Turkey (GOT) indicates the
following:

Turkey continues to make improvements in its legal system and laws
concerning the protection of IPR. These improvements are reflected in
practice. Recent activities to combat counterfeit and piracy and
developments in the field of copyright protection are as follows:

A-Institutional Restructuring:

1\. Establishment of Specialized Commissions and Departments: In order
to enhance the capabilities to follow the local operations in various
provinces, an "Intellectual and Artistic Products Authority" was
established. This Authority's sole responsibility is to fight against
violations of intellectual property rights. Additionally, a Commission,
consisting of the representatives from the Ministry of Justice, Ministry
of National Education, Ministry of Interior Affairs, Ministry of Culture
and Tourism, and Business Associations has been established with the aim
of countering piracy. Besides, Provincial Supervision Commissions have
been controlling the labels of the copyrighted products in order to
fight piracy and copyright infringements.

2\. Employment of New Personnel: In all 81 Provincial Police
Departments, 939 personnel are employed to deal solely with violations
of IPR.

3\. Label Automation System: In May 2006, a web-based label automation
system has been established in order to be able to combat with book
piracy in a more efficient and faster way.

B-Training of the Personnel Combating IPR Infringements and Cooperation
between Institutions: GOT organized a number of training programs In
cooperation with Ministry of Justice, Ministry of Culture and Tourism,
Turkish Patent Institute and Security General Directorate, on the job
training as well as trainings in France, Greece and EUROPOL. Each year
GOT provides on the job training to approximately 500 police officers.

C-Activities for Creating Public Awareness on Piracy: Broadcasting in
movie theaters on reproduction of DVDs/VCDs of movies illegal and piracy
will be punished with imprisonment. Ministry of Culture made a campaign
in newspapers and TV programs on usage of computer software reproduced
through piracy is illegal and crime.

D-Participation in European Union Projects: An EU twinning project named
"Adopting Turkish Legislation related to IPR" started implementation on
4 May 2006 and planned to be completed in November 2007. Another
twinning project proposal named "Support to the Turkish Police in
Enforcement of Intellectual and Industrial Property Rights" was accepted
to be financed under the EU Pre-Accession Financial Aid 2006
Programming.

E-Statistics on Intellectual Property Rights Violations: Between
2000-2006 at 2356 police operations 3208 people were prosecuted. Since 1
March 2006, at 365 operations, 254 people have been prosecuted and a
number of products (226,221 piece, 1113 Kg, and 1122 packages) were
seized.

The local Copyright office is "Directorate General of Copyrights and
Cinema at\
Ministry of Culture" and can be contacted at
<telifvesinema@kultur.gov.tr>. The local IPR office is "Turkish Patent
Institute" and can be contacted at <info@turkpatent.gov.tr> and further
information is available at
<http://www.turkpatent.gov.tr/portal/default_en.jsp>.

## Due Diligence [**Return to top**](#ch3)

Companies can minimize their risk of exporting to new customers or
entering into business with new partners by utilizing the U.S.
Department of Commerce International Company Profile (ICP) program. An
ICP provides up-to-date information that includes bank and trade
references; names of principals, key officers and managers; product
lines; the number of employees; financial data; sales volume; reputation
and market outlook, all at a reasonable price. For more information,
please visit our web site at
[www.buyusa.gov/turkey/en](http://www.buyusa.gov/turkey/en).

## Local Professional Services [**Return to top**](#ch3)

English-speaking attorneys specializing in commercial law, investment
legislation, joint ventures, corporate law, tax law, bankruptcy law,
public finance, banking corporations, criminal law, and civil law are
available for consultation with U.S. business representatives. A list of
specialized attorneys is available from CS offices in Turkey. U.S.
companies will also find large multi-national U.S. accounting and
financial firms operating in Turkey, to assist in establishing a
presence in the Turkish market.

## Web Resources [**Return to top**](#ch3)

For additional information on entering the Turkish market, or if you
have specific questions pertaining to your product or market niche,
please visit our web site at
[www.buyusa.gov/turkey/en](http://www.buyusa.gov/turkey/en). You can
also advertise your company and products in our web site. For further
information on this, please contact <Ozge.Cirika@mail.doc.gov>.

E-mail: <usa@invest.gov.tr>

Internet:
[www.investinginturkey.gov.tr](http://www.investinginturkey.gov.tr/)

[[[]{#establishinganoffice .anchor}]{#salesservice .anchor}Return to
table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch4 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 4: Leading Sectors for U.S. Export and Investment 

-   [Agricultural Sector](#agricultural-sectors-return-to-top)

**Commercial Sectors**

-   [Water and Wastewater
    Technologies](#water-and-wastewater-technologies)

-   [Franchising](#leadingsector2)

-   [Education Services](#education-services--overview-return-to-top)

-   [Automotive Parts and Equipment](#leadinsector4)

-   [Defense Equipment and Services](#defense-equipment-and-services)

-   [Medical Equipment and Services](#medical-equipment-and-services)

-   [Information Technology](#information-technology)

-   [Telecommunications Equipment &
    Services](#telecommunication-equipment-and-services)

-   [Electric Power Systems](#electric-power-systems)

-   [Natural Gas Transmission, Distribution, Exploration, Storage and
    Training](#natural-gas-transmission-distribution-exploration-storage-and-trading)

## Water and Wastewater Technologies

### Overview [**Return to top**](#ch4)

There is a potentially big market for U.S. environmental technology
products in the rapidly developing Turkish market. Turkey, despite
having a relatively effective environmental law, has not been able to
implement environmental protection measures until recently, due to the
scarcity of resources and the developing nature of the economy. However,
with the start of the accession talks with the European Union, Turkey
has adopted a new environmental law to initiate the harmonization of its
environmental regulations with EU standards. Alignment with the EU
standards is creating an environmental infrastructure and technologies
market that will ultimately be worth €70.5 billion. The alignment is
planned for completion by 2024.

According to the Ministry of Environment and Forestry, €68 billion of
this volume would be spent on capital investment and the rest would be
on technical support programs and personnel expenses. The total
investment value may increase to €90 billion when the investments
required by the 'chemicals directive' are added to the total picture.

The amount that would be spent by the state on the capital investment is
expected to be around €50 billion, whereas private sector would spend
€18 billion. The largest portion of this chain of investment, €35
billion, would be for wastewater and drinking water facilities. This
would be followed by investment in solid waste management and prevention
of air pollution. As urbanization and industrialization take their toll,
problems and needs related to better and more efficient usage of water
resources will become more critical.

> Currently, annual water use per capita is around 1,500 m3, but in 20
> years as the population approaches 90 million people, this amount is
> expected to go down to 1,042 m3; internationally, 1,000 m3 is accepted
> as the threshold for the alarm bells to ring. An increase of around 33
> percent in the amount of water drawn from surface and groundwater
> resources between the years 1995 and 2002 shows that there will be
> increased pressure on resources in order to meet water demand.

There are some bottlenecks in the water sector that hinder development:

-   Overlap in the responsibilities of different institutions in
    issuing, monitoring and controlling permits,

-   Deficient technical and legal knowledge in local administrations and
    municipalities,

-   Insufficient means to monitor the levels of pollution, and thus,
    lack of benchmark indicators and numerical environments to devise
    sound plans,

-   Billing problems due to leaks and losses in water pipeline systems,

-   Illegal and excess drawing off of groundwater,

-   Insufficient sanctions and inspections, and

-   Pollution originating from pesticides and fertilizers.

Discharge of sewage and wastewater into surface water without treatment
by industrial facilities is also a major problem. There are 87 organized
industrial zones in Turkey, but only 41 of them have operating water
treatment systems. Seventeen of these zones have connected their sewage
systems to the system of the municipality and thus have partially
reduced the negative impact they have on environment.

> There are 16 metropolitan municipalities with populations greater than
> 500,000 people, 3,200 municipalities with populations lower than
> 500,000 people, and over 37,000 small towns and villages with
> populations lower then 2,000 people. The social and economic
> conditions of their residential units demonstrate wide differences.
>
> According to the results of a survey done by the Turkish Institute of
> Statistics in 2004 on 1,911 municipalities, it was noted that 1,421 of
> them had established sewage systems. In that year, 47 percent of 2.77
> billion m3 of waste water drained through these systems was discharged
> into rivers, 39.3 percent to sea, 4.2 percent to dams, 1.9 percent to
> lakes and ponds, 1.3 percent to fields, and 6.3 percent to other
> environments. 1.68 billion m3 of this discharged amount was treated in
> the treatment plants.

The methods used for treatment have been as follows:

-   **Biological treatment** (treatment implemented through the use of
    microbe-size organisms for the removal of organic contaminants in
    wastewater) -- applied to 58.2 percent of the wastewater treated,

-   **Physical treatment** (treatment implemented through filters,
    sedimentation tanks etc) -- applied to 28.3 percent of the
    wastewater treated, and

-   **Advanced treatment** (treatment implemented through advanced
    methods like biofilters, hybrid reactors, ion exchange, membrane
    processes etc)-- applied to 13.2 percent of the wastewater treated.

#### 

There are 138 treatment plants in Turkey in which secondary and advanced
treatment techniques are used, according to the data of 2004. In order
to fulfill the requirements of the Urban Wastewater Treatment Directive,
approximately 2,942 new treatment plants with various capacities must be
built for towns with populations over 2,000. Additionally, in small
towns and villages whose population is less than 2,000, appropriate
treatment and disposal methods will be implemented as part of the EU
acquis.

Agriculture is another important source of water contamination. There
are 8.5 million hectares of irrigable land in Turkey. As of January
2005, 4.9 million hectares of this were irrigated. The most important
problem with regard to agricultural irrigation in Turkey is lack of
drainage systems. The infiltration of fertilizers and plant protection
chemicals into the soil through surface irrigation systems could be
reduced by treatment of wastewater drained into rivers, the sea etc., by
the installation of covered drainage systems, or by the utilization of
pressurized irrigation techniques.

### Best Products/Services [**Return to top**](#ch4)

Development of municipal water/wastewater treatment is taking place more
rapidly than the other areas of environmental protection. There are
still thousands of municipalities that do not have proper
water/wastewater treatment systems. Some of the smaller towns, due to
their limited financial capability, may not be able to undertake large
projects with international players, but there are still cities with
250,000 + populations without a treatment facility.

As far as the treatment of industrial wastewater in concerned, a small
portion of industry fully complies with the rules and regulations on
treatment of the wastewater generated at their own facilities. U.S.
consultancy or equipment manufacturers may find business in this area as
well.

Some product groups having potential in the Turkish market are:

-   Water pumps/filters/pollution control equipment (Turkey has a strong
    pumps and valves manufacturing base; high-end products could have a
    better chance in the market),

-   SCADA systems,

-   Design and operation of water/wastewater plants,

-   Sludge treatment technologies,

-   Leakage detection systems,

-   Reverse osmosis,

-   Membrane technology,

-   Industrial wastewater remediation systems, and

-   Metering devices

### Opportunities [**Return to top**](#ch4)

Turkey needs to invest in almost every aspect of environmental
technology in the years to come but most heavily in water and wastewater
treatment. The fact that government's and municipalities actions towards
controlling and preventing pollution creating sources at both municipal
level and industrial level will trigger demand for solutions at both
service and equipment procurement levels. Especially the following
sectors will need to make wastewater treatment investments:

-   textile industry

-   cement industry

-   Iron/steel industry

-   chemicals industry

-   food processing industry

-   automotive industry

### Resources [**Return to top**](#ch4)

#### Ministry of Environment and Forestry 

#### http://www.cevreorman.gov.tr 

#### 

#### Istanbul Metropolitan Municipality 

#### Department of Environmental Protection & Development

#### http://www.ibb.gov.tr

#### 

#### Istanbul Water and Sewerage Authority -- ISKI 

#### http://www.iski.gov.tr 

#### 

#### Ankara Water and Sewerage Authority -- ASKI

#### http://www.aski.gov.tr

#### 

#### Izmir Water and Sewerage Authority -- IZSU 

#### http://www.izsu.gov.tr

## Franchising

### Overview [**Return to top**](#ch4)

It has been nearly twenty years since franchising arrived in Turkey. The
Turkish Franchising Association (UFRAD) was founded in 1991 and the
first brand was launched in 1985, when McDonald's entered Turkey as the
first foreign franchise in the country. Since then, the sector has
experienced an influx of both foreign and local investment concentrating
in the greater urban Istanbul area, Ankara, Izmir, Bursa as well as some
others being started in smaller cities in the western part of the
country.

There is no definitive figure for the size of the market. This is mainly
due to the fact that franchising is a developing concept in this country
and selling through dealers is also perceived as a franchise system.
When this is taken into account, we note that there are approximately
800 brands in the market that generate an annual turnover of \$25
billion; the turnover of car dealers and ready-to-wear companies is also
included in this figure. Two hundred of these brands are noted to be of
foreign origin whereas 600 of them are of Turkish.

However, when companies that work primarily on a 'dealership' basis are
excluded, the turnover of franchised brands is approximately \$1.5
billion. Considering the accelerating penetration of domestic and
foreign brands into the Turkish market, this figure is expected to reach
\$10 billion by 2010. The current number of brands with master
franchises in the Turkish market is 200, approximately 50 of these being
U.S. brands.

The expansion of the fast food industry in Turkey largely resulted from
a surge in urban population and in increased demand for western-style
fast foods. Moreover, fast food restaurants are generally perceived as
convenient family establishments in Turkey, especially those that
include special facilities for children.

Although investments appear to concentrate on fast food companies, the
sector is diversifying rapidly into other areas such as automotive
products and services, business services, children\'s services,
computer/electronics/internet services, convenience stores, educational
products and services, hair salons and services, hotels, janitorial
services, and real estate service companies.

### Best Products/Services [**Return to top**](#ch4)

Fast food restaurants, casual dining concepts, language training,
computer training, children's services, maintenance services, healthcare
services, sports facilities, real estate services and hotels.

### Opportunities [**Return to top**](#ch4)

Construction of new shopping malls and office plazas increase the demand
for new fast food or casual dining brands in their food courts.
Construction sector has the highest growth rate in the Turkish economy
for the last three years and shopping malls, not only in large cities,
but in relatively smaller cities are being built.

Growth in construction sector also triggers demands for real estate
services. Plans to develop new industrial zones increase the need for
land development.

Additionally, as well as having a population of 72 million people with
half of it under the age of 16 and with a birth rate higher than Western
Europe, demand for children's services is on a rise; especially ones
targeting toddlers.

On the education side, as Turkey has become an active player of
international trade and tourism industry, demand for Turks fluent in
English is immense which might make Turkey a good market for companies
that teach English as a second language.

## Education Services- Overview [**Return to top**](#ch4)

Turkey\'s population of 71 million is relatively young, when compared
with many other countries. About 70 percent of the population is under
the age of twentysix and 35 percent under the age of fifteen. This young
population provides considerable opportunities for international
education institutions.

According to the Basic Law on National Education No 1739, the Turkish
school system has 4 different levels:

a\) Pre-school Education: Pre-school education is not compulsory in
Turkey. Most of the preschools are privately owned and some are attached
to the state primary schools. They are concentrated in large cities so
as to meet the needs of working parents.

b\) Primary School Education: In Turkey, primary school education is
compulsary which starts at the age of 6 and lasts eight years. 10,85
million students are enrolled at 34,656 elementary schools.

c\) Secondary Education: Secondary education includes all of the
general, vocational and technical high schools that provide four years
of education after primary school. The number of high school students is
about 3,39 million. There are a total of 7934 high schools, including
the public and private high schools. The public high schools have
limited resources and more students in one classroom compared to the
private ones.

d\) Higher Education: Normally there is 4 years of undergraduate
education for the universities, with some fields such as medicine
lasting six years. There are also the "Meslek Yuksek Okullari",
literally "higher vocational schools" which offer 2 year of
undergraduate study over high school and are very much like the
community colleges in the U.S.

As of 2007, there are 85 public and 30 private foundation universities
serving 2,42 million students in various academic programs. 2 million
students are enrolled in undergraduate programs, 109,000 in master's
programs, 33,711 in Ph.D, 11,884 in doctors in residency programs and
431,000 in the open university. Public universities charge a small fee,
whereas private university tuition costs range between 10 thousand
dollars to 20 thousand dollars per year. A number of outstanding
students of limited means are able to attend private universities on
merit scholarships.

Entrance into the university is very competitive due to the limited
capacity of Turkish universities. Students need to pass a nationwide
placement test that takes place once every year in June. Every year an
increasing number of students enter the exam. In 2006 over 1,800,000
high school graduates took the exam and only 10% of these applicants
were enrolled in a 4-year program, 10% in a 2-year program, 10% to the
open university (distance education in the various subfields of
economics and business administration). The rest were unable to enter
any higher education program. The establishment of nine new public
universities was announced on January 2008 to help increase the capacity
of higher education.

In Turkey, the Ministry of National Education (Milli Egitim Bakanligi)
is responsible for administering all educational services in the
country, excluding higher education. The Council of Higher Education
(YOK) is a 22-member corporate public body responsible for the planning,
coordination and supervision of higher education.

The number of Turkish universities are insufficient to meet the
increasing demand for higher education, thus there is a large Turkish
student population studying abroad. Many students willing to study
abroad, place American universities at the top of the list due to the
quality of education and good career prospects. Over 30 thousand
students go abroad for university education; U.S. colleges and
universities already attract around 11,500 Turkish students for
undergraduate, graduate and specialized training.

The Institute of International Education's Open Doors 2007 Statistics
reveal that worldwide Turkey with its 11,506 students has the 8th
largest student group studying in the U.S. at the college level, right
after Mexico and surpassing Germany, France and the U.K. Turkey ranks
number one among the European and Middle Eastern countries with its
student body in the U.S. Turkish students also constitute the ninth
largest student body in the U.S. for intensive English programs.

According to Institute of International Education's Report of Turkey for
the Academic Year 2006-2007, among 11,506 Turkish students the level of
enrollment is as follows:

-   Undergraduate: 3305

-   Graduate: 6587

-   Other (Language and Training Courses): 1614

### Best Prospects/Services [**Return to top**](#ch4)

According to the Activity Report prepared by the Turkish Fulbright
Commission Istanbul Branch Office in 2006, which is part of the
Education USA network of the Department of State, following are the most
popular fields of study chosen by Turkish students:

  ---------------------------------------------------------------- ------
   1. Business administration and economics (especially MBA        38 %
  programs in finance, marketing and international business)       

  2\. Engineering, computer science and other technical fields     22 %

  3\. English as a second language                                 11 %

  4\. Short-term certificate programs and/or summer programs       8 %
  (mostly in business ESL)                                         

  5\. Social sciences, humanities and arts (mainly psychology,     6 %
  political sciences, architecture and law)                        

  6\. Medicine and other medical fields (for the most part,        6 %
  advanced level residencies)                                      

  7\. Mass communications (radio-TV, film&video production)        5 %

  8\. Natural and physical sciences                                3 %

  9\. Other fields                                                 1 %
  ---------------------------------------------------------------- ------

### Opportunities [**Return to top**](#ch4)

There are more students interested in higher education than can be
accommodated in the Turkish universities. Thus, good opportunities exist
for American universities and colleges to explore a rapidly growing
market. The results of the central university placement exam in Turkey
are not announced until mid August, so overseas schools that can accept
unmatched or dissatisfied students for the second semester have an
advantage.

The Ministry of National Education, the Council of Higher Education and
many ministries offer scholarships to hundreds of successful students
each year wishing to continue their studies abroad. These students
usually apply to top \"brand name\" universities either in Turkey or
abroad. Cost is not a critical factor in their decision-making process
as the scholarship sponsors pay for their entire studies. However, these
scholarship holders are usually bonded to work with their sponsoring
organizations for about 6-10 years after they graduate. Their decisions
are based mostly on the reputations of institutions, the faculty, and
the programs that these students will be pursuing.

Due to the competitive nature of the Turkish labor market and the
significant level of unemployment, many students feel the necessity to
have a post graduate/masters degree to be able to find better jobs.
These programs are even more competitive, so students seek placement at
foreign universities. Graduate studies are the most popular level of
enrollment for Turkish students.

Several Turkish universities have cooperation programs with American
universities and their students have opportunities to continue their
education in the U.S. institutions. Other American institutions may wish
to pursue such cooperative agreements as well as student exchange
programs to attract qualified Turkish students.

Many students and professionals opt for supplementary English language
education to improve their command of English, as fluency in English
provides a competitive advantage in job hunting and career prospects.
This opportunity gives U.S. firms a chance to compete in the market by
providing private English language courses in Turkey and intensive
language programs in the United States.

Other opportunities for U.S. educational institutions and companies
include the following:

-   Professional language training in Law; Business Administration;
    Marketing; and Technical English in Turkey and abroad

-   Computer-based training programs in English for primary schools,
    high schools and universities

-   MBA training and certificate courses for professionals in Turkey,
    particularly computer-based programs

### Resources [**Return to top**](#ch4)

The Turkish Fulbright Commission

[http://www.fulbright.org.tr](http://www.fulbright.org.tr/)

Ministry of National Education (For General Education)

<http://www.meb.gov.tr/english/indexeng.htm>

The Council of Higher Education (For Higher Education)

<http://www.yok.gov.tr/english/index_en.htm>

## Automotive Parts and Equipment

### 

### Overview [**Return to top**](#ch4)

  -------------------------- --------------- ------------- ----------------
                             2006            2007          2008 (estimated)

  Total Market Size          10,370          10,600        11,600

  Total Local Production     6,300           7,500         8,200

  Total Exports              4,400           6,200         6,800

  Total Imports              8,470           9,300         10,200

  Imports from the U.S.      72              80            90
  -------------------------- --------------- ------------- ----------------

Exchange Rate used: \$1 = YTL 1.25

Note: The above statistics are unofficial estimates.

Increased consumer demand in the 1990s and Turkey's Customs Union
agreement with the EU drove rapid growth of automotive production in
Turkey. The growing local market and promising neighboring export
markets (the CIS, Central and Eastern Europe and the Middle East)
attracted foreign direct investment to Turkey. Most international
vehicle producers already have production in Turkey. Presently, there
are 19 international vehicle producers in the Turkish market including;
Ford, Toyota, Renault, Fiat, Chrysler, Opel, Honda, Hyundai, Peugeot,
MAN, Mercedes, Isuzu, Mitsubishi, through J/V partnerships with local
firms, direct investment, or license agreements.

All this resulted the Turkish automotive industry to reach some
significant figures as follows:

\- Turkish automotive production capacity reached 1.2 million units, and
targeting 2

million in 2015.

\- Turkey ranks as the following among the European Union countries:

\- the largest bus producer

\- third largest LCV producer

\- third largest truck market

-Turkey is the 17th largest automotive producer on the world.

The Turkish automotive parts/service equipment industry has expanded as
Turkish automotive production and imports have increased. In 2004, it
was a record year for the industry in production, exports, and sales.
Exports continued on the same trend in 2005 but the domestic market did
not increase comparatively. 2007 was another record year for auto parts
exports increasing by 40 percent compared to the year before. As a
result of this trend, automotive exports now rank first in total exports
ahead of the traditional exports such as textiles and apparel. Today,
Turkey produces spark plugs, carburetors, fuel injection systems, and
several transmission parts. This sector provides parts to for new
vehicles as well as the existing Turkish automobile fleet that exceeds
10 million units. Of the locally produced parts industry, 90 percent
either are used in the production of vehicles that are exported or
directly go to world part market.

The Turkish import regime prohibits importation of remanufactured,
rebuilt, used, reconditioned vehicles. Only the current year or the
following year models can be imported. This rule also for parts, too.
The Turkish import regime also prohibits importation of remanufactured,
rebuilt, used or reconditioned parts. They can only be imported for use
as scrap iron for iron and steel production.

### Best Products/Services [**Return to top**](#ch4)

Tires, brake linings, gearboxes, and clutches are the major imported
items in the parts industry. Generally, imported parts are used in
supplying imported vehicles, to OEMs for vehicles to be exported, or
where there is no local production, such as for CV drive shafts,
catalytic converters and tapered roller bearings. Imports are also found
where production shortages occur. Examples include power steering
hydraulic systems, bearings, and v-belts. Parts, which need to be
replaced frequently because of poorly maintained roads, heavy traffic,
traffic accidents, and poor fuel quality, can also be considered as
\"best prospects.\" Examples include: shock absorbers, brakes, clutches,
rings, filters, bumpers, lights, and signaling equipment.

### Opportunities [**Return to top**](#ch4)

As Turkey continues to move towards European Union integration,
equipment meeting stricter EU guidelines from emission control to
automobile safety and standards tests, will equate to increased sales of
advanced auto parts. Privatization of the vehicle inspection centers,
again as a part of the EU integration, promises another opportunity to
the U.S. service equipment suppliers, because these centers need to meet
some guidelines in order to be authorized inspection centers. As a
result of these more strict inspections of the vehicles, parts market is
also estimated to bring new opportunities to the parts supplier, as
well.

### Resources [**Return to top**](#ch4)

**Automotive Distributors' Association**

[www.odd.org.tr](http://www.odd.org.tr/)

**Automotive Manufacturers' Association**

[www.osd.org.tr](http://www.osd.org.tr/)

**Authorized Automobile Dealers Association**

[www.oyder-tr.org](http://www.oyder-tr.org/)

**Association of Automotive Parts & Components Manufacturers**

[www.taysad.org.tr](http://www.taysad.org.tr/)

## Defense Equipment and Services 

### Overview [**Return to top**](#ch4)

Located at the crossroads of Europe, Asia and the Middle East, Turkey
and its armed forces is prepared to deter political conflicts and must
continue the fight on terror. Turkey understands that its role within
NATO will include the maintaining of troop strength that will serve as a
deterrent, support security and humanitarian operations in the region,
support regional crisis management, and operate small scale or limited
force deployments. Turkey maintains the second largest land force in
NATO and operates the second largest fleet of F-16s, second only to the
United States.

The FY 2008 MOD budget reached 13.3 billion YTL, constituting 6.46% of
the national budget. This does not include spending by either the
Ministry of Interior's Gendarme or the Undersecretariat for Defense
Industry procurements (SSM) 6.9 billion YTL of the total MOD budget will
be allocated to procurements of equipment and services. In 2007 the
total share of MOD in the national budget was 6.3%.

All procurements for the Turkish Armed Forces are carried out according
to rules and legislation, and within a system in which relevant and
authorized institutions and organizations participate. The bases of all
procurement activities are the Public Tender Law No. 4734 and the Public
Tender Contracts Law No. 4735, which came into effect on January 1^st^,
2003. Military procurements are being carried out by the Ministry of
National Defense and the SSM is in charge of all new procurement of the
Turkish Armed Forces, excluding logistics related procurement and
certain small sized projects.

Turkey is aiming to improve its manufacturing capabilities and develop a
national industry in the field of defense to become a self-sufficient
country. In order to reach this ultimate goal, Turkey seeks to maximize
local manufacturing capabilities through R&D, technology transfer, and
offsets.

The anticipated value of Turkish defense acquisitions in 2007 is several
billion USD and a number of projects are in the pipeline. Within the
scope of the ten-year procurement plan of the Turkish Armed Forces eight
new projects were launched under the responsibility of SSM. The
objective will be to utilize local industrial capabilities to the
maximum extent possible.

### Best Prospects/Services [**Return to top**](#ch4)

Potential Turkish projects include: Joint Strike Fighter, 30 New F-16
Block 50+ Production and Existing F-16 Upgrades, Transport, Heavy Lift,
and Police Helicopters, Air Defense Missile Systems, Military
Satellites, Naval Patrol Craft, Weapons Platforms, Amphibious Vessels,
Coastal Surveillance Radar Systems, Submarines, among many others.

### Opportunities [**Return to top**](#ch4)

Although the focus is on developing national defense industry, due to
the size and the sophistication level of the upcoming projects there are
various opportunities for U.S. companies in the Turkish market. On the
basis of main weapons systems, 80 percent of the defense equipment is
presently procured from abroad with the U.S. receiving the majority
share.

The requirements of the Turkish Armed Forces (TAF) are met by direct
purchase from domestic and foreign markets or by participation in joint
production programs. The joint production programs constitute potential
export opportunities, as the tendency is to give more emphasis on joint
production and joint activities through R&D.

Modernization of the TAF will also bring export opportunities to the
U.S. companies. With the following 25-year period, combat weapons and
equipment currently in the TAF inventory will need to be modernized or
replaced with systems incorporating new technologies. Other requirements
include main battle tanks, tactical wheeled armored vehicles, tank
transport and rescue vehicles, artillery upgrades, the pedestal mounted
Stinger program, army tactical missile system (ATACMS), combat aircraft,
command control aircraft, UAVs, submarines, fast patrol boats, mine
hunter vessels and maritime patrol and surveillance aircraft.

The following agenda items were discussed during the December 2007
meeting of the Defense Industry Executive Committee:

Electro Optical Reconnaissance and Surveillance Satellite System
Project, Underwater/ Abovewater Surveillance and Detection System
Project, Procurement of Link 16 Terminal, Radar Command and Control
Modernization, Radar System Modification, Human Resource System Project,
Land Based Standoff Electronic Support Capability Acquisition, 30 Bed
Mobile Surgical Hospital Project, 25 Ton Coast Guard Boat, Penguin
Guided Missiles for the Seahawk Helicopters

The following projects will be executed under the auspices of the
Defense Industry Executive Committee by utilizing the local capabilities
at the maximum possible level.

-Modern Infantry Rifle and Machine Gun Project

-Amphibious Armored Combat Engineering Vehicle

-Ammunition Resupply Vehicles for Firtina SPHs

-Tank Transporter Vehicles and Trailers

-Upgrade of Ay Class Submarine Equipment/ System

-Mid Life Modernization of Yavuz Class Frigates

-Turkish Frigate 2000 Programme (TF 2000)

-Depot Level Repair/Maintenance of Mi 17 Helicopters

-Klipper Sailboat for Naval Students

-Fleet Replenishment Vessels

### Resources [**Return to top**](#ch4)

U.S. Department of Commerce market
research:[http://www.export.gov/marketresearch.html](http://www.export.gov/marketresearch.html )

Undersecretariat of Defense Industries

[www.ssm.gov.tr](http://www.ssm.gov.tr/)

Ministry of National Defense

[www.msb.gov.tr](http://www.msb.gov.tr/)

SASAD - Savunma Sanayii Imalatcilari Dernegi

(Defense Industries Manufacturers Association)

[www.sasad.org.tr](http://www.sasad.org.tr/)

## Medical Equipment and Services

### Overview [**Return to top**](#ch4)

With a population of over 70 million Turkey is a rapidly growing market
for the medical products and services sector. The Turkish Ministry of
Health (MOH) was allocated 10.8 million YTL by the Government of Turkey
(GOT) in FY-08 and constitutes 4.85% of the national budget.

More than 60% of the health expenditures are devoted to medical
services, while medical devices constitute a smaller portion of the
total overall health expenditure budget. Major health services are
provided by both public and private hospitals. Approximately 40% of
in-patient and 56% of the outpatient expenses are financed by public
sources.

The current policy is to privatize Turkey\'s health sector - although a
high percentage of the total hospital bed capacity is still provided by
the government. A larger number of private hospitals being built offers
foreign suppliers increased sales opportunities and less complicated
procurement requirements vis-à-vis the often-confusing tender
requirements of government agencies.

Turkey has a number of specialized private care facilities providing
cardiovascular care, OBGYN, orthopedics and minimally invasive
outpatient ambulatory procedures. A number of private hospitals are
procuring angio-cath, radiological equipment and advanced surgical and
life support technologies.

The Ministry of Health is planning to invest in new health care
facilities including but not limited to 51 hospitals, 19 annex
buildings, 98 local health units and a significant number of oral health
centers. Procurement of new ambulances and diagnostic medical devices is
also on the agenda. The Ministry is working to establish a regulatory
mechanism that will be in charge of pharmaceuticals and medical devices.

### Best Prospects/Services [**Return to top**](#ch4)

Disposable products, advanced med/surg equipment including angio-cath
facilities, radiology, pathology, electronic diagnostic equipment,
optical devices, parts and components of the medical devices, electronic
instruments and appliances for physical and chemical analysis, vaccines,
orthotic and prosthetic equipment, OR/ER systems.

### Opportunities [**Return to top**](#ch4)

The total bed capacity in the Turkish Hospitals is above 200,000, which
has increased more than 10% compared to that of year 2003. Privatization
and transformation of the healthcare system, establishment of new
healthcare facilities and the ongoing hospital projects of the Ministry
of Health will also bring export opportunities.

As Turkey continues to expand the number of private hospitals and public
hospitals the purchase of advanced medical equipment will continue. In
2008, funds will be allocated for the establishment of additional
healthcare facilities. The Commercial Service works closely with several
private hospitals, the Ministry of Health, local associations and
medical device manufacturers in identifying supply sources for their
equipment needs.

### Resources [**Return to top**](#ch4)

U.S. Department of Commerce market
research:[http://www.export.gov/marketresearch.html](http://www.export.gov/marketresearch.html )

Ministry of Health

[http://www.saglik.gov.tr](http://www.saglik.gov.tr/)

Health Industry Employers' Association (SEIS)

<http://www.seis.org.tr/>

State Institute of Statistics

<http://www.tuik.gov.tr/>

## Information Technology

### Overview [**Return to top**](#ch4)

Turkey's Information Technology (IT) market size is estimated to have
reached \$5.2 billion in 2007 and the total ITC industry (including
telecommunications) is estimated at \$23.80 billion (ref. Interpro). The
ICT market increase is estimated at 15% for 2008.

The break down of the ICT market gross revenue is as follows: 68%
carrier services (GSM operators), 11% hardware sales, 10% telecomm
equipment, 7% services (maintenance, set up, network security etc.), 3%
software, 1% consumer goods. With over 7 million personal computers in
Turkey and 16.5 million internet users (according to TNS Piar), pc sales
are still the main driver for gross IT sales.

The introduction of ADSL (Asymmetric Digital Subscriber Line) by Turkish
Telecom is providing internet speeds up to 50 times faster than the
normal dial up speeds used frequently by small businesses and households
and has boosted e-commerce transactions. Presently, there are 4.0
million ADSL broadband subscribers and this has brought new
opportunities for hardware and software sales (including PC and notebook
sales, along with accessories such as speakers, wi-fi modems, bluetooth
USB sticks, digital music archives, storage and many more 'gadgets.).

The Turkish information technologies market is dominated by hardware
sales. The market has experienced double-digit growth over the past five
and the hardware market for Turkey and is estimated at \$2.64 billion
for 2007. An estimated 2.6 million PC's were sold in 2007, half in
notebooks. Notebook sales are expected to increase as hotspots and
wireless networks and applications become more available.

U.S. IT hardware and software manufacturers will find that due to time
commitment, cost, and complexity of the regulatory and commercial
environment, it is essential to have local representation. Although many
people in the larger urban commercial centers understand English
language may be a serious barrier in rural areas. It is therefore
imperative that marketing information and user guides be written to the
consumers' own language. To win over the local customer, a Turkish
language web site would be extremely useful.

For companies seeking to gauge market receptivity, exhibitions and
conferences are excellent product launch vehicles. Reconfiguring the
user interface and software would not be necessary in the initial market
fact finding stages and that once market interest is determined and
confirmed can the U.S. company and its local partner look at packaging
the hardware and software to meet the needs of the Turkish consumer.
Software translations may not be needed for professionals, however
software products for the general consumer are necessary.

Following is the market size estimate for the IT Sector (excluding
telecommunications):

+-----------------------------+------------+------------+------------+
| USD Millions                | 2006       | 2007       | 2008       |
|                             |            |            |            |
|                             |            |            | (Estimate) |
+-----------------------------+------------+------------+------------+
| Total Market Size           | 4,500      | 5,200      | 5,980      |
+-----------------------------+------------+------------+------------+
| Total Local Production      | 1,300      | 1,600      | 1,650      |
+-----------------------------+------------+------------+------------+
| Total Exports               | 230        | 370        | 400        |
+-----------------------------+------------+------------+------------+
| Total Imports               | 3,200      | 3,600      | 4,330      |
+-----------------------------+------------+------------+------------+
| Imports from the U.S.       | 1,000      | 1,250      | 1,650      |
+-----------------------------+------------+------------+------------+

Exchange Rate used: \$1 = 1.170 YTL (New Turkish Lira)

Note: The above statistics are unofficial estimates.

### Best Products/Services [**Return to top**](#ch4)

-   Audio Visual Equipment

-   Audio Visual Broadcast Equipment

-   Consumer Electronics

-   Wireless equipment / services

-   Notebook PC's

The audiovisual and the consumer electronics market is also seen as a
future prospect as smart homes, LCD/plasma TV's, digital cameras,
removable data storage and PDA's are in demand. As was the case with the
immense growth rate of mobile phones now reaching 43 million users.

According to the Carmel Group estimates, there will be 30 million
subscribers for the digital satellite market in 2008. Market research
shows that 97% of Turkish families see television as their prime source
for entertainment and news. Consumer trends indicate that large screen
LCD's and Plasma TV sales are on a roll as well as free satellite
receivers. Recently, local provider Digiturk began offering HDTV and
this expected to spur increased sales of LCD and Plasma TVs.

According to a study made by Hannover-Messe Istanbul, all Turkish
television channels are expected to invest at least \$30 million in new
transmitting systems, \$10 million in electricity generating groups and
another \$10 million in studio modifications in the next few years. The
total estimated investment for the AV industry to move into digital
broadcasting, new studios, and transmitters will be approximately \$5
billion over the next 10 years.

The industry consensus is that the next big market opportunity for ICT
firms in Turkey is wireless broadband, audiovisual products and
accessories. Hot spots in airports, café's and other public locations
are in the rise. Wireless connectivity devices such as PCMIA cards,
bluetooth hardware, edge technology, gprs, gps, internet via satellite
are also increasing in popularity and sales. Wireless connectivity is
also boosting notebook pc sales as people seek mobility and connectivity
at the same time.

The nation has 14 million TV homes, 1 million cable TV subscribers, 1
million ADSL broadband Internet subscribers, 15.5 million internet users
with a total of 7 million pc's and 1.250 million notebooks in country.
Digital broadcasting is projected to reach 3.5 million homes by 2008.

Vestel ([www.vestel.com.tr](http://www.vestel.com.tr/)), Beko
([www.beko.com.tr](http://www.beko.com.tr/)) and Arcelik
([www.arcelik.com.tr](http://www.arcelik.com.tr/)) are the main
producers in Turkey. Almost all-multinational competitors such as Sony,
Toshiba, Philips, Samsung, and Creative are competing for market share.
Turkey is the only country in Europe to produce notebooks with Vestel.
The overwhelming portion of consumer electronics equipment is imported
to the market.

######## Standards and Import Regulations - CE mark is an issue. Since Turkey has adapted full acceptance of the regulations due to its European Union Customs Union membership, IT products need to meet the European Union directives on low voltage and electro magnetic compatibility. IT products need a CE mark to be able to imported into Turkey. 

European Union (EU) Waste from Electrical and Electronic Equipment
Directive (WEEE) and Restriction of Hazardous Substances Directive
(RoHS) is also an issue.

Language barriers do pose a challenge for U.S. companies, hence a
Turkish partner, distributor and/or agent is strongly advised. U.S.
partners and products perceived well and favorably amongst business
circles and consumers.

Apart from electro-mechanical standards, IT producers must ensure that
all electronics be compatible with the radio-frequency levels of the
Turkish national standards on frequencies. Products manufactured prior
to 1 January 2000 cannot be imported. This is an outstanding regulation
attributed to hinder problems related to the Y2K bug. No secondhand IT
equipment is allowed into Turkey "unless the equipment is an integral
part of a machine used in manufacturing".

### Opportunities [**Return to top**](#ch4)

[Cebit Bilisim Eurasia, Istanbul, Turkey]{.underline}. IT and Telecom
solutions trade fair. This event is an U.S. Department of Commerce
certified event. Details:
[[www.cebitbilisim.com]{.underline}](http://www.cebitbilisim.com/)\
\
[Cebit Broadcast, Cable and Satellite Eurasia, Istanbul,
Turkey]{.underline}. Satellite and broadcast technologies trade fair.
This event is an U.S. Department of Commerce certified event.

Details:
[[www.cebit-bcs.com/eng/index_en.htm]{.underline}](http://www.cebit-bcs.com/eng/index_en.htm)

###  [**Return to top**](#ch4)

## Telecommunication Equipment and Services

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
  USD Millions             2006           2007         2008 (estimated)

  Total Market Size        15,700         18,000       21,000

  Total Local Production   11,200         13,000       15,000

  Total Exports            1,900          2,200        2,500

  Total Imports            6,400          7,200        8,500

  Imports from the U.S.    350            500          750
  ------------------------ -------------- ------------ -------------------

(Above figures are unofficial estimates. Prices are calculated at an
average exchange rate of USD 1 = YTL 1.20)

In 2007, the total number of GSM cellular service subscribers approached
approximately 60 million with an approximate penetration rate of 85%.
The total telecom equipment and service market grew to \$18 billion and
is expected to expand by 17% in 2008. Fixed line subscribers are
approximately 19 million, reaching almost 100% penetration per house
basis.

The three GSM cellular operator, Turkcell, Vodafone and AVEA and the
fixed line operator Turk Telekom will invest in equipment and services
at a total value of \$3-4 billion in 2008. GSM operators will be
deploying new IP type of switches to increase number of subscribers.
Turkcell has approximately 64% of the GSM market, Vodafone approximately
21% and AVEA 15%.

In 2008, Telecommunications Authority
([www.tk.gov.tr](http://www.tk.gov.tr/)) (TA) will announce tenders for
number portability, 3.5G third generation GSM cellular systems, and
WiMax services. The 3.5G licenses will be given for 1900 MHz. When 3.5G
is launched in Turkey, GSM operators estimate that 48% of the
subscribers will use the handsets as video telephone, 47% as mobile
Internet, and 38% as mobile TV. Program and software developers, service
companies with special TV and video broadcasting over the 3.5G cell
phones will be able to obtain great business in Turkey during the next 5
years. For commerce, with the introduction of the mobile signature,
customs formalities will be completed much quickly.

Ojer Telecom (a JV between Saudi Oger and Telecom Italia) owns 55%
shares of Turk Telekom. In 2008, Turkish Government will additionally
privatize 15% shares of Turk Telekom through public offering. Turk
Telekom's business development continued and will continue in 2008
spreading the usage of high speed internet throughout the country.

Turk Telekom will continue to be the major buyer of fixed-line
telecommunications equipment. Turk Telekom with approximately 20 million
subscribers may invest in new technologies in 2007. Turk Telekom plans
to expand its ADSL backbone, therefore, will continue to purchase new
ADSL equipment.

Turk Telekom will invest \$3.42 billion thru 2010 for its Next
Generation Network (NGN) project and will also replace its rural area
switches with small telephone switches over 10,200 switch centers. Turk
Telekom is also planning to establish IP TV and number portability.

Over 40 private long distance telephony companies have been also
operating over the last 3-4 years, mostly using VoIP via an
interconnection agreement with Turk Telekom. These companies continue
establishing their own networks. If the Telecommunications Authority
(TA) improves the interconnection agreements with Turk Telekom for these
companies, their investment and competitiveness will continue.

Vodafone and AVEA are expected to make significant new investments in
2008 and also increase promotions to expand their subscribers. If the TA
proceeds with the number portability license tender this year, the
competition between the GSM operators will greatly increase and shares
of Vodafone and AVEA in the market would considerably raise.

Turkcell is the largest GSM cellular operator in Turkey. It has over 35
million subscribers. Their founding shareholders are Sonera Holding,
formerly known as Telecom Finland Ltd. and is currently owned by
TeliaSonera, Çukurova Group and MV Holding. 23.4% of Turkcell shares are
publicly traded in Istanbul and New York Stock Exchanges.

AVEA is the third largest cellular phone operator, having approximately
8 million subscribers. Turk Telekom owns 81% of the shares of AVEA and
the Turkiye Is Bank owns the remaining 19%. AVEA operates at 1800 MHz
GSM frequency, and Turkcell and Vodafone operate at 900 MHz GSM systems.

The above mentioned investments are inevitable as the number of
subscribers in mobile telephony increased three times while the fixed
line subscribers remained constant during the last five-year. TA has
registered 59 million GSM cellular phone handsets and Turkey imports
approximately 10 million mobile handsets every year. Many subscribers
continuously change their cell phones with new models sustaining
consistent growth in the handset market.

Turkish GSM companies will widely implement new services such as
Multimedia Messaging Service (MMS), Mobile Video Streaming (MVS) and
other new features by moving forward to the 3G technologies. These
services, new GSM and fixed telephony players multiplied by the
competition introduced through the new long distance telecom companies
will boost the telecommunications services market in Turkey.

GSM cell phone sets suitable for video downloading and TV broadcasting
equipped with wide band Internet access will be the driving force for
growth in this sector. These new technologies will be the basis for the
3G and 4G operations.

The private sector may make major investments on the establishment of
new fiber-optic networks, VoIP Equipment and Wireless Local Loop
networks. Due to its strategic location in Eurasia, between Europe and
Central Asia and Middle East, Turkey has the potential to become a major
hub for the distribution of telecommunications equipment in the region.

In Turkey, Northern Telecom, Alcatel, Siemens, Ericsson and NEC supply
majority of the fixed lines switches, trans-multiplexers, and other
telephony equipment. U.S. companies can be competitive in software
programs required for customer databases, emergency call services,
corporate management and intelligent network operation centers.
Motorola, Nokia, Ericsson and Siemens are the main GSM switch and base
station suppliers. U.S. companies can be competitive in new software
products required by GSM cellular operators to provide new services to
their clients and better corporate and client management.

### Best Prospects/Services [**Return to top**](#ch4)

Number portability, 3G, Multimedia Messaging Service (MMS), Mobile Video
Streaming (MVS), WiMax technologies and services would be in great
demand. Turkish companies are seeking partners to participate in such
tenders. TV Broadcasting over 3G phones, video and other data transfer
over the cell phones will be in high demand once 3G licenses are
deployed.

Other best prospects in 2008 will be new model GSM handsets with new
features (3G), VoIP equipment, ADSL equipment, switches and networks for
long distance operators. SCADA systems for main natural gas transmission
lines and electricity distribution networks will be the other best
prospects. Depending on the timing of the 3G license tenders, the other
best prospect can be the third generation GSM networks.

### Opportunities [**Return to top**](#ch4)

U.S. companies should not miss the opportunity of supplying of number
portability software. GSM companies will be procuring new network
equipment and software to expand their services and provide better
quality service to their clients. Turk Telekom's potential investment of
\$3.42 billion until 2010 for its Next Generation Network (NGN) project
will be a major opportunity. TT's plans to change its rural area
switches with small telephone switches in 10,200 switch centers, to
establish IP TV and number portability are other opportunities. The TA
will conduct 3G, WiMax and high frequency band license tenders in 2008.
Once the new telecom law passes, there will be more liberalization in
providing telecom services. U.S. companies should consider this large
telecom market as a hub for the region and consider establishing joint
venture companies to supply to the EU markets as Turkey is already in
the European Customs Union and a candidate to join the EU. (CE
certification is required by the import laws of Turkey to be able to
export to the Turkish market.) Additional opportunities exist for the
Turkish market in international traffic either originating or
terminating in the country. Due to the widely dispersed Turkish
population there are considerable international calls being placed,
primarily from Western Europe and the United States to Turkey.

### Resources [**Return to top**](#ch4)

\- Telecommunications Authority's web site:
[www.tk.gov.tr](http://www.tk.gov.tr/)

\- Turk Telekom's web site:
[www.turktelekom.com.tr](http://www.turktelekom.com.tr/)

\- Turkcell's web site:
[www.turkcell.com.tr](http://www.turkcell.com.tr/)

\- Vodafone's web site:
[www.vodafone.com.tr](http://www.vodafone.com.tr/)

\- Avea's web site: [www.avea.com.tr](http://www.avea.com.tr/)

\- Turkish Competitive Telco Operators Association (TELKODER)
[www.telkoder.org.tr](http://www.telkoder.org.tr/)

\- Turkish Electronics and IT Industries Association (TESID)
[www.tesid.org.tr](http://www.tesid.org.tr/)

## Electric Power Systems

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           2006           2007         2008 (estimated)

  Total Market Size        2,650          2,900        3,300

  Total Local Production   850            950          1,000

  Total Exports            350            400          450

  Total Imports            2,150          2,350        2,750

  Imports from the U.S.    420            460          650
  ------------------------ -------------- ------------ -------------------

(Above figures are unofficial estimates. Prices are calculated at an
average exchange rate of USD 1 = YTL 1.20)

Turkey's demand for electricity grows at a rate of 8% per year. In 2007,
Turkey produced 190 billion kWh of electricity from the existing
installed capacity of 41,000 MW. In case of low demand, Turkey will
require 400 billion kWh and in case of high demand, 500 billion kWh
electricity production a year in 2020. This means Turkey will have to
increase the total installed capacity over two times of the existing
capacity. Minister of Energy and Natural Resources Dr. Hilmi Guler
announced that Turkey requires an investment of \$128 billion through
2020 in the energy sector. Of that, \$105 billion is estimated to be in
electric power generation, transmission and distribution sectors. The
Turkish Government expects the majority of this investment to originate
from the private sector.

The Turkish Government passed the Renewable Energy Law No. 5346, which
entered into force on May 18, 2005. This law requires retail companies
to buy 8 percent of their total electricity procurement from renewable
energy generation companies. In addition, Energy Market Regulatory
Agency (EMRA) ([www.epdk.org.tr](http://www.epdk.org.tr/)) has license
fee exemption for renewable energy investors and The Turkish Electricity
Trading Company, TETAS provides buying guarantees to renewable energy
companies. Renewable energy will play an important role as Turkey\'s
preparations for accession to the European Union is underway.

Turkish private sector is showing great interest on the renewable energy
type of power generation. Companies are seeking technologies, equipment,
financing and partners to implement hydroelectric, wind, geothermal,
solar and biomass power plant projects. The private sector plans to
invest 2000-3000 MW wind power projects over the next 3-5 years in
Turkey. The Ministry of Energy and Natural Resources (MENR) has
developed the wind energy atlas of Turkey including information on the
transmission lines and substation availability in those locations. This
study showed Turkey has at least 48,000 MW of wind energy potential.
Recently, EMRA collected license applications for wind power, the
private sector made an incredible amount of applications. Certainly,
EMRA will be very selective in awarding the licenses. Most of these
companies will require wind turbines and towers and will also be seeking
for potential partners and financing.

Recently, Turkish Government increased the wholesale electricity prices.
Companies can sell their electricity at much higher prices through
Market Accounting Conciliation Center (PMUM) set at TEIAS (see
[www.teias.gov.tr](http://www.teias.gov.tr/)). Generation companies
submit their price and amount of electricity that they would like to
supply to the grid through submitting their bids to PMUM one day before.
The following day TETAS buys the electricity by starting with the lowest
bid. Currently, as there is great demand for electricity, wholesale
prices are approximately at 8-9 cents per kWh levels and prices are not
expected to decrease for years to come until excess capacity is in the
marketplace. The new law passed recently at the Turkish Parliament
brings more incentives to renewable energy generation and guarantees to
have the wholesale price of at least 5.5 Euro cents per kWh for the next
10 years as well as having buying guarantees. However, at a given
region, wind energy can supply up to 5-15% of the total electricity
distributed. Renewable energy companies can obtain higher prices for the
voluntary carbon credits received from companies, which are in the
countries that are a signatory to the Kyoto agreement.

Turkey's hydroelectric power generation potential is 36,700 MW. Only 36%
of this potential is being utilized so far. An installed capacity of
over 13,000 MW hydroelectric power plants currently exists in Turkey. An
additional 10,000 MW is under construction. When these projects are
completed, 45% of Turkey's hydroelectric potential will be in use.

In recent years, State Hydraulic Works (DSI) has started tendering new
projects on water usage contract basis, which requires the private
sector to obtain license from the Energy Market Regulatory Agency (EMRA)
and invest for the building of the dams and hydroelectric power plants
on certain locations designated by DSI. The Turkish Private Sector with
their foreign partners will require financing for building these new
hydroelectric power plants. Investors are then free to sell its
electricity to the grid or large users. In the following years, DSI
plans to tender out 627 new projects at the total installed capacity of
11,000 MW.

Turkey is in the first rank in Europe and 7^th^ rank in the world in the
geothermal energy

resources. Only two projects are underway so far in geothermal power
generation while the large potential remains unexplored. Minerals
Research Exploration Institute (MTAE) of Turkey will soon announce the
geothermal atlas of Turkey. EMRA would then collect license applications
for such locations.

Turkey is fast moving into the liberalization of the electricity trading
market. EMRA issues licenses for power generation or wholesale trading
companies, which can sell its electricity generated anywhere in Turkey
to any large client in any place in Turkey by paying a certain trading
fee. EMRA has received license applications for over 30,000 MW, half of
which is for hydroelectric power plant projects.

Many Turkish companies are seeking for potential foreign partners to
participate in the upcoming power sector privatizations. Turkish
Government will tender the privatization of its three electricity
distribution grids located in Ankara, Bursa and Istanbul's Anatolian
side by the second half of 2008. For the purpose of privatization, the
countrywide Turkish electricity grid has been divided into 21 regions.
EMRA estimates that the winners will need to make a total investment of
\$2.2 billion until 2020 for the upgrading of the electricity
distribution grids. Many Turkish companies are seeking for potential
U.S. investors or O&M service companies to be able to bid for these
privatizations. The Privatization Administration (PA) will collect bids
for the privatization of 9 power plants on 22 February 2008. PA plans to
privatize most of the power plants and electricity distribution grids by
the end of 2009. Further information is available at
[www.oib.gov.tr](http://www.oib.gov.tr/).

Turkish Parliament passed a nuclear energy law at the end of 2007, which
provides electricity buying guarantee of Turkish Electricity Trading
Company (TETAS) for 15 years. MENR will issue the nuclear energy
regulations outlining the tendering procedures which will either allow
full investment to be made by the private sector or by public private
partnership or otherwise by the government. To diversify the energy
resources, Turkish Government predicts Turkey should have a nuclear
energy power generation capacity of 15,000 MW by 2025.

Turkish Government plans to license nuclear power plant investments at
the total capacity of 5000 MW by the year 2012. For this purpose, MENR
and Turkish Atomic Energy Agency (TAEK) have been studying the potential
sites for the construction of nuclear power plants. The first investment
will be made in Akkuyu and studies are continuing for Sinop site.

Turkey has approximately 46,000 km of electricity transmission lines and
approximately 840,000 km electricity distribution lines. However, these
lines need to be expanded to accommodate new power generation facilities
including nuclear power plants to be built. In 2008 budget, Turkish
Electricity Trading Company (TEDAS) is estimated to make an investment
of USD 450 million. Turkey has electricity transmission line connections
between Bulgaria, Georgia, Syria, Iran and Iraq. Turkey is trading some
electricity between these countries. Another electricity transmission
line is being built between Turkey and Greece to connect Turkey to the
South European Grid. A Turkish company is exporting electricity to
Northern Iraq.

### Best Prospects/Services [**Return to top**](#ch4)

Supply of wind turbines, hydroelectric turbines, simple or combined
cycle power plant equipment, geothermal and solar energy equipment, coal
gasification systems, remote controlled process management systems,
hydrogen generation pilot facilities, and generator sets are the best
prospects in 2008. Other best prospects will be supply of fluidized bed
type lignite coal furnaces, heat recovery boilers, upgrading of
electricity distribution lines and substations in particular for
improvement of technical and other loses in electricity grids,
refurbishment of existing power plants, supply and installation of power
transformers and gas insulated substations for power transmission lines
and SCADA systems for the electricity distribution lines. If the nuclear
power plant project goes ahead, supply of nuclear power plant equipment
and services will be one of the major best prospects.

### Opportunities [**Return to top**](#ch4)

To meet the large demand in the market, manufacturing of wind and hydro
turbines in Turkey can be one of the major opportunities. This would
require technology transfer and manufacturing equipment supply and
engineering services as well as financing services. If the nuclear power
plant investment is implemented, in addition to technology transfer and
equipment, nuclear safety, waste storage, fuel supply, etc. will create
new opportunities in the Turkish market. The private sector is seeking
for companies, which has nuclear power plant operation experience, to be
a potential partner. Several Turkish companies are planning large
imported coal-fired power plants and combined cycle power plants, which
require clean coal technologies and gas and steam turbines, and heat
recovery boilers. Supply of geothermal and solar energy equipment is
some of the other opportunities that U.S. companies should consider.
U.S. Eximbank will provide credit guarantees for renewable energy
projects with a repayment period of 15 years after the post
commissioning no matter how small the investment is.

### Resources [**Return to top**](#ch4)

Ministry of Energy and Natural Resources' Web Site:
[www.menr.gov.tr](http://www.menr.gov.tr/)

Energy Market Regulatory Agency Web Site:
[www.epdk.org.tr](http://www.epdk.org.tr/)

Nuclear Atomic Energy Agency of Turkey Web Site:
[www.taek.gov.tr](http://www.taek.gov.tr/)

Privatization Administration's Web Site:
[www.oib.gov.tr](http://www.oib.gov.tr/)

Turkish Electricity Trading Company Web Site:
[www.tetas.gov.tr](http://www.tetas.gov.tr/)

Turkish Electricity Transmission Company Web Site
[www.teias.gov.tr](http://www.teias.gov.tr/)

Turkish Electricity Distribution Company Web Site
[www.tedas.gov.tr](http://www.tedas.gov.tr/)

## Natural Gas Transmission, Distribution, Exploration, Storage, and Trading

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           2006           2007         2008 (estimated)

  Total Market Size        4,150          4,300        4,700

  Total Local Production   750            800          850

  Total Exports            250            300          350

  Total Imports            3,650          3,800        4,200

  Imports from the U.S.    280            320          400
  ------------------------ -------------- ------------ -------------------

(Above figures are unofficial estimates. Prices are calculated at an
average exchange rate of USD 1 = YTL 1.20)

Surrounding Turkey is 73% of the world's proven oil reserves and 72% of
the world's proven gas reserves. This makes Turkey a crucial bridge
between energy rich regions and Europe, which spends approximately 300
billion dollars per year for the imported energy resources. Turkey
spends \$35 billion for energy products imports including oil & gas.

Some companies have found natural gas offshore western Black Sea coast
of Turkey and started production. Companies have explored for oil & gas
in only 20% of the potential online prospects and 1% of the potential
offshore prospects so far in Turkey. This means many prospects are
waiting to be explored. Foreign companies can select the public company
Turkish Petroleum Corporation (TPAO) as a partner for exploration and
production. TPAO already has important prospect licenses for which they
would not hesitate to select a foreign partner as TPAO has limited
resources for investment itself.
[www.tpao.gov.tr](http://www.tpao.gov.tr/)

Turkey has become a critical player in global energy security. The
Baku-Tbilisi-Ceyhan (BTC) pipeline started operation in 2006 with 1
million barrel per day (bpd) oil and approximately 5% of the world\'s
oil supply will be flowing through Turkey. The target is to increase the
delivery to 1.6 million bpd of crude. Central Asian oil supply will be
blended through BTC. Ceyhan, a harbor at the Mediterranean coast of
Turkey will be the energy hub and in the future supply a crude oil blend
of Azeri, Iraqi and Central Asian oil. Ceyhan will also have at least a
couple of more new oil refineries. Several foreign and local companies
have already applied to EMRA for obtaining license.

Turkish Government is supporting Samsun-Ceyhan Bosphorus by-pass crude
oil pipeline to be constructed. Calik Energy and Italian ENI will be the
50/50 investors. Total cost of the project will be \$2.5 billion. 6
tender packages are being prepared. U.S. companies can be competitive in
pumping stations.

The Shah Deniz natural gas pipeline was completed and commenced
supplying natural gas to Turkey and Greece in 2007. This pipeline will
later on expand to Italy under the Adriatic Sea to Italy. Azerbaijan
will supply 2-6.6 billion cubic meters per annum (bcma) of gas for 15
years to Turkey, Greece, Italy and Europe through Turkey.

Additionally another natural gas pipeline to supply natural gas to
Europe from Azerbaijan, Iraq, Iran, Egypt and Turkmenistan and
potentially Kazakhstan is being planned by five countries as an
alternative resource to Europe. This pipeline named NABUCCO will be
extended from Turkey to Austria through Bulgaria, Romania, and Hungary.
These five countries and a private company will be the investor for
NABUCCO. The 3,300 Km pipeline is planned to supply 25.5-31 bcma of gas
to Europe and will become operational in 2012.

Turkey and Egypt signed a framework agreement to supply Egyptian natural
gas to Turkey and Europe via Jordan and Syria. A pipeline has already
been built from Egypt to Syria and currently a link to Turkey is under
study. By the end of 2011, Turkey will receive 2-4 bcma gas from Egypt.
The subject framework agreement states that Turkey would also receive
2-6 bcma of Egyptian gas to supply to Europe.

The total length of the oil pipeline operated by the Petroleum Pipeline
Corporation, BOTAS, has increased to 3,374 Km from 2298 Km by the
completion of 1,076 Km long BTC crude oil pipeline. With this addition,
Botas' 80 million tons of crude oil pipeline capacity increased to 130
million tons per year.

Botas also has approximately 10,000 Km of natural gas (NG) transmission
pipelines within Turkey. Approximately 50 cities in Turkey received
natural gas and this figure is expanding every year throughout the
entire country with the private sector investments of NG distribution
lines. Turkey imported over 34 billion cubic meter (bcm) of natural gas
(NG) in 2007 from Russia, Iran, Azerbaijan, Algeria and Nigeria (last
two LNG) and 65% of the gas comes from Russia through western pipelines
and Blue Stream pipeline (under the Black Sea). Turkey's NG demand is
expected to increase to 39 bcm in 2010, 41 bcm in 2015 and 43 bcm in
2020. Currently, 47% of the gas is consumed by power plants, 28% by the
industry, 24% by residential users and 1% by the fertilizer industry.

One of the major projects in this sector in 2008 will be BOTAS Petroleum
Pipeline Company's Underground Gas Storage project near Salt Lake in
Turkey. The World Bank approved a loan of US \$325 million to support
this Gas Sector Development Project. The gas storage facility will be
located in an underground salt formation close to Tuz Gölü, a salt lake
in Central Turkey. The facility, upon completion, will have a storage
capacity of about 960 million cubic meters of working gas and 460
million cubic meters of cushion gas (the portion of gas which is
required to remain in the cavern to maintain its integrity). The
facility will have the capacity to deliver 40 million cubic meters of
gas per day up to 20 days and can be refilled at the rate of 30 million
cubic meters per day over a period of 25 days. Opportunities exist in
this project especially in the tenders to be held for surface and
sub-surface facilities. U.S. firms are deemed to be rather competitive
in these types of facilities. Leaching of the caves in joint venture
with local firms can be another potential opportunity for U.S. firms.

Calik Energy is developing another underground gas storage project in
South of Turkey. U.S. Trade Development Agency (US TDA) has provided a
grant for the feasibility study of this project, which is being
conducted by an American firm.

As part of the liberalization process in the natural gas (NG) market,
the Energy Market Regulatory Agency (EMRA) issues licenses for natural
gas distribution, storage, trading (import-export or wholesale) to the
private sector.

Turkey has signed long term take or pay NG procurement contracts with
Russia, Iran, Azerbaijan, Turkmenistan, Algeria (LNG) and Nigeria (LNG).
The Turkish Petroleum Pipeline Corporation, BOTAS, announced a tender to
transfer these contracts to the private sector. The contracts at the
total amount of 16 bcm (in 64 lots) will be transferred to the private
sector. BOTAS held a tender in 2006, and Turusgaz was awarded the
contract for the delivery of 16 lots. Botas is expected to tender the
remaining contracts in 2008. Further information is available at
[www.botas.gov.tr](http://www.botas.gov.tr/).

Almost every city is building NG distribution pipelines in Turkey. These
are new investments made by the Turkish private sector under a license
obtained from EMRA. Other potential projects are BOTAS' planned main NG
transmission pipeline construction tenders, which will include
compressor stations.

### Best Prospects/Services [**Return to top**](#ch4)

Compressors and generators for natural gas pipelines, SCADA systems,
environmental control services, pipeline construction equipment, remote
controlled digital gas meters, pressure reduction valves, CNG service
station equipment, LNG facilities, refinery equipment and technology
supply, engineering services, financing, Underground Storage Surface and
sub-surface Facilities will have major prospects in 2008 and the
following years.

### Opportunities [**Return to top**](#ch4)

U.S. Companies can have potential opportunities in the construction of
NABUCCO, Samsun-Ceyhan, and Iraq-Turkey natural gas pipelines. Tuz Golu
Underground Gas Storage project surface and sub-surface facilities, salt
cavern leaching contracts, new refineries, and BOTAS' new main
transmission pipeline construction tenders, which include gas turbines
and generators. In next 5 years, Botas will require 7 more natural gas
compressor stations. Opportunities exist in oil and gas exploration and
production offshore Black Sea and in Southeastern Turkey. A new LNG
facility project is being sought in the port of Ceyhan.

### Resources [**Return to top**](#ch4)

Botas' Web Site: [www.botas.gov.tr](http://www.botas.gov.tr/)

Energy Market Regulatory Agency (EMRA)'s Web Site:
[www.emra.org.tr](http://www.emra.org.tr/)

Petroleum Affairs General Directorate (PIGM) web site
[www.pigm.gov.tr](http://www.pigm.gov.tr/)

## Agricultural Sectors [**Return to top**](#ch4)

Companies producing and exporting agricultural commodities or processed
foods can visit the website of the U.S. Department of Agriculture at
<http://www.fas.usda.gov/hotpages/default.asp?lstCode=TU&submit=Submit+Query>
or

<http://www.usemb-ankara.org.tr/FAS/FAS.HTM>

\*[Data Source for all commodities]{.underline}: Global Trade Atlas
using official Turkish Government Statistics and the State Institute of
Statistics for corn, tallow and rice. [Please note]{.underline}: The
Turkey State Institute of Statistics has revised the methodology by
which it is publishing their import and export statistics. The effect of
this change is a significant decrease in the volume of both the import
and exports that are being reported. As of November 6, 2006 the Global
Trade Atlas reflects this revised methodology in the Turkey data from
January 2006 forward.

(All figures in '000 metric tons; Calendar years)

COTTON

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Oct.)

  Total Exports       88                24                26

  Total Imports       776               708               778

  Total Imports from  494               417               528
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

Turkey continues to be one of the leading markets for U.S. cotton.
Turkey's textile industry remains important to the economy in terms of
investment, employment and exports. U.S. cotton has a very good
reputation in Turkey, and strong U.S. exports in recent years reflect
this. Lack of good quality local cotton due to rains and floods during
the last harvesting season will support a strong demand for U.S. cotton
this year as well. Turkey is expected to remain a significant importer
in coming years due to quality of U.S. cotton, increasing domestic
consumption and availability of GSM-102 export credit programs.

SOYBEANS

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Oct.)

  Total Exports       3.7               0                 0

  Total Imports       1,154             704               778

  Total Imports from  555               567               325
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

The industry has been investing in modern crushing facilities and is
continuing to expand capacity despite the seasonal down turns in the
local poultry industry. The outbreak of Avian Influenza in late 2005 and
early 2006 hurt the local poultry industry. However, the industry
recovered from the adverse effects of the outbreak and soybean
consumption increased in 2007. Increased production of bio-diesel also
contributed to the demand for soybeans for crushing. Marketing programs
of the American Soybean Association help drive demand for soybeans in
Turkey and the U.S. continues to be a leading supplier for the Turkish
market. On March 13, 2006 the Turkish government increased soybean
import duties to 10 percent from 0 percent.

SOYBEAN MEAL

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Oct)

  Total Exports       19                2                 0

  Total Imports       512               45                93

  Total Imports from  298               17                70
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

Soybean meal consumption continues to increase in response to demand
from Turkey's poultry industry. Local production has increased in recent
years, as crushing capacity has grown. Full fat soy has become very
popular among local poultry producers and a number of companies have
installed or are in the process of installing new crushing facilities.
On March 13, 2006 the Turkish government increased soybean meal import
duties to 13.5 percent from 8 percent.

CORN OIL

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Oct)

  Total Exports       12                0                 0

  Total Imports       102               87                68

  Total Imports from  67                77                68
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

Turkey continues to import large quantities of crude vegetable oils
(sunflower oil, corn oil, and soy oil) since the demand for vegetable
oils continues to outpace production. Turkish refined oil export markets
include the Middle East, Russia, the NIS and North Africa. The United
States is the largest corn oil supplier for Turkey.

CORN

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Nov)

  Total Exports       128               193               7

  Total Imports       215               31                1108

  Total Imports from  15                2                 350
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

Domestic corn production has increased in recent years and Turkey had a
record high crop in 2005. As a result, Turkey reduced imports and
exported corn, which is not seed, for the first time. However, high
production reduced the market prices, which discouraged farmers to grow
corn. As a result, planting area and production were reduced in 2006.
Currently, corn prices are about twice of what they were a year ago.
This may encourage producers to produce corn again in 2008. Turkey
imported larger quantities of corn during the first half of 2007 than it
did during the same period in 2006. The import duty, which was 130
percent in 2006, was reduced seasonally due to the shortage and high
prices.

TALLOW

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Nov)

  Total Exports       .086              0                 0

  Total Imports       139               148               133

  Total Imports from  139               148               132
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

The United States is the largest tallow supplier to Turkey, which uses
tallow only for making soap. Turkey supplies processed soaps to most of
the world, the primary markets being the Middle Eastern, North African,
Former Soviet Union, and Eastern European countries.

SOYBEAN OIL

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Oct)

  Total Exports       3                 0                 0

  Total Imports       191               152               15

  Total Imports from  .049              0                 0
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

Demand for soybean oil in 2005 was driven by the surge in bio-diesel
production in Turkey. Total imports declined in 2006 due to the
government's new regulations on the specifications of bio-diesel, which
favor canola oil and reduces the cost advantages of production. Most
soybean oil imports are from Argentina. In 2007 soybean oil imports
declined significantly due to high world soybean oil prices. The
government of Turkey decreased import duties of most oils, including
soybean oil from 31.2 percent to 22 percent to prevent inflationary
effects on local food prices. However, according to the 2008 official
import regime, import fees will return to 31.2 percent on May 31, 2008.

RICE (Total of Milled and Paddy rice on milled basis)

  ------------------- ----------------- ----------------- -----------------
  Year                2005              2006              2007 (Jan-Oct)

  Total Exports       .83               1                 1

  Total Imports       262               209               174

  Total Imports from  64                58                0
  U.S.                                                    
  ------------------- ----------------- ----------------- -----------------

Turkey normally produces about one half of its needs and imports the
other half. However, Turkish rice production has increased significantly
in recent years due to preventive majors taken by the Turkish government
and, as a result, Turkey had a record high crop in 2006, which has
decreased the need for imports. Turkey eliminated most of the preventive
measures and started providing control certificates again as a result of
the court case raised by the United States at the WTO. This is expected
to discourage producers and, as result, domestic production is expected
to be lower in the future. In recent years, Turkey has been importing
larger quantities of Egyptian milled rice, which is currently much
cheaper than the U.S. rice. This is especially important since Turkish
markets are price sensitive. Most of the rice in 2007 has been imported
from Egypt and the remainder from Italy. This is milled rice. Turkey
typically imports paddy rice from the United States but due to high
prices of U.S. paddy and more affordable shipping costs and price of
milled rice from Egypt coupled with lower duty rates, Egyptian milled
rice was preferred.

**Industry Contacts**

**Turkish Farmers Union**

[www.tzob.org.tr](http://www.tzob.org.tr/)

**Turkish Dairy, Meat, Food Industry and Producers Union**

[www.setbir.org.tr](http://www.setbir.org.tr/)

**Poultry Industrialists\' and Breeders Association**

[www.besd-bir.org](http://www.besd-bir.org/)

**Flour Millers' Federation**

[http://www.usf.org.tr/site/](http://www.usd.org.tr/)

**Turkish Feed Millers Association**

[www.turkiyeyembir.org.tr](http://www.turkiyeyembir.org.tr/)

**Turkish Seed Industry Association**

[http://www.turkted.org.tr/](mailto:turkted@turkted.org.tr)

**Union of Pasta Producers**

[www.makarna.org.tr](http://www.makarna.org.tr/)

# Federation of Food Associations

[www.gdf.org.tr](http://www.gdf.org.tr/)

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch5 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 5: Trade Regulations and Standards

-   [Import Tariffs](#fifteen)

-   [Trade Barriers](#sixteen)

-   [Import Requirements and Documentation](#seventeen)

-   [U.S. Export Controls](#eighteen)

-   [Temporary Entry](#tempentry)

-   [Labeling and Marking Requirements](#twentyone)

-   [Prohibited and Restricted Imports](#twentythree)

-   [Customs Regulations and Contact Information](#twentyfour)

-   [Standards](#twentyfive)

-   [Trade Agreements](#tradeagreements)

-   [Web Resources](#twentysix)

## Import Tariffs [**Return to top**](#ch5)

Import duties are calculated on the CIF value. Turkey is a signatory to
Article VII of the General Agreements on Tariffs and Trade (GATT). The
agreement stipulates that the customs valuation is the transaction value
(the price that is actually paid or payable plus costs and expenses).
Turkey is also obliged to comply with other Article VII provisions
including the rapidity of clearance of goods, currency convertibility,
and appeal privileges and rights. Turkish regulations do not allow for
advance rulings on customs HS classification or on the applicable import
duties on particular products.

Customs surcharges including a value-added tax (VAT) being levied on
most imported, as well as domestic, goods and services. The importer is
responsible for paying the VAT. The VAT is calculated on a C.I.F. basis
plus duty rate and any other applicable charges levied before the goods
clear customs. The VAT for most agricultural products (basic food)
ranges from one to eight percent and can reach up to 18 percent for some
processed products. Capital goods, some raw materials, imports by
government agencies and state owned enterprises, and products for
investments with incentive certificates are exempt from import fees.
Information on Turkish Customs procedures and regulations can be seen at
[www.gumruk.gov.tr](http://www.gumruk.gov.tr/).

U.S. companies can also calculate the Turkish duty by visiting
[www.gumruk.gov.tr](http://www.gumruk.gov.tr/) and in English review
Turkey's Harmonized Tariff Schedule by commodity, chapter or sub
heading.

## Trade Barriers [**Return to top**](#ch5)

On October 3, 2005, the European Commission began EU accession
proceedings with the Republic of Turkey. The process of EU membership is
expected to take between ten and fifteen years. Prior to beginning its
move towards EU accession, on January 1, 1996, Turkey and the EU formed
a customs union. The agreement covers industrial products and processed
agricultural goods. The Republic of Turkey adopted the EU's common
external tariff (CCT), resulting in lower duties for imports from third
countries, including the United States. The union establishes zero duty
rates and no quotas for non-agricultural items of EU and European Free
Trade Association (EFTA) origin. The current import regime is organized
in five chapters that list more than 20,000 items, identified with 12
digit harmonized tariff system numbers.

The Government of Turkey (GOT) estimates that as a result of its
accession to the European Customs Union, the average duty rate for
imports from the European Union and EFTA countries has dropped from
approximately ten percent to zero. For products imported from third
countries, including the United States, the average duty rate has
dropped from ten percent to approximately 4.1 percent. Turkey has
reserved some exempted categories for sensitive products with tariffs on
these items generally much higher than the CCT. Some agricultural goods
will remain protected by steep tariffs. When the European Union applies
further Uruguay Round reductions, Turkey\'s average rates for third
countries (including the U.S.) will be lowered to 3.5 percent.

Turkey is a member of GATT/WTO and regulates its customs in line with
GATT requirements. While generally in compliance with the WTO agreement,
Turkey often fails to notify the WTO of changes to import requirements.
Applications of non-tariff barriers, such as implementing a reference
price system and not issuing control certificates on occasion, continues
from time to time and poses problems for imports of agricultural
products. For instance, Turkey has not provided any control certificates
for beef for years. The United States initiated a case against Turkey
under the WTO in November 2005 regarding Turkey's regulations concerning
the importation of rice. The panel discussions of this dispute are
underway. Turkey maintains high import duties on agricultural products,
while consistent with WTO obligations it is not considered consistent
with the spirit of the WTO agreement.

## Import Requirements and Documentation [**Return to top**](#ch5)

**IMPORT LICENSES**

The 1996 Turkish import regime abolished the requirement that every
importer needs an import license and that the importer must obtain an
import authorization from a bank. An importer only needs a tax number to
import all but restricted items, e.g., firearms, hazardous materials,
etc., which can be imported only by authorized establishments, or for
which the approval of the Directorate General of Security is required.
All agricultural imports require control certificates, which are issued
by the Ministry of Agriculture and Rural Affairs' General Directorate of
Protection and Control.

#### IMPORT DOCUMENTATION

Turkish documentation procedures require a commercial invoice and a bill
of lading or airway bill to accompany all commercial shipments.
Depending on the type of the product importers may be required to submit
a Certificate of Origin. Import licenses and phytosanitary certificates
are necessary for food and agricultural commodity imports.

Commercial Invoice: The commercial invoice must be submitted in
triplicate, including the original copy; and must contain a complete
description of the goods and all required payment terms. The exporter
must endorse the original as follows: \"We hereby certify that this is
the first and original copy of our invoice, the only one issued by our
firm for the goods herein mentioned.\" It is advisable to have the
Turkish Embassy or Consulate in the United States certify the document.
At least one copy of the invoice should accompany the goods, and the
original should be sent to the importer through the correspondent bank.

Certificate of Origin: The certificate of origin is to be prepared in
duplicate. No corrections are permitted on this document, which is to be
prepared in English by a local chamber of commerce. The Turkish Embassy
or Consulate in the United States must certify the certificate of
origin. One copy of the document must be surrendered to the customs
authorities at the time of importation.

Bill of Lading/Airway Bill: Details in the bill of lading should
correspond exactly to those given in other shipping documents. The
original bill of lading should be submitted in triplicate along with 3
copies.

Proforma Invoices: The proforma invoice must not be more than six months
old at the time of application. It must contain an unexpired option (if
appropriate), indicate freight and insurance charges separately, and
bear the importer\'s name.

Products falling under the European Union New Approach Directives must
be accompanied by either a self-declaration of conformity or a notified
body's issued certificate of conformity to be allowed entry into the
Turkish market. Please see the standards and CE mark section below.

#### Health Certification

Special health certificates are required for imports of plants, seeds,
animals and animal products. Plants, including fruits and vegetables,
must be substantially free from pests and diseases and must have been
grown in an area substantially free from prohibited pests and diseases.
Additional information may be obtained from the U.S. Department of
Agriculture's Animal and Plant Health Inspection Service (APHIS) at Tel:
(301) 734-7885 or Fax: (301) 734-6402 (Veterinary Services) and Tel:
(301) 734-8537 or Fax: (301) 734-5786 (Plant Protection and Quarantine).
APHIS inspects and certifies that plants, plant products and live
animals conform to health and sanitary requirements as mandated by the
Turkish government. U.S. exporters are encouraged to obtain information
from the importer prior to shipment because of the complexity of
phytosanitary regulations.

#### Special Import Requirements

Alcohol can be imported by the private sector by obtaining license and
permission from the Tobacco, Tobacco Products and Alcoholic Drinks
Market Regulatory Authority (TAPDK), which is an independent regulatory
body. Despite these changes, non-tariff barriers, arduous document
requirements, and high duty rates continue to limit trade in alcoholic
beverages. Cigarettes can only be imported by TEKEL and cigarette
producers, which are permitted by the government under a special decree
(such as Philip Morris, RJ Reynolds, British Tobacco, etc.). The Tobacco
Law was enacted in 2001, however privatization of Tekel's tobacco
production has yet to be completed. Medical X-ray films can only be
imported into Turkey by the Red Crescent Association that is a sister
organization to the Red Cross.

The importation of precious metals (gold, silk, and platinum) can only
be done by members of the Istanbul Gold Exchange. The Istanbul Gold
Exchange consists of domestic or foreign banks, precious metals
companies, currency offices, precious metals producing and marketing
companies and precious metals refineries are members of the exchange. In
2003, Turkey signed an agreement to become a participant of the
Kimberley Process Diamond Certification Scheme, which is a joint
government, international diamond industry and civil society initiative
to stem the flow of conflict diamonds. On 14 August 2007 Turkey
officially became a member of the Kimberley Process Certification
Scheme. Information on the regulations pertaining to the importation of
precious metals and stones can be found at <http://www.iab.gov.tr/>

Importing products such as pharmaceuticals; organic chemicals,
especially those used to produce medicines and medical products;
vaccines for both humans and animals; cosmetic products; chemicals used
in cleaning and the food industry; live animals and plants; grains and
plant seeds; and hormones require control certificates from the
Directorate General of Curative Care Service of the Ministry of Health
and Agriculture. The following documents must be submitted to the
relevant Ministry to obtain the control certificates: p*ro forma*
invoice, health certificate, certificate of analysis, formula or list of
contents of the product, pedigree certificate, and radiation analysis
report. All documents must be obtained from and/or approved by the
relevant authorities in the country of origin. Documents must be
submitted in the original language with a translation into Turkish.
Control certificates must be presented to customs authorities upon
import.

Products requiring after-sales service such as motor vehicles, household
electrical goods, office equipment and computers, cash registers, TV and
video equipment, heaters, gas-fired burners, industrial machinery,
automobiles, and wireless equipment require an import permit from the
Ministry of Industry and Trade. In order to obtain such a permit,
importers must guarantee that they will provide service and spare-parts
either by establishing offices or by signing agreements with existing
service/parts firms. The penetration of maintenance facilities over the
country depends on the type of the product. Particular product groups
that are being frequently used require a wide spread network of
maintenance facilities in each of Turkey's seven geographic regions. In
July 2001, the GOT codified a regulation, which requires additional
maintenance facilities to be established for companies importing
automobiles into the Turkish Republic.

Telecommunications equipment such as all wireless equipment, automatic
data processing machines, electrical apparatus for line telephony or
telegraphy, and telephone answering machines need type-approval of the
Telecommunications Regulatory Authority.

Under a regulation published in the Turkish Official Gazette of December
31, 2007 (No. 26743-supplementary issue) importers are required to
obtain a control certificate from the Ministry of Environment for
materials considered detrimental to the environment. Such materials
include hard coal, lignite, petrocoke, petroleum, arsenic, mercury, lead
sulfides and carbonates, fluorocarbons, other chemicals and scrap
metals.

## U.S. Export Controls [**Return to top**](#ch5)

The Bureau of Industry and Security is charged with the development,
implementation and interpretation of U.S. export control policy for
dual-use commodities, software, and technology. Dual-use items subject
to BIS regulatory jurisdiction have predominantly commercial uses, but
also have military applications. In order to accomplish this objective,
BIS seeks to promulgate clear, concise, and timely regulations. This
section of our Web site provides a link to the Bureau\'s regulations
governing exports of dual-use items (the \"Export Administration
Regulations\"), codified at 15 Code of Federal Regulations, Chapter 7.
It also provides discussions of certain key regulatory policy areas,
including policies governing exports of high performance computers,
exports of encryption products, deemed exports, U.S. antiboycott
regulations, special regional considerations, the multilateral export
control regimes, and the technical advisory committees.  

In addition to the U.S. export control policy for dual-use items, the
Bureau of Industry and Security is also charged with the development,
implementation and interpretation of the antiboycott provisions of the
Export Administration Act. The antiboycott provisions encourage, and in
some cases require, U.S. persons to refuse to participate in foreign
boycotts that the United States does not sanction. U.S. persons are also
required to report receipt of boycott-related requests

## Key Regulatory Areas

[High Performance Computers](http://www.bxa.doc.gov/hpcs/default.htm)\
[Encryption](http://www.bxa.doc.gov/encryption/default.htm)\
[Deemed Exports
FAQ\'s](http://www.bxa.doc.gov/deemedexports/deemedexportsfaqs.html) \|
[Process Improvements and
Guidance](http://www.bxa.doc.gov/DeemedExports/DeemedExpImprovements11_03.htm)\
[Antiboycott
Regulations](http://www.bxa.doc.gov/antiboycottcompliance/default.htm)\
[Regional
Considerations](http://www.bxa.doc.gov/policiesandregulations/RegionalConsiderations.htm)\
[Multilateral Export
Regimes](http://www.bxa.doc.gov/policiesandregulations/MultilateralExportRegimes.htm)\
[Technical Advisory Committees](http://tac.bis.doc.gov/)\
[Wassenaar Arrangement](http://www.bxa.doc.gov/wassenaar/default.htm)

## Export Administration Regulations

The Government Printing Office\'s [Export Administration Regulation Web
site](http://www.access.gpo.gov/bis/index.html) contains an up-to-date
database of the entire Export Administration Regulations (EAR),
including the Commerce Control List, the Commerce Country Chart, and a
link to the Denied Persons List. EAR revisions are incorporated into
this site within 48-72 hours and the EAR can be viewed, downloaded, and
searched. This Web site also includes a table with all the Federal
Register notices that revise the text of the EAR since its complete
revision on March 25, 1996. In addition, users can subscribe to GPO\'s
paper version of the EAR from this Web site. Lastly, users can e-mail
the Regulatory Policy Division directly from this Web site, to get
answers to general questions about the EAR. Users can also attach a
properly formatted advisory opinion (See Section 748.3c for the proper
format) and forward it to BIS by e-mail.

The NTIS [EAR Marketplace](http://bxa.fedworld.gov/) Web site also
offers an up-to-date searchable EAR database and files that are
downloadable and viewable. In addition, the EAR Marketplace has a
combined, downloadable and searchable version of the Denied Persons
List, the Entity List, the Debarred List, and the Specially Designated
Nationals List. Subscribers to the EAR on-line database are notified by
email whenever a change occurs to any of these lists. The EAR
Marketplace also includes a table with all the Federal Register notices
that revise the text of the EAR since its complete revision on March 25,
1996.  In addition, NTIS offers a loose leaf/paper version of the EAR,
which can be ordered on-line.

**Turkish Export Controls Information**

The export of sensitive and dual-use materials covered by various
international non-proliferation agreements and arrangements to which
Turkey is a party, is controlled by a two-tier mechanism which involves
licensing by the Ministry of National Defense (MND) and registration by
the Undersecretariat for Foreign Trade (UFT) through the appropriate
exporters' union. Law No. 3763, of 1940, "The Control of Private
Industrial Enterprises Producing War Weapons, Vehicles, Equipment and
Ammunition," requires a MND license for the export of all weapons and
ammunition as well as the materials used for the production of weapons
and ammunition. Sporting and hunting rifles are exempt from MND
licensing. The second tier, UFT control via registration, was
promulgated via Decree number 95/7623 in December 1995. As a part of the
over all process, MND consults with UFT regarding proposed export sales.

All exporters are required to be a member of one of the 13 exporters'
unions in Turkey. Sensitive goods, technology and dual-use materials are
registered by the Istanbul Metals and Minerals Exporters' Union (IMMIB)
thereby creating a centralized mechanism monitoring the export company,
product, quantity, and value. It is IMMIB that determines whether the
intended export items require MND licensing and provides the UFT
registration. It is UFT's role to draft the general export policies and
to monitor and control the overall trade control process.

## Temporary Entry [**Return to top**](#ch5)

Goods may be temporarily imported into Turkey without payment of duties
and tax if they are to be used in the production or manufacture of a
product that is to be exported. The importer gives security in the form
of a bank guarantee (temporary import bond) in the amount of applicable
duties and taxes. Upon exportation of the finished product, the
guarantee is remitted. Temporary admission of goods intended for
re-export in their original form is permissible free of import duties
and taxes with the approval of the Undersecretariat for Foreign Trade.

Turkey is a signatory to the International Convention to Facilitate the
Importation of Commercial Samples and Advertising Material. Samples of
no commercial value are admitted duty-free. Other samples are assessed
duties and taxes at the time of import, but these are refunded if the
samples are re-exported within six months from the date of import. A
letter of guarantee will be provided to Turkish Customs for a temporary
import, with the guarantee being returned at the time of re-export.
Samples should be listed on an invoice. Books, newspapers, magazines,
catalogs, pamphlets, brochures, and similar advertising materials are
exempt from customs duty.

U.S. traders may also wish to consider a more simplified procedure in
the form of an \"ATA Carnet.\" Carnets are international customs
documents permitting the holder to temporarily import products as
samples without paying customs duties or posting bonds. Virtually all
goods, personal and professional, including commercial samples,
professional equipment, goods intended for use at trade shows and
exhibitions, computers, tools, cameras and video equipment, industrial
machinery, automobiles, apparel and even jewelry are covered under a
carnet.

The reader may wish to check the "General List" to see if the goods are
covered by ATA Carnet guidelines or call the Carnet-Help-Line at (800)
5-DUTYFREE or visit the web site www.uscib.org for clarification. Normal
processing of an ATA Carnet is five working days; expedited service is
available at an extra charge. In the United States, carnets are sold by
the U.S. Council for International Business and Roanoke Trade Services
at the following locations: New York, NY, (212) 708-5078; Long Beach,
CA, (800) 421-9324 or (562) 628-9306; Schaumburg, IL, (800) 762-6653 or
(847) 969-8211; San Francisco, CA (800) 255-4994 or (415) 732-5480;
Miami, FL (also serves Houston) (800) 468-5467 or (305) 593-5583; Hunt
Valley, MD (800) 422-9944 or (410) 771-6100 x 12; Boston, MA (800)
233-3620 or (617) 368-9907; and Houston, TX (pick up site only) (800)
456-0422 or (713) 582-6464 x 102.

With the carnet, goods may be imported without payment of duties and
taxes. Carnets are valid for one year and may be used for multiple
exists and entries to countries that accept the Carnet.

## Labeling and Marking Requirements [**Return to top**](#ch5)

All packages, cases, and bales must bear shipping marks, numbers,
dimensions, and the gross weight of the merchandise. Packages along with
accompanying bills of lading for goods to be shipped through Turkey must
be marked \"In Transit.\" All goods entering Istanbul or any other entry
port in Turkey (Ankara, Iskenderun, Izmir, Antalya, Mersin, Sinop,
Samsun, and Trabzon) will be cleared through customs, and full payment
of duty will be required unless the packages and bills of lading are
marked \"In Transit.\" If so marked, the goods may be cleared for entry
and reshipment.

## Prohibited and Restricted Imports [**Return to top**](#ch5)

Importation of certain product groups like narcotics is prohibited. A
list of all prohibited or restricted products for Turkey can be viewed
at the Turkish Customs Service Website at
[www.gumruk.gov.tr](http://www.gumruk.gov.tr/).

## Customs Regulations and Contact Information [**Return to top**](#ch5)

The Turkish Customs can be reached via
[www.gumruk.gov.tr](http://www.gumruk.gov.tr/).

## Standards [**Return to top**](#ch5)

-   [Overview](#standardsoverview)

-   [Standards Organizations](#standardsorganizations)

-   [Conformity Assessment](#standardsconformityassessment)

-   [Product Certification](#standardsproductcertification)

-   [Accreditation](#standardsaccreditation)

-   [Publication of Technical
    Regulations](#standardspublicationoftechnicalregulatio)

-   [Labeling and Marking](#standardslabelingandmarking)

-   [Contacts](#contactsstandards)

###  Overview [**Return to top**](#twentyfive)

The Government of Turkey's Undersecretariat for Foreign Trade announced
the implementation of twenty-three European Union industrial directives,
which would affect an estimated 70% of the manufactured products
imported into Turkey. The Undersecretariat for Foreign Trade has adopted
the EU's Low Voltage Directive, the Simple Pressure Vessels Directive,
the Gas Appliances Directive, the Hot Water Boilers Directive, the EMC,
the Machinery Directive, the Civil Explosives Directive, the Weighing
Instruments Directive, the Equipment and Protective Systems Intended in
Explosive Atmospheres Directive, the Lifts Directive (elevators), the
Household Refrigerator/Freezer Directive, the Pressure Equipment
Directive, the Noise Emission Directive, the Energy Efficiency for
Ballast for Fluorescent Lighting Directive, the Active Implantable
Medical Device Directive, the Medical Device Directive, the In Vitro
Diagnostics Device Directive, the Toy Directive, the Recreational Water
Craft Directive, the Construction Equipment Directive, the Personal
Protective Equipment Directive, the Radio and Telecommunications
Terminal Equipment Directive and the Cableway Directive (ski lifts and
gondolas).

Equipment meeting the directive definition of products needing to
conform to EU technical regulations must have evidence of meeting the
requirements either through verified laboratory testing conducted by an
EU approved notified body or by manufacturer's self-declaration if the
directive dictates. Companies selling to the Turkish market must submit
evidence of conformity (CE Mark) either by providing a
notarized/consularized conformity certificate from a notified body or a
manufacturer's issued certificate of conformity, which declares
compliance of all relevant directives.

The CE Mark was established by the European Union to ensure the free
circulation of products in Europe. The directives that were entered into
effect under a system called the "New Approach," were established to
ensure, health and safety, consumer and environmental protection. The
"New Approach" identifies level of risk and hazard. Annexes to the
various EU directives will specify levels of risk and types of products
that would need to be either certified by a notified body or if the
product can be certified by the manufacturer as conforming to the
particular directive(s). The EU's laws and regulations made it
compulsory to comply with the directives when goods are sold in the
territory of the European Union and the European Economic Area (EEA).
Companies must show evidence of product compliance by maintaining or
presenting a technical file that includes product specifications,
technical drawings and standards applied per the appropriate directives
and corresponding annexes.

###  Standards Organizations [**Return to top**](#twentyfive)

#### NIST Notify U.S. Service

> Member countries of the World Trade Organization (WTO) are required
> under the Agreement on Technical Barriers to Trade (TBT Agreement) to
> report to the WTO all proposed technical regulations that could affect
> trade with other Member countries. **Notify U.S.** is a free,
> web-based e-mail subscription service that offers an opportunity to
> review and comment on proposed foreign technical regulations that can
> affect your access to international markets. Register online at
> Internet URL:
> [http://www.nist.gov/notifyus/](http://www.nist.gov/notifyus/%0D)

###  Conformity Assessment [**Return to top**](#twentyfive)

The European Commission does not have a list of products to which their
directives apply. Thus the manufacturer is to determine the
applicability of relevant directives to any given product. Conformity
Assessment is a mandatory step for the manufacturer in the process of
complying with specific EU legislation. As the initial step to obtain
the CE marking manufacturers need to identify all applicable EU
directives and determine the essential requirements indicated in the
directives. This is followed by the selection of the appropriate
conformity assessment module, which determines the relevant procedures
to demonstrate conformity. For low risk profile products the process is
relatively simple as manufacturers are allowed to self certify without a
third party involvement. The high-risk group products are certified via
an accredited testing laboratory, which is referred to as a "Notified
Body". The risk level of the product determines the scope of the
notified body involvement during the conformity assessment process. A
notified body may be involved in the design, the production phase or
both. CE marking shall be followed by the identification number of the
notified body if it has any involvement in the production phase. It is
also possible to have multiple notified bodies involved in the
conformity assessment process for those products, which fall under more
than one directive. There are competent notified bodies in the U.S. to
perform tests on products and an updated list is maintained by the U.S.
Department of Commerce. You can find conformity assessment bodies in
individual member state country in this list by the European Commission
<http://europa.eu.int/comm/enterprise/nando-is/home/index.cfm>[.]{.underline}
To promote market acceptance of the final product, there are a number of
voluntary conformity assessment programs.

Turkish Standards Institute, Turkish Cement Manufacturers Association
and Turk Loydu Vakfi Iktisadi Isletmesi have been recognized as notified
bodies in Turkey responsible for carrying out the conformity assessment
procedures referred to in the applicable New Approach directives
indicated below:

Turkish Standards Institute (Notified Body Number: 1783)

-89/106/EEC Construction Products

-90/396/EEC Appliances Burning Gaseous Fuels

-95/16/EC Lifts

-97/23/EC Pressure Equipment

Turkish Cement Manufacturers Association (Notified Body Number: 1784)

-89/106/EEC Construction Products

Turk Loydu Vakfi Iktisadi Isletmesi (Notified Body Number: 1785)

-90/396/EEC Appliances Burning Gaseous Fuels

-97/23/EC Pressure Equipment

Products that fall under the Active Implantable Medical Device
Directive, the Medical Device Directive, the Low Voltage Directive, the
EMC Directive and the Machinery Directive are inspected by the Turkish
Standards Institution, in terms of CE compliance. The inspection
procedure in TSE, for CE compliance, starts with the examination of the
declaration of conformity. The declaration of conformity must mention
the applicable directive(s), the name of the manufacturer or his
authorized representative, the name of the notified body (if involved),
product information and reference to harmonized standards. If the
notified body is also involved in the process, the type examination
certificate should also be submitted.

Following the initial phase, the products are examined in terms of the
way CE Mark is affixed.The examination process is conducted by a
committee set up by the Turkish Standards Institute. CE Mark must be
affixed to the data plate or to the product. If not, it should be placed
on packaging and accompanying documents. It must be affixed visibly,
legibly and indelibly. It must be in compliance with the predetermined
proportions. If the committee decides that CE mark is affixed properly
to the product, TSE issues another declaration of conformity.

For products falling outside of the scope of the European Union New
Approach Directives and where the Government of Turkey has established a
directive or standard, then that standard or directive would apply. At
this point, certification of compliance with TSE standards would be
required. Turkish Standards Institute contact information is provided
below in the website portion of this chapter.

The manufacturers are required to submit a declaration of conformity for
each applicable directive and prepare a technical file. Following this
step the CE mark can be affixed to the product in accordance with the
Directive 93/68/EEC.

###  Product Certification [**Return to top**](#twentyfive)

To sell their product to Turkey, the EU as well as Norway, Liechtenstein
and Iceland, U.S. exporters are required to apply CE marking whenever
their product is covered by specific product legislation. CE marking
product legislation offers manufacturers a number of choices and
requires decisions to determine which safety/health concerns need to be
addressed, which conformity assessment module is best suited to the
manufacturing process, and whether or not to use EU-wide harmonized
standards.

In the 1980s, the New Approach was launched to overcome the lengthy
adoption process of "old approach" type legislation. The goal of the
European Union\'s harmonization program under the New Approach is to
streamline technical harmonization and the development of standards for
certain product groups, including, among others, machinery, toys,
construction products, electromagnetic compatibility, personal
protective equipment, non-automatic weighing instruments, medical
devices, gas appliances, hot water boilers, and radio and
telecommunications terminal equipment (RTTE). Under the New Approach,
Directives cover essential safety, health and environmental
requirements. The three regional European standards organizations, CEN,
CENELEC and ETSI, are mandated by the Commission to develop technical
standards that are consistent with the essential requirements of EU
Directives.

Products manufactured to standards adopted by CEN, CENELEC and ETSI, and
published in the Official Journal as harmonized standards, are presumed
to conform to the requirements of EU Directives. The manufacturer then
applies the CE Mark and issues a declaration of conformity. With these,
the product will be allowed to circulate freely within the European
Union. A manufacturer can choose not to use the harmonized EU standards,
but must then demonstrate that the product meets the essential safety
and performance requirements. Trade barriers occur when design, rather
than performance, standards are developed by the relevant European
standardization organization, and when U.S. companies do not have access
to the standardization process through a European presence.

The CE mark addresses itself primarily to the national control
authorities of the Member States, and its use simplifies the task of
essential market surveillance of regulated products. Although CE marking
is intended primarily for inspection purposes by EU Member State
inspectors, the consumer may well perceive it as a quality mark.

The CE mark is not intended to include detailed technical information on
the product, but there must be enough information to enable the
inspector to trace the product back to the manufacturer or the
authorized representative established in the EU. This detailed
information should not appear next to the CE mark, but rather on the
declaration of conformity, the certificate of conformity (which the
manufacturer or authorized agent must be able to provide at any time,
together with the product\'s technical file), or the documents
accompanying the product

###  Accreditation [**Return to top**](#twentyfive)

Independent certification bodies have been officially accredited by
competent authorities to test and certify to EU requirements. However,
under the U.S./EU Mutual Recognition Agreements (MRAs), notified bodies
based in the United States and referred to as conformity assessment
bodies, will be allowed to test in the United States to EU
specifications, and vice versa. The costs will be significantly lower
and U.S. products will, as a result, become more competitive. At this
time, the U.S./EU MRAs cover the following sectors: EMC (in force), RTTE
(in force), medical devices (in transition), pharmaceutical (in
transition), and recreational craft (in force). This link lists to
American and European Conformity Assessment bodies operating under a
mutual recognition agreement
<http://ts.nist.gov/ts/htdocs/210/gsig/mra.htm>.

Accreditation is handled at member state level. "European Accreditation"
([www.european-accreditation.org](http://www.european-accreditation.org/))
is an organization representing nationally recognized accreditation
bodies. Membership is open to nationally recognized accreditation bodies
in countries in the European geographical area that can demonstrate that
they operate an accreditation system compatible with EN45003 or ISO/IEC
Guide 58. As previously stated, Turkish Standards Institute, Turkish
Cement Manufacturers Association and Turk Loydu Vakfi Iktisadi Isletmesi
have been recognized as notified bodies in Turkey responsible for
carrying out the conformity assessment procedures referred to in the
applicable New Approach directives The Turkish Standards Institute is
the accredited authority in the Republic of Turkey for all matters
related to ISO, EN ISO and TSE standards and directives.

###  Publication of Technical Regulations [**Return to top**](#twentyfive)

The Turkish Standards Institute publishes all Turkish standards and
directives and documents are available for purchase.

Turk Standartlari Enstitusu (TSE)

Necatibey Caddesi 112

Standart Hazirlama Baskanligi

06100 Bakanliklar

Ankara, Turkey

Tel: \[90\] (312) 417-0020

Fax: \[90\] (312) 425-4399

Web site: [www.tse.org.tr](http://www.tse.org.tr/)

###  Labeling and Marking [**Return to top**](#twentyfive)

All packages, cases, and bales must bear shipping marks, numbers,
dimensions, and the gross weight of the merchandise. Packages along with
accompanying bills of lading for goods to be shipped through Turkey must
be marked \"In Transit.\" All goods entering Istanbul or any other entry
port in Turkey (Ankara, Iskenderun, Izmir, Mersin, Sinop, Samsun, and
Trabzon) will be cleared through customs, and full payment of duty will
be required unless the packages and bills of lading are marked \"In
Transit.\" If so marked, the goods may be cleared for entry and
reshipment.

### Contacts [**Return to top**](#twentyfive)

[www.gumruk.gov.tr](http://www.gumruk.gov.tr/)

## Trade Agreements [**Return to top**](#ch5)

The EU confirmed Turkey\'s status to be accession negotiations on 17
December 2004. Turkey continues to reap the benefits of its 1996 customs
union agreement with the EU, particularly in terms of improved economic
efficiency. The customs union commits Turkey to adopt the EU\'s common
external tariff and a commercial policy \"substantially similar\" to
that of the EU, including adoption of the EU\'s preferential trade
regime with third countries. Turkey has already signed Free Trade
Agreements with the EFTA member countries and is in the process of
finalizing agreements with the other EU applicant countries.

Turkey is a founding member of the Black Sea Economic Cooperation (BSEC)
in which the governments of Albania, Armenia, Azerbaijan, Bulgaria,
Georgia, Greece, Moldova, Romania, Russia, Turkey and the Ukraine are
nurturing multilateral cooperation among the members on a number of
issues including trade. Turkey, along with Pakistan and Iran, is a
founding member of the Economic Cooperation Organization (ECO). ECO,
whose membership beyond the founders includes Afghanistan, Azerbaijan,
Turkmenistan, Uzbekistan, Kyrgyzstan, Tajikistan and Kazakhstan has had
limited success in improving trade cooperation. Turkey is a founding
member of the Southern Europe Cooperative Initiative (SECI); a regional
association aimed at encouraging cooperation among its member states on
a variety of issues including customs, transportation and anti-crime
efforts. SECI member states include Albania, Bosnia & Herzegovina,
Bulgaria, Croatia, Greece, Hungary, the Former Yugoslav Republic of
Macedonia, Moldova, Romania, Slovenia and Turkey

## Web Resources [**Return to top**](#ch5)

# U.S. Embassy and U.S. EU Mission Contacts

The United States Embassy's Commercial Section has been assisting U.S.
companies, which meet EU directives conformity, in having products clear
Turkish Customs as expeditiously as possible. The Commercial Section is
also working to have the Government of Turkey accept CE conformity
certification from U.S. corporations or U.S.-based Notifying Bodies,
without having U.S. companies face additional bureaucratic delays at
customs and additional testing at the Turkish Standards Institute. For
additional assistance in managing the new CE Mark regulations in Turkey,
please contact Commercial Specialist Ozge Cirika at
<Ozge.Cirika@mail.doc.gov>.

For additional information on the European Union Directives and European
standards, please contact:

U.S. Mission to the E.U.

Foreign Commercial Service

Rue Zinner 13

B - 1000 Brussels, Belgium

Fax: 32 2 513 1228

Louis Santamaria -- Standards Attaché

Tel: 32 2 508 2674

<Louis.Santamaria@mail.doc.gov>

Sylvia Mohr -- Standards Specialist

Tel: 32 2 508 2675

[Sylvia.Mohr@mail.doc.gov](mailto:Sylvia.mohr@mail.doc.gov)

# CE Websites

<http://www.ita.doc.gov/td/tic/ce_mark/ceindex1.htm>

<http://ts.nist.gov/ts/htdocs/210/ncsci/export-eu.htm>

[www.buyusa.gov/europeanunion](http://www.buyusa.gov/europeanunion)

<http://europa.eu.int/comm/enterprise/index_en.htm>

[www.newapproach.org](http://www.newapproach.org/)

# Standards Websites

[**www.cenorm.be**](http://www.cenorm.be/)

[**www.cenelec.org**](http://www.cenelec.org/)

[**www.etsi.org**](http://www.etsi.org/)

[**www.ansi.org**](http://www.ansi.org/)

[[[[]{#fifteen .anchor}]{#eighteen .anchor}]{#twentyfive .anchor}Return
to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch6 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 6: Investment Climate

-   [Openness to Foreign
    Investment](#openness-to-foreign-investment-return-to-top)

-   [Conversion and Transfer Policies](#thirtytwo)

-   [Expropriation and
    Compensation](#expropriation-and-compensation-return-to-top)

-   [Dispute Settlement](#dispute-settlement-return-to-top)

-   [Performance Requirements and
    Incentives](#performance-requirements-and-incentives-return-to-top)

-   [Right to Private Ownership and
    Establishment](#right-to-private-ownership-and-establishment-return-to-top)

-   [Protection of Property
    Rights](#protection-of-property-rights-return-to-top)

-   [Transparency of Regulatory
    System](#transparency-of-regulatory-system-return-to-top)

-   [Efficient Capital Markets and Portfolio
    Investment](#efficient-capital-markets-and-portfolio-investment-return-to-top)

-   [Political Violence](#political-violence-return-to-top)

-   [Corruption](#corruption-return-to-top)

-   [Bilateral Investment
    Agreements](#bilateral-investment-agreements-return-to-top)

-   [OPIC and Other Investment Insurance
    Programs](#opic-and-other-investment-insurance-programs-return-to-top)

-   [Labor](#labor-return-to-top)

-   [Foreign-Trade Zones/Free
    Ports](#foreign-trade-zonesfree-ports-return-to-top)

-   [Foreign Direct Investment
    Statistics](#foreign-direct-investment-statistics-return-to-top)

-   [Web Resources](#web-resources-return-to-top-2)

## Openness to Foreign Investment [**Return to top**](#ch6)

The Government of Turkey (GOT) views foreign direct investment as vital
to the country\'s economic development and prosperity. Accordingly,
Turkey has one of the most liberal legal regimes for FDI in the OECD.
With the exception of some sectors (see below), areas open to the
Turkish private sector are generally open to foreign participation and
investment. However, all investors -- regardless of nationality -- face
a number of challenges: excessive bureaucracy, a slow judicial system,
high taxes, weaknesses in corporate governance, sometimes unpredictable
decisions made at the local government level, and frequent changes in
the legal and regulatory environment.

Regulations governing foreign investment are, in general, transparent.
Turkey provides national treatment, including in the acquisition of real
estate by foreign-owned corporate entities registered under Turkish law,
and in most sectors does not have an investment screening system (only
notification is required). The GOT set \"reciprocity with the related
nation\" as a precondition for real estate property purchases by
foreigners, and set an upper limit of 30,000 square meters to the area
of the real estate foreigners can buy. []{.mark}

Equity participation of foreign shareholders is restricted to 25 percent
in broadcasting and 49 percent in the aviation and maritime
transportation sectors. Establishment in financial services, including
banking and insurance, and in the petroleum sector requires special
permission from the GOT for both domestic and foreign investors. In
practice, regulators have not restricted foreign ownership in the
financial sector: in 2005 and 2006 a series of foreign acquisitions in
the sector were approved, and several foreign financial houses have
longstanding operations in Turkey.

Turkey\'s privatization process continues to move forward. The GOT
privatizes State Economic Enterprises through block sales, public
offerings, or a combination of both. Transactions completed under the
Turkish privatization program generated \$8.1 billion in 2006 and
approximately \$3.8 billion for 2007. On a cash basis, however, the
program yielded \$3 billion in 2005 and \$9.6 billion in 2006, since
privatizations are often paid for in installments. The Turkish
government is committed to continuing the privatization process despite
delays that may occur in some individual cases.

Bureaucratic \"red tape\" has been a significant barrier to companies,
both foreign and domestic. However, recent reforms have simplified
company establishment procedures, reduced permit requirements,
instituted a single company registration form, and enabled individuals
to register their companies through local commercial registry offices of
the Turkish Union of Chambers and Commodity Exchanges.

Since 2001, the Turkish government has been implementing a comprehensive
investment climate reform program. This program aims to streamline all
investment-related procedures and to attract more FDI to the country. A
national platform jointly formed by the public and private sectors, the
Coordination Council for the Improvement of Investment Environment
(YOIKK), provides technical guidance for issues relating to the
investment environment.

In addition, the Investment Advisory Council of Turkey (IAC) was created
in 2004 to provide an international perspective for the reform agenda of
Turkey. IAC members include executives from multinational companies,
representatives of international institutions such as the IMF, World
Bank and EIB, and the heads of Turkish NGOs representing the private
sector. The Council, chaired by the Prime Minister, convenes yearly to
advise the government on the direction of its reform program. The
Council's recommendations serve as a guideline for the YOIKK Platform,
and developments regarding the Council recommendations are published in
the Turkish Treasury\'s annual IAC Progress Reports.

The government continued to implement judicial reforms in 2007, some of
which aim to attract foreign investment to Turkey. The National
Judiciary Network project, an automation and integration project
overseen by the Ministry of Justice, reached its final preparatory stage
in 2007 and is expected to come online in 2008. This will significantly
speed the processing of commercial cases by sharing documents and court
records more easily, as well as allowing for the filing of suits online.
The Ministry of Justice began redistributing caseloads among courts in
2007 to reduce the burden in the busiest courts. As part of this
redistribution, the Ministry shut down 137 small district courts and
reassigned their resources to those with increased workloads. In
addition, the government has improved foreign investors\' access to
justice, including to legal aid and Alternative Dispute Resolution
mechanisms supported by the U.S., the EU, and the World Bank.

In addition to structural reforms, the Investment Promotion Agency
(IPA), whose main objective is to support new investors throughout the
establishment process and solve problems that arise after establishment,
became much more active in 2007. The agency serves as an advocate within
the government for reforms that promote investment and will work to
raise public awareness of the benefits of investment.

Turkey also made the taxation system more investor-friendly. In 2006,
the basic corporate tax rate was reduced from 30 to 20 percent. The
Government also cancelled the withholding tax for foreign investors\'
holdings of bonds, bills, and stocks, while retaining it for bank
deposits and repurchase agreements. The 15 percent rate on bonds, bills,
and stocks was reduced to 10 percent for domestic investors. The Tax
Administration also established a large taxpayer unit in 2007 that will
handle tax collection from large corporations. The GOT failed to
implement further tax reforms, however, including an employment tax
reduction, the rate of which is among the highest of OECD countries. The
GOT also increased the VAT tax on leasing activities from 1 percent to
18 percent at the end of 2007.

Turkish law and regulations affecting the investment climate continue to
evolve. Potential investors should check with appropriate Turkish
government sources for current and detailed information. The following
web site provides the text of regulations governing foreign investment
and incentives, as well as other useful background information:
http://www.hazine.gov.tr/realsectorleg.htm Additional information on the
reforms can be found in the Investment Advisory Council Progress Reports
at: http://www.hazine.gov.tr/Investment_Advisory_Council_of_Turkey.htm

## Conversion and Transfer Policies [**Return to top**](#ch6)

Turkish law guarantees the free transfer of profits, fees, and
royalties, and repatriation of capital. This guarantee is reflected in
Turkey\'s 1990 Bilateral Investment Treaty (BIT) with the United States,
which mandates unrestricted and prompt transfer in a freely-usable
currency at a legal market-clearing rate for all funds related to an
investment. There is no difficulty in obtaining foreign exchange, and
there are no foreign exchange restrictions. As the result of a 1997
court decision, however, the Turkish Government has blocked full
repatriation of investments by oil companies under Article 116 of the
1954 Petroleum Law, which protected foreign investors from the impact of
lira depreciation. Affected companies have challenged the 1997 decision,
but lost the case in 2002. Companies expect the new Petroleum Law, which
the GOT claims will go before Parliament in 2008, to address this
problem and to improve the investment environment for oil and gas
exploration.

## Expropriation and Compensation [**Return to top**](#ch6)

Under the BIT, expropriation can only occur in accordance with due
process of law. Expropriations must be for public purpose and
non-discriminatory. Compensation must be reasonably prompt, adequate,
and effective. The BIT ensures that U.S. investors have full access to
the local court system and the ability to take the host government
directly to third-party international binding arbitration to settle
investment disputes. There is also a provision for state-to-state
dispute settlement.

As a practical matter, the GOT occasionally expropriates private real
property for public works or for State Enterprise industrial projects.
The GOT agency expropriating the property negotiates and proposes a
purchase price. If the owners of the property do not agree with the
proposed price, they can go to court to challenge the expropriation or
ask for more compensation. There are no outstanding expropriation or
nationalization cases.

## Dispute Settlement [**Return to top**](#ch6)

There are some outstanding investment disputes between U.S. companies
and Turkish government bodies.

Turkey\'s legal system provides means for enforcing property and
contractual rights, and there are written commercial and bankruptcy
laws. However, the court system is overburdened, which sometimes results
in slow decisions and judges lacking sufficient time to grasp complex
issues. Judgments of foreign courts, under certain circumstances, need
to be executed by local courts before they are accepted and enforced.
Monetary judgments are usually made in local currency, but there are
provisions for incorporating exchange rate differentials in claims.

Turkey is a member of the International Center for the Settlement of
Investment Disputes (ICSID), and is a signatory of the New York
Convention of 1958 on the Recognition and Enforcement of Foreign
Arbitral Awards. Turkey ratified the Convention of the Multinational
Investment Guarantee Agency (MIGA) in 1987. There are no arbitration
cases pending before ICSID involving a U.S. company.

Turkish law accepts binding international arbitration of investment
disputes between foreign investors and the state. In practice, however,
Turkish courts have on at least one occasion failed to uphold an
international arbitration ruling involving private companies.

## Performance Requirements and Incentives [**Return to top**](#ch6)

Turkey is a party to the WTO Agreement on Trade Related Investment
Measures (TRIMS).

Turkey\'s investment incentive system was substantially amended in 2006
to promote investment in manufacturing services and the energy sector
and to encourage exports. The general investment incentive regime
provides tax benefits and in some cases credit possibilities. It is
applied in diverse ways according to the location, scale, and subject of
the investment. It includes exemption for customs duties and fund levies
and customs and value-added (VAT) tax exemptions for locally-purchased
or imported machinery and equipment. The Turkish Treasury also covers
selected parts of investment credit interest rates for SMEs, research
and development (R&D) projects, environmental projects, and projects in
50 prioritized development provinces that have annual per capita income
below \$1,500.

For these prioritized development provinces, under certain conditions,
the law provides for withholding tax incentives on income tax, social
security premium incentives, free land, and electricity price support of
between 20 and 50 percent. These incentives will remain in effect until
the end of 2008, except for allocation of free public land, which has no
expiration date. The same law also limits certain tax preferences
previously enjoyed by Turkey\'s free zones (see below).

For R&D support, Turkey\'s Scientific and Technological Research Council
(TUBITAK) and the Turkish Technology Development Foundation (TTGV) both
reimburse and/or grant R&D related expenses and capital loans for R&D
projects. Projects eligible for such incentives include concept
development, technological research and technical feasibility research,
laboratory studies to transform a concept into a design, design and
sketching studies, prototype production, construction of pilot
facilities, test production, patent and license studies, and activities
related to post-scale problems stemming from product design. In addition
to these incentives, the Turkish government also provides support to
Technology Development Zones (TDZs) that includes infrastructure and
facilities, exemption from income and corporate taxes (through December
31, 2013) for profits derived from software and R&D activities,
exemption from all taxes (through December 31, 2013) for the wages of
researchers, software, and R&D personnel employed in TDZs, VAT
exemptions for the same period of income and corporate tax exemptions
for IT specific sectors, and customs, duties, and fund levy exemptions.
Finally, the Turkish government\'s export incentive program focuses on
R&D activities, market research, and participation in exhibitions and
international fairs.

There are no performance requirements imposed as a condition for
establishing, maintaining, or expanding an investment. There are no
requirements that investors purchase from local sources or export a
certain percentage of output. Investors\' access to foreign exchange is
not conditioned on exports.

There are no requirements that nationals own shares in foreign
investments, that the shares of foreign equity be reduced over time, or
that the investor transfer technology on certain terms. There are no
government-imposed conditions on permission to invest, including
location in specific geographical areas, specific percentage of local
content -- for goods or services -- or local equity, import
substitution, export requirements or targets, employment of host country
nationals, technology transfer, or local financing.

The GOT does not require that investors disclose proprietary
information, other than publicly available information, as part of the
regulatory approval process. Enterprises with foreign capital must send
their activity report, submitted to the general assembly of
shareholders, auditor\'s report, and balance sheets to the Treasury\'s
Foreign Investment Directorate every year by May.

With the exceptions noted under \"Openness to Foreign Investment\" and
\"Transparency of the Regulatory System\", Turkey grants all rights,
incentives, exemptions and privileges available to national capital and
business to foreign capital and business on a most-favored-nation (MFN)
basis. American and other foreign firms can participate in
government-financed and/or subsidized research and development programs
on a national treatment basis.

Military procurement generally requires an offset provision in tender
specifications. The offset guidelines were modified to encourage direct
investment and technology transfer.

More information on Turkey\'s trade regime can be found at
www.foreigntrade.gov.tr.

## Right to Private Ownership and Establishment [**Return to top**](#ch6)

With the exceptions noted above, private entities may freely establish,
acquire, and dispose of interests in business enterprises, and foreign
participation is permitted up to 100 percent.

Competitive equality is the standard applied to private enterprises in
competition with public enterprises with respect to access to markets,
credit, and other business operations. Turkey has an independent
Competition Board.

## Protection of Property Rights [**Return to top**](#ch6)

Secured interests in property, both movable and real, are recognized and
enforced. There is a reliable system of recording such security
interests. For example, there is a land registry office where real
estate is registered. Turkey\'s legal system protects and facilitates
acquisition and disposal of property rights, including land, buildings,
and mortgages, although some parties have complained that the courts are
slow to render decisions and that they are susceptible to external
influence (see \"Dispute Settlement\").

Turkey\'s intellectual property rights regime has improved in recent
years, but certain deficiencies from international standards remain a
concern. Turkey remained on the U.S. Special 301 Priority Watch List in
2007 due to insufficient protection for confidential pharmaceutical test
data and continued high levels of piracy and counterfeiting of copyright
and trademark materials.

Turkey\'s copyright law provides deterrent penalties for copyright
infringement. The law contains several strong anti-piracy provisions,
including a ban on street sales of all copyrighted products and
authorization for law enforcement authorities to take action without a
complaint by the rights holder. The law established minimum penalties of
three months to two years imprisonment and/or a fine between 5,000 and
50,000 YTL (new Turkish lira) (approximately \$4,200 to \$42,000)
depending on the severity of the damages. The law sets the maximum
penalty at three to six years imprisonment and/or fines between 50,000
and 250,000 YTL (approximately \$42,000 to \$210,000). While pirated
materials are still common, the number of cases brought against the
producers and/or distributors of these goods has increased
significantly, and deterrent penalties have become more common.

Turkey is a signatory to a number of international conventions,
including the Stockholm Act of the Paris Convention, the Patent
Cooperation Treaty, the Strasbourg Agreement, and the WIPO Copyright
Agreement and Performances and Phonograms Treaty.

Turkey accepts patent applications in compliance with the TRIPS
agreement \"mailbox\" provisions. The patent law does not, however,
contain interim protection for pharmaceuticals in the research and
development \"pipeline\".

Turkey\'s Patent Law provides for penalties for infringement of up to 4
years in prison, or 46,000 YTL (approximately \$39,000) in fines, or
both, closure of the business for at least one year, and a prohibition
on the owner\'s participation in any commercial activity during that
same period. However, research-based companies in the pharmaceuticals
sector have criticized provisions which delay the initiation of
infringement suits until after the patent is approved and published,
permit use of a patented invention to generate data needed for the
marketing approval of generic pharmaceutical products, and give judges
wider discretion over penalties in infringement cases.

[]{.mark}

Unlike some other countries, including the United States, Turkey does
not currently have a system that directly links marketing approval for
pharmaceutical products to the patent protection system. The Patent
Institute sends reports to the Ministry of Health informing them of
pharmaceutical-related patents that have been approved. In addition, in
2006, the Patent Institute, with assistance from the World Bank, created
an online database that allows users to search for valid patents. The
Patent Institute does not, however, share with other entities or the
public unpublished information regarding patent applications that have
not yet been approved.

In general, the Ministry of Health provides protection for confidential
test data submitted in support of applications to market pharmaceutical
products. However, several of the regulation\'s provisions undermine
protection for confidential test data. Data exclusivity is limited to
original products licensed in a European Customs Union country after
January 1, 2001, for which no generic manufacturers had applied for
licenses in Turkey as of January 1, 2005. In addition, the term of
exclusivity is limited to the duration of the drug patent. The six-year
term of data protection starts on the date of licensing in a European
Customs Union country, implying a shorter term of protection because of
the length of the marketing approval process in Turkey.

Trademark holders also contend that there is widespread and often
sophisticated counterfeiting of their marks in Turkey, especially in
apparel, film, cosmetics, detergent and pharmaceuticals. Turkey provides
protection for commercial seed under its Plant Variety Protection (PVP)
Law.

Further information on the intellectual property situation in Turkey is
available in the National Trade Estimate report, available at the U.S.
Trade Representative\'s website: www.ustr.gov.

## Transparency of Regulatory System [**Return to top**](#ch6)

The GOT has adopted policies and laws that in principle should foster
competition and transparency. However, foreign companies in several
sectors claim that regulations are sometimes applied in a nontransparent
manner. Turkey is an observer, but not a member, to the WTO Government
Procurement Committee.

Turkish legislation generally requires competitive bidding procedures in
the public sector. A Public Procurement board exists to oversee public
tenders, and there are minimum bidding thresholds under which foreign
companies are prohibited from bidding on public tenders. The law gives
preference to domestic bidders, Turkish citizens, and legal entities
established by them, as well as to corporate entities established under
Turkish law by foreign companies. The public procurement law has been
amended eight times since its enactment and may be further amended in
the future: it has been cited by the EU as not being in conformity with
the EU \"acquis communautaire\" or body of law.

In general, labor, health and safety laws and policies do not distort or
impede investment, although legal restrictions on discharging employees
may provide a disincentive to labor-intensive activity in the formal
economy. Certain tax policies distort investment decisions. High
taxation of cola drinks discourages investment in this sector. Generous
tax preferences for free zones have provided a stimulus to investment in
these zones, though these preferences will be trimmed in the future (see
free zones section). Similarly, incentives for investment in certain
low-income provinces appear to be stimulating investment there (see
\"Performance Requirements/Incentives\").

## Efficient Capital Markets and Portfolio Investment [**Return to top**](#ch6)

The government has taken a number of important steps in recent years to
strengthen and better regulate the banking system. A 2005 revision of
the Banking Law brought tighter bank regulation, notably by broadening
the range of expertise inspectors can draw on when conducting on-site
inspections.

An independent Banking and Regulation Supervision Agency (BRSA) monitors
and supervises Turkey\'s banks. The BRSA is headed by a board whose
seven members are appointed by the cabinet for six-year terms. In
addition, bank deposits are protected by an independent deposit
insurance agency, the State Deposit Insurance Fund (SDIF).

Because of high local borrowing costs and short repayment periods,
foreign and local firms frequently seek credit from international
markets to finance their activities. As of November 2007, there were 36
deposit-taking commercial banks and 13 development or investment banks
operating in Turkey. Sector assets as of September 2007 totaled
approximately \$465 billion, or about 85 percent of GNP, according to
BRSA data. Total loans for the banking sector totaled \$154 billion for
the same period.

There is a regulatory system established to encourage and facilitate
portfolio investments, though it needs improvements in transparency,
accounting, and enforcement provisions to bring it up to U.S. and EU
standards. The Istanbul Stock Exchange (ISE), formed in 1985, is
becoming a significant emerging market stock exchange. As of December
31, 2007, 379 companies were listed on the exchange. However, Turkey has
yet to develop other capital markets. The Capital Markets Board is
responsible for overseeing the activities of capital markets, including
activities of ISE-quoted companies, and securities and investment
houses. The Turkish private sector is dominated by a number of large
holding companies, whose upper management is family-controlled. Most
large businesses continue to float publicly only a minority portion of
company shares in order to limit outside interference in company
management. There has been no attempt at a hostile takeover by either
international or domestic parties in recent memory. Capital market
instruments are still developing in Turkey. Turkey\'s first mortgage law
was adopted in 2007. Hedging instruments are also very limited. Izmir\'s
futures market opened in 2003 and has recorded monthly transaction
volumes of around \$12 billion.

## Political Violence [**Return to top**](#ch6)

In recent years, terrorist bombings \-- some with significant numbers of
casualties \-- have struck religious, political, and business targets in
a variety of locations in Turkey. The potential remains throughout
Turkey for violence and terrorist actions against U.S. citizens and
interests, both by transnational and indigenous terrorist organizations.

In November 2003, the Al-Qa\'ida network was responsible for four large
suicide bombings in Istanbul that, among other targets, hit western
interests. Indigenous terrorist groups also continue to target Turkish
as well as U.S. and Western interests. In 2007, the PKK, aka KADEK, aka
KONGRA GEL, was responsible for the deaths of at least 139 security
personnel and 27 civilians. Another 216 security forces and 134
civilians were wounded in PKK-related violence. The PKK operates in
parts of Northern Iraq and crosses the border to conduct attacks in the
southeast region of Turkey, where the group has traditionally
concentrated its activities, as well as in Istanbul, Ankara, and resort
areas of southern and western Turkey. Other terrorist groups, including
the Turkish group Revolutionary People\'s Liberation Party/Front
(DHKP/C), continue to target Turkish officials and various civilian
facilities and may use terrorist activity to make political statements.
Since 2002, civilian venues such as courthouses, fast food restaurants,
and public transportation, as well as trash receptacles in public
spaces, have been targets of minor bomb attacks, resulting in small
numbers of casualties. Similar, random bombings are likely to continue
in unpredictable locations. Americans traveling to southeastern Turkey,
the site of PKK actions, should exercise caution.

Although the Turkish government takes air safety seriously and maintains
strict controls, particularly on international flights, a hijacking
occurred on an Atlasjet flight as recently as August 2007 and a crash
(not related to terrorist activity) of an Atlasjet flight occurred in
November 2007. For the latest security information on Turkey and
throughout the world, travelers should monitor the State Department web
site http://travel.state.gov, where the current Worldwide Caution Public
Announcement, Travel Warnings, and Public Announcements can be found.

## Corruption [**Return to top**](#ch6)

Corruption is perceived to be a problem in Turkey by private enterprise
and the public at large, particularly in government procurement.
American companies operating in Turkey have complained about being
solicited, with varying degrees of pressure, by municipal or local
authorities for \"contributions to the community". Parliament continues
to probe corruption allegations involving senior officials in previous
governments, particularly in connection with energy projects.

Public procurement reforms were designed to make procurement more
transparent and less susceptible to political interference, including
through the establishment of an independent public procurement board
with the power to void contracts. With regard to the WTO Government
Procurement Agreement, Turkey is not yet a signatory, although it has
maintained observer status for over a decade. The judicial system is
also perceived to be susceptible to external influence and to be biased
against outsiders to some degree.

Turkish legislation outlaws bribery and some prosecutions of government
officials for corruption have taken place, but enforcement is uneven.
Turkey ratified the OECD Convention on Combating Bribery of Public
Officials, and passed implementing legislation in January 2003, to
provide that bribes of foreign officials, as well as domestic, are
illegal and not tax deductible. In 2006, Turkey\'s parliament ratified
the UN Convention Against Corruption.

Turkey\'s Criminal Code makes it unlawful to promise or to give any
advantage to foreign government officials in exchange for their
assistance in providing improper advantage in the conduct of
international business. In the event that such a crime makes an unlawful
benefit to a legal entity, such legal entity shall be subject to certain
security measures. The provisions of the Criminal Law regarding the
bribing of foreign governmental officials are in line with the
provisions of the Foreign Corrupt Practices Act of 1977 of the United
States (the \"FCPA\").

There are, however, a number of differences between Turkish law and the
FCPA. For example, there is not an exception under the Turkish law for
payments to facilitate or expedite performance of a \"routine
governmental action\" in terms of the FCPA. Another difference between
the provisions of the FCPA and Turkish law is that the FCPA does not
provide for a punishment of imprisonment, while the Turkish law provides
a punishment of imprisonment from four years to 12 years. The Prime
Ministry\'s Inspection Board, which advises a new Corruption
Investigations Committee, is responsible for investigating major
corruption cases. Nearly every state agency has its own inspector corps
responsible for investigating internal corruption. The parliament can
establish investigative commissions to examine corruption allegations
concerning cabinet ministers for the Prime Minister. A majority vote is
needed to send these cases to the Supreme Court for further action.

Transparency International has an affiliated NGO in Istanbul.
Transparency International (TI) noted that Turkey did not improve its
fight against corruption in 2007 and moved Turkey from 65^th^ to 66^th^
in the transparency ranking of 180 countries.

## Bilateral Investment Agreements [**Return to top**](#ch6)

Since 1962, Turkey has been negotiating and signing agreements for the
reciprocal promotion and protection of investments. Turkey has signed
bilateral investment treaties with 79 countries and has initiated
negotiations with eight countries. Sixty three of these agreements are
now in force, including with the United States, United Kingdom, Germany,
the Netherlands, Belgium, Luxembourg, Denmark, Austria, Sweden,
Switzerland, Spain, Finland, Italy, Portugal, Hungary, Poland, Romania,
Tunisia, Kuwait, Bangladesh, China, Japan, South Korea, Indonesia,
Croatia, Cuba, the Czech Republic, Estonia, Russian Federation,
Azerbaijan, Kazakhstan, Georgia, Tajikistan, Ukraine, Uzbekistan,
Belarus, Lithuania, Latvia, Slovakia, Macedonia, Pakistan, Turkmenistan,
Moldova, Kyrgyzstan, Albania, Bulgaria, Argentina, Bosnia, Malaysia,
Egypt, Mongolia, Greece, Israel, Afghanistan, Ethiopia, Iran, Lebanon,
Syria, Slovenia, Jordan, and India.

Turkey\'s bilateral investment treaty with the United States came into
effect on May 18, 1990. A bilateral tax treaty between the two countries
took effect on January 1, 1998. Turkey has avoidance of double taxation
agreements with 61 countries.

## OPIC and Other Investment Insurance Programs [**Return to top**](#ch6)

The Overseas Private Investment Corporation (OPIC) offers a full range
of programs in Turkey, including political risk insurance for U.S.
investors, under its bilateral agreement with Turkey. OPIC is also
active in financing private investment projects implemented by U.S.
investors in Turkey. OPIC-supported direct equity funds, including the
\$200 million Soros Private Equity Fund can make direct equity
investments in private sector projects in Turkey. Small- and
medium-sized U.S. investors in Turkey are also eligible to utilize the
new Small Business Center facility at OPIC, offering OPIC finance and
insurance support on an expedited basis for loans from \$100,000 to \$10
million. In 1987, Turkey became a member of the Multinational Investment
Guarantee Agency (MIGA).

The U.S. Government annually purchases approximately \$24 million of
local currency. Embassy purchases are made at prevailing market rates,
which fluctuate in accordance with Turkey\'s free floating exchange rate
regime.

## Labor [**Return to top**](#ch6)

Turkey has a youthful population of 73.9 million, over 45 percent of
which is under the age of 25. Of this, about 60 percent live in urban
areas. The Turkish labor force numbers 25.7 million (23.3 million
employed and 2.4 million unemployed). Approximately 25 percent of the
workforce is in agriculture. The official unemployment rate was 9.3
percent in 2007 (11.8 percent urban and 5.6 percent rural).

According to the State Statistics Institute of Turkey, the literacy rate
is 81.0 percent (81.2 percent among men and 80.8 percent among women).
Students are required to complete eight years of schooling and to remain
in school until they are 15 years old. Those who complete primary school
education account for 95.7 percent of the population. Of these, only
34.5 percent complete vocational or higher educations, including
distance education.

Turkey has an abundance of unskilled and semi-skilled labor. Although
the Ministry of Education launched projects within the framework of EU
programs to meet the needs of high-tech industries, there is a shortage
of qualified workers. Individual high-tech firms, both local and
foreign-owned, have generally conducted their own training programs for
such job categories. Vocational training schools for some commercial and
industrial skills exist in Turkey at the high school level. Formal
apprenticeship programs remain in place, although informal training is
dying out in some traditional occupations. Turkey\'s labor force has a
reputation for being hardworking, productive, and dependable.

Labor-management relations have been generally good in recent years.
Employers are obliged by law to negotiate in good faith with unions that
have been certified as bargaining agents. Strikes are usually of short
duration and almost always peaceful. Approximately 2.9 million of the 11
to 12 million wage and salary earners are considered to be officially
unionized, although the actual number is probably substantially lower.
The law prohibits discrimination on the basis of union membership but
discrimination sometime occurs in practice. There is no obligation for a
worker to become a member of any union and there is no obligation to
make a collective labor agreement for any sector. However, in order to
be covered by a collective labor agreement, a worker should be a member
of a union. In order to be a bargaining agent, a union must have a
membership of more than half of the workers employed in a work place and
include at least 10 percent of the workers employed in that specific
sector. The Labor Law sets a series of steps to be followed, including
mediation by an Arbitration Board, before a union may initiate a strike.
Facilitating labor-employer relations is among the responsibilities of
the Economic and Social Council, which aims at maintaining an effective
dialogue between the state and social parties to encourage compromise in
industrial relations.

Turkey has signed many International Labor Organization (ILO)
conventions protecting workers\' rights, including conventions on
Freedom of Association and Protection of the Right to Organize; Rights
to Organize and to Bargain Collectively; Abolition of Forced Labor;
Minimum Wage; Occupational Health and Safety; Termination of Employment;
and Elimination of the Worst Forms of Child Labor. Since 1980, Turkey
has faced criticism by the ILO, particularly for shortcomings in
enforcement of ILO Convention 87 (Convention Concerning Freedom of
Association and Protection of the Right to Organize) and Convention 98
(Convention Concerning the Application of the Principles of the Right to
Organize and to Bargain Collectively). However, there are few
restrictions on freedom of association and the political activities of
trade unions. The Constitution provides certain restrictions on the
right to strike. Civil servants (defined broadly as all employees of the
central government ministries, including teachers) are allowed to form
trade unions and to engage in limited collective negotiations, but are
prohibited from striking.

Improvements to job security legislation provided employers with greater
flexibility in the organization of work and weakened to a certain extent
the job security provided by the regulations. They contain many new
provisions in conformity with international regulations of the ILO and
the EU.

There are no special laws or exemptions from regular labor laws in the
country\'s 21 free trade and export processing zones.

Use of technology is encouraged at work. There is a special law
concerning establishment of Technology Development Zones (called
\"techno-parks\"). The state also contributes to research and
development activities either through reimbursement or providing
subsidies. Personnel expenses, cost of machinery, equipment and
software, consultancy and other services, fees paid to scientific
institutions, registration fees for patent and industrial designs to the
Patent Institute, and the cost of R&D related materials may be
reimbursed up to 60 percent by the state. This aid may be extended for
up to three years.

## Foreign-Trade Zones/Free Ports [**Return to top**](#ch6)

Firms operating in Turkey\'s 21 free zones have historically enjoyed
many advantages. The zones are open to a wide range of activities,
including manufacturing, storage, packaging, trading, banking, and
insurance. Foreign products enter and leave the free zones without
payment of any customs or duties. Income generated in the zones is
exempt from corporate and individual income taxation and from the
value-added tax, but firms are required to make social security
contributions for their employees. Additionally, standardization
regulations in Turkey do not apply to the activities in the free zones,
unless the products are imported into Turkey. Sales to the Turkish
domestic market are allowed, with goods and revenues transported from
the zones into Turkey subject to all relevant import regulations. There
are no restrictions on foreign firm operations in the free zones.
Indeed, the operator of one of Turkey\'s most successful free zones
located in Izmir is an American firm.

Taxpayers who possessed an operating license as of February 6, 2004,
will not have to pay income or corporate tax on their earnings in the
zone for the duration of their license. Earnings based on sale of goods
manufactured in a zone will be exempt from income and corporate tax
until the end of the year in which Turkey becomes a member of the
European Union. Earnings secured in a free zone under corporate tax
immunity and paid as dividends to real person shareholders in Turkey, or
to real person or legal-entity shareholders abroad, will be subject to
10 percent withholding tax. The tax immunity of the wage and salary
income earned by persons employed in the zones by taxpayers possessing
an operating license as of February 6, 2004, will remain in effect until
December 31, 2008, or the expiration date of the operating license,
whichever is earlier. The implications of the new rules are complex, and
interested parties may want to consult with a tax advisor and/or the
Foreign Trade Undersecretariat (web site: www.dtm.gov.tr).

## Foreign Direct Investment Statistics [**Return to top**](#ch6)

With the foreign investment permit requirement in place until 2003, the
Turkish Treasury collected detailed sector and country of origin data
for authorized FDI. Data collected since the abolition of the permit
requirement, by the Central Bank and other entities, may not be directly
comparable to data collected prior to 2003.

According to Turkish Treasury data, as of October 2007, there are 18,028
foreign firms investing and operating in Turkey. The aggregate actual
inflows reached \$65.6 billion. In 2006, EU countries accounted for 82.1
percent of FDI inflows to Turkey, Gulf countries for 10 percent, and
Americas for 5.7 percent. Over the past two decades, the Netherlands
(21.3 percent) has been the top source of foreign investment, followed
by the United Kingdom (8.5 percent), France (8.4 percent), Germany (8.3
percent), and Belgium (6.7 percent). According to U.S. Commerce
Department data, cumulative U.S. FDI in Turkey is \$4.6 billion. U.S.
FDI is sharply understated because many global firms make their
investments through subsidiaries or affiliates located in third
countries. By unofficial estimates, the U.S. may be one of the largest
sources of foreign investment in Turkey.

In 2006, about 88.0 percent of foreign direct investment took place in
services, 10.6 percent in manufacturing, and 0.7 percent in mining.

FDI Inflow by Years (million \$)

Year Actual Inflow Inflow/GDP No firms (Cumulative)\
\
1980-1988 1,020\
1989 663 0.61 1,145\
1990 684 0.45 1,375\
1991 810 0.54 1,575\
1992 844 0.53 1,790\
1993 636 0.35 2,021\
1994 608 0.46 2,219\
1995 885 0.52 2,517\
1996 722 0.39 2,876\
1997 805 0.41 3,249\
1998 940 0.45 3,662\
1999 783 0.42 4,063\
2000 982 0.49 4,588\
2001 3,352 2.29 5,065\
2002 1,133 0.62 5,560\
2003 1,752 0.73 6,665\
2004 2,885 0.96 8,760

2005 10,029 2.77 11,605

2006 19,945 4.98 14,955

2007\* 16,142 4.63 18,028

TOTAL 65,620 18,028

Source: Central Bank of Turkey, State Institute of Statistics,
Undersecretariat of Treasury\
(\*)January through October 2007.\
(\*\*) Includes capital inflows, foreign loans and real estate
investment.

FDI Stock by Source Country (end of 2006/ million \$)

Country Value Share (percent)

Netherlands 18,538 21.3

United Kingdom 7,349 8.5

France 7,332 8.4

Germany 7,239 8.3\
Belgium 5,794 6.7

Finland 5,715 6.6

U.S.A. 4,541 5.2

Italy 4,412 5.0

Switzerland 1,706 1.9\
Canada 1,172 1.3\
Others 23,020 26.8

Total 86,818 100.0

Source: Central Bank of Turkey.

The investment permit requirement lifted as of 2004.

Turkey\'s External Investment by Country (As of December\
2007)

Country Amount Share\
(million \$)\
Netherlands 3,500.5 29.7\
Azerbaijan 2,889.1 24.5\
Germany 561.4 4.7

United Kingdom 513.2 4.4\
Kazakhstan 475.7 4.0\
Luxembourg 252.7 2.1\
Russia 238.6 2.0

United States 237.9 2.0\
Romania 214.5 1.8

Italy 118.9 1.1

Switzerland 113.3 1.0\
France 86.2 0.8\
Others 2,587.5 21.9

Total 11,789.5 100.0

Source: General Directorate of Banking and Foreign Exchange, Turkish
Treasury

Major foreign investors

Turkey's foreign investors include ABB, Abbott Laboratories, AEG, AES,
Akzo Nobel, Alcatel Lucent, Alliance One, Arcelor, Archer Daniels
Midland, Aria, Aventis, BASF, Bausch and Lomb, Bayer, Bechtel, Bosch,
Bridgestone-Firestone, British Petroleum, Bunge, Cadberry Schweppes,
Cargill, Castrol, Chase Manhattan, Cisco Systems, Citigroup, Coca Cola,
Colgate-Palmolive, DaimlerChrysler, Delphi-Packard, Dow Chemical, ESBAS
A.S., Eurest, Fiat, Ford Motor Co., Fortis, M.A.N., General Electric,
Goodyear, Henkel, Honda, Hugo Boss, Hyundai, ITT, Indesit, JTI, L6,
Lafarge, Lockheed Martin, Marsa-Kraft-Jacobs Suchard, McDonald\'s, Merck
Sharp Dohme, Metro Group, Mobil, NRG, Nestle, Normandy Mining, Nortel
Networks, Novartis, Pepsi, Perfetti, Pfizer, Philip Morris, Pirelli
Tire, Procter and Gamble, Renault, RJR Nabisco, Roche, Sandoz, Shell,
Siemens, Texas Pacific Group, Toreador/Madison Oil, Toyota, Unilever,
United Defense, Vodafone, Volkswagen, and Yazaki.

## Web Resources [**Return to top**](#ch6)

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch7 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 7: Trade and Project Financing

-   [How Do I Get Paid (Methods of
    Payment)](#how-do-i-get-paid-methods-of-payment-return-to-top)

-   [How Does the Banking System
    Operate](#how-does-the-banking-system-operate-return-to-top)

-   [Foreign-Exchange
    Controls](#foreign-exchange-controls-return-to-top)

-   [U.S. Banks and Local Correspondent
    Banks](#u.s.-banks-and-local-correspondent-banks-return-to-top)

-   [Project Financing](#project-financing-return-to-top)

-   [Web Resources](#web-resources-return-to-top-3)

## How Do I Get Paid (Methods of Payment) [**Return to top**](#ch7)

**GENERAL FINANCING AVAILABILITY**

Traditionally, Turkish corporations have satisfied most of their
financing requirements through the banking industry. Corporate/banking
relationships are close. However, given the continuing gap between
Turkey\'s extensive needs and its limited internal resources external
financing of public and private project investment is a crucial factor
in the and coming years. Exporters are advised to provide financing for
their exports. In addition to short and medium-term credits available
from commercial banks in local and foreign currencies, lower-cost TL
credits are also available from Turkish Eximbank.

**HOW TO FINANCE EXPORTS AND METHODS OF PAYMENT**

Letters of Credit (LCs) are traditional import instruments for
private-sector transactions. LCs should be irrevocable and confirmed by
a prime U.S. bank. As Turkish importers develop long-term contacts and
prove their credit-worthiness, suppliers may be willing to accept
documents against payment (d/p) or documents against acceptance (d/a).
Deferred payment schedules are not common except in cases of large
transactions where supplier financing plays a role.

Turkish banks continued to have seen some tightening in their access to
international credit, though the major banks borrow internationally.
Suppliers should consider unconventional project financing packages
(e.g., forfeiting, factoring and utilization of third-country export
credits) when bidding on major government infrastructure projects.
Exporters should be flexible and try to accommodate customers\' needs,
building any additional associated cost into the offer price.

Firms bidding on GOT contracts should pay careful attention to the way
proposals are prepared and should strictly follow the administrative
specifications. Financing costs and foreign exchange rate risks,
wherever applicable, should be factored into the bid price. Bids, which
do not comply with administrative specifications (which include
financial criteria), are generally rejected. Generally, validity of a
proposal is required to be 3 to 6 months from the bid date. Government
tenders often involve bid and performance bonds. Bid bonds are normally
equivalent to 3 percent of the value of the tender, while performance
bonds are usually equivalent to 6 percent of the contract value. The
government only calls these bonds in cases of substantial
non-performance. All bonds have to be counter-guaranteed by a Turkish
national bank.

A number of leasing companies operate in Turkey, most owned by Turkish
banks. They finance purchases of expensive capital goods such as
aircraft, auto fleets, construction equipment and other special
equipment. Turkish financial leasing in capital expenditures still only
accounts for a fraction of capital expenditures in developed countries.
The terms of leasing are usually four years, with a balloon payment at
the end. Turkish leasing companies are eager to work with U.S.
counterparts.

Turkish factoring companies (again, usually offshoots of banks)
generally belong to the International Factors Group based in Belgium.
Like leasing companies, all factoring and forfeiting companies are
having funding difficulties. Both factoring and forfeiting maximize cash
flow, reduce transaction risks, and may enhance competitiveness by
offering flexible payment terms to the buyer. All U.S. banks active in
Turkey know and deal with at least one of the major leasing and
factoring companies.

## How Does the Banking System Operate [**Return to top**](#ch7)

The banking sector plays less of a financial intermediary role than one
would expect in an economy of Turkey's size and sophistication. The
three state -owned commercial banks plus the six largest private banks
hold nearly a two-thirds share of total bank assets (information on
banks, the listing of banks licensed in Turkey and statistics on the
Turkish banking sector can be viewed at
([www.bddk.org.tr](http://www.bddk.org.tr/)). Turkish banks engage in
core banking services, securities brokering and other businesses. In
terms of trade finance, treasury operations, electronic banking, and
information management, the dozen leading Turkish banks are as
sophisticated as their other OECD counterparts.

The Istanbul Stock Exchange, formed in 1986, is becoming one of the
major players in the capital market. In 1995, the Istanbul Gold Exchange
opened for trading. The Capital Market Board, based in Ankara, is
responsible for overseeing the activities of capital markets. The
Central Bank of the Republic of Turkey is headquartered in Ankara and
together with Turkish Treasury is responsible for the integrity of the
banking system. In 1994, the Central Bank became an autonomous body but
is not independent.

The Central Bank and BDDK (Banking Regulating and Auditing Commission)
supervises bank activities in order to guarantee that they meet
liquidity requirements and operates in a responsible fashion. While the
Central Bank\'s Bank Supervision Division acts as the government\'s
supervisory authority, the Undersecretariat of the Treasury is
responsible for the enforcement of banking laws. The BDDK also
determines the disposition of insolvent banks.

Recently as the Turkish Government decreased taking loans from national
banks, the banks have turned towards the general public to offer credit
for homes, private vehicles and general expenditures. Small business
loans are also in the rise. The recent major share buyouts and total
buyouts of three major banks in Turkey proved the trust in the financial
system by international investors.

The continuous wave of privatization and mergers from 2005 to late 2006
helped raise

the rate of direct investments. In 2006, net direct investment inflows
realized as USD

19.2 billion. The high-rated increase in direct investments as non-debt
capital inflows remains important for securing the sustainable financing
of the current account deficit.

Suitable economic figures resulted in an increase in direct investments
to Turkey as direct foreign investment hit a record-high in the last two
years. Net foreign direct investment inflows amounted to USD 20.1
billion in 2006 and approximately USD 20.0 billion in 2007.

The largest single foreign direct investment capital inflow in 2006 came
from the transfer of Telsim's assets to Vodafone in May, with a USD 4.7
Billion-worth capital investment.

Another significant direct capital inflow in the communication sector
was Oger

Telecommunication's USD 1.5 billion installments for its acquisition of
55% stake in Turk Telekom.

Capital investments prevailed in financial sector. National Bank of
Greece acquired 46% stake in Finansbank, resulting in a USD 2.8 billion
direct capital inflow, and in October and December of 2006, Dexia
acquired 75% of the shares of Denizbank, producing a USD 3.2 billion
capital inflow. Another highlight of 2006 noted the partnership deal
between Turkey's Akbank and one of the largest global financial
institutions, U.S. owned Citi. Citi purchased 20 percent of Akbank
shares at a cost of \$3.1 billion. Guler Sabancı, CEO of Akbank,
speaking briefly with the press, stated "the partnership stands as an
example for the businesspeople of the United States and Turkey".

The majority of direct foreign investments in 2006 were much attracted
to services sectors such as transportation, communication,
wholesale/retail trade and financial intermediation. 90.1% of the
capital inflow was directed to investments in services, 8.5% in
manufacturing (particularly chemicals and food), 0.7% in mining and
quarrying, 0.6% in electricity, gas and water supply and 0.03% in
agriculture.

A great deal of investments originated from EU member states, supported
by a significant volume of capital inflow from the Gulf and the United
States.

Five years ago foreigners only had a three percent share in the banking
industry in Turkey, which suffered a massive economic crisis in 2001.
The following years after the 2001 crisis and implementations of the
International Monetary Fund (IMF) and the single-party rule brought
stability to the economy, thus, appealing to the growing interests of
foreign investors in the banking sector.

Today foreign investments control over 25 of the 46 banks in the Turkish
banking sector resulting in foreign share of the banking industry
exceeding 38.8 percent. The influx of foreign capital into the country
began shortly after the February 2001 economic crisis hit Turkey.

Latest Bank Acquisitions in Turkey

  ---------------- ----------------- ---------------- ---------- ------------
  Bank             Date              Acquirer         Acquired % Amount Paid

  Demirbank        September 2001    HSBC             100.0%     \$350 mln

  Koc Fin. Serv.   October 2002      Unicredito       50.0%      \$240 mln

  TEB Fin. Serv.   November 2004     BNP Paribas      50.0%      \$217 mln

  YKB              January 2005      Kocbank          57%        \$1,390 mln

  Sekerbank        July 2005         Rabobank         36.5%      \$90 mln

  Disbank          August 2005       Fortis           89.3%      \$1,056 mln

  Garanti          August 2005       GECF             25.5%      \$1,560 mln

  C Bank           December 2005     Bank Hapoalim    57.5%      \$113 mln

  MNG Bank         January 2006      Dubai Isl. Bank  100.0%     \$16 mln

  Finansbank       March 2005        NBG              46.0%      \$2,780 mln

  Tekfenbank       May 2006          EFG Eurobank     70.0%      \$18 mln

  Denizbank        May 2006          Dexia            75.0%      \$2,440 mln

  Sekerbank        June 2005         Turan Alem       34.0:      \$260 mln

  Akbank           October 2006      Citigroup        20.0%      \$3,100 mln

  Alternatifbank   November 2006     Alpha Bank       50.0%      \$ 205 mln

  MNG Bank         April 2007        Arab Bank & Bank 91.0%      \$160 mln
                                     Med                         

  Oyak Bank        June 2007         Dutch ING        100%       \$2,670 mln
  ---------------- ----------------- ---------------- ---------- ------------

## Foreign-Exchange Controls [**Return to top**](#ch7)

There are no foreign-exchange limits placed on importers by the GOT, and
there are no restrictions on the transfer of funds in or out of the
country. Although the Yeni Turkish Lira (YTL) is fully convertible, most
international transactions are denominated in U.S. dollars or Euros due
to these currencies\' universal acceptance. Banks deal in foreign
exchange and to borrow and lend in foreign currencies. Foreign exchange
is freely traded and widely available. Foreign investors are free to
convert and repatriate their Turkish lira profits.

## U.S. Banks and Local Correspondent Banks [**Return to top**](#ch7)

U. S. and U.S.-affiliated investment and commercial banks present in
Turkey include Citibank, JP Morgan Chase, American Express, Wachovia and
the Bank of New York. The Turkish banking sector continues to undergo
significant industry consolidation.

## Project Financing [**Return to top**](#ch7)

**TYPES OF AVAILABLE EXPORT FINANCING**

The Export-Import Bank of the United States (Eximbank) is open for
business in Turkey and offers a variety of credit facilities to U.S.
firms exporting to Turkey as well as providing project financing for
U.S. investments. Eximbank does not have a ceiling for Turkey as long as
a Treasury guarantee is provided (for the public sector). For the
private sector investments, Eximbank considers the financial records of
the Turkish company or the ability of a project to generate enough
revenue to pay back the loan. The U.S. Trade and Development Agency
(TDA) is active in financing pre-feasibility and feasibility studies and
pre-design work for major government projects and private sector
projects, while the Overseas Private Investment Corporation (OPIC)
insures and provides investment credit financing to many U.S investments
in Turkey. U.S. firms may also compete for contracts financed by the
World Bank. Most major government tenders still require suppliers\'
credits.

USDA's Commodity Credit Corporation offers three-year GSM-102 export
credit guarantees for imports of a wide range of agricultural products.
Seven-year GSM-103 guarantees are available for imports of breeder
cattle and poultry. USDA copntinues to facilititate Credit Guarantee
Program for sales of U.S. manufactured goods and services to improve
existing agricultural related facilities.

## AVAILABILITY OF PROJECT FINANCING

Project financing is available through a multitude of sources including
Turkish and foreign commercial banks and investment banks. OPIC is
another source for project financing for U.S. investors. Interested U.S.
companies should note that American banks active in Turkey are among the
leaders in project financing.

## TYPES OF PROJECTS RECEIVING FINANCING SUPPORT

Turkey offers numerous major project opportunities in
telecommunications, energy, transportation, and building of
infrastructure projects such as dams, airports, harbors, roads, and
water and sewerage systems. Supplier financing is the key to winning
these large projects. U.S. Eximbank financing, along with OPIC and TDA
programs, are available to U.S. suppliers. The World Bank /International
Bank for Reconstruction and Development continues to fund major projects
in Turkey ([www.worldbank.org.tr](http://www.worldbank.org.tr/))

## SMALL BUSINESS SUPPORT

The Overseas Private Investment Corporation (OPIC) has established small
business centers to assist qualified small businesses the opportunity to
utilize OPIC's resources with improved customer service and easier
access through a streamlined approval process. OPIC stands ready to
assist small and medium sized business grow through investments in over
150 emerging markets around the world. The Small Business Centers will
support the financing and political risk insurance needs to eligible
small business.

To support small and medium sized business enterprises in their
international trading activity, the United States Commercial Service and
the Overseas Private Investment Corporation entered into a partnership
that combines the strength of the Commercial Service's network of 105
offices in the United States and 150 offices overseas with the
investment finance and political risk insurance support of the Overseas
Private Investment Corporation. This cooperation agreement has been
established to better assist small and medium sized business
enterprises. These businesses account for ninety-seven percent of all
U.S. exporters, and small business continues to be the bulwark of the
U.S. economy.

Leasing issues and licenses are regulated via the Banking Regulating and
Auditing Commission also known as the BDDK. Presently there are 75
leasing firms in Turkey. Leasing firms can only offer leasing and are
not allowed to make any other financial transactions. There are no
limits on foreign investment or international leasing firms provided
they obtain a license to operate in Turkey from BDDK (www.bddk.org.tr).

Leasing terms are 4 years and in very exceptional cases 2 years. The
equipment leased will be owned by the leasor after the period of the
lease. A definite advantage of the leasing process was the VAT reduction
from 18% to 1% during the lease time. However, recently the government
has raised the rate back up to 18%. Industry groups have complained
about this change and are seeking to overturn this decision and at a
minimum be to 8%.

## Web Resources [**Return to top**](#ch7)

Export-Import Bank of the United States:
[http://www.exim.gov](http://www.exim.gov/)

Country Limitation Schedule:
<http://www.exim.gov/tools/country/country_limits.html>

OPIC: [http://www.opic.gov](http://www.opic.gov/)

Trade and Development Agency: <http://www.tda.gov/>

SBA\'s Office of International Trade: <http://www.sba.gov/oit/>

USDA Commodity Credit Corporation:
<http://www.fsa.usda.gov/ccc/default.htm>

U.S. Agency for International Development:
[http://www.usaid.gov](http://www.usaid.gov/)

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch8 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 8: Business Travel

-   [Business Customs](#business-customs-return-to-top)

-   [Travel Advisory](#travel-advisory-return-to-top)

-   [Visa Requirements](#visa-requirements-return-to-top)

-   [Telecommunications](#telecommunications-return-to-top)

-   [Transportation](#transportation)

-   [Language](#language-return-to-top)

-   [Health](#health-return-to-top)

-   [Local Time, Business Hours and
    Holidays](#local-time-business-hours-and-holidays-return-to-top)

-   [Temporary Entry of Materials and Personal
    Belongings](#temporary-entry-of-materials-and-personal-belongings-return-to-top)

-   [Web Resources](#web-resources-return-to-top-4)

## Business Customs [**Return to top**](#ch8)

The Turkish people take pride in their traditions and culture. However,
having ties with western countries, Turkish people in major cities have
adopted a western way of life. A foreigner visiting any one of the large
cities in Turkey will find himself or herself in an atmosphere similar
to that of a contemporary western city. There are no local customs,
beyond the bounds of normal courtesy that a visiting businessman should
feel compelled to observe. In general, a personal relationship is an
important basis for a successful business relationship in Turkey. It is
usually important to allow time for friendly conversation before
commencing with a business agenda. Business cards are almost always
exchanged, and visitors are usually offered a glass of tea or a cup of
Turkish coffee and it is customary to accept the offer.

## Travel Advisory [**Return to top**](#ch8)

For the latest security information:

<http://travel.state.gov/travel/cis_pa_tw/cis_pa_tw_1168.html>

The Department of State urges American citizens to take responsibility
for their own personal security while traveling overseas.  For general
information about appropriate protective measures travelers can take in
an overseas environment, see the Department of State's pamphlet [A Safe
Trip
Abroad](http://travel.state.gov/travel/tips/safety/safety_1747.html). 

## Visa Requirements [**Return to top**](#ch8)

U.S. citizens are required to obtain visas before entering Turkey. A
passport and visa are required. Holders of all types of passports can
purchase a 90-day sticker visa at the port of entry for \$20, if they
are traveling to Turkey as tourists. For further information, travelers
in the U.S. may contact the Embassy of the Republic of Turkey at 2525
Massachusetts Avenue, NW, Washington, D.C. 20008, telephone: (202)
612-6700, or the Turkish consulates general in Chicago, Houston, Los
Angeles, or New York. Information may also be found at Internet address
http://www.turkey.org. Overseas, travelers may contact a Turkish embassy
or consulate. Holders of official and diplomatic passports on official
business must obtain a visa from a Turkish embassy or consulate before
arrival in Turkey. Holders of official and diplomatic passports on
private travel may receive a visa free of charge from a Turkish embassy
or consulate, or obtain one upon arrival at the port of entry for \$20.
All those who are planning to stay more than three months for any
purpose are required to obtain a visa from a Turkish embassy or
consulate. Such travelers must also apply for a residence/work permit or
Turkish ID card within the first month of their arrival in Turkey. For
example, this would include anyone who plans to spend more than three
months doing research, studying, or working in Turkey.

All travelers are advised to obtain entry stamps on the passport page
containing their visa at the first port of entry before transferring to
domestic flights. Failure to obtain entry stamps at the port of entry
has occasionally resulted in serious difficulties for travelers when
they attempt to depart the country.

In an effort to prevent international child abduction, many governments
have initiated procedures at entry/exit points. These often include
requiring documentary evidence of relationship and permission for the
child\'s travel from the parent(s) or legal guardian not present. Having
such documentation on hand, even if not required, may facilitate
entry/departure.

The loss or theft abroad of a U.S. passport should be reported
immediately to the local police and the nearest U.S. Embassy or
Consulate. Travelers are encouraged to carry a photocopy of their
passport, to assist in getting a replacement passport if the original is
stolen. U.S. citizens may refer to the Department of State\'s pamphlet,
A Safe Trip Abroad for ways to promote a trouble-free journey.

U.S. Companies that require travel of foreign businesspersons to the
United States should allow sufficient time for visa issuance if
required. Visa applicants should go to the following links.

State Department Visa Website: <http://travel.state.gov/visa/index.html>

United States Visas: <http://www.unitedstatesvisas.gov/>

U.S. Embassy Ankara: at
[http://www.usemb-ankara.org.tr](http://www.usemb-ankara.org.tr/)

## Telecommunications [**Return to top**](#ch8)

Communication: The telephone system in Turkey\'s major cities is good.
E-mail and faxes are widely used in international business. Travelers
and businesspersons can utilize GSM cellular service prepaid cards and
hire a GSM mobile/cell phone in Turkey. Coverage is nationwide.

## Transportation [**Return to top**](#ch8)

Transportation: The national flag carrier, Turkish Airlines (THY),
together with its subsidiaries, dominates air passenger service and
flies non-stop daily to most major European, Middle Eastern, Asian
cities and U.S. gateways including Tokyo, London, Frankfurt, Paris, New
York and Chicago. Major European airlines have also frequent non-stop
flights to Turkey. Delta Airlines serves Istanbul direct from its New
York Kennedy hub. THY is joining the Star Alliance in 2008. United
Airlines and Lufthansa offer code-share service with Lufthansa serving
Istanbul, Izmir and Ankara from its Star Alliance Frankfurt and Munich
hubs. Though Turkish Airlines dominates domestic air travel within
Turkey, the Government has liberalized domestic air service, and new
airlines are also serving the domestic market. Rail transportation is
also available between most of the major cities. Comprehensive networks
of long distance buses, which are inexpensive, operate between the major
cities. Car rental is relatively expensive. Public transportation is
available in the cities. However, businessmen are advised to use taxis.

Lodging: Medium to luxury-type hotels, including international hotels
such as the Hilton, Sheraton, Hyatt, Holiday Inn, Conrad, Four Seasons,
Ritz Carlton and Swissotel, are available in major cities. Apartment
rents in Istanbul are expensive. Rents in Ankara and Izmir are more
reasonable. Payment on an apartment rental, in a popular area of a city,
is usually made in a foreign currency. Generally, six months to one
year\'s rent is expected in advance.

## Language [**Return to top**](#ch8)

Language: The official language spoken by more than 90 percent of the
population is Turkish. Most educated Turks have a command of at least
one foreign language, with sufficient fluency to carry out business
transactions. Most company executives were educated in western
countries. English is the dominant language for international business.

## Health [**Return to top**](#ch8)

Health: Medical facilities are available, but may be limited outside
urban areas. Food and water borne diseases are prevalent throughout
Turkey. Anyone coming to Turkey should have comprehensive medical
insurance. Useful information on medical emergencies abroad, including
overseas insurance programs, is provided in the Department of State's
Bureau of Consular Affairs brochure, [Medical Information for American
Traveling Abroad,]{.underline} available via the Bureau of Consular
Affairs home page at
[www.travel.state.gov](http://www.travel.state.gov/)

Vaccines: Vaccines necessary for Turkey are all childhood immunizations,
Typhoid, Hepatitis B, Hepatitis A (or Immune Globulin as an
alternative). Visitors who will visit rural areas, or go on hiking, or
trekking trips in the country may wish to get Rabies vaccine although
this is not required.

Information on vaccinations and other health precautions can be obtained
from the Center for Diseases Control and Prevention's (CDC) hotline for
international travelers at 1-877-FYI-TRIP (1-877-394-8747), fax
1-800-CDC-FAXX (1-800-232-3299), or via CDC's Internet site at
[http://www.cdc.gov](http://www.cdc.gov/).

Food: Turkish cuisine is characterized by the freshness of its
ingredients and most American business travelers have no trouble finding
a good meal. All major hotels have at least one restaurant serving
continental cuisine. Several European and ethnic restaurants are also
available in major cities. Prices at these places are usually
moderate-to-expensive. Good food is available not only at expensive
restaurants but also at moderately priced establishments. One also has
the choice of fast food restaurants such as McDonald\'s, Wendy\'s,
Kentucky Fried Chicken, Burger King and their Turkish kebap equivalents.
A variety of fresh fruits and vegetables are available throughout the
year.

## Local Time, Business Hours, and Holidays [**Return to top**](#ch8)

Time in Turkey is Universal Time Coordinated/Zulu + 2 hours (Zulu is
London UTC). In comparison, Eastern Standard Time is Zulu --5 hours,
Central Standard Time is Zulu --6 hours and Pacific Standard Time is
Zulu --8 hours.

Business Hours is from 08:30 to 17:30 Monday through Friday except
holidays.

TURKISH HOLIDAYS IN 2008

  ------------------------------------ ----------------------------------
  April 23                             National Sovereignty and
                                       Children\'s Day

  May 19                               Ataturk Memorial, Youth and Sports
                                       Day

  August 30                            Victory Day

  September 29-Oct 2                   Ramadan Holiday begins 13:00 on
                                       9/29

  October 28-29                        Turkish Independence Day begins
                                       13:00 on 10/28

  December 7-11                        Kurban Bayrami (Sacrifice Holiday)
                                       begins 13:00 on 12/7

                                       
  ------------------------------------ ----------------------------------

## Temporary Entry of Materials and Personal Belongings [**Return to top**](#ch8)

Travelers entering Turkey on a temporary basis and carrying items such
as laptop computers and accessories, display and exhibit materials are
permitted to bring these items into Turkey duty free. Customs officials
register the items to the traveler's passport and subsequently cancel
them as the traveler exits the country with the same items. Catalogs,
brochures, pamphlets, and similar advertising materials are exempt from
customs duty. For additional information about temporary entry, please
see VI. Trade Regulations and Standards, Temporary Entry section.
Customs regulations may be found at
[www.gumruk.gov.tr](http://www.gumruk.gov.tr/).

## Web Resources [**Return to top**](#ch8)

Department of State Travel Information:
[www.travel.state.gov](http://www.travel.state.gov/)

Center for Diseases Control Health Info:
[http://www.cdc.gov](http://www.cdc.gov/).

State Department Visa Website: <http://travel.state.gov/visa/index.html>

United States Visas.gov: <http://www.unitedstatesvisas.gov/>

U.S. Embassy Anakara: at
[http://www.usemb-ankara.org.tr](http://www.usemb-ankara.org.tr/)

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 9: Contacts, Market Research, and Trade Events

-   [Contacts](#contacts-return-to-top-1)

-   [Market Research](#tradeevents)

-   [Trade Events](#tradeevents)

## Contacts [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

**U.S. Mission Trade-related Personnel**

**Commercial Affairs**

<http://www.buyusa.gov/turkey/en/>

**United States Department of State**

[**http://ankara.usembassy.gov/**](http://ankara.usembassy.gov/)

**United States Department of Agriculture**

Agricultural Affairs Office

<Agankara@fas.usda.gov>

**Washington-Based U.S. Government Country Contacts**

##### U.S. Department of Commerce

Ms. Kristin Nadji

Turkey Desk Officer

<Kristin_Nadji@ita.doc.gov>

##### U.S. Department of State

Mr. Paul Malik

U.S. Department of State- Senior Desk officer for Turkey

<MalikP@state.gov>

##### Trade and Development Agency

[www.ustda.gov](http://www.ustda.gov/)

Mr. Daniel D. Stein

Regional Director for Russia, NIS, and Turkey

<dstein@ustda.gov>

##### U.S. Department of Agriculture, Foreign Agricultural Service

[www.fas.usda.gov](http://www.fas.usda.gov/)

Mr. James Dever

<dever@fas.usda.gov>

##### Export-Import Bank of the United States

[www.exim.gov](http://www.exim.gov/)

Mr. Craig O'Connor, Business Development Officer

<Craig.Oconnor@exim.gov>

##### Overseas Private Investment Corporation

[www.opic.gov](http://www.opic.gov/)

Peter Ballinger

<Pball@opic.gov>

##### Turkish Government Contacts:

**AGRICULTURE AND RURAL AFFAIRS**

Ministry of Agriculture and Rural Affairs, General Directorate of
Agricultural Production Development

[www.tarim.gov.tr](http://www.tarim.gov.tr/)

**COMMUNICATIONS**

Ministry of Communications and Transportation

[www.ubak.gov.tr](http://www.ubak.gov.tr/)

Telecommunications Authority

[www.tk.gov.tr](http://www.tk.gov.tr/)

##### DEFENSE AND NATIONAL SECURITY

Ministry of National Defense, Foreign Procurement Department

[www.msb.gov.tr](http://www.msb.gov.tr/)

Undersecretariat for Defense Industries

[www.ssm.gov.tr](http://www.ssm.gov.tr/)

##### EDUCATION

Ministry of National Education

[www.meb.gov.tr](http://www.meb.gov.tr/)

Higher Education Council

[www.yok.gov.tr](http://www.yok.gov.tr/)

**ENERGY AND NATURAL RESOURCES**

Ministry of Energy and Natural Resources

[www.enerji.gov.tr](http://www.enerji.gov.tr/)

##### 

##### ENVIRONMENT AND FORESTRY AFFAIRS 

Ministry of Environment, General Directorate of Environmental Impact,
Assessment and Planning

[www.cevreorman.gov.tr](http://www.cevreorman.gov.tr/)

**HEALTH**

Ministry of Health, Foreign Relations Department

[www.saglik.gov.tr](http://www.saglik.gov.tr/)

##### TRADE AND ECONOMY

State Planning Organization-SPO

[www.dpt.gov.tr](http://www.dpt.gov.tr/)

Undersecretariat of the Treasury

[www.treasury.gov.tr](http://www.treasury.gov.tr/)

Undersecretariat of Foreign Trade, General Directorate of Imports

[www.dtm.gov.tr](http://www.dtm.gov.tr/)

Prime Ministry, Privatization Administration

[www.oib.gov.tr](http://www.oib.gov.tr/)

Turkish Institute of Standards, Standards Preparation Department

[www.tse.org.tr](http://www.tse.org.tr/)

##### TRANSPORTATION

General Directorate of State Highways

[www.kgm.gov.tr](http://www.kgm.gov.tr/)

State Airports Administration

[www.dhmi.gov.tr](http://www.dhmi.gov.tr/)

General Directorate of State Railways Administration

[www.tcdd.gov.tr](http://www.tcdd.gov.tr/)

##### TRAVEL AND TOURISM

Ministry of Culture and Tourism

[www.kulturturizm.gov.tr](http://www.kulturturizm.gov.tr/)

**BUSINESS/TRADE ASSOCIATIONS**

**American Chamber of Commerce in Turkey**

[http://www.abft.net/](http://www.americanbusinessforuminturkey.org/)

###### Turkish-American Business Association

<http://amcham.org.tr/>

**Foreign Economic Relations Board-DEIK**

[www.deik.org.tr](http://www.deik.org.tr/)

**Turkish Industrialists\' and Businessmen\'s Association-TUSIAD**

[www.tusiad.org.tr](http://www.tusiad.org.tr/)

**Union of Chambers of Commerce, Industry, Maritime Commerce and
Commodity Exchanges of Turkey (TOBB)**

[www.tobb.org.tr](http://www.tobb.org.tr/)

##### EDUCATIONAL 

**Fulbright Commission**

[www.fulbright.org.tr](http://www.fulbright.org.tr/)

E-mail: <fulb-ank@itu.edu.tr>

##### FRANCHISING

Turkish National Franchising Association

[www.ufrad.org.tr](http://www.ufrad.org.tr/)

## Market Research [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

To view market research reports produced by the U.S. Commercial Service
please go to the following website:
[http://www.export.gov/marketresearch.html](http://www.export.gov/marketresearch.html )
and click on Country and Industry Market Reports.

Please note that these reports are only available to U.S. citizens and
U.S. companies. Registration to the site is required, but free of
charge.

## Trade Events [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

Please click on the link below for information on upcoming trade events.

<http://www.export.gov/tradeevents.html>

[]{#tradeevents .anchor}

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

[[]{#ch10 .anchor}Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

# Chapter 10: Guide to Our Services

The U.S. Commercial Service offers customized solutions to help your
business enter and succeed in markets worldwide. Our global network of
trade specialists will work one-on-one with you through every step of
the exporting process, helping you to:

-   Target the best markets with our world-class research

-   Promote your products and services to qualified buyers

-   Meet the best distributors and agents for your products and services

-   Overcome potential challenges or trade barriers

For more information on the services the U.S. Commercial Service offers
U.S. businesses, please click on the link below.

[Return to table of
contents](#doing-business-in-turkey-2008-country-commercial-guide-for-u.s.-companies)

U.S. exporters seeking general export information/assistance or
country-specific commercial information should consult with their
nearest **Export Assistance Center** or the **U.S. Department of
Commerce\'s Trade Information Center** at **(800) USA-TRADE**, or go to
the following website: [http://www.export.gov]()\
\
To the best of our knowledge, the information contained in this report
is accurate as of the date published. However, **The Department of
Commerce** does not take responsibility for actions readers may take
based on the information contained herein. Readers should always conduct
their own due diligence before entering into business ventures or other
commercial arrangements. **The Department of Commerce** can assist
companies in these endeavors.