G/SCM/Q2/TUR/30  
 
31 July 2014  
(14-4442)  Page: 1/3  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
QUESTIONS FROM THE UNITED  STATES REGARDING THE  
NEW AND FULL NOTIFICATION OF TURKEY1 
The following communication, dated 29 July 2014, is being circulated at the request of the Delegation of the United States.  
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  Programs Included in Notification 
 
Export Subsidy Programme for Agricultural Products (Decree Nos. 2012/2 and 2013/4)  
According to the Turkey's notification (G/SCM /N/253/TUR), these subsidies to exporters and 
producer/exporters of processed agricultural produc ts are provided in the form of "deduction of 
debts" to the "public corporations" and are calculated "on the basis of a fixed amount per unit". 
 
Question 1  Could Turkey explain what "deduction of debts" me ans?  For example, is it forgiveness of loans? 
 
Question 2  
What are the "public corporations" to whom these debts are owed? 
 Question 3 
 
In calculating the amount of subsidies, does the "fixed amount per unit" pertain to amount of production or exportation, or both?  
Programs Previously Notified 
 Question 4 
 
With regard to the following programs, we note th at while these were notified in Turkey's prior 
notification G/SCM/N/220/TUR (21 March 2012), they are not included in the current notification. 
Could Turkey explain why these programs are not covered in the current notification? 
  Investment Encouragement Program ("IEP") 
 Energy Support (Law 5084, as amended by Laws 5350 and 5615) 
 Turk EXIM and Central Bank Programs, including, e.g.: 
 
o Short- and Medium-Term Export Credit and Insurance programs 
o ITFC-Backed Production Credit program 
o Specific Export Credit and Insurance programs 
 
                                               
1 G/SCM/N/253/TUR. G/SCM/Q2/TUR/30 
 
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  Other Programs 
 Question 5  
Based on publicly available information, the programs described below appear to meet the 
notification requirements under Article 25 of th e SCM Agreement, but to date, Turkey has not 
submitted the requisite notifications. We request th at Turkey indicate when it intends to submit 
notification of these programs, or otherwise explain why these programs are not subject to 
notification. We also note that some of these programs appear to be export-contingent and, therefore, prohibited under Article 3 of the SCM Agreement.  
1. Special Zones 
 Public information also indicates that Turkey main tains various programs supporting enterprises in 
Organized Industrial Zones ("OIZ"), Industrial Zones, Industrial Estates and Technology 
Development Zones.
2 We note that central-level programs limited to enterprises located in 
designated geographic areas, such as OIZs and other special zones, may be specific under 
Article 2.2 of the SCM Agreement and, thus, appear to be subject to the notification requirements 
under Article 25 of the SCM Agreement.    2. Free Zones 
 
Public information further shows that firms operating in free zones under a production license are exempted from income and corporate taxes until th e year in which Turkey becomes a full member 
of the European Union.
3 The information indicates that firms outside these free zones are not 
eligible for these incentives. We note that, as with the OIZs and other special zones, these free zone incentives appear to be subject to the no tification requirements under Article 25 of the 
SCM Agreement.  
 3. Income Tax Deductions for Export Revenue 
 
Under Turkey's Income Tax Law No. 193 (2 June 1995), Article 40, Addendum 4108, exporters 
may claim deductions from income derived from exports and other overseas activities with foreign-exchange earnings, for up to 0.5 percent of such  income. This program appears to be subject to 
the notification requirements under Article 25 of the SCM Agreement. 
 4. Pre-Shipment Rediscount Program 
 
Administered by the Export Credit Bank of Turk ey, this program provides financing support for 
exporters, and manufacturers that supply exporters. This program appears to be subject to the notification requirements under Article 25 of the SCM Agreement. 
 
5. Pre-Export Credit Programs 
 
Turk EximBank administers this program, which provides financing support to certain exporters 
and their manufacturer-suppliers based on written export commitments. This program appears to be subject to the notification requiremen ts under Article 25 of the SCM Agreement. 
 
6. IEP Customs Duty and VAT Exemptions 
 Under a program administered by the Ministry of  Economy and the Ministry of Customs and Trade 
pursuant to Council of Ministers' Decree No. 2012/3305 (June 2012), certain producers may obtain 
Investment Encouragement Certificates, which entitle them to customs duty and VAT exemptions on imported equipment for use in their production. Eligibility for this program appears to be limited 
to certain geographic regions and/or certain types of production. Thus, this program appears to be 
subject to the notification requirements  under Article 25 of the SCM Agreement. 
 
                                               
2 WT/TPR/S/259, page 59, paragraph 72. 
3 WT/TPR/S/259, page 68, paragraphs 102-104. G/SCM/Q2/TUR/30 
 
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  7. Tax Incentives for Employer's Share in Insurance Premiums 
 Under a program administered by Turkey's Social Security Institution pursuant to Articles 2, 4 and 7 of Law No. 5084, enterprises located in certain provinces may enjoy tax support toward 
their share of workers' insurance premiums. This pr ogram appears to be subject to the notification 
requirements under Article 25 of the SCM Agreement.  
 
 
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