WORLD TRADE
ORGANIZATIONG/SCM/N/71/TUR
25 October 2001
(01-5232)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1 of the GATT 1994
and Article 25 of the Agreement on Subsidies and
Countervailing Measures
TURKEY
The following communication, dated 9 October 2001, has been received from the
Permanent Mission of Turkey.
_______________
TABLE OF CONTENTS
Page
I. ENCOURAGING INVESTME NTS IN TU RKEY ...........................................................3
II. CREDIT PROGRAMMES ...............................................................................................11III. EXPORT SUBSIDY PROGRAMME FOR AGRICULTURAL  PRODUCTS............20
2001 Notification of Turkey Concerning Investment Encouragement in Turkey
As it has been given in the original full notification of Turkey (G/SCM/N/38/TUR), in 1998,
and the following updating notifications relating to investment encouragement  measures, once again
in year 2001 we are pleased to present the following information in a descriptive format.
In relation with the 1998 notification, the programme is basically the same but with a new
Decree, which is in a way a continuation of the past system with small changes.  The system defined
below, uses basically the same approach in order to encourage investments in Turkey.  But, it does
bring about certain changes in detail and certain adaptations compared to the previous Decree
(98/10755, dated 25 March 1998), these are given in detail in the following pages.
The new Decree concerned is a continuation of the programme aimed only for encouraging
investments, the activities which take place within this system are not related directly to trade, they do
not contain specific requirements, and use a regional and horizontal approach, it is a programme
which all types of investments of investors both domestic and foreign can take advantage of.G/SCM/N/71/TUR
Page 2
The whole of the programme is based on a plain-and-simple, investment project proposal and
completion by the investor, while the Government in return allows for several measures of
encouragement and easement of operation as far as bureaucratic formalities are concerned.
Additionally, if in need, detailed information concerning the investment encouragement
system, the Decree’s and Communiqués in detail, as well as statistical data, can be obtained from the
www.treasury.gov.tr  website.
The following pages will give a more in depth description of the system:G/SCM/N/71/TUR
Page 3
I. ENCOURAGING INVESTMENTS IN TURKEY
For ease of definition, the general Turkish investment encouragement programme can be
divided into three sub-headings, which are currently in force:
1. General Investment Encouragement Regime
2. Aids Granted to Small and Medium Sized Enterprises (SMEs)
3. Programme for Incomplete Investments and/or non Operating Enterprises
It should be noted that, as far as the mechanism is concerned, local and foreign investors are
equally treated; the foreign capital companies can benefit from all encouragement measures and
allowances granted to local companies.
In order to qualify for investment encouragement measures, the foreign investors must first
apply and qualify to receive an investment certificate from the General Directorate of Foreign
Investments (GDFI), domestic investors alike must apply, qualify and receive their certificates from
the General Directorate of Incentives and Implementation (GDII). Both of these General Directorates
are  parts of the Undersecretariat of Treasury.
1. The General Investment Encouragement Programme
(a) The legislative base and the title of the general investment encouragement programme is :
“DECREE CONCERNING STATE ENCOURAGEMENTS TO INVESTMENTS AND THE
INVESTMENT ENCOURAGEMENT FUND”
(Decree No:2001/1821, dated: 21 December 2001)
(published on the Official Gazette dated at 18.01.2001 and No:24291)
This main Decree also provides a base for the other two sub headings given above.
(b) The purpose  of the general investment encouragement programme is to; encourage, support
and orient investments, in-line with international commitments, in conformity with the objects
of Development Plans and Annual Programmes, in order to reduce regional imbalances within
the country, create new employment opportunities, while taking advantage of advanced and
appropriate technologies with greater added value and to realize international
competitiveness.
(c) The system in general , which could be called the "General Investment Encouragement
Programme" (GIEP), covers all investment activities related to the production of goods and
services, research and development (R&D), environmental protection, improvement ofquality and standards and support of the small-and medium sized enterprises.  The Fund,
which is established, with this Decree aims to support Small- and Medium-Sized Enterprises
(SMEs) investments under a similar mechanism.
(d) As mentioned above, one of the main objectives of the system is to eliminate inter-regional
imbalances .  For this purpose there have been several regional classifications  established
with the Decree;G/SCM/N/71/TUR
Page 4
• Developed regions :  Istanbul and Kocaeli city boundaries.  Greater Municipality
boundaries along with Ankara, Izmir, Bursa, Adana, and Antalya cities.
• Normal Regions :  Cities situated outside of the Developed Region and Priority
Development Region classifications.
• Priority Development Regions : Cities, which are determined as the Priority Development
Regions by the Decision of the Council of Ministers.
The list of the provinces within the Priority Development Regions  is given in the Table I
attached to this document.
As it is described above, in Turkey, mainly a regional/horizontal system  is implemented
within the state encouragement for investments.
(e) How the programme works
In summary, no matter what sector the investor shall be operating in, all investors who have
prepared their relative investment feasibility studies and proposals, who believe that they shall be
eligible for evaluation, within the set framework of  the Decree, apply to the Undersecretariat  of
Treasury for the evaluation of their investment project to be considered for encouragement.
A Turkish  firm should be legally established and registered to apply for a certificate, but a
foreign partnership can make an application in the name of a company to be established for thelimited liability  or capital stock companies and branches.
Applications to be made for the issuance of an  investment encouragement certificate to the
relevant authority is as follows:
I. all investments  to be made by  foreign capital  companies and their branches will be
received by  General Directorate of  Foreign Capital (GDFC)
II. investments to be made in the manufacturing and agro-industry  sectors (food and
beverages, forestry products, weaving and clothing, leather and leather products,paper, chemistry, rubber and plastics, glass and glass products, nonferrous metals,
metal goods, machinery manufacturing, transport vehicles and suppliers, electrified
and mechanical machinery, measuring devices, electronics, cement, fired clay and
cement products, ceramics, packaging, office materials production and integrated
meat and meat products, integrated m ilk and dairy products, fodder production,
processing of agricultural products) with a fixed investment under TL 2 Trillion shall
be made to the Undersecretariat of Treasury before 31/7/2001. After that time,
applications which are within this limit shall be received by the authorized Chambers
of Industry (Adana, Ankara, Bal ıkesir, Denizli, Ege Region, Eski şehir, Gaziantep,
İstanbul, Kayseri, Kocaeli, Konya Chambers of  Industry),
III. for other investments, applications are made to General Directorate of Incentives and
Implementation (GDII).
(f) Procedure to Obtain an Investment Encouragement Certificate
An investor should complete and apply with the following items for an encouragement
certificate:G/SCM/N/71/TUR
Page 5
• Investment application form
• The receipt of the amount deposited in the Central Bank, varying between TL 200 Million
and TL 2 Billion according to regional  developmental status of the location and amount offixed investment
• Imported and locally purchased machinery list
• A notarized copy of authorized signatures of the company
• A copy of the trade registry gazette  in which the Articles of Association is published
• Current capacity report for the capacity increase, modernization, quality improvement and
integration investments in developed regions.
• Other information and documentation that could be required according to the investment
characteristics.
Once the application is completed and presented for evaluation purposes, in conformity with
the Decree and Communiqué's, eligible investment projects are evaluated and granted a Certificate or
a Permission and Certificate, after an analysis of each project proposal.
As far as all the related procedures are concerned for the investment encouragement
system, there are no differences between foreign and domestic investors .  The "Certificate"
mentioned above contains specific encouragement benefits which are granted to the investment.
 (g) Tools of Encouragement
Within the objectives and the scope of the programme, eligible investments projects  which
are granted a certificate  can benefit  from the following encouragement measures:
a. Exemption from Customs Duties and Fund Levies
b. Investment Allowance
c. Value Added Tax Exemption for imported and locally purchased machinery and
equipment
d. Exemption from certain taxes, duties and fees
e. Credit allocation from the Investment Encouragement Fund
Definitions, descriptions of the encouragement measures:
(a) Exemption from Customs duties and Fund Levies
Investment projects which are evaluated and found eligible by the Undersecretariat of
Treasury,  imports of the machinery and equipment to be used in the physical plant shall be subject to
Customs Duty exemption.  Once the exemption is listed on the "Certificate", the investor can import
the machinery and equipment indicated on the approved list, namely the "Global List" aiming only  at
the purposes of the investment in question.
(b) Investment Allowance
Investment allowance is a tax exemption granted to income or corporate tax payers.
Investments for which an allowance is foreseen in  the encouragement certificate shall benefit fromG/SCM/N/71/TUR
Page 6
this  type of encouragement. Investment allowance is 40 per cent in the Developed Regions, 60 per
cent in the Normal Regions and 100 per cent for the investments to be realized in Priority
Development Regions and Organized Industrial Regions.  The allowance ratio is 200 per cent for the
industrial investments which TL equivalent is over  US$ 250 Million and bearing at least two of  the
characteristics such as  increasing international competition, requiring high technology, having highadded value, increasing tax revenues and employment.  Further application and implementation
relating to this tool is being carried out by the Ministry of Finance under the General Tax Law.
(c) Value Added Tax Exemption for imported and locally purchased machinery and equipment
Pursuant to the Law No. 4369 and date: 22/7/1998, imports and  local purchases of machinery
and equipment within the scope of approved global lists attached to the investment  encouragementcertificate are exempted from the Value Added Tax.
(d) Exemption from certain taxes, duties and fees
The investors who are committed to realize US$ 10,000 US Dollars of exports upon the
completion of the investment are granted an exemption during the investment stage from the taxes,
duty and related fees, for operations and processes of obtaining standard credits through banks and
other official dues such as land registration, company registration etc. are exempted in accordance
with the related;  Law No. 488 (dated 1 July 1964) and Law No. 492 (dated 2 July 1964).  The
implementation shall be done in accordance with Temporary Article 2 of the Law No. 3505 (dated3 December 1988) which are all general Tax Laws.
(e) Credit allocation from the Investment Encouragement Fund
Credit allocation measure under the GIEP at present is used, aiming at Small- and Medium-
Sized Enterprises (SMEs) under a similar invest ment encouragement programme applied through
intermediary banks  which are; "Halkbank", "Turkish Development Bank", "Turkish Industrial
Development Bank" and "Turkish Industrial Investment Bank".  These banks issue the same type of
certificate system as mentioned, specifically, for the purchase of investment related machinery and
equipment of SMEs.
Credit allocation can be done within the limits in order to guide and encourage the
investments aiming at regional development, SME investments, investments in priority technology
areas which are to be determined by Higher Science and Technology Board, environmental
protection, technology park, research and development (R&D) in compliance with the legislation
about state aids on investments.  The limit for the in vestment credits aiming  at regional  development
is 30 per cent of the fixed investment amount and also shall not exceed TL 4.5 Trillion.  The limit forthe credits is 50 per cent of the fixed investment amount and with TL 250 Billion for research and
development investments, environmental protection investments, priority technology investments and
investments to be moved to organized industrial zones.  The interest rate for these credits at present
stand at 15 per cent.  Term structure of the inve stment credits aiming at regional development is
6 years with a 3-year grace period.  The term structure is 5 years for the credits allocated  aiming atother purposes, with a one-year grace period.
 2. Aids Granted to Small and Medium Sized Enterprises (SMEs)
 
 In Turkey, the importance of small and medium sized enterprises for the economic life was
realized at the beginning of 1990’s.  In the mid 1990’s, with the ratification of 1/95 Community
Council Decision, Customs Union  with the European Union has been established  as of
1 January 1996.  In order to help survival and competitiveness of  the Turkish  SMEs in the Customs
Union,  design of new support mechanisms seemed necessary at that time.G/SCM/N/71/TUR
Page 7
 
 In this context, the first legislative regulation Decree  No: 96/8615, Date: 19 September 1996
named as  “DECREE  FOR STATE AIDS IN INVESTMENTS FOR SMEs , (published on the
Official Gazette dated 16 October 1996  and No: 22789 ) was put into force.
 
The investments of small and medium sized enterprises are supported with  Decree No:
2000/1822, dated:  21 December 2001 “DECREE  FOR STATE AIDS IN INVESTMENTS FOR
SMES’” (published on the Official Gazette dated at 18.01.2001 and No. 24291).
• In line with the development plans and yearly programmes, the related legislation aims to:
• encourage,
• increase production and quality standards,
• supply the demands in relation to the product development,
• create employment,
• bring about a level competition within the Customs Union
of the investments of SMEs.
• According to the SME definition within the framework of the Decree, companies which are;
• 
 -operating in the manufacturing, agro-industry, tourism, education and health, mining,
software industries and
 
 -employing   
 1-9 workers   (defined as micro size),
 10-49 workers  (defined as small size),
 50-250  workers  (defined as medium size) and
 -holding assets with a total value excluding land and building (operating in the manufacturing
and agro-industry), including machinery-equipment,  installations, vehicles, furniture and
office stocks not exceeding TL 400 Billion
 
 shall be deemed as SMEs.
 
 The SMEs purchase of machinery-equipment and raw materials (energy supply is not
included) are supported with the issuance of an Encouragement Certificate granted by theUndersecretariat.  In order to be eligible for the encouragement elements, machinery-equipment
and/or raw material investment subject to the Encouragement Certificate shall not exceed
TL 400 Billion.
 
 The first application of investor shall be made to the related branch of
 
• Turkish Development Bank for the investments to be made in the tourism, education,
health and agro-industry
• Halkbank, Turkish Industrial Development Bank, Turkish Industrial Investment Bank for
the other sectors.
The related branch of the intermediary bank applied to evaluate the application of the investor
based upon the application form of the investor.  For the issuance of  an Encouragement Certificate,
intermediary bank then apply to the Undersecretariat of Treasury on behalf of the investor.
• The investments of  SMEs benefit from the following encouragement elements:G/SCM/N/71/TUR
Page 8
(a) Credit from the Investment Encouragement Fund,
(b) Exemption from Customs Duties and Fund Levies
(c) Investment Allowance
(d) Value Added Tax Exemption for imported and locally purchased machinery
and equipment
(e) Exemption from certain taxes, duties and fees
There are certain ceilings set in respect to the amount of credits to be allocated and the interest
rates to be applied depending on the regional location of the investment.
• Credits allocated to the SMEs from the Fund are within the following limits:
  -TL 200 Billion in the investment credits and TL 80 Billion in the operational credits.
 The amount and ratio of the credit increa se as the enterprise scale and regional
developmental status of the region decreases .
• In the allocation of the credits in the scope of the Fund, investors equity ratio shall be 20 per cent
of investment  in the Priority Development Regions and 30 per cent of the investment  in the
other regions respectively.
The interest rates of the credits allocated to SMEs  from the Fund are;
• Investment credits: 10 per cent   in Priority Development Regions and 15 per cent in the
other regions
• Operational Credits : 15 per cent in the Priority Development Regions and 25 per cent in
the other regions.  The maximum maturity period of the Fund based investment credits
to be allocated to SMEs is  4 years and 2 years in the operational credits .  In the
investment credits  no repayment is done  in the first year.
3. Programme for Incomplete Investments and/or Non Operating Enterprises
The legal basis for this programme is;
“DECREE ON, GAINING INTO THE ECONOMY, INVESTMENTS WHICH ARE
INCOMPLETE AND/OR NOT OPERATING DUE TO INSUFFICIENT OPERATIONAL
CAPITAL OR PARTIALLY OPERATING ENTERPRISES”
(Decree No. 2000/1721, Date: 25 December 2000)
(published on the Official Gazette dated at 25.12.2000 and No. 24271)
This Decree aims to encourage and gain inve stments into the economy by  increasing their
production and employment, operating in manufacturing industry (cotton gin and packaging
investments are not included), agro-industry (cold depots are included), health and educational sectors
which are incomplete and/or non-operating due to insufficient operational capital or partially
operating and located in the 26 predetermined provinces which are the least developed parts of
the country.
Without taking into consideration whether there is an encouragement certificate or not
and not exceeding TL 450 Billion for each firm ; with the intervention of the intermediary banks
investment and/or operational credits can be allocated from the Investment Encouragement Fund.G/SCM/N/71/TUR
Page 9
The interest rate of the investment credit is 10 per cent and 15 per cent   for the operational
credits respectively.  The  investment credits  to be allocated in this scope have 2 years of  grace
period and  shall be recovered in  5 years with 7 equal installments .  The operational credits
which have  one year grace period  shall be recovered  in 3 years with 5 equal installments .G/SCM/N/71/TUR
Page 10
COMPLIMENTARY DATA ON THE INVESTMENT ENCOURAGEMENT SYSTEM:
TABLE I.List of Provinces within the Priority Development Regions in Turkey
1. Ad ıyaman 26. Kars
2. Ağrı 27. Kastamonu
3. Aksaray 28. K ırıkkale
4. Amasya 29. K ırşehir
5. Ardahan 30. Kilis
6. Artvin 31. Malatya7. Bart ın 32. Mardin
8. Batman 33. Mu ş
9. Bayburt 34. Nev şehir
10. Bingöl 35. Ni ğde
11. Bitlis 36. Ordu12. Çanakkale (Bozcaada and Gökçeada) 37. Osmaniye
13. Çank ırı 38. Rize
14. Çorum 39. Samsun
15. Diyarbak ır 40. Siirt
16. Elaz ığ 41. Sinop
17. Erzincan 42. Sivas
18. Erzurum 43. Şanl ıurfa
19. Giresun 44. Şırnak
20. Gümü şhane 45. Tokat
21. Hakkari 46. Trabzon22. Iğdır 47. Tunceli
23. Kahramanmara ş 48. Van
24. Karabük 49. Yozgat
25. Karaman 50. ZonguldakG/SCM/N/71/TUR
Page 11
II CREDIT PROGRAMMES
1. Title of the subsidy programmeCredit Programmes
Turk Eximbank supports exporters, export-oriented manufacturers and overseas investors
with short, medium and long-term cash and non-cash credit programmes.  Moreover, export
receivables are discounted in order to promote sales on deferred payment conditions and to increase
export trade volume.
Short-term Export Credits
In 2000, 65 per cent of short-term credits offered by Turk Eximbank has been extended via
intermediary Turkish commercial banks which are allo cated credit lines and 35 per cent of the short-
term credits has been extended directly by Turk Eximbank.  Credits are extended either in TL or in
foreign currency under this programme.  The Bank has financially supported approximately 13 percent of Turkey's exports by her short-term credits in 2000.
Pre-shipment Turkish Lira Export Credits (PSEC TL) Programme ; a short-term credit
facility extended in TL covering all sectors and providing financial support to exporters starting from
the early stages of production.
Pre-shipment Small and Medium Scale Enterprises (SMSEs) Export Credit
Programme  (a sub-programme of PSEC TL programme)
PSEC-Priority Development Areas Export Credit Programme (a sub-programme of
the PSEC TL programme).
Pre-shipment Foreign Currency Export Credit (PSEC EX) Programme ; a short-term
credit facility extended in foreign currency covering all sectors and providing financial support to
exporters starting from the early stages of production.
Foreign Trade Companies (FTC) Short-term Export Credits Programme ; extended to
foreign trade corporate companies (FTCC) and sect oral foreign trade companies (SFTC) in both TL
and foreign currency to meet their export Financing needs.
The programme has TL and foreign currency credit options:
ETC Short-term Turkish Lira Export Credit Programme
ETC Short-term Foreign Currency Export Credit Programme
Performance Related Foreign Currency Credit Programme ;  extended to exporters and
export-oriented manufacturers in foreign currency.
Performance Related Turkish Lira Export Credit Programme ;  extended to exporters and
export-oriented manufacturers in TL.
Short-term Export Credit Discount Programme ;  a post-shipment finance facility in which
export receivables subject to bankers' acceptances provided by commercial banks and/or irrevocable
letters of credit are discounted by Turk Eximbank.
Short-term Pre-shipment Rediscount Programme;   a pre-shipment finance facility which
was put into effect within the framework of an additional limit to the post-shipment discount limitG/SCM/N/71/TUR
Page 12
extended to Turk Eximbank by the Central Bank of Turkey. Promissory notes that are prepared by the
exporters on behalf of Turk Eximbank having an aval of the banks which have short-term letter of
guarantee limit in the Bank and that have a maximum maturity of 120 days are discounted under this
limit.
Medium and Long-term Export Credits
Buyers' Credit and Guarantee Programme ;  Turk Eximbank extends credit lines under
sovereign guarantee to correspondent banks and financial institutions in various countries.  Within the
framework of this programme, financing facilities are allocated for both export and project finance.
Islamic Development Bank (IDB) Export Financing Scheme ;  Turk Eximbank acts as an
intermediary agency for the Export Financing Sche me of the IDB, in accordance with the agreement
signed in 1988 between the two parties. This progra mme entails financing on buyer credit basis, and
provides credit facilities to importers that reside  not only in member countries of the Organization of
Islamic Conference, but also in member countries of the OECD for their imports from Turkey.  The
IDB has the credit approval authorisation and the buyer's (importer's) risk for the transactionsmediated by Turk Eximbank is borne by the IDB.
This scheme also entails a limit amounting to Islamic Dinars 20 million (approximately
$ 29 million) provided by the IDB. Under this revo lving credit line allocated to Turk Eximbank by
IDB (an exception to general practice), Turk Eximbank has the credit approval authorisation and thebuyer's risk is borne by Turk Eximbank. The figures in the table at the end of the document are the
disbursements from this limit.
IDB Import Trade Financing Operations (ITFO Line);   a medium-term revolving
financing facility provided by IDB's ITFO Line financing scheme.  Export commitment is required byTurk Eximbank from the beneficiaries of this programme.
Overseas Chain Stores Investment Credit Programme ;  Turk Eximbank supports Turkish
entrepreneurs' overseas investments for the establishment of shopping malls and chain stores in which
various consumer goods may be offered for sale.
Letter of Guarantee Programme for Ship-building and Exporting ;  Turkish firms
involved in ship-building and/or the export of ships will be provided letters of guarantee in order to
secure financing from both domestic and foreign banks/financial institutions or obtain pre-financing
either in advance or in installments from the buyer.
Specific Export Credit Programme ;  a medium-term pre-shipment financing facility
provided to manufacturers/exporters for their foreign currency generating projects.  Under this
programme, the Bank provides support to companies, which engage in ship-building and factory
construction, and manufacturer/exporters that produce high value-added industrial export goods.
Export Finance Intermediation Loan (EFIL);  a credit line amounting to $ 252.5 million
obtained from the World Bank backed by a guarantee of the Turkish Treasury with a maturity of
seven years with a three-year grace period. Under this programme, short/medium-term working
capital needs of manufacturer-exporters and their export related investment requirements are financed.
Turk Eximbank lends this loan through five participating banks.  The credit risk on the participating
banks is borne by Turk Eximbank, whereas the credit risk on the borrowing enterprises is borne by the
on-lending banks.G/SCM/N/71/TUR
Page 13
Insurance Programmes
Through the export credit insurance programmes, which are one of the Turk Eximbank's main
areas of activity, export receivables are insured against commercial and political risks within certain
limits.  Besides, export credit insurance programmes enable exporters to obtain credits from financialinstitutions at favourable terms, by using their insurance policies attained from Turk Eximbank as
collateral.
Short-term Export Credit Insurance
Short-term Export Credit Insurance Programme ;  provides companies with one year
blanket insurance cover for exports sold on short-term credits (with payment terms up to 360 days).This programme covers all goods exported by Turkish companies.
Medium and Long-term Insurance Facilities
Specific Export Credit Insurance Programme ;  a single buyer insurance programme
providing cover against political and/or commercial risks for both the pre-shipment and post-shipment
stages. This programme covers receivables arising from exports of capital and semi-capital goods
with maximum five-year maturity.
Specific Export Credit Insurance Post-shipment Political Risk Programme ;  a single
buyer insurance programme providing cover to exporters for their medium and long-term exports of
capital and semi-capital goods to especially Central and Western Asian Republics, against political
risks in the post-shipment stage.
Specific Export Credit Insurance Post-shipment Comprehensive Risk Programme ;
provides extended cover to medium and long-term exports of capital and semi-capital goods against
both commercial and political risks.
Overseas Contractors' Services Insurance Programme ;  a single transaction insurance
providing cover against non-performance risk of the progress payments for goods and services
included in constructional works contracts. The programme has not been implemented yet, but
currently under review.
Overseas Investment Insurance Programme ;  aims to provide cover to Turkish companies'
direct investments abroad against political risks.   The groundwork for this programme has been laid
out in co-ordination with the Multilateral Investme nt Guarantee Agency (MIGA).  In this context, a
"Cooperation Agreement" has been signed with MIGA in October 1999)  This programme is plannedto be implemented in the near future.
2. Policy objective and/or purpose of the subsidy
Credit ProgrammesShort-term Export Credits
Pre-shipment Turkish Lira Export Credits (PSEC TL) Programme ;  aims to meet the
financing needs of exporters and/or export oriented producers starting from the early stages ofproduction.
Pre-shipment Small and Medium Scale Enterprises (SMSEs) Export Credit facility ;
aims to support SMSEs.G/SCM/N/71/TUR
Page 14
PSEC-Priority Development Areas Export Credit facility;  aims to help exporters in
priority development areas and ultimately eliminate the social and economic gaps
between these regions and Turkey's developed regions.
Pre-shipment Foreign Currency Export Credit Programme ;  same as PSEC TL
programme.
Foreign Trade Companies Short-term Export Credits Programme ;  aims to assist large
export trading companies in their export financing needs.
Performance Related Foreign Currency and Turkish Lira Export Credit Programmes ;
aim to increase the competitiveness of exporters in international markets.
Short-term Export Credit Discount Programme ;  aims to increase the competitiveness of
Turkish exporters in international markets by enabling them to sell Turkish goods on deferred
payment terms and eliminating overseas risks thereb y encouraging them to enter into new and target
markets.
Short-term Pre-shipment Rediscount Programme ;  aims to support manufacturer-
exporters and exporters on pre-shipment basis by discounting receivables in the form of promissory
note avalized by selected Turkish commercial banks.
Medium and Long-term Export Credits
Buyers' Credit and Guarantee Programme ;  aims to strengthen the competitiveness of
Turkish exporters and contractors in the international markets and provide a risk-free environment to
these companies in their activities in the markets pertaining high political and commercial risks.
Through this programme, Turk Eximbank enables foreign buyers to purchase Turkish goods andservices on deferred payment conditions.
Islamic Development Bank (IDB) Export Financing Scheme-Line ; aims to provide export
finance for the exports directed to countries that  are determined in the Annual Programme of Turk
Eximbank.
IDB Import Trade Financing Operations (ITFO Line);   aims to provide finance for the
imports of raw materials, semi-capital and capital goods from member and non-member countries of
OIC, which are used in the production of export goods.
Overseas Chain Stores Investment Credit Programme ; aims to support direct sales of
Turkish brand consumer goods in international markets.
Letter of Guarantee Programme for Ship-building and Exporting ;  aims to support
Turkish dockyards in order to increase their shares in international markets.
Specific Export Credit Programme ;  aims to meet credit demands which cannot be fulfilled
within the standard short-term credit programmes of Turk Eximbank.  This programme is designed to
support Turkish manufacturers, manufacturer-exporters and exporters in order to meet their specific
requirements by providing medium-term financing.
Export Finance Intermediation Loan (EFIL);   aims to finance the short/medium-term
working capital needs of manufacturer-exporters and their export related investment requirements.G/SCM/N/71/TUR
Page 15
Insurance Programmes
As a result of revisions made in February 1997, Short-term Export Credit Insurance, which
had previously been compulsory for the beneficiaries of the Pre-shipment Export Credit programme,
became optional. In order to facilitate exports to priority target markets through the provision ofinsurance protection, Turk Eximbank has extended insurance lines to selected banks in these countries
within the framework of Trade Financing Agreements. Under the said Agreements, IL/Cs issued by
these banks are covered against political and commercial risks.
Short-term Export Credit Insurance
Short-term Export Credit Insurance Programme ;  this post-shipment facility aims to
provide cover against political and commercial risks.
Medium and Long-term Insurance Facilities
Specific Export Credit Insurance Programme ;  aims to provide insurance cover against
commercial and/or political risks for the export of capital and semi-capital goods sold on credit terms
of 1 to 5 years maturity.
Specific Export Credit Insurance Post-shipment Political Risk Programme ;  aims to
provide insurance cover against political risks in the post-shipment stage for receivables with creditterms of up to'5 years relating to the export of capital and semi-capital goods.
Specific Export Credit Insurance Post-shipment Comprehensive Risk Policy ;  aims to
provide extended cover to medium and long-term exports of capital and semi-capital goods against
both commercial and political risks.
Overseas Contractors' Services Insurance Programme ;  aims to insure Turkish
contractors' overseas activities in politically risky countries.
Overseas Investment Insurance Programme ;  aims to provide cover against political risks
for the overseas investments of Turkish firms.
3. Background and authority for the  subsidy
Turk Eximbank regularly presents her annual programmes to the Supreme Advisory and
Credit Guidance Committee chaired by the State Minister in charge of the Bank's activities.  This
Committee fixes upper limits of credits to be extended by the Bank, guarantees to be issued andinsurance transactions to be effected either as a total amount or by countries.  Procedures and
guidelines concerning the implementation of all above mentioned programmes are administered
within the framework of annual programmes by the Board of Directors of the Bank. Regarding
medium and long term credit, guarantee and insurance facilities, the Bank fully complies with OECD
Consensus, which determines the guidelines for the officially supported export credits for two years or
more.  In April, 1998, Turkey became a full member of Export Credits and Credit Guarantees Group
of OECD. Turk Eximbank has been a full member of the Berne Union, an international association of
export credit insurers and sending regular information to these organizations.
4. Form of the subsidy
Short-term export credits
In the form of loan.G/SCM/N/71/TUR
Page 16
Buyers' Credit and Guarantee Programme
It may be in the form of direct lending or guarantee.
Other medium and long term export credits
In the form of loan.
Short, Medium and Long Term Insurance Facilities
In the form of export credit insurance.
5. To whom and how the subsidy is provided
Credit Programmes
Short-term Export Credits
Pre-shipment Turkish Lira Export Credits (PSEC TL) Programme ;  extended to Sectoral
Foreign Trade Companies (SFTC), manufacturers, manufacturer-exporters and exporters.  The interest
rate is determined by Turk Eximbank according to money market rates, loan repayment periods, andcost of funding.
Pre-shipment Small and Medium Scale Enterprises (SMSEs) Export Credit facility;
extended only to small and medium scale manufacturers and manufacturer-exporters
of up to 200 employees. Interest rate is the same as that of PSEC TL.
PSEC-Priority Development Areas Export Credit facility;   extended to companies
located in Turkey's priority development ar eas. Interest rate is slightly lower than
PSEC TL interest rate.
Pre-shipment Foreign Currency Export Credit (PSEC FX) Programme ;  extended to
Sectoral Foreign Trade Companies (SFTC), manufacturers, manufacturer-exporters and exporters.
Interest rate is' LIBOR+spread, EURIBOR+spread, STG LIBOR+spread, TIBOR+spread (for JPY
credits). Spread is determined by Turk Eximbank.
Foreign Trade Companies Short-term Export Credits Programmes ; extended to Foreign
Trade Corporate Companies (FTCC) and Sectoral Foreign Trade Companies (SFTC) and allocated on
the basis of previous year's export performance.  Applicants must be entitled to FTCC and SFTC
status by the Undersecretariat of Foreign Trade. Interest rate for FTC Short-term Turkish Lira ExportCredit Programme is the same with that of PSEC TL and interest rate for FTC Short-term Foreign
Currency Credit Programme is the same with that of PSEC FX.
Performance Related Foreign Currency and Turkish Lira Export Credit Programmes ;
extended to manufacturers, manufacturer-exporters and exporters except FTCC and SFTC.  Theinterest rate for FX option is the same with that of PSEC FX and the rate for TL option is the same as
that of PSEC TL.
Short-term Export Credit Discount Programme ;  export receivables subject to bankers'
acceptance and/or irrevocable letters of credit are discounted by Turk Eximbank and in this way apost-shipment Financing facility is provided for Tu rkish exporters. Export receivables with a maturity
of up to 180 days are discounted on LIBOR+spread.G/SCM/N/71/TUR
Page 17
Short-term Pre-shipment Rediscount Programme ;  Promissory notes that are prepared by
the exporters on behalf of Turk Eximbank having an aval of the banks which have short-term letter of
guarantee limit in the Bank and that have a maximum maturity of 120 days, are discounted and in this
way a pre-shipment financing facility is provided for Turkish exporters and export orientedmanufacturers.  Under this programme, export transactions based on cash against documents and
irrevocable letters of credit are covered. Interest rate is LIBOR+spread where spread is determined by
Turk Eximbank.
Medium and Long-term Export Credits
Buyers' Credit and Guarantee Programme ;  credit lines are extended under sovereign
guarantee to correspondent banks and financial institutions in various countries. Interest rates are
established between the parties concerned a nd also according to the OECD Consensus.
Islamic Development Bank (IDB) Export Financing Scheme-Line ;  extended to Turkish
exporters who export goods to countries that are determined in the Annual Programme of TurkEximbank.  The credibility of the importer's country or the credibility of the bank provided guarantee
were taken into account in credit applications which are evaluated on transaction basis.
IDB Import Trade Financing Operations (ITFO Line);   extended to Turkish importers for
their imported input requirements. The mark-up rate is LIBOR+1.5 per cent for the imports from themember countries of OIC and LIBOR+2.5 per cent for the imports from non-member countries OIC,
Overseas Chain Stores Investment Credit Programme ;  extended to Turkish entrepreneurs
who invest abroad for the establishment of shopping malls and chain stores in foreign countries.  The
interest rates are determined by Turk Eximbank according to the credit term, cost of funding and thecredibility of the project exporter, on project basis.
Letter of Guarantee Programme for Ship-building and Exporting ;  Turkish firms
involved in ship-building and/or the export of ships will be provided letters of guarantee in order to
secure financing from both domestic and foreign banks/financial institutions or obtain pre-financing
either in advance or in instalments from the buyer. The commission rate is determined by Turk
Eximbank for each transaction.
Specific Export Credit Programme ;  a medium-term financing facility provided to
manufacturers/exporters for their foreign currency generating projects in Turkey or abroad at pre-
shipment stage. It is provided with the terms determined on project basis.
Export Finance Intermediation Loan (EFIL);   all private exporters with foreign exchange
earnings, irrespective of their sector, are eligible for participation as sub-borrowers on a commercial
basis. Turk Eximbank determines the interest rate s applied to the participating banks considering the
cost of funding.
Insurance Programmes
Short-term Export Credit Insurance
Short-term Export Credit Insurance Programme ;  all Turkish exporters are eligible for
this programme.  The premium rates vary according to the risk classification of the buyer's country,
the terms and conditions of payment and the type of the buyer (public/private).G/SCM/N/71/TUR
Page 18
Medium and Long-term Insurance Facilities
Specific Export Credit Insurance Programme ;  all Turkish exporters are eligible for this
programme.  The premium rates vary according to the risk classification of the buyer's country, the
terms and conditions of payment and the type of the buyer (public/private).
Specific Export Credit Insurance Post-shipment Political Risk Programme ;  same as
Specific Export Credit Insurance Programme.
Specific Export Credit Insurance Post-shipment Comprehensive Risk Policy ;  same as
Specific Export Credit Insurance Programme.
Overseas Contractors' Services Insurance Programme ;  Turkish contracting companies
engaged in turn key or partial building projects, or the expansion and assembly of industrial plants
tendered by an overseas employer are eligible for this programme.
Overseas Investment Insurance Programme ;  The scheme applies to investments of
Turkish companies in overseas enterprises. Eligible investments may be in the form of a new
investment in a start-up operation, new investment in an existing business or the
expansion/modernisation of an existing business.
6. Duration of the subsidy
There is no time limit to Turk Eximbank programmes.  The programmes may be revised,
eliminated or new programmes are introduced according to the requirements of Turkish exporters and
international rules and regulations.G/SCM/N/71/TUR
Page 19
TURK EXIMBANK'S CREDITS AND TOTAL COVERED SHIPMENTS UNDER INSURANCE
PROGRAMMES IN THE THREE MOST RECENT YEARS ($ million)
PROGRAMMES 1998 1999 2000
PRE-SHIPMENT TURKISH LIRA EXPORT CREDITS 855.0 958.5 736.0
PRE-SHIPMENT FOREIGN CURRENCY EXPORT CREDIT 1,196.8 1,154.1 1,443.5
FTC SHORT-TERM TURKISH LIRA EXPORT CREDIT 188.3 209.7 194.8
FTC SHORT-TERM FOREIGN CURRENCY EXPORT CREDIT 436.2 335.3 500.5
PERFORMANCE RELATED TL EXPORT CREDIT 212.0 313.7 130.3
PERFORMANCE RELATED FX CREDIT 343.2 326.3 322.1
SHORT-TERM EXPORT CREDIT DISCOUNT PROGRAMME 13.0 31.7 23.6
SHORT-TERM PRE-SHIPMENT REDISCOUNT PROGRAMME - 1.9 20.6
BUYERS' CREDIT & GUARANTEE PROGRAMME 215.0 196.5 52.0
IDB EXPORT FINANCING SCHEME-LINE 3.1 - -
IDB ITFO LINE 9.7 7.2 3.8
OVERSEAS CHAIN STORES INVESTMENT CREDIT 1.8 10.4 11.5
LETTER OF GUARANTEE PROGRAMME FOR-SHIP-BUILDING
AND EXPORTING22.7 4.4 -
SPECIFIC EXPORT CREDIT PROGRAMME 18.1 3.4 -
EXPORT FINANCE INTERMEDIATION LOAN (EFIL) - - 55.4
SHORT-TERM EXPORT CREDIT INSURANCE PROGRAMME 2,977 3,000 2,952
MEDIUM AND LONG-TERM EXPORT CREDIT INSURANCE
PROGRAMMES13.0 18.5 -G/SCM/N/71/TUR
Page 20
III. EXPORT SUBSIDY PROGRAMME FOR AGRICULTURAL PRODUCTS
1. Title of the subsidy programme
The title of the subsidy programme is "Export Subsidy Programme for Agricultural Products"
(Decree No:2000/5). The Decree 2000/5 of the Money-Credit and Coordination Council was
announced in the Official Gazette dated 25 March 2000, which' has been applied between 1 January
and December 31, 2000.  This programme came into force replacing the Decree 98/30.
2. Policy objective and/or purpose of the subsidy
The policy objective of this export subsidy programme is to develop Turkey's export potential
in processed agricultural products.
3. Background and authority of the subsidy
Authority for the subsidy is the Money-Cred it and Coordination Council.  The Council is
comprised of the Ministers of State, the Minister of Agriculture, the Undersecretary of the Minister of
Finance, the Undersecretary for State Planning Organization, the Undersecretary for Foreign Trade,
the Undersecretary for Treasury and the Head of the Central Bank.
4. Form of the subsidy.
The subsidies are provided to producer/exporters or exporters in the form of deduction of their
debts to the public corporations (taxes, so cial insurance premium costs, energy costs,
telecommunication costs) from their subsidy entitlement.
5. Subsidy per unit
The subsidy per product is given below.
Product Rate
(in US$/ton)Share of exported quantity
eligible
ihb i d2000/5
Cut flowers (fresh) 285 57%
Vegetables, frozen (exc.potatoes)106 38%
Vegetables (dehydrated) 370 33%
Fruits (frozen) 92 45%
Preserves, pastes 55 85%
Homogenized fruit
preparations53 69%
Fruit juices (concentrated) 168 31%
Olive oil 200 100%
Prepared or preserved fish 210 100%
Meat of poultry (excl.
edible offals)199 28%G/SCM/N/71/TUR
Page 21
Eggs 7$/000 pieces 40%
Chocolate arid other food
preparations containingchocolate110 60%
Biscuits, waffles 110 30%
Macaroni vermicelli 73 40%
The second column specifies that the subsidy will only be paid on determined percentage of
the quantity exported.  This system has been used owing to the annual volume commitment of
Turkey, originated in the WTO Agreement on Agriculture.
6. Statistical, data permitting an assessment of the trade effects of the subsidy
No statistical data permitting an assessment of the trade effects of this subsidy is available.
DECREE 2001/2 OF THE MONEY-CREDIT AND COORDINATION COUNCIL
1. Title of the subsidy programme
The title of the subsidy programme is "Export Subsidy Programme For Potatoes".  The Decree
2001/2 of the Money-Credit and Coordination Council is announced in the Official Gazette dated
26 January 2001, which has been applied between 1 October 2000 and 30 April 2001.
2. Policy objective and/or purpose of the subsidy
The policy objectives of this export subsidy programme are to develop the export potential of this
product and to channel excessive production to exports.
3. Background and authority of the subsidy
Authority for the subsidy is the Money-Cred it and Coordination Council.  The Council is
comprised of the Ministers of State, the Minister of Finance, the Minister of Agriculture, the
Undersecretary for State Planning Organizati on, the Undersecretary for Foreign Trade, the
Undersecretary for Treasury and the Head of the Central Bank.
4. Form of the subsidy
The form of the subsidy is cash grants. These subsidies are provided to the exporters of this
product, as a fixed amount per ton in US dollars.
5. Subsidy per unit
The subsidy rate of this product is given below.
Product Rate
(in USS/ton)
2001/2
Potatoes 20G/SCM/N/71/TUR
Page 22
6. Statistical data permitting an assessment of the trade effects of the subsidy
No statistical data permitting an assessment of the trade effects of this subsidy is available.
__________