WORLD TRADE  
ORGANIZATION  G/SCM/N/95/TUR 
26 January 2004 
 (04-0260) 
Committee on Subsidies 
and Countervailing Measures Original:   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 19 January 2 004, is being circulated at the request of the 
Delegation of Turkey.  
_______________ 
 
 
TABLE OF CONTENTS
 
 
Page  
 
I. INVESTMENT ENCOU RAGEMENT IN TURKEY ......................................................1 
 
II. CREDIT PROGRAMMES .................................................................................................9  III. EXPORT SUBSIDY PROGRAMME FOR AGRICULTURAL PRODUCTS............19 
 
 
I. INVESTMENT ENCOURAGEMENT IN TURKEY  
 As in the original full notification of Turk ey (G/SCM/N/71/TUR) in 2001, once again in the 
year 2003, we are pleased to present the fo llowing information in a descriptive format. 
 
 In relation to the 2001 notification, the pr ogramme 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 
(2000/1821, dated 21 December 2000).  These are given in detail in the following pages. 
 
 The new Decree concerned is a continuation of the programme aimed only at 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, bot h domestic and foreign, can take advantage of. 
 G/SCM/N/95/TUR 
Page 2  
 
  The whole of the programme is based on a plai n 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 fa r as bureaucratic formalities are concerned. 
  Additionally, if in need, detailed informa tion concerning the investment encouragement 
system, the Decrees and Communiqueés 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/95/TUR 
 Page 3 
 
 
 I. ENCOURAGING INVESTMENTS IN TURKEY  
 
The Turkish Investment Encouragement System can be divided into two sub-
headings, which are currently in force: 
1. General Investment Encouragement Programme (GIEP) 
 
2. Aids Granted to Small and Medium Sized Enterprises (SMEs) Investments  
 It should be noted that, as far as the mechanis m is concerned, domestic and foreign investors 
are equally treated;  the foreign investment comp anies can benefit from all encouragement measures 
and allowances granted to domestic companies.   
In order to qualify for investment encouragem ent measures, the foreign investors must first 
apply and qualify to receive an investment encouragement certificate from the General Directorate of Foreign Investments (GDFI), domestic investors alike must apply, qualify and receive their certificates from the General Directorate of Incen tives and Implementation (GDII).  Both of these 
General Directorates are  parts of the Undersecretariat of Treasury.  
 
1. The General Investment Encouragement Programme (GIEP)  
(a)  The legislative base and the title of the ge neral investment encouragement programme is : 
“DECREE CONCERNING STATE ENCO URAGEMENTS TO INVESTMENTS" 
(Decree No:2002/4367, dated: 10 June 2002) 
(published in the Official Gazette  dated at 09.07.2002 and No:24810) 
 This main Decree also provides a base fo r "Aids Granted to Small and Medium Sized 
Enterprises' (SMEs) Investments".  
(b) The purpose of the general investment encour agement programme is to:  encourage, support 
and orient investments, in-line with intern ational commitments, in conformity with the 
objectives of Development Plans and Annual Programmes, in order to reduce regional 
imbalances within the country, create new em ployment opportunities, while taking advantage 
of advanced and appropriate tec hnologies with greater added valu e and to realize international 
competitiveness. 
(c)  The programme covers all investment ac tivities related to the production of goods and 
services, research and development (R&D), e nvironmental protection and improvement of 
quality and standards.  
(d) As mentioned above, one of the main objectiv es of the system is to eliminate inter-regional 
imbalances.  For this purpose the following regional classification is  established with the 
Decree: 
• Developed regions :  Istanbul and Kocaeli city boundaries.  Greater Municipality 
boundaries along with Ankara, Izmir, Bu rsa, Adana, and Antalya cities.  
• Normal Regions :  Cities situated outside of the Developed Region and Priority 
Development Region classifications.  G/SCM/N/95/TUR 
Page 4  
 
 • 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 Table I attached 
to this document. 
 As described above, in Turkey, mainly a regi onal/horizontal system is implemented within 
the state encouragement for investments. 
 
(e)  How the programme works 
 
 In summary, no matter which sector the investor shall be operating in, all investors who have 
prepared their investment feasibility studies and propo sals, 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 the 
limited liability or capital stock companies and branches. 
  Applications to be made for the issuance of an investment encouragement certificate to the 
relevant authority are as follows:   I. All investments to be made by foreign investment or joint ventures companies and 
their branches will be received by General Directorate of  Foreign Investment 
(GDFI). 
  II. Investment encouragement certificate applications for domestic investments that have 
a fixed investment cost not exceeding TL 4 trillion (excluding those which can 
benefit from credit allocation measure) shall first be made to the local authorities.  In 
this way, it is aimed to ensure the pa rticipation of local governmental and non-
governmental institutions in the invest ment encouragement implementations. 
  III. For other investments, applications are made to General Directorate of Incentives and 
Implementation (GDII). 
 
(f)  Procedure to Obtain an Inv estment Encouragement Certificate 
  An investor should complete and apply with  the following documents for an encouragement 
certificate: 
• Investment application form  
• The receipt of the amount deposited in the Central Bank, varying between TL 200 Million 
and TL 400 Million according to regional de velopmental status of the location. 
• A notarized copy of authorized  signatures of the company  
• A copy of the trade registry gazette in whic h the Articles of Association is published. 
  G/SCM/N/95/TUR 
 Page 5 
 
 
  Once the application is completed and presented for evaluation purposes, in conformity with 
the Decree and Communiqués, eligible investme nt projects are evaluated and granted an 
Encouragement Certificate after an analysis of each project proposal.   As far as all the related procedures are con cerned for the investment encouragement system, 
there are no differences between foreign and domestic  investors.  The "Certificate" mentioned above 
contains specific encouragement measures which are granted to the investment.  
 (g)  Tools of Encouragement Measures  
 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) Value Added Tax Exemption for importe d and domestically purchased machinery 
and equipment 
 (c) Exemption from certain taxes, duties and fees  
(d) Credit allocation from the Budget  
 
Definitions, descriptions of the encouragement measures:  
(a) Exemption from Customs Duties and Fund Levies 
 
 For the investment projects which are evaluated and found eligible by the Undersecretariat of 
Treasury,  imports of the machinery and equipment to be used in the production process shall be 
subject to Customs Duty exemption.  Once the exem ption is listed on the "Certificate", the investor 
can import  the machinery and equipment indicated on the approved list, namely the "Machinery and 
Equipment List" aiming only at the purposes of the investment in question, without paying any 
customs duties.  (b) Value Added Tax Exemption for importe d and domestically purchased machinery and 
equipment 
 
 Pursuant to Law No. 4369 dated 22/7/1998, imports and domestic purchases of machinery 
and equipment within the scope of approved machinery and equipment lists attached to the investment  
encouragement certificate are exempted from the Value Added Tax.   (c) Exemption from certain taxes, duties and fees  
 The investors who are committed to realize US$1,000 of exports upon the completion of the 
investment are granted an exemption during the in vestment stage from the taxes, duty and related 
fees, for operations and processes of obtaining standa rd credits through banks and land registration in 
accordance with the related Laws (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 (dated 3 December 1988) which are all general Tax Laws.  However, according to Law 
No. 4842 investors will start to benefit from this  measure without the obligation to have an 
encouragement certificate and without having to  realize $1,000 of exports starting from 
1 January 2004.  Therefore, this measure is goi ng to be excluded from both "General Investment 
Encouragement Programme" and "Aids Granted to  Small and Medium Sized Enterprises (SMEs) 
Investments Programme" as of the specified date. 
 G/SCM/N/95/TUR 
Page 6  
 
 (d) Credit allocation from the Budget 
  Credit can be allocated in order to guide a nd encourage the investments aiming at regional 
development, research and development (R&D) inv estments, environmental protection investments, 
investments in priority technology areas which are to be determined by Higher Science and 
Technology Board or Scientific and Technical Research Council, investments to be moved to 
provinces specified for regional development and inv estments to be moved to priority development 
regions and other organized zones from develope d regions and manufacturing, agro-industry and 
mining investments to be realized  in the priority development regions in compliance with the 
legislation on State Encouragement to Investments. 
 
 The limit for the investment credits aiming at regional development is 30 per cent of the fixed 
investment cost and also shall not exceed TL 4.5 Tr illion.  For research and development investments, 
environmental investments, priority technology investments and investments to be moved to 
organized industrial zones, the limit for the credits is  50 per cent of the fixed investment cost and shall 
not exceed TL 400 Billion.  
  Also for manufacturing, agro-industry and mini ng investments to be realized in the priority 
development regions, investment cred it can be provided up to 50 per cent of the fixed investment cost 
and after the completion of the investment, operatin g credit shall be provided  to the establishments 
which create an employment of at least 50 persons.  Operating credit can also be provided to existing 
enterprises in the priority development regions with  insufficient operational capital and which employ 
at least 50 workers.   The interest rate is 20 per cent for investme nt credits, 30 per cent for operational credits.  
Term structure of the investment credits aiming at regional development is 6 years with a 3-year grace 
period and for other types of investments 5 years with a one year grace period.  The term structure is 
2 years for operational credits.   Credit applications are received and evaluate d by various intermediary banks assigned for the 
allocation of credits.  2.  Aids Granted to Small and Medium Sized Enterprises (SMEs) Investments  
In Turkey, the importance of small and me dium-sized enterprises for economic life was 
realized at the beginning of the 1990’s.  In the mi d 1990’s, with the ratification of 1/95 Association 
Council Decision, Customs Union with the Eu ropean Union has been established as of  
1 January 1996.  In order to help survival and co mpetitiveness of  the Turkish  SMEs in the Customs 
Union,  design of new support mechanisms seemed necessary at that time. 
 
 Currently, the investments of small and medium sized enterprises are supported with  Decree 
No. 2000/1822, dated:  21 December 2000 “DE CREE  FOR STATE AIDS IN INVESTMENTS 
FOR SMES” (published in 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 the investment of SMEs, 
• increase production and improve quality standards,  
• supply the demands in relation to the product development,  
• increase employment,  
• bring about a level competition within the Customs Union  
 
• According to the SME definition within the fra mework of the Decree, companies which are;  G/SCM/N/95/TUR 
 Page 7 
 
 
  
-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 excludi ng land and building including machinery-
equipment,  installations, vehicles, furnitu re and office stocks not exceeding TL 950 Billion 
(operating in the manufacturing and agro -industry) shall be deemed as SMEs. 
 
 The SMEs purchase of machinery-equipment and raw materials are supported with the 
issuance of an Investment Encouragement Certificate granted by the Undersecretariat.  In order to be 
eligible for the encouragement measures, machinery-equipment and/or raw material investment 
subject to the Investment Encouragement Certificate shall not exceed TL 950 Billion (these amounts have been amended with the Circular No. 2003/1, which was published in the Official Gazette dated 
10 September 2003).  
 
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 in which it is specialized;  and 
 
• Halkbank, Turkish Industrial Develo pment Bank for the other sectors. 
 
The related branch of the assigned intermediary  bank receiving the application evaluates the 
project of the investor.  After the intermed iary bank's approval, the necessary documents are 
submitted to the Undersecretariat of Treasury for the issuance of an Encouragement Certificate 
following a final evaluation. 
• The investments of  SMEs benefit from the following encouragement elements: 
 (a) Exemption from Customs Duties and Fund Levies 
 (b) Value Added Tax Exemption for impor ted and domestically purchased machinery 
and equipment 
 (c) Exemption from certain taxes, duties and fees
1 
 (d) Credit allocation from the Budget 
 
There are certain ceilings set in respect to the am ount of credits to be allocated and the interest 
rates to be applied depending on the regional location of the investment.  The interest rate of 
investment credits is 10 per cent for the projects in  priority development regions and 15 per cent for 
the projects in other regions.  For operational credits, the interest rate is 15 per cent for the projects in 
priority development regions and 25 per cent for the projects in other regions.  
 The maximum amount of credit that can be  allowed for investment projects in the 
manufacturing and agro-industr y sectors is given below. 
                                                      
1 With the Law No. 4842, the obligation to have  an encouragement certif icate to benefit from 
"exemption from certain taxes, duties and fees" will be abolished starting from 1 January 2004. G/SCM/N/95/TUR 
Page 8  
 
 Maximum investment credit ratios available to SMEs 
(as a percentage of fixed investment cost)  
 
 Priority development 
region Normal region Developed region 
Micro-sized companies 60% 50% 40% 
Small-sized companies 50% 40% 30% 
Medium-sized companies 40% 30% 20% 
The amount to be allowed cannot exceed; 
  - TL 475 Billion for investment credits,  - TL 75 Billion for operational credits,  - TL 475 Billion for investment credits and TL 190 Billion for operational credits when both 
types of credit are allocated together. 
 
 The maximum maturity period of credits to be a llocated to SMEs is 4 years for the investment 
credits and 2 years for the operational credits.  In the investment credits no repayment is done in the 
first year. 
 
COMPLIMENTARY DATA ON THE INVE STMENT 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.  Malatya  
7. Bart ın 32.  Mardin 
8. Batman 33.  Mu ş  
9.  Bayburt 34.  Nev şehir 
10.  Bingöl 35.  Ni ğde 
11.  Bitlis 36.  Ordu 
12.  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.  Trabzon 
22.  Iğdır 47.  Tunceli 
23.  Kahramanmara ş 48.  Van 
24.  Karabük 49.  Yozgat 25.  Karaman 50.  Zonguldak   G/SCM/N/95/TUR 
 Page 9 
 
 
 II. CREDIT PROGRAMMES 
 1.  Title of the subsidy programme  PROGRAMMES  
 
 Turk Eximbank supports expor ters, export-oriented manufacturers, overseas investors and 
companies engaged in foreign currency earning services with short, medium and long-term cash and non-cash credit programmes.  Moreover, export recei vables are discounted in order to increase export 
trade volume and to ease the entry into new and ta rget markets through the promotion of sales on 
deferred payment conditions.  Turk Eximbank provi ded a total support of $5 billion in terms of 
financing support and pure cover, which accounted for 14 per cent of Turkey's exports in 2002. 
 
CREDIT PROGRAMMES 
  Providing financial resources to industries with strong export potential is a key factor in 
Turkey's export-promotion strategy, in keeping wi th this outward-oriented economic strategy, the 
Bank supports exporters through several credit programmes.  
1. Short-term Export Credits 
  In 2002, 64 per cent of short-term credits offered by Turk Eximbank was extended via 
intermediary Turkish commercial banks which are allocated credit lines and 36 per cent of the short-
term credits was extended directly by Turk Eximbank.   Credits are extended either in TL or in foreign 
currency under this programme.  In 2002, 45 per cen t of the total credits was provided in TL and 55 
per cent in foreign currency.  The Bank has fina ncially supported approximately 6 per cent of 
Turkey's exports by her short-term credits. 
  Pre-shipment Export Credit (PSEC) Programme ; a short-term credit facility provided to 
exporters starting from the early stages of produc tion in all sectors.  The programme has TL and 
foreign currency credit options and ex tended through the commercial banks. 
 
 PSEC-Priority Development Areas Export Credit Programme ;  a sub-programme of the 
PSEC extended in TL to companies located in  Turkey's priority development areas. 
  Foreign Trade Companies (FTC) Short-term Export Credit 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 credit is ex tended directly by Türk 
Eximbank.   Pre-export Credit Programme  (in 2003, Performance Related Credit Programme was 
renamed as Pre-export Credit Programme);  a short- term credit facility provided to exporters and 
export-oriented manufacturers in the preparatory st age of exports.  The credit has TL and foreign 
currency options and is extended directly by Türk Eximbank. 
  Pre-export Small and Medium Scale Enterprises (SMSE) Credit Programme ;  a new 
short-term credit facility (effective since April 2003) extended both in TL and foreign currency to 
only small and medium scale enterprises directly by Türk Eximbank. 
 G/SCM/N/95/TUR 
Page 10  
 
 2. Specific Credit Programmes 
 
 Short-term Export Credit Discount Programme ;  a post-shipment finance facility in which 
export receivables subject to acceptance by commercial banks and/or irrevocable letters of credit are 
discounted by Turk Eximbank.  Export receivables with a maturity of up to 180 days are discounted 
using the funds allocated by the Central Bank of Tu rkey.  In some cases, Türk Eximbank may use its 
own resources after evaluation. 
 
 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 limit 
extended to Türk Eximbank by the Central Bank of  Turkey.  Promissory notes prepared by the 
exporters on behalf of Türk Eximba nk, which have the aval of the banks possessing a short-term letter 
of guarantee limit with Türk Eximbank and whic h have a maximum maturity of 180 days, are 
discounted under this limit.  This programme covers export transactions based on cash against 
documents and irrevocable letters of credit.  Su ch transactions including those based on cash against 
goods may also be discounted from Türk Ex imbank's own resources after evaluation. 
  Overseas Chain Stores Investment Credit Programme ;  Turk Eximbank supports the 
overseas investments of Turkish entrepreneurs fo r the establishment of shopping malls and chain 
stores in which various consumer goods may be o ffered for sale.  In 2003, the scope of this 
programme was extended to cover the investment s for both establishing Turkish brand names and 
promoting Turkish designed goods abroad.  Cred its under this programme are granted for up to 
7 years.   Letter of Guarantee Programme for Ship-building and Exporting ;  Turkish firms 
involved in ship-building and/or the export of ships are 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.   Letter of Guarantee Programme fo r Overseas Contractors' Services ;  Türk Eximbank 
supports Turkish contractors by providing them with a letter of guarantee for their overseas projects.  
 Specific Export Credit Programme ;  is used to evaluate credit demands that cannot be met 
within the Bank's existing standard credit programmes.   It is a medium-term pre-shipment financing 
facility provided to manufacturers/exporters fo r projects that generate foreign currency. 
 
3. Credits for Foreign Currency Earning Services  
 
 Tourism Marking Credit Programme ;  a short-term financing facility provided to travel 
agencies for their promotional and marketing activ ities abroad and thus contributing to Turkey's 
balance of payments via increasing tourism reve nues.  In 1999, the programme was expanded to 
include private airlines.   International Transportation Marketing C redit Programme (Road Transportation & 
Shipping) ;  a short-term financing facility provided to international transportation companies to 
increase their competitiveness and thus contribut e to Turkey's foreign exchange earnings. 
  Credit programme for Foreign Currency Earning Services ;  a financing facility provided 
to the companies resident in Turkey for both th eir foreign currency earning services abroad and the 
export of services like software projects, consultancy services.   G/SCM/N/95/TUR 
 Page 11 
 
 
 4. Islamic Development Bank Backed Credits 
 
 IDB Export Financing Scheme ;  Türk Eximbank acts as an in termediary agency for the 
Export Financing Scheme of the IDB, in accordance  with the agreement signed in 1988 between the 
two parties.  This programme entails financing on buyer credit basis, and provides credit facilities to 
importers that reside not only in member countri es of the Organization of Islamic Conference (OIC) 
but also in non-Islamic countries, except boycotted countries by OIC, for their imports from Turkey.  
The IDB authorizes the credit and bears the buyer' s risk for transactions mediated by the Bank. 
  This scheme also entails a limit amounting to Islamic Dinars 19.2 million ($25.6 million) 
provided by the IDB.  Within this limit, Türk Ex imbank provides export finance for exports directed 
to any country and has the credit approval author ization while bearing the buyer's risk.  The 
credibility of the importer's country or of the bank- provided guarantee are taken into account in credit 
applications, which are evaluated on transaction basis.   The figures in the table at the end of the 
document are the disbursements from this limit. 
 
 IDB Import Trade Financing Operations (ITFO Line) ;  another limit provided by the IDB 
to Türk Eximbank which is a medium-term revolving  financing facility provided by IDB's ITFO Line 
financing scheme.  It provides financing for imports  of raw materials, semi-capital and capital goods 
from member and non-member countries of OIC for use in the production of export goods.  Export 
commitment is required and the amount of commitm ent is determined for each transaction by Türk 
Eximbank. 
 5. Export Finance Intermediation Loan (EFIL);  a credit line amounting to US$252.5 million 
obtained from the World Bank backed by a guarantee of the Turkish Treasury.  This credit line has a 
maturity of seven years with a three-year grace period.   $246 million of this loan has been allocated to 
finance short/medium-term working capital needs of  manufacturer-exporters and their export related 
investment requirements.  Türk Eximbank lends through commercial banks, chosen on the basis of 
criteria set by the  World Bank.  The credit risk on th e participating banks is borne by Turk Eximbank, 
whereas the credit risk on the borrowing en terprises is borne by the on-lending banks. 
 6. Buyers' Credit and Guarantee Programme ;  Türk Eximbank extends credit lines under 
sovereign guarantee to correspondent banks and financial institutions in  various countries.  Within the 
framework of this programme, financing facilities ar e allocated for project finance and may take the 
form of direct lending or guarantee.  Project fi nance is generally a medium- or long-term facility 
referring specifically to large individual projects fo r which the eventual cash flow will repay the debt 
incurred to finance them and which are undertaken by  Turkish contractors in the role as main or sub-
contractor. 
 
INSURANCE PROGRAMMES 
 
 Through the export credit insurance programmes,  which are one of the Turk Eximbank's main 
areas of activity, export receivables are insured agai nst commercial and political risks within certain 
limits.  Besides, export credit in surance programmes enable exporters  to obtain credits from financial 
institutions at favourable terms via the insurance policies issued by Turk Eximbank as collateral. 
 
1. Short-term Export Credit Insurance 
 
 Short-term Export Credit Insurance Programme ;  this unified type of cover is provided on 
the whole-turnover basis with several exclusions ag ainst commercial and political risks.  Shipments 
up to 360 days to be effected on all payment te rms from open-account to documentary credits are 
covered in accordance with the country cover condition and credit limit approval. 
 G/SCM/N/95/TUR 
Page 12  
 
 2. Medium and Long-term Insurance Facilities 
 
 This is a single contract (single buyer) mu lti-transaction export credit insurance programme 
providing cover against commercial and/or political risks for the export of capital or semi-capital 
goods with credit terms up to five years, in princi ple.  Extended credit terms may be covered in line 
with the specific conditions and/or the require ments of the export transaction upon the Board's 
approval.   Specific Export Credit Insurance Programme ;  provides insurance cover against political 
and commercial risks for both pre and the post-shipment stages. 
 
 Post-shipment Political Risk Insurance Programme;   provides insurance cover against 
political risks for only the post-shipment stage.   Post-shipment Comprehensive Risk Insurance Programme ;  provides insurance cover 
against political and commercial risks for only the post-shipment stage. 
 
2. Policy objective and/or purposes of the subsidy 
 CREDIT PROGRAMMES  
1. Short-term Export Credits  
 Pre-shipment Export Credit Programme ;  aims to meet the financing needs of exporters 
and/or export oriented producers starting from the early stages of production.  
 PSEC-Priority Development Areas Export Credit Programme ;  aims to support exporters 
located in priotiry development areas and ultimatel y eliminate the social and economic gap among the 
regions of Turkey.   Foreign Trade Companies Shor t-term Export Credits Programme ;  aims to provide 
financial support to large export trading companies for their export financing needs. 
 
 Pre-export Credit Programme ;  aims to increase the competitiveness of exporters in 
international markets and support export projects in the preparatory stage.   Pre-export SMSE Credit Programme ;  aims to provide financial support to SMSEs in the 
preparatory stage of their exports. 
 
2. Specific Credit Programmes 
 
 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 thereby encouraging them to enter into new and target 
markets.   Short-term Pre-shipment Rediscount Programme;  aims to support Turkish 
manufacturers, exporters and manufactur er-exporters on pre-shipment basis. 
 
 Overseas Chain Stores Investment Credit Programme ;  aims to support direct sales of 
Turkish brand consumer goods in international markets and establish Tu rkish brand names and 
promote Turkish goods abroad.   G/SCM/N/95/TUR 
 Page 13 
 
 
  Letter of Guarantee Programme for Ship-building and Exporting ;  aims to support 
Turkish dockyards in order to increase their shares and competitiven ess in international markets. 
  Letter of Guarantee Programme fo r Overseas Contractors' Services ;  aims to enable 
Turkish contractors to sustain their current share in  international markets and encourage them to enter 
into new markets. 
  Specific Export Credit Programme ;  aims to meet the specific requirements of Turkish 
manufacturers/exporters through medium-term fina ncing and thus encourage the export of new 
products to new markets. 
 
3. Credits for Foreign Currency Earning Services 
 
 Tourism Marketing Credit Programme ;  aims to increase the competitiveness of travel 
agencies through financing their promotional and ma rketing activities abroad and thus contribute to 
Turkey's balance-of-payments via increasing tourism revenues. 
 
 International Transportation Marketing C redit Programme (Road Transportation & 
Shipping) ;  aims to increase the competitiveness of inte rnational transportation companies and thus 
contribute to Turkey's foreign exchange earnings.  
 Credit Programme for Foreign Currency Earning Services ;  aims to contribute to 
Turkey's foreign exchange earnings through financing the companies resident in  Turkey for both their 
foreign currency earning services abroad and the expor t of services like software projects, consultancy 
services.  4. Islamic Development Bank Backed Credits  
 
 IDB Export Financing Scheme ;  aims to increase the trade volume among Islamic countries.  
The ultimate aim is to increase th e competitiveness of Turkish export ers in current and new markets 
by enabling them to sell on deferred payment conditions.  
 IDB Import Trade Financing Operations (ITFO Line);   aims to provide finance for the 
imports of raw materials, semi-capital and capita l goods from member and non-member countries of 
OIC, which are used in the production of export goods.  5. Export Finance Intermediation Loan (EFIL) ;  aims to finance the short/medium-term 
working capital needs of manufacturer-exporters a nd their export-related investment requirements. 
 6. Buyers' Credit and Guarantee Programme ;  aims to strengthen the competitiveness of 
Turkish exporters and contractors in internationa l markets and to provide these companies a risk-free 
environment for their activities in markets at high political and commercial risk.  Through this programme Türk Eximbank enables foreign buye rs to purchase Turkish goods and services on 
deferred payment conditions. 
 
INSURANCE PROGRAMMES  
 1. Short-term Export Credit Insurance 
  Short-term Export Credit Insurance Programme ;  this post-shipment facility aims to 
provide insurance cover against political and commercial risks.  G/SCM/N/95/TUR 
Page 14  
 
 2. Medium and Long-term Insurance Facilities 
 
 Specific Export Credit Insurance Programme ;  aims to provide insurance cover against 
commercial  and political risks for both pre- and post shipment stages for the export of capital and 
semi-capital goods sold with credit terms up to five years. 
 
 Post-shipment Political Risk Insurance Programme ;  aims to provide insurance cover 
against political risks for only the post-shipment stage for receivables with credit terms of up to 5 
years relating to the export of capital and semi-capital goods.  
 Post-shipment Comprehensive Risk Insurance Programme ;  aims to provide extended 
cover to medium and long-term exports of capita l and semi-capital goods against both commercial 
and political risks for only the post shipment stage.  
3.  Background and authority for the  subsidy 
 
 Turk Eximbank regularly presents her annua l programmes to the Supreme Advisory and 
Credit Guidance Committee chaired by the State Minist er in charge of the Bank's activities.  This 
Committee fixes upper limits of credits to be exte nded by the Bank, guarantees to be issued and 
insurance 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 th e Board of Directors of the Bank.  Regarding 
medium and long term credit, guarantee and insura nce facilities, the Bank fully complies with OECD 
Consensus, which determines the guidelines for the offi cially supported export credits for two years or 
more.  In April, 1998, Turkey also became a fu ll member of Export Credits and Credit Guarantees 
Group of OECD.  Moreover, Turk Eximbank has b een a full member of the Berne Union, an 
international association of export credit insurers sends regular information to these organizations. 
 
4.  Form of the subsidy 
  Short-term export credits  
 In the form of loan. 
 
 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 or guarantee. 
 
 Short, Medium and Long Term Insurance Facilities 
  In the form of export credit insurance. 
  G/SCM/N/95/TUR 
 Page 15 
 
 
 5.  To whom and how the subsidy is provided 
 CREDIT PROGRAMMES   1. Short-term Export Credits 
 
 Pre-shipment Export Credit Programme ;  extended to Sectoral Foreign Trade Companies 
(SFTC), manufacturers, manufacturer-exporters and e xporters.  The interest rate is determined by 
Turk Eximbank according to money market rates, loan repayment periods, and cost of funding. 
 
 PSEC-Priority Development Areas Export Credit Programme ;  extended to companies 
located in Turkey's priority development areas.  Interest  rate is slightly lower than the interest rate of 
PSEC TL.   Foreign Trade Companies Short-term Export Credit Programmes ;  extended to Foreign 
Trade Corporate Companies (FTCC) and Sectoral Foreign Trade Companies (SFTC).  Applicants 
must be entitled to FTCC and SFTC status by the Under secretariat of Foreign Trade.  The interest rate  
is determined by Turk Eximbank according to money market rates, loan repayment periods and cost 
of funding.   Pre-Export Credit Programme ;  extended to manufacturer-e xporters, exporters and export 
oriented manufacturers except FTCC and SFTC and a llocated on the basis of the previous year's 
export performance.  The interest rate for FX option is the same as that of PSEC FX and the rate for 
TL option is the same as that of PSEC TL.   Pre-export Small and Medium Scale Enterprises (SMSE) Programme ;  extended to only 
small and medium scale enterprises directly by Türk Eximbank.  The interest rate is lower than the 
interest rate of Pre-export Credit Programme.  
2. Specific Credit Programmes  
 
 Short-term Export Credit Discount Programme ;  export receivables of Turkish exporters, 
manufacturers-exporters and manufacturers are discounted .  Export receivables with a maturity of up 
to 180 days are discounted on LIBOR+banking commission.   Short-term Pre-shipment Rediscount Programme ;  a pre-shipment financing facility 
provided for Turkish manufacturers, exporters a nd manufacturer-exporters.  Rediscount rate is 
LIBOR+spread, where spread is determined by Türk Eximbank. 
  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 and to 
those who invest abroad for the establishment of stor es to sell their own brand.  The interest rates are 
determined by Türk Eximbank accord ing to the credit term, cost of funding and the credibility 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 are eligible for this cred it.  The commission rate 
and payment term is determined by Türk Eximbank for each transaction.  
 Letter of Guarantee Programme fo r Overseas Contractors' Services ;  Turkish contractors 
who participate in tenders abroad are provided letters of guarantee by Türk Eximbank under the 
counter-guarantee of Turkish commercial banks.  The commission rate is determined by Türk 
Eximbank. G/SCM/N/95/TUR 
Page 16  
 
  
 Specific Export Credit Programme ;  Companies, which engage in ship-building and factory 
construction, and manufacturer/e xporters that produce high value- added industrial export goods can 
benefit from this programme.  The term s are determined on a project basis. 
 3. Credits for Foreign Currency Earning Services  
 
 Tourism Marketing Credit Programme ;  travel agencies selected by the Ministry of 
Tourism and private airlines that have obtai ned a working licence from the Ministry of 
Transportation, and those that attract more than  US$500,000 worth of foreign currency to Turkey 
annually are eligible for this credit.  The maximum payment term is 360 days.  The interest rate is 
determined by Türk Eximbank.  
 International Transportation Marketing C redit Programme (Road Transportation & 
Shipping );  international transportation companies reside nt in Turkey with a freight revenue of more 
than US$500,000 in the previous year and internatio nal shipping companies resident in Turkey with 
freight revenue of more than US$1 million in the previous year and export services via ships that are 
registered to Turkish Ship Register and/or via rental foreign flag ships, are eligible for this credit.  The 
maximum payment term is 360 days.  The inter est rate is determined by Türk Eximbank. 
  Credit Programme for Foreign Currency Earning Services ;  companies resident in Turkey 
which engage in foreign currency earning services abro ad or export of services like software projects, 
consultancy services are eligible for this credit.  The terms are determined on a project basis. 
 
4. Islamic Development Bank Backed Credits 
  IDB Export Financing Scheme ;  extended to Turkish expor ters who export goods to 
countries that are determined in the Annual Progra mme of Turk Eximbank.  The annual mark-up rates 
are LIBOR+risk premium where the premium is de termined on transaction basis according to the 
credibility of the importer's country and the importe r.  For transactions where Türk Eximbank bears 
the buyer's risk, the Bank charges a reimbursement commission to the exporter.  
 IDB Import Trade Financing Operations (ITFO Line);   extended to Turkish 
manufacturer/exporters or export oriented manufacturer s to finance their import of inputs used in the 
production of export goods.  The mark-up rate is EURIBOR+3.5 per cent for the imports from member countries of OIC and EURIBOR+4 per cent for the imports from non-member countries OIC. 
 
5. 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.  Türk Eximbank determines the interest rat es applied to the on-lending banks considering the 
cost of funding.  The interest rate and the pa yment term applied to companies are determined 
independently by the on-lending banks.  
6. Buyers' Credit and Guarantee Programme ;  credit lines are extended under sovereign 
guarantee to correspondent banks and financial institutions in various  countries.  The total payment 
term cannot exceed 8 years including the grace period.  Interest rates are established between the parties concerned in compliance with the OECD Consensus.   G/SCM/N/95/TUR 
 Page 17 
 
 
 INSURANCE PROGRAMMES  
 1. Short-term Export Credit Insurance  
 Short-term Export Credit Insurance Programme ;  all Turkish exporters, manufacturer-
exporters, FTCCs and SFTCs are eligible for this programme.  Premium rate s vary according to the 
risk class of the buyer's country, the tenor and the payment term of each shipment together with the 
status of the buyer (private, public or sovereign).  
2. Medium and Long-term Insurance Facilities 
  Capital or semi-capital goods exported by Tu rkish companies may qualify for insurance under 
these programmes.  The premium rates are dete rmined by Türk Eximbank on transaction basis 
according to the risk classification of the buyer's country, the terms and conditions of payment and the 
type of the buyer (public/private). 
 
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 accordi ng to the requirements of Turkish exporters and 
international rules and regulations. 
 G/SCM/N/95/TUR 
Page 18  
 
 TURK EXIMBANK'S PROGRAMMES 
IN THE THREE MOST RECENT YEARS 
($ million) 
 
CREDITS 2000 2001 2002 
1.    S-T Export Credit Programmes    
 Pre-Shipment TL Export Credits 736.0 595.8 576.3 
 Pre-Shipment FX Export Credit 1,443.5 1,166.8 797.9 
 Foreign Trade Companies S-T TL Export Credit 194.8 151.5 279.2 
 Foreign Trade Companies S-T FX Export Credit 500.5 289.8 257.5 
 Pre-Export TL Export Credit 130.3 166.8 112.7 
 Pre-Export FX Export Credit 322.1 278.5 94.4 
2.    Specific Export Credit Programmes    
 S-T Export Credit Discount Programme 23.6 18.5 19.2 
 S-T Pre-Shipment Rediscount Programme 20.6 39.4 16.3 
 Overseas Chain Stores Investment Credit Programme 11.5 4.2 0.3 
 Letter of Guarantee Programme for Ship-Building and Exporting - 3.2 0.5 
 Letter of Guarantee Programme for Overseas Contractors Services - - - 
 Specific Export Credit Programme - 13.8 7.1 
3.    Credit Programmes for Foreign Currency Earning Services    
 Tourism Marketing Credit Programme 5.1 7.5 2.0 
 Int. Transportation Marketing Credit Programme - - 3.3 
 Credit Programme for Foreign Currency Earning Services - - - 
4.    IDB Backed Credits -   
 Export Financing Scheme  6.0 2.8 
 IDB ITFO Line 3.8 1.2 - 
5.    Export Finance Intermediation Loan (EFIL) 55.4 67.6 97.4 
6.    Buyers Credit & Guarantee Programmes 52.0 22.0 21.3 
Insurance    
 S-T Export Credit Insurance Programme 2,952 2,811 2,706 
 Medium and L-T Export Credit Insurance Programmes - - - 
  G/SCM/N/95/TUR 
 Page 19 
 
 
  
III. EXPORT SUBSIDY PROGRAMME FOR AGRICULTURAL PRODUCTS 
IMPLEMENTED IN 2001, 2002 AND 2003 
 
DECREE 2001/1 OF THE MONEY-CREDIT AND COORDINATION COUNCIL  1. Title of the subsidy programme  
 "Export Subsidy Programme for Agricultural Products" implemente d between 1 January-
31 December 2001 and published in the Official G azette dated 26 January 2 001 (Decree No. 2001/1). 
 
2. Policy objective and/or purpose of the subsidy 
 
To develop Turkey's export potential in certain agricultural products. 
 3. Background and authority of the subsidy 
 
 The authority is the Money-Credit and Coordina tion Council, which consists of the Minister 
of State, the Minister of Finance, the Undersecretary of State Planning Organization, the Undersecretary of  Foreign Trade, the Undersecretary of Treasury and Governor of the Central Bank.  4. Form of the subsidy  
The subsidies are paid to exporters or producer s exporting in their names.  The payments are 
made in the form of deduction from their matured debts to the public organizations (taxes, social 
insurance premium costs, energy costs, telecommunication costs). 
 
5. Subsidy per unit 
 
Product 
              Rate 
(in US$/ton) 
 Share of exported quantity 
eligible 
to receive the subsidy 
Cut flowers (fresh) 234 69% 
Vegetables, frozen (exc. potatoes)2 94 43% 
Vegetables (dehydrated) 370 33% 
Fruits (frozen) 88 47% 
Pastes and preserves 65 71% 
Homogenized food preparations 53 66% 
Fruit juices  157 29% 
Olive oil  200 100% 
Prepared or preserved fish 210 100% 
Meat of poultry (excl. edible offals) 195 29% 
Natural honey 67 75% 
Eggs  $6/1,000 pieces 47% 
                                                      
2 "Export Subsidy Programme for Potatoes" implemented between 1 October 2000-30 April 2001, 
which can be found in G/SCM/N/71/TUR, has been notified before. G/SCM/N/95/TUR 
Page 20  
 
 Product 
              Rate 
(in US$/ton) 
 Share of exported quantity 
eligible 
to receive the subsidy 
Chocolate and other food preparations containin
g cocoa 110 60% 
Biscuits, waffles and cakes 110 30% 
Macaroni vermicelli 72 40% 
 
 The numbers in the third column state that payments will only be made for the specified percentages of the quantities exported.  This system  has been used not to exceed the limits set by the 
Agreement on Agriculture and Uruguay Round commitments of Turkey. 
 
DECREE 2001/5 OF THE MONEY-CREDIT AND COORDINATION COUNCIL 
 
1. Title of the subsidy programme 
 
 "Export Subsidy Programme for Apples" impl emented between 1 April-31 May 2001 and 
published in the Official Gazette dated 3 June 2001 (Decree No. 2001/5). 
 
2. Policy objective and/or purpose of the subsidy 
 
 To develop the export potential of apples a nd to channel excessive production to exports. 
 
3. Background and authority of the subsidy 
 
 The authority is the Money-Credit and Coordi nation Council.  The Council consists of the 
Minister of State, the Minister of Finance, the Undersecretary of State Planning Organization, the 
Undersecretary of Foreign Trade, the Undersecretary of Treasury and the Governor of the Central 
Bank. 
 
4. Form of the subsidy 
 
The form of the subsidy is cash grants. These s ubsidies are provided to the exporters of this 
product, as a fixed amount per ton in US dollars. 
 
5. Subsidy per unit 
 
Product 
 Rate 
(in US$/ton) 
Apples 40 
  
DECREE 2002/1 OF THE MONEY-CREDIT AND COORDINATION COUNCIL 
 1. Title of the subsidy programme  
 "Export Subsidy Programme for Agricultural Products" implemente d between 1 January-
31 December 2002 and published in the Official Gazette dated 29 June 2002  (Decree No. 2002/1). 
  G/SCM/N/95/TUR 
 Page 21 
 
 
 2. Policy objective and/or purpose of the subsidy 
 
To develop Turkey's export potential in agricultural products. 
 
3. Background and authority of the subsidy 
  The authority is the Money-Credit and Coordi nation Council.  The Council consists of the 
Minister of State, the Minister of Finance, the Undersecretary of State Planning Organization, the 
Undersecretary of  Foreign Trade, the Undersecretary of Treasury and Governor of the Central Bank.  4. Form of the subsidy  
The subsidies are provided to exporters or producer s exporting in their names.  The payments are 
made in the form of deduction from their matured debts to the public organizations (taxes, social 
insurance premium costs, energy costs, telecommunication costs). 
 
5. Subsidy per unit 
 
Product 
              Rate 
(in US$/ton) 
 Share of exported quantity 
eligible 
to receive the subsidy 
Cut flowers (fresh) 208 69% 
Vegetables, frozen (exc. potatoes) 90 40% 
Vegetables (dehydrated) 370 30% 
Fruit (frozen) 85 49% 
Pastes and preserves 68 60% 
Homogenized food preparations 63 65% 
Fruit juices  151 27% 
Olive oil  180 100% 
Prepared or preserved fish 200 100% 
Meat of poultry (excl. edible offals) 192 27% 
Natural honey 66 72% 
Eggs  $6/1,000 pieces 69% 
Chocolate and other food preparations 
containin g cocoa 119 55% 
Biscuits, waffles and cakes 119 27% 
Macaroni vermicelli 72 40% 
 
 The numbers in the third column state that payments will only be made for the specified percentages of the quantities exported.  This system  has been used not to exceed the limits set by the 
Agreement on Agriculture and Uruguay Round commitments of Turkey. 
 
 DECREE 2003/1 OF THE MONEY-CREDIT AND COORDINATION COUNCIL 
 
1. Title of the subsidy programme 
 
 "Export Subsidy Programme for Agricultural Products" implemente d between 1 January-
31 December 2003 and published in the Official  Gazette dated 14 April 2003 (Decree No. 2003/1). 
 G/SCM/N/95/TUR 
Page 22  
 
 2. Policy objective and/or purpose of the subsidy 
 
To develop Turkey's export potential in certain agricultural products. 
 
3. Background and authority of the subsidy 
  The authority is the Money-Credit and Coordi nation Council.  The Council consists of the 
Minister of State, the Minister of Finance, the Undersecretary of State Planning Organization, the 
Undersecretary of  Foreign Trade, the Undersecretary of Treasury and Governor of the Central Bank.  4. Form of the subsidy  
The subsidies are paid to exporters or producer s exporting in their names.  The payments are 
made in the form of deduction from their matured debts to the public organizations (taxes, social 
insurance premium costs, energy costs, telecommunication costs). 
 
5. Subsidy per unit 
 
Product 
              Rate 
(in US$/ton) 
 Share of exported quantity 
eligible 
to receive the subsidy 
Cut flowers (fresh) 205 62% 
Vegetables, frozen (exc. potatoes) 84 38% 
Vegetables (dehydrated) 370 30% 
Fruit (frozen) 82 46% 
Pastes and preserves 68 60% 
Natural honey 65 72% 
Homogenized food preparations 63 65% 
Fruit juices  144 27% 
Olive oil  180 100% 
Prepared or preserved fish 200 100% 
Meat of poultry (excl. edible offals) 189 27% 
Eggs  $6/1,000 pieces 69% 
Prepared or preserved meat of poultry 250 40% 
Chocolate and other food preparations containin
g cocoa 119 55% 
Biscuits, waffles and cakes 119 27% 
Macaroni vermicelli 69 44% 
 
 The numbers in the third column state that payments will only be made for the specified percentages of the quantities exported.  This system  has been used not to exceed the limits set by the 
Agreement on Agriculture and Uruguay Round commitments of Turkey. 
 
 
DECREE 2003/2 OF THE MONEY-CREDIT AND COORDINATION COUNCIL 
 
1. Title of the subsidy programme 
 
 "Export Subsidy Programme for Apples" impl emented between 1 March-31 May 2003 and 
published in the Official Gazette dated 22 May 2003 (Decree No. 2003/2).  G/SCM/N/95/TUR 
 Page 23 
 
 
  
2. Policy objective and/or purpose of the subsidy 
 
 To develop the export potential of this product and to channel excessive production to 
exports. 
 
3. Background and authority of the subsidy 
 
 The authority for the subsidy is the Money-Credit and Coordination Council.  The Council 
consists of the Minister of State, the Minister of Finance, the Undersecretary of State Planning 
Organization, the Undersecretary of Foreign Trade,  the Undersecretary of Treasury and the Governor 
of the Central Bank. 
 
4. Form of the subsidy 
 
The form of the subsidy is cash grants. These s ubsidies are provided to the exporters of this 
product, as a fixed amount per ton in US dollars. 
 
5. Subsidy per unit 
 
Product 
 Rate 
(in US$/ton) 
Apples 40 
  
__________