Turkey WT/TPR/S/259/Rev.1 
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  II. TRADE AND INVESTMENT REGIMES 
(1) GENERAL FRAMEWORK  
1. The 1982 Constitution asserts that Turkey is a secular and democratic republic governed by 
the rule of law, with an independent judiciary and fundamental human rights for all citizens.  The 
Constitution may be amended by re ferendum or a qualified majority vote (2/3) in the Turkish 
Parliament, known as the Turkish Grand National Assembly (TGNA).1  The single-chamber TGNA 
consists of 550 members elected by popular vote  every five years on the basis of proportional 
representation.2  The Constitutional Court is at the top of the judiciary, followed by the High Court of 
Cassation, Council of State, Court of Accounts, High Military Court of Appeals, and Military High 
Administrative Court.   
2. The President, elected by popular vote for a five-year term, has broad supervisory powers.3  
He appoints (and may dismiss) the Prime Minister and other ministers, on the advice of the Prime Minister.  The present Cabinet consists of the Prime Minister, four Deputy Prime Ministers, 
and 21 Ministers.   
3. Turkey's overall framework for the formula tion and implementation of trade policy has 
remained broadly unchanged since the last TPR of Turkey.  However, following a reorganization of 
the institutional structures of ministries and certain  public institutions initiated in June 2011, the titles 
of the relevant institutions and their portfo lios have been adjusted in recent months.
4  The Ministry of 
Economy (formerly the Undersecretariat of the Prime Ministry for Foreign Trade) formulates, administers, and coordinates Turkey's foreign trade po licies.  Depending on the nature of the issue, the 
Ministry may consult with other ministries and agencies such as the ministries of Foreign Affairs;  Science, Industry and Technology;  Finance;  Food, Agriculture and Livestock;  Health;  Culture and 
Tourism;  Energy and Natural Resources;  Envi ronment and Urbanism;  Development;  Customs and 
Trade;  the Undersecretariat of Treasury;  the Cent ral Bank of Turkey;  the Turkish Patent Institute;  
the Competition Authority;  the Public Procurement Authority;  the Banking Regulation and Supervision Agency (BRSA);  the Information and Communication Technologies Authority;  the 
Energy Market Regulatory Authority;  the Sugar Authority;  the Tobacco and Alcohol Market 
Regulatory Authority;  the Public Procurement Agency;  and the Export Credit Bank of Turkey (Turk 
Eximbank).  A number of independent regulator y institutions with responsibilities in goods- and 
services-related matters are listed in Table II.1.  The Ministry of Economy, through the Directorate-General of Incentives Implementation and Foreign Inv estment, is responsible for state aids provided 
to investments and matters related to foreign dir ect investment in Turkey (section (4) below).   
4. The Ministry of Economy conducts periodic review s and assessments of trade policies.  In 
this context, the export and import regimes and legi slation on standardization are reviewed annually 
and updated as necessary.  The private sector and NGOs provide inputs to trade policy formulation by communicating their views to the Ministry of Economy either directly or through the Union of 
Chambers and Commodity Exchanges of Turkey (T OBB), the Turkish Export ers Assembly (TIM), 
the Turkish Businessmen's and I ndustrialists' Association (TUSIAD) , the Independent Businessmen's 
and Industrialists' Association (MUSIAD), and the Foreign Economic Relations Board (DEIK), as 
                                                      
1 Only members of the TGNA may propose amendments to the Constitution. 
2 A party must obtain minimum 10% of the votes cast at the national level to participate in the 
distribution of parliamentary seats.   
3 The President may be re-elected, but only once, for a second five-year term.  Until 2007, the President 
of Turkey was elected by Parliament  for a single seven-year term.   
4 Decree Law No. 637, published in Official Gazette  No. 27958 (bis), 8 June 2011. WT/TPR/S/259/Rev.1 Trade Policy Review 
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  well as individual and local chambers of commerce, and exporters' associations.5  Consultation is 
sometimes held with universities and research institutes, such as the Economic Development 
Foundation (IKV), the Economic Policy Research F oundation of Turkey (TEPAV) and the Foreign 
Trade Association of Turkey (TURKTRADE).6   
Table II.1 
Independent regulatory institutions, 2011 
Institution Law No./Year Sectors Task 
Capital Market Board 2499/1981 Capital markets Regulating and supervising the capital markets and protecting 
the rights and interests of investors 
Radio and Television 
Supreme Council 6112/2011 Radio, television, 
and on-demand 
media services Regulating and supervising radi o, television, and on-demand 
media services 
Competition Authority 4054/1994 Goods and services 
markets (all sectors) Prohibiting agreements, decisi ons, and concerted practices 
that restrict competition, and any abuse of dominant position 
by one or more undertakings;  controlling mergers and 
acquisitions; establishing a competition culture as part of its 
competition advocacy role  
Banking Regulation and 
Supervision Agency 4389/1999 
(Banks Act 
No. 4389 was superseded by 
Banking Law 
No. 5411/2005) Banking Protecting the rights and interests of depositors;  laying down 
principles regarding the establishment, management, 
operation, acquisition, merger, li quidation, and supervision of 
banks in order to ensure efficient operation of the credit 
system with due regard to the requisites of economic 
development, and confidence a nd stability in the financial 
market 
Information and 
Communication 
Technologies Authority 4502/2000 
5809/2008 Telecommunications Constituting a dynamic and strong market based on fair 
competition;  contributing to the sectoral policy-making process;  taking measures to protect consumer rights;  
ensuring efficient and productive use of scarce resources in 
the sector, such as frequency and numbers 
Electronic Signature Law 5070/2004 Information 
technology Defining the principles for the legal and technical aspects and 
application of electronic signatures 
Energy Market Regulatory Authority 4628/2001 
4646/2001 5015/2003 5307/2005 Electric energy 
Natural gas Petroleum 
Liquefied petroleum 
gas (LPG) Constituting a financially str ong, stable, and transparent 
energy market operating under pr ivate law in a competitive 
environment to provide adequa te, refined, continuous, and 
environment-friendly electricity and natural gas;  ensuring 
independent regulation and supervision in the market; regulate the guidance, surveilla nce and supervision activities 
in the delivery of petroleu m and LPG, to ensure the 
transparent, non-discriminatory, and stable supply from domestic and foreign resources to consumers, directly or after processing in a cost-effective manner 
Sugar Authority 4634/2001 Sugar, starch-based 
sweeteners Regulating the sugar regime through establishment of 
procedures and principles rega rding sugar production, and the 
conditions and methods of marketing 
Tobacco and Alcohol Market Regulatory 
Authority 4733/2002 
(Amended by Law No. 5752/2008) Tobacco, tobacco 
products, alcohol and alcoholic beverages Regulating the procedures and principles regarding 
production, domestic and external purchase and sale of 
tobacco, tobacco products, alcohol, and alcoholic beverages 
Public Procurement Authority 4734/2002 All public 
institutions Determining the procedures and principles to be applied in 
public procurements;  examining the complaints concerning 
all public procurements 
Source: Information provided by the Turkish authorities.    
                                                      
5 The views of the private sector, including NGOs, are customarily taken into consideration throughout 
the process (although this is not legally required).   
6 The former Export Promotion Centre (IGEME) has been integrated into the Ministry of Economy.   Turkey WT/TPR/S/259/Rev.1 
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  5. The hierarchy of legal instruments in Turk ey comprises the Constitution, laws, decrees, 
regulations, implementing regulations , Council of Ministers' decisions, and other administrative Acts 
such as circulars.  In general, policies are formulated and implemented by means of laws.7  The main 
legislation relating to international trade is the Foreign Trade Regulations Law (No. 2976 of 1984).  
International agreements duly put into effect in  Turkey, including the WT O Agreements, carry the 
force of law.  Thus, their provisions would apply in the case of any inconsistency between them and 
domestic law, which would conseque ntly have to be amended to reflect Turkey's international 
commitments.  The WTO Agreements, and Turkey's  current and future trade relations with the 
European Union, are the main factors in fluencing the Turkish trading system.   
6. The main pieces of trade-related legislation in Turkey are listed in Table AII.1.  The present 
Turkish Commercial Code (No. 6762), in force sin ce 1957, stipulates that trading companies may take 
the form of a collective, commandite, joint-stock, or  limited liability company, or be a cooperative.  
All companies established according to the Commercia l Code are regarded as Turkish companies.  A 
new Commercial Code (No. 6102), published in the Official Gazette  on 14 February 2011, will enter 
into force on 1 July 2012.  Secondary legislati on to implement the new Commercial Code is in 
preparation.  The new Code also regulates the establishment of branches of foreign companies.8  The 
establishment of representative offices is regulated in the Foreign Direct Investment Law (No. 4875).   
(2) POLICY OBJECTIVES  
7. Since it entered into force on 1 January 1996, th e Customs Union with the EU has been the 
main factor shaping Turkey's foreign trade po licy.  The EU opened accession negotiations with 
Turkey in October 2005.  Guidance on reform  priorities is provided through the Accession 
Partnership, adopted in February 2008.  Turkey 's (third) National Programme was promulgated on 
31 December 2008 to achieve the objectives iden tified in the Accession Partnership.  On 
15 March 2010, the Turkish Council of Minister s adopted an action plan for 2010-11 outlining 
legislation to be enacted and studies to be carri ed out on the various chapters of the accession 
negotiations.9   
8. At the national level, Turkey's Long-Term Deve lopment Strategy (2001-2023), prepared by 
the Ministry of Development, envisages the develo pment of an export-oriented, technology-intensive 
production structure, with emphasis on high-value- added products and services.  Export-oriented 
activities, particularly of small and medium -sized enterprises, are to be supported, inter alia,  by 
providing credit, guarantees,  and insurance through Turk Eximbank;  harmonization of foreign 
                                                      
7 The relevant minister presents the draft law to the Council of Ministers, which forwards the adopted 
draft to Parliament for approval.  Draft laws may also be proposed by members of the Turkish Grand National 
Assembly.  Bills are forwarded for assessment to the st anding sub-commissions of the TGNA;  if approved, they 
are forwarded to the President for signature.  Laws enter into force upon publication in the Official Gazette .  
Decisions with respect to policy proposals may also be made by means of Council of Minister decrees, which 
must be published in the Official Gazette .  The import and export regimes, safeguard measures, and surveillance 
of imports are all being implemented through decrees.   
8 Until now, the establishment of a branch of a foreign company has been regulated by a temporary law 
of 30 December 1914, requiring permission from the former  Ministry of Industry and Trade.  The temporary law 
has been repealed through Law No. 6103 of 2011.  The new legislation will enter into force on the same day as 
the new Commercial Code, i.e. 1 July 2012.   
9 Turkey adopted its first National Programme to transpose the EU acquis  on 19 March 2001, setting 
out the procedures and a programme for implementing actions in priority areas.  The second National 
Programme was launched in 2003 and a third National Programme in 2008.  In addition, Turkey announced a 
Programme for Alignm ent with the EU acquis  2007-2013 on 17 April 2007.   WT/TPR/S/259/Rev.1 Trade Policy Review 
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  investment legislation with EU norms;  reduced bur eaucratic procedures for exporters;  and improved 
basic infrastructure.   
9. Turkey has also embarked on a branding strategy aimed at improving the image of Turkish 
products around the world, and providing strategi c support to Turkish firms and exporters' and 
producers' unions.  Turkey does not have an export st rategy plan at present.  However, a long-term 
export strategy document (Export Strate gy for 2023) is being prepared. 
10. The main objective of Turkey's Ninth De velopment Plan (2007-13) is to increase 
competitiveness, inter alia,  by improving the business environment, reducing the informal economy, 
increasing the quality and effectiveness of public services, fostering regional development, and 
modernizing the energy and transportation infrastructur e.  Turkey is also examining various strategies 
for improving its information and communication t echnology infrastructure, as a means to enhance 
productivity.   
(3) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO 
11. Turkey became an original Member of  the WTO on 26 March 1995, having been a 
contracting party to the GATT since 1951.  Turkey accords MFN treatment (or better) to all other 
Members of the WTO, except Armenia.10  Turkey is not a signatory to any of the plurilateral 
agreements resulting from the Uruguay Round, but pa rticipates as an observer in the Committees on 
Government Procurement and Trade in Civil Airc raft.  Turkey is a party to the Information 
Technology Agreement (ITA), having signed the Mini sterial Declaration on Trade in Information 
Technology Products at the Singapore Ministeria l Conference.  Turkey's most recent WTO 
notifications are listed in Table II.2.   
Table II.2 
Selected notifications to the WTO, January 2011 to 8 November 2011 
Requirement Subject Most recent notification Date 
GATT 1994    
Article XXIV:7(a) - (Free-trade areas) Regional trade agreement - Turkey and 
EFTA states WT/REG86/N/1/Add.7 02.09.11 
 WT/REG86/N/1/Add.6 21.07.11 
 WT/REG86/N/1/Add.4 04.05.11 
 Regional trade agreement - Turkey and 
Jordan WT/REG294/N/1 08.03.11 
 Regional trade agreement - Turkey and 
Chile WT/REG293/N/1 25.02.11 
Anti-dumping - Implementation of Article VI of the GATT 1994  
Article 16.4 Report (ad hoc) G/ADP/N/219/Rev.1 26.10.11 
Article 16.4 Report (semi-annua l) G/ADP/N/216/TUR 12.09.11 
Article 16.5 Competent authority G/ADP/N/14/Add.32 14.10.11 
Agreement on Import Licensing procedures    
Articles 1.4(a) and 8.2(b) Cha nges in laws, regulations, and 
procedures G/LIC/N/1/TUR/9 03.10.11 
Article 7.4 Replies to the questionnaire on import 
licensing procedures G/LIC/N/3/TUR/11 03.10.11 
Table II.2 (cont'd) 
                                                      
10 Turkey invoked Article XIII of the Marrakesh Agreement establishing the WTO as Armenia's WTO 
accession negotiations were being wr apped up in 2002 (see document  WT/L/501, 3 December 2002). Turkey WT/TPR/S/259/Rev.1 
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  Requirement Subject Most recent notification Date 
Safeguards    
Article 12.1(a) Polyethylene tereph thalate G/SG/N/11/TUR/16  24.06.11 
Articles 12.1(b) and 12.1(c)  G/SG/N/10/TUR/13  24.06.11 
  G/SG/N/8/TUR/13 24.06.11 
  G/SG/N/6/TUR/16 28.03.11 
Articles 12.1(a), 12.4, and 9 footnote 2  Spectacle frames (extension) G/SG/N/14/TUR/5, 
G/SG/N/11/TUR/14, 
G/SG/N/7/TUR/8 15.04.11 
Articles 12.1(b) and 12.1(c)  G/SG/N/11/TUR/8/Suppl.1, 
G/SG/N/10/TUR/8/Suppl.1, 
G/SG/N/8/TUR/8/Suppl.1 08.11.11 
Articles 12.1(a), 12.4, and 9 footnote  2 Travel goods, handbags and similar 
containers (extension) G/SG/N/14/TUR/6, 
G/SG/N/11/TUR/15, 
G/SG/N/7/TUR/9 08.04.11 
Articles 12.1(b) and 12.1(c)    G/SG/N/11/TUR/9/Supp.1, 
G/SG/N/10/TUR/9/Suppl.1, 
G/SG/N/8/TUR/9/Suppl.1 08.11.11 
Articles 12.1(a), 12.4, and 9 footnote 2 Cotton ya rn (extension) G/SG/N/11/TUR/17 and Corr.1, 
G/SG/N/7/TUR/10, 
G/SG/N/6/TUR/14/Suppl.1 24.06.11 
Articles 12.1(a), 12.4, and 9 footnote 2 Certain electri cal appliances (extension) G/SG/N/11/TUR/11/Suppl.1, 
G/SG/N/7/TUR/11, 
G/SG/N/6/TUR/13/Suppl.1 08.11.11 
Sanitary and phytosa nitary measures    
Article 7, Annex B Regulation on pl ant quarantine G/SPS/N/TUR/23 08.11.11 
 Regulation implementing feed hygiene G/SPS/N/TUR/22 04.11.11 
 Regulation implementing on the 
planning on the market and use of feed G/SPS/N/TUR/21 04.11.11 
 Regulation implementing the methods of 
sampling and analysis for official 
control of foodstuffs G/SPS/N/TUR/20 04.11.11 
 Regulation on import controls of food of 
plant origin and feed G/SPS/N/TUR/19 07.09.11 
 Draft regulation G/ SPS/N/TUR/18 26.07.11 
 Draft regulation G/ SPS/N/TUR/17 25.05.11 
 Regulation on pre-notification and 
veterinary checks for entry of live 
animals and animal products into the 
country G/SPS/N/TUR/16 16.05.11 
 Regulation laying down specific rules 
for the official controls on foods of 
animal origin G/SPS/N/TUR/15 19.04.11 
 Regulation on the official controls of 
food and feed G/SPS/N/TUR/14 19.04.11 
 Regulation on food hygi ene G/SPS/N/TUR/13 19.04.11 
 Regulation on specific hy giene G/SPS/N/TUR/12 19.04.11 
 Rules for food of animal origin   
Subsidies and countervailing measures    
Article 25.11 Semi-annual report G/SCM/N/228/Add.1 19.10.11 
Article 25.12 Competent authority G/SCM/N/18/Add.32 14.10.11 
Technical barriers to trade     
Article 2.9.2 Regulation on im port controls of food of 
plant origin and feed G/TBT/N/TUR/6 31.08.11 
Source:  WTO documents. WT/TPR/S/259/Rev.1 Trade Policy Review 
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  12. Turkey attaches great importance to the succe ssful conclusion of the Doha Development 
Agenda (DDA), as an opportunity to establish a more  competitive and fairer international trading 
system.  Turkey expects the negotiations to lead to  a balanced outcome that takes into account the 
developmental concerns of WTO Members.  A WTO-DDA Coordination Committee, headed by the 
Ministry of Economy with the participation of public and private sectors and NGOs (and 
academicians, as necessary), has been established to  follow up issues related to the DDA and to 
determine Turkey's strategy in multilateral negotiatio ns.  Turkey generally takes the EU negotiation 
position into consideration in the DDA, particularly  with respect to non-agricultural products, as these 
are fully covered under the Customs Union between Turkey and the EU.   
13. As a member of the G-20, a candidate country  to the European Union, and an emerging 
economy, Turkey has taken major initiatives to suppor t LDCs in their efforts to eradicate poverty.  
Turkey hosted the United Nations Minister ial Conference on LDCs in 2007, and the 4th United 
Nations Conference on Least Developed Count ries was held in Istanbul in May 2011.11  Turkey has 
also put LDC-related topics high on the agenda of the international community.  Turkey has pledged 
to make US$200 million available annually from  2012, for technical cooperation programmes, 
projects, and scholarships.  Turkey's investments in LDCs amount to nearly US$2 billion at present, 
and the Turkish Government aims to increase this to US$5 billion by 2015, and US$12 billion 
by 2020.  As a donor to the Enhanced Integrated Framework, Turkey notes that numerous development projects have been implemented succe ssfully in 23 partner countries through programme 
coordinating offices of the Turkish Coope ration and Development Agency (TIKA).
12   
14. Turkey has been involved in several cases under the WTO Dispute Settlement Mechanism to 
date, acting as complainant in two cases and as responde nt in eight cases (Table II.3).  Since its last 
Review, Turkey has not participated in any new case as a complainant or respondent.  However, it has 
reserved its third-party rights in a numbe r of disputes involving other WTO Members.13   
                                                      
11 The Istanbul Programme of Actio n, agreed at the 2011 Conference,  is a detailed document aiming at 
the ultimate eradicatio n of extreme poverty and hunger in LDCs.   
12 The TIKA is engaged in development assistance projects in more than 100 countries worldwide.   
13 In addition to the nine disputes enumerated in WTO (2007), Turkey has requested third-party 
participation in (i) China - measures affecting the pr otection and enforcement of intellectual property rights 
(DS362);  (ii) Colombia - indicative prices and restrictions  on ports of entry (DS366);  (iii) EU - tariff treatment 
of certain information technology products (DS375, DS376, DS377);  (iv) United States - definitive anti-dumping and countervailing duties on certain products from China (DS379);  (v) United States - measures 
concerning the importation, marketing and sale of tuna and tuna products (DS381);  (vi) certain measures 
affecting imports of poultry from China (DS392);  (vii) China - measures related to the exportation of various 
raw materials (DS394, DS395; DS398);  (viii) EU - defi nitive anti-dumping measures on certain iron or steel 
fasteners from China (DS397);  (ix) United States - m easures affecting imports of certain passenger vehicle and 
light truck tyres from China (DS399);  (x) EU - anti-dumping measures on certain footwear from China (DS405);  (xi) United States - measures affecting th e production and sale of clove cigarettes (DS406);  and 
(xii) Dominican Republic - safeguard measures on imports of polypropylene bags and tubular fabric (DS415, 
DS416, DS417, DS418).   Turkey WT/TPR/S/259/Rev.1 
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  Table II.3 
WTO dispute settlement cases involving Turk ey as respondent or complainant, 1995-2011 
Dispute Raised by/against Actions Outcome 
Restrictions on imports of 
textile and clothing products Hong Kong, 
China/Turkey Consultations requested on 12 February 1996, 
under GATT Articles XI, XIII, and XXIV as well as WTO ATC Article 2 (WT/DS29/1) Pending consultation 
Restrictions on imports of 
textile and clothing 
products India/Turkey Consultation requested on 21 March 1996, under 
GATT Articles XI, XIII, and XXIV as well as WTO ATC Article 2 (WT/DS34/1).  Establishment 
of panel requested on 2 February 1998 
(WT/DS34/2).  DSB agreed to establish a panel on 13 March 1998 (WT/DSB/M/43).  Panel report 
adopted on 19 November 1999 (WT/DS34/11).  
Appellate Body Report adopted on 19 November 
1999 (WT/DS34/11) Notification of mutually 
agreed solution on 6 July 2001 (WT/DS34/14) 
Taxation of foreign film revenues United States/Turkey Consultation requested on 12 June 1996, under 
GATT Article III (WT/DS43/ 1).  Establishment of 
a panel requested on 10 January 1997 (WT/DS43/2).  DSB agreed to establish a panel on 25 February 1997 (WT/DS/M/29) Notification of mutually 
agreed solution on 
24 July 1997 
(WT/DS43/3) 
Restrictions on imports of 
textile and clothing 
products Thailand/Turkey Consultation requested on 20 June 1996, under 
GATT Articles I, II, XI, XIII, and XXIV as well as 
WTO ATC Article 2 (WT/DS47/1) Pending consultation 
Anti-dumping duty on steel 
and iron pipe fittings Brazil/Turkey Consultation requested on 9 October 2000, 
under GATT Article XXIII and Article 17 of the 
Anti-Dumping Agreement (WT/DS208/1) Pending consultation 
Certain import procedures 
for fresh fruit Ecuador/Turkey Consultation requested on 31 August 2001, under 
GATT Article XXII, Article 11 of the SPS Agreement, Article 6 of the Import Licensing 
Agreement, Article 19 of the Agreement on 
Agriculture, and GATS Article XXII (WT/DS237/1).  Establishment of panel requested 
on 13 June 2002 (WT/DS237/3). DSB agreed to 
establish a panel on 29 July 2002 
(WT/DSB/M/130) Notification of mutually 
agreed solution on 29 November 2002 (WT/DS237/4) 
Import ban on pet food from Hungary Hungary/Turkey Consultation requested on 3 May 2002, under 
GATT Article XXIII, Article II of the SPS 
Agreement, and Article 19 of the Agreement on 
Agriculture (WT/DS256/1) Pending consultation 
Measures affecting the 
importation of rice United States/Turkey Consultation requested on 2 November 2005, under 
GATT Articles III, XI:1 and Article 2.1 of the 
TRIMs Agreement, Article 4.2 of the Agriculture 
Agreement (WT/DS334/1), and various Articles of 
the Import Licensing Agreement (WT/DS334/). 
Establishment of panel requested on 6 February 2006 (WT/DS334/4).  DSB agreed to establish a panel on 17 March 2006 (WT/DS334/5/Rev.1) Panel report issued to the 
parties on 8 June 2007; 
circulated to all Members in September 2007 
Definitive anti-dumping measures on steel rebar 
from Turkey Turkey/Egypt Consultation requested on 6 November 2000, 
under GATT Article XXIII and Article 17.3 of the Anti-Dumping Agreement (WT/DS211/1)  Establishment of a panel requested on 3 May 2001 
(WT/DS211/2) and 11 May 2001 
(WT/DS211/2/Corr.1).  DSB agreed to establish a panel on 20 June 2001 (WT/DSB/M/106).  Panel report adopted on 1 October 2002 (WT/DS211/5) Parties notified in 
meeting of 29 August 2003 that the matter would no longer 
be pursued with the 
DSB.  Egypt revoked the measure on 3 August 2004 
Definitive anti-dumping measures on blanketing 
from Turkey Turkey/South Africa Consultation requested on 9 April 2003, 
under GATT Article XXIII and Article 17 of the 
Anti-Dumping Agreement (WT/DS288/1) Panel has not been 
established, complaint not withdrawn.  No 
mutually agreed solution 
notified 
Source:  WTO Secretariat.  WT/TPR/S/259/Rev.1 Trade Policy Review 
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  (ii) Regional agreements 
(a) Customs Union with the European Union 
15. Turkey signed an Association Agreement to pr omote trade and economic relations with the 
EU in 1963.  The timetable for the formation of a customs union was laid down by an additional 
protocol in 1973.  The EU had unilaterally elimin ated all customs duties and equivalent measures on 
the specified products when the trade-related provi sions of the Interim Agreement of the Protocol 
entered into force in September 1971, whereas Turkey was accorded a transition period of 22 years.   
16. The Customs Union between Turkey and the EU entered into force on 1 January 1996 
according to the Decision No. 1/95 of the Turkey-EU Association Council.14  The Customs Union 
provides for a common external tariff (CET) for the products covered, and foresees that Turkey will 
align its trade-related legislation with the EU acquis  in several areas essential for market access, e.g. 
with respect to product standards.15  The Customs Union covers all industrial products as well as the 
industrial component of processed agricultural good s, TRIPS, and competition policy, but does not 
extend to agricultural commodities, services, or government procurement.16  Unlike members of the 
European Economic Area, Turkey may be subject  to anti-dumping and countervailing measures taken 
by the EU.  Trade in agricultural products is regulated according to Decision No. 1/98 of the 
Association Council, amended by Decision No. 2/2 006 to take into account the EU enlargement in 
2004.17  A free-trade area has existed since 1996 betw een Turkey and the EU for products covered by 
the European Coal and Steel Community.   
17. Turkey was granted the status of candidate country for EU membership at the Helsinki 
European Council in 1999.  Subject to the fulfil ment of certain conditions, EU member states 
endorsed "enlarging and deepening" the Custom s Union and opening accession negotiations with 
Turkey at the Copenhagen European Council in December 2002.  Negotiations began on 
3 October 2005.  By September 2011, 13 negotiation chapters had been opened, and one of them 
provisionally completed.18   
(b) Free-trade agreement with the Eur opean Free Trade Association (EFTA) 
18. The free-trade agreement between Turkey a nd EFTA is based on an asymmetrical model 
similar to Turkey's Customs Union with the EU.  The agreement covers i ndustrial products (within 
HS Chapters 25 to 97), fish and mari ne products, processed agricultural goods19, intellectual property, 
competition rules, state aid, and anti-dumping.20  The agreement entered into force on 1 April 1992, 
from which date EFTA states abolished all customs duties and charges of equivalent effect on 
non-agricultural imports from Turkey, except fo r textiles and apparel goods, for which EFTA 
countries eliminated the import duties on 1 January 1996.21  Turkey has granted non-agricultural 
                                                      
14 The Association Council is the main deci sion-making body of the association.   
15 Until 1 January 2001, Turkey was allowed to maintain import duty rates above the CET for certain 
"sensitive" products, i.e. at the outset 290 items at the HS 12-digit level. 
16 Negotiations addressing services and government procurement were launched in 2000, but are now 
part of Turkey's accession process.   
17 Free movement of agricultural goods is an agreed common objective, but no firm timetable has been 
set for the integration of agriculture into the Customs Union.   
18 EU (2011). 
19 Except for items such as mannitol, sorbitol, casein, egg and milk albumin, and dextrin.   
20 For trade in agricultural goods, Turkey has conclu ded bilateral agreements with individual EFTA 
countries.   
21 EFTA comprises Switzerland, Norway, Iceland, and Liechtenstein.  For Iceland, the FTA with 
Turkey entered into for ce in September 1992.   Turkey WT/TPR/S/259/Rev.1 
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  imports from EFTA states the same customs duty treatment as imports from the EU since 
1 January 1993, and provides duty-free treatment fo r fish and marine products.  Trade in processed 
agricultural products follows the same system as th at applied to Turkey's trade with the EU.   
19. Turkey and EFTA states supervise the functioni ng and implementation of the agreement in a 
Joint Committee.  At its ninth meeting, on 2-3 December 2009, a protocol was added on the mutual 
recognition of conformity assessment of products.  It  was also agreed to ex amine the possibility of 
extending the free-trade agreement to cover trade in services.   
(c) Euro-Mediterranean partnership 
20. In November 1995, the Euro-Mediterranean Conf erence of Ministers of Foreign Affairs  
marked the starting point of the Euro-Mediterran ean Partnership, a framework to be based on 
three pillars (political and security cooperation, economic and financial partnership, and a social, 
human and cultural agenda).  In the context of the Partnership and as part of the creation of a 
Euro-Mediterranean Free-Trade Area , Turkey has concluded bilatera l free-trade agreements with 
Egypt, Israel, Morocco, Tunisia, Palestinian Aut hority, Jordan, Syria, and Lebanon (section (iii) 
below).22   
(d) Economic Cooperation Organization 
21. Together with Iran and Pakistan, Turkey formed the Economic Cooperation Organization 
(ECO) in 1985.  The ECO was expanded to in clude Afghanistan, Azerbaijan, Kazakhstan, 
Kyrgyz Republic, Tajikistan, Turkmenistan, and Uz bekistan in 1992.  The stated purpose of the ECO 
is to foster sustainable socio- economic development, a nd cooperation projects ha ve been launched in 
priority areas such as energy, trade, trans portation, agriculture, and drug control.   
22. ECO members signed a framework agreement to enhance trade relations between them in 
March 2000.  Afghanistan, Iran, Pakistan, Tajik istan, and Turkey concluded the ECO Trade 
Agreement (ECOTA) in July 2003.  The ECOTA has binding provisions on, inter alia , state 
monopolies, state aid, the protection of intellectual property rights, dumping and anti-dumping measures, and the elimination of quantitative restricti ons to trade.  Tariffs are to be reduced by no less 
than 10% per year to a maximum of 15% within eight  years of the entry into force of the ECOTA.  
Following the completion of the ratification pro cess by Iran, the ECOTA entered into force on 
24 April 2008.  It is expected to become fu lly operational after the exchange of lists.   
(e) Developing-8 (D-8) 
23. Developing-8 (D-8) is an organization for development cooperati on between Bangladesh, 
Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakist an, and Turkey.  The establishment of the D-8 was 
announced through the Istanbul Declaration of  Summit of Heads of State/Government on 
15 June 1997.  The aim of the D-8 Organization fo r Economic Cooperation is to improve the member 
states' position in the world economy, diversify and create new opportunities in trade relations, 
enhance their participation in decision-making at the international level, and to improve the standards 
of living of their populations. 
                                                      
22 The Euro-Mediterranean Partnership comprises the current 27 members of the EU together with 
Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia, and Turkey.  Libya has 
held observer status since 1999.  The original aim was to achieve the Euro-Med iterranean Free-Trade Area 
by 2010.   WT/TPR/S/259/Rev.1 Trade Policy Review 
Page 18 
  
  24. The members of the D-8 signed a preferential trade agreement (PTA) to enhance economic 
and trade integration in 2006.  The agreement aims  at promoting and expanding trade through tariff 
reductions and the elimination of non-tariff barrier s (NTBs).  The tariff re ductions and NTB-related 
clauses are to apply to goods covering 8% of the HS tariff lines with tariff rates above 10% for each 
contracting member.  Tariffs above  25% are to be reduced to 25%;  tariffs below 25%, but above 15% 
are to be cut to 15%, and a tariff of 10% will apply to tariffs in the 10-15% ra nge.  LDCs will reduce 
their tariffs in eight annual instalments, other count ries in four instalments.  The PTA obtained legal 
force between Turkey, Malaysia, Iran, and Nigeria on 25 August 2011, following the completion of their internal ratification processes.  The D-8 PTA is expected to become fully operational after the 
completion of the exchange of tariff concession lists. 
(f) The Organization of Islamic Cooperation (OIC) 
25. The Organization of Islamic Co-operation (OIC),  formerly the Organization of the Islamic 
Conference, is an inter-governmental organiza tion with 57 member stat es spread across four 
continents.
23  The OIC aims at strengthening intra -Islamic economic and trade cooperation and 
deepening economic integration, leading to the est ablishment of an Islamic Common Market.  As a 
first step, Framework Agreement on Trade Preferen tial System among the Member States of the OIC 
(TPS/OIC) entered into force in 2002.  The frame work agreement sets out the general rules and 
principles for the negotiations to establish the TPS/OI C.  The negotiations on the modalities for tariff 
reductions and the timetable were completed, a nd the Protocol on Preferential Tariff Scheme for 
TPS/OIC (PRETAS) was adopted in 2005, and entered into force in February 2010.  The tariff 
reduction commitments of the PRETAS are to apply to 7% of the HS tariff lines with tariff rates 
above 10% for each contracting member.  Tariffs above  25% are to be cut to 25%, and tariffs of 15% 
and 10% will apply to tariffs previously in th e (respective) 15-25% and 10-15% range.  The PRETAS 
also covers non-tariff barriers, anti-dumping and saf eguard measures, and other trade-related issues.  
Negotiations on rules of origin were complete d in 2007.  The rules entered into force on 
9 August 2011.  However, for the TPS/OIC to become  fully operational, at least ten OIC members 
must complete the signature and ratification of th e three legal instruments of the agreement, and 
submit their tariff concession lists.  So far, only five members (including Turkey) have completed the 
process.   
(g) Black Sea Economic Cooperation (BSEC) 
26. The BSEC declaration, signed on 25 June 1992 by  Albania, Armenia, Azerbaijan, Bulgaria, 
Georgia, Greece, Moldova, Romania, the Russian Federation, Turkey, and Ukraine, was aimed at 
improving and diversifying their economic and trade relations.  The BSEC provides for cooperation in 
various areas, including banking and finance;  and th e exchange of economic and statistical data on 
energy, transport, telecommunications, trade and industry, agriculture and agri-industry, 
environmental protection, tourism, and scien ce and technology.  The Black Sea Trade and 
Development Bank became ope rational in 1999.  Although a declara tion of intent to form a BSEC 
free-trade area was adopted in 1997, the BSEC h as not provided a framework  for the exchange of 
preferential tariff concessions.  As noted in the d eclaration, the progressive establishment of such an 
area will have to take into account each member's existing and future links with the EU.  
(iii) Bilateral free-trade agreements 
27. Turkey's free-trade and association agreements contain a standard model based on the 
preferences each party has exchanged with the EU.  Trade in industrial goods is fully liberalized at the 
                                                      
23 The decision to establish the organization was taken at a summit in Rabat on 25 September 1969.   Turkey WT/TPR/S/259/Rev.1 
 Page 19 
 
 
  end of a transitional period, whereas mutual concess ions are exchanged on selected agricultural and 
processed agricultural goods.  Since its last Re view, Turkey has finalized negotiations with 
Montenegro, Serbia, Georgia, Chile, Jordan, Lebanon , and Mauritius.  Turkey has 16 FTAs in force at 
present.24  Details of the agreements concluded, an d earlier agreements remaining in force, are 
provided in Table II.4.25   
Table II.4 
Bilateral trade agreements, 2011 
Country Date of 
agreement Entry into 
force Major Turkish exports and im ports covered by the agreement 
EFTA 10.12.1991 01.04.1992 Phased reduction of ta riffs on industrial goods;  complete elimination on 
industrial goods by 1 January 1999 
Israel 14.03.1996 01.05.1997 Phased reduction of tariffs on industrial goods; complete elimination on 
industrial goods on 1 January 2000 
Macedonia (FYR) 07.09.1999  01.09.2000  Phased reduction of  tariffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2008 
Croatia 13.03.2002  01.07.2003  Phased reduction of ta riffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2007 
Bosnia-Herzegovina 03.07.2002  01.07.2003  Phased reduction of tariffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2007 
Palestinian Authority 20.07.2004  01.06.2005  Phased reducti on of tariffs on industrial goods;  complete elimination on 
industrial goods by 1 June 2015 
Tunisia  25.11.2004  01.07.2005  Phased reduction of tariffs on industrial goods;  complete elimination on 
industrial goods by 1 July 2014 
Morocco  07.04.2004  01.01.2006  Phased reduction of tariffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2015 
Syria  22.12.2004  01.01.2007  Phased reduction of ta riffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2019 
Egypt  27.12.2005  01.03.2007  Phased reduction of ta riffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2020 
Albania  22.12.2006  01.05.2008 Phased reduction of tariffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2013  
Montenegro 26.11.2008 01.03.2010 Phased reduction of tariffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2015 
Serbia 01.06.2009 01.09.2010 Phased reduction of ta riffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2015 
Georgia  21.11.2007 01.11.2008 Full elimination of tariffs on industrial goods by 1 November 2008 
Chile 14.07.2009 01.03.2011 Phased reduction of ta riffs on industrial goods;  complete elimination on 
industrial goods by 1 January 2015 
Jordan 01.12.2009 01.03.2011 Phased reduction of tari ffs on most industrial goods; elimination on industrial 
goods by 1 January 2018 
Lebanona 24.10.2010 .. Phased reduction of tariffs on most industrial goods; elimination on industrial 
goods by 1 January 2020 
Mauritiusb 09.09.2011 .. Phased reduction of tariffs on most industrial goods, elimination on industrial 
goods by 1 January 2022 
.. Not available. 
a The Turkey-Lebanon FTA was signed on 24 November 2010 and will en ter into force once the intern al ratification procedures 
have been completed in both countries. 
b The Turkey-Mauritius FTA was signed on 9 September 2011 and w ill enter into force once the inte rnal ratification procedures 
have been completed in both countries. 
Source: Information provided by the Turkish authorities. 
                                                      
24 The ratification processes have commenced for the FTAs with Lebanon and Mauritius;  the FTAs are 
expected to enter into force in 2012.   
25 Turkey's free-trade agreements w ith Bulgaria, Czech Republic, Estoni a, Hungary, Latvia, Lithuania, 
Poland, Romania, Slovak Republic, and Slovenia expired in the context of EU enlargement.   WT/TPR/S/259/Rev.1 Trade Policy Review 
Page 20 
  
  28. Turkey is currently engaged in negotiations with the Faroe Islands, the Gulf Cooperation 
Council, MERCOSUR, Ukraine, Moldova, Colombia, Ecuador, Libya, Seychelles, Korea, Cameroon, 
Democratic Republic of Congo, and Malaysia.  Turkey  has initiated the launch of negotiations with:  
Mexico; the South African Customs Union (SACU); Al geria; ASEAN countries;  Indonesia;  India;  
the Africa, Caribbean and Pacific (ACP) countries;  Canada;  Peru;  and Cent ral America.  Moreover, 
exploratory talks with the CARICOM Secretariat we re held in 2009.  To date, Mexico, SACU, and 
Algeria have not responded to Turkey's i nvitation to engage in FTA negotiations. 
(iv) Other preferential trade arrangements 
29. Pursuant to Article 16 of Decision No. 1/95 of the Turkey-EU Association Council, Turkey 
has been moving to align its Generalized System of Preferences (GSP) Scheme with that of the EU.  
Preferences are granted on selected non-agricultura l goods, including raw materials and semi-finished 
goods, depending on the level of "sensitivity".  Du ties are fully eliminated on non-sensitive products, 
while duty reductions apply on the more sensitive items.26  Duties are eliminated for least developed 
countries in line with the EU Everything But Ar ms Initiative, and Turkey grants additional 
preferences to specific countries under the Sp ecial Incentives Arrangements for Sustainable 
Development and Good Governance.  Benefici aries under Turkey's GSP scheme are announced 
annually in the Annexes to its import regime.27  As of 2010, Turkey's GSP regime mirrors that of the 
EU in terms of product coverage , geographical coverage (except for Armenia), and duty-reduction 
rates.  Turkey has not yet adopted the amendments to the EU GSP scheme, notably regarding rules of 
origin, which entered into force on 1 January 2011.   
30. Turkish exports are granted preferential treat ment under the GSP schemes of Canada, Japan, 
New Zealand, the Russian Federation, and the United States.  In the Russian Federation, imports from 
Turkey are subject to a tariff reduction of 25% of the general rate except for products on a negative 
list.28  The United States extends GSP treatment to 3,400 products of Turkish origin at the HS 8-digit 
level.  Turkey exported 734 pr oducts (HS 8-digit) to the United States under its GSP programme 
in 2010.29  
(4) INVESTMENT REGIME  
31. Turkey enacted the Decree on Improving th e Investment Environment in Turkey on 
11 December 2001 as part of a national strategy to  increase domestic and foreign investments.  The 
Decree established the Coordination Council for the Improvement of the Investment Environment and 
technical subcommittees to identify and remove remain ing barriers to private investment.  Legislation 
to ensure the registration of investments in one day, and reduce the number of required documents, 
was approved by Parliament on 11  June 2003 and published in the Official Gazette  on 17 June 2003.  
Additional steps to improve the business and investme nt climate include the adoption of the Foreign 
Direct Investment Law No. 4875 in 2003, and the establishment of the Turkish Investment Support 
and Promotion Agency in 2006.   
                                                      
26 The preference generally amounts to a 3.5 percenta ge point reduction in the MFN tariff rate, except 
where the EU GSP scheme allows for larger preferential reductions (then these higher reductions apply), and for 
HS Chapters 50-63, where the cuts equal 20% of the MFN duty rate.   
27 Iraq was recently added to Turk ey's list of beneficiaries.   
28 Due to their Customs Union with  the Russian Federation, Kazakhs tan and Belarus also follow a 
common approach on GSP.   
29 Like all other exporters eligible for GSP treatme nt in the United States, Turkey is subject to 
provisions such as the "competitive need limitation" and the " de minimis  waiver".  Turkish exports to the United 
States under GSP amounted to US$644.5 milli on in 2009 and US$793 million in 2010.   Turkey WT/TPR/S/259/Rev.1 
 Page 21 
 
 
  32. Turkey has been a member of the Internationa l Centre for Settlement of Investment Disputes 
and the Multilateral Investment Gu arantee Agency since 1987.  Turkey  joined the Convention on the 
Recognition and Enforcement of Foreign Arbitr al Awards, and the European Convention on 
International Commercial Arbitration in 1991.  The Law on International Arbitration No. 4686, 
enacted in July 2001, provides for international arbitration to resolve conflicts from public service 
concession contracts involving any foreign element.  Turkey has signed 82 bilateral agreements for 
the promotion and protection of foreign direct investment;  73 are in force.   
33. Key elements of the 2003 Foreign Direct Invest ment Law included the freedom to invest, the 
reassurance of existing guarantees of foreign invest ors' rights in one document, the adoption of 
international standards in defining a "foreign invest or" and "foreign direct investment", and a policy 
shift from ex-ante control to investment promoti on and facilitation with minimal ex-post monitoring.30  
The Law guarantees national treatment and investor rights.   
34. All companies established according to the Tu rkish Commercial Code are regarded as 
Turkish companies, with equal rights and respons ibilities as stated in the Constitution and in other 
laws.  The rights include national treatment, guara ntee against expropriation without compensation, 
transfer of proceeds, the right to expatriate pe rsonnel, and access to international arbitration or any 
other means of dispute settlement.   
35. A 100% foreign owned company may operate in nearly all sectors of the Turkish economy.  
Remaining restrictions on foreign ownership are la id down in legislation regulating specific activities 
(Table II.5).  Under recent liberalization in the ar ea of broadcasting, the limitation on foreign equity 
participation in a media service provider was raised from 25% to 50% in March 2011.  Other 
restrictions have remained unchanged since Turkey's  last Trade Policy Review.  Thus, foreign equity 
participation may not exceed 49% in aviation a nd in maritime services provided under concession 
agreements, and foreigners may not obtain a fish ing licence in Turkey.  Special permission under 
specific laws is required to provide accounti ng, auditing, and bookkeeping services; for the 
establishment of private employment offices; and fo r investments in the financial sector, petroleum, 
mining, electricity, and education services.  Acquisition of real estate by foreigners remains restricted, 
or subject to reciprocity provisions.  In accordan ce with the Land Registry Law No. 2644, foreigners 
purchasing land plots between 2.5 and 30 hectares n eed permission from the Council of Ministers.  
Foreigners may not purchase land exceeding 30 hectares.31   
                                                      
30 The Law abolished all former screening and approv al procedures, and share transfer requirements.  
The term foreign investor was broadened to include Turks living abroad as well as international organizations.   
31 In early 2008, the Constitutional Court suspended provisions in the Foreign Direct Investment Law 
and the Title Deed Law, which had allowed the purcha se of land by foreign individuals, foreign trade 
corporations (i.e. established abroad under foreign law), or foreign capital companies (i.e. established in 
Turkey).  The Turkish Government subsequently passed new legislation to permit foreign acquisition of land.  
According to this legislation, foreign natural person s may acquire real estate for residence and business 
purposes, subject to reciprocity and compliance with legal restrictions.  The properties must be separated and 
registered (for business or residence) in implemented development plans or localized development plans.  The 
total area acquired by foreign individuals may not exceed 10% of the land within implemented development plans or localized development plans, or 2.5 hectares fo r each individual property.  As information on foreign 
land ownership is not readily available, this may cause problems and legal challenges for individual investors 
seeking to purchase land in Turkey.  Pursuant to Article  36 of the Land Registry Law, foreign capital companies 
established in Turkey and registered  in the Turkish Commercial Regist ries are legally accepted as Turkish 
companies regardless of the citizenship of their shareholders.  Foreign capital companies may thus acquire real 
estate to conduct the business activities listed in the ar ticles of association of the company, except in military WT/TPR/S/259/Rev.1 Trade Policy Review 
Page 22 
  
  Table II.5 
Foreign direct investment restrictions, 2011 
Sectors  Legal source Restriction 
Broadcasting Law on Establishment of 
Radio and Television 
Enterprises and Their Media 
Services  Law No. 6112;  
15 February 2011  The proportion of total direct foreign capital in a media service provider may 
not exceed 50% of the paid-in capital. 
Aviation Civil Aviation Law 
No. 2920 
SHY-6A (Regulation on 
Commercial Air Transport Operations) 
SHY-22 (Regulation on 
Airport Groundhandling) No more than 49% equity participatio n by foreigners.  Licences to operate 
airlines are only granted to loca lly incorporated companies whose 
management is under the control of Tu rkish citizens and the majority of 
voting shares are owned by Turkish citizen s.  Airlines, of which the majority 
of shares are controlled by foreigners , are not permitted to carry passengers 
from one national airport to another.  
To obtain groundhandling services licences (A and C Group Licences), the majority authorized administration and representation of the company must 
be Turkish. The contract of such a co mpany has to guarantee that the votes of 
its majority shareholders belong to Turkish nationals. 
Maritime transportation Cabotage Act No. 815, 
Turkish Commercial Code 
No. 6762 (to be replaced by Turkish Commercial Code 
No. 6102 on 1 July 2012) No more than 49% equity participation by foreigners.  Cabotage is reserved 
to national flag carriers.  Registration of commercial ships is granted only to 
locally incorporated companies whose management is under the control of Turkish citizens, and majority of voting shares are owned by Turkish citizens. 
Port services  Cabotage Act No. 815, 
Turkish Commercial Code No. 6762 (to be replaced by 
Turkish Commercial Code 
No. 6102 on 1 July 2012), Privatization Law No. 4046, 
and Law No. 5189 of 
16 June 2004 Port services are provided under concession agreements. 
Fishing  Fishing Law No. 1380, 
Bylaw on Fishing Products 
No. 6710, Turkish Commercial Code No. 6762 Foreigners may not obtain a fishing li cence.  Vessels owned by foreigners 
also may not register as fishing vesse ls in Turkey, unless owned by Turkish 
nationals or by companies of which ma jority of voting shares are owned by 
Turkish citizens. 
Accounting, auditing and book-keeping services Law No. 3568 on 
Accountancy, Financial Advisory and Certified 
Financial Advisory Services, 
1989 Special permission required.  Foreign fi nancial advisors who are citizens of 
countries that have officially codified  the principles of the profession of 
financial advisory may, under recipr ocal conditions, be authorized by 
approval of the Prime Minister upon the proposal of the Ministry of Finance, 
provided that these persons have th e qualifications required for Turkish 
financial advisors and have  rights to perform similar services in their own 
countries. 
Financial sector Banking Law No. 5411, 
Bank Cards and Credit 
Cards Law No. 5464, 
Decree Law No. 90 on Linding Activities, Capital 
Market Law No. 2499, 
amended by Laws No. 3794 and 4487 and the relevant Communiqués;  Financial 
Leasing Law No. 3226;  
Insurance Law No. 5684 Special permission required.  Permission to establish a bank, which has to be 
founded in the form of a joint-stock comp any, or to open the first branch of a 
foreign bank in Turkey, shall be given by the Banki ng Regulation and 
Supervision Board. Only intermediary institutions (inclu ding banks) established in Turkey and 
authorized by the Capital Market Bo ard may perform securities activities;  
however, banks may not trade in the Is tanbul Stock Exchange (ISE) equities 
market.  Mutual funds may be founded only by authorized banks, insurance companies, non-bank securities intermedia ries;  and pension funds by private 
pension companies established in Turkey.   
Portfolio management and investment a dvisory services may be performed by 
non-bank securities intermediaries, non- deposit taking banks and portfolio 
management companies established in Turkey. 
Table II.5 (cont'd) 
                                                                                                                                                                     
zones (military forbidden zones, military security zones,  and strategic zones), which require permission from the 
Turkish military authorities, or in special security zones (subject to permission by the province governorship).   Turkey WT/TPR/S/259/Rev.1 
 Page 23 
 
 
  Sectors  Legal source Restriction 
  An insurance company or  reinsurance company that is to operate in Turkey 
must be established as a joint-stock company or a cooperative.  Foreign 
insurance and reinsurance companies may also operate in Turkey by opening branches, provided that they have not been prohibited in their country of 
operation.  Following establishment, insurance and reinsurance companies 
must obtain an operational licence from the Undersecretariat of Treasury; a separate licence is issued for each insurance branch. Ot her than specific 
exceptions, cross-border supply of insurance services is prohibited.    
Foreign commercial presence or presence of foreign natural persons regarding services auxiliary to insu rance is permitted only for consultancy 
and risk-management services.   
Petroleum Petroleum Law No. 6326 
and Petroleum Market Law 
No. 5015 Special permission required.  Foreign en terprises may invest in marketing and 
sales activities without restriction.  They may invest in upstream activities 
including exploration and exploitatio n activities may be conducted under a 
licence granted by the General Directorate of Petroleum Affairs providing that they are not controlled or owned by  a foreign State (this restriction may 
be lifted by the Council of Ministers).  Petroleum-related activities may be 
carried out through locally incorporated stock companies or Turkish branches of stock companies incorporated ab road.  Downstream market activities 
including, refining, transportation through pipelines and storage may be 
conducted under a licence granted by the Energy Market Regulatory Authority. 
Mining Mining Law No. 3213 Foreigners may invest in  the mining subsector only through local branches 
(Chapter II(4)). However, exploration and exploitation of boron are reserved 
for the Government. For uranium and thorium, the public sector may explore and exploit these minerals without selli ng. On the contrary selling of these 
radioactive minerals may be perm itted by the Cabinet Council.  
Real-estate trading Land Registry Law 
No. 2644 Foreign trade corporations (trade companies established in foreign countries 
according to their own law) and foreign real persons in Turkey may acquire 
land. In the acquisition of land by fore ign real persons the "principle of 
reciprocity" applies. 
Acquisition of real estate by foreign trade corporations in Turkey is subject to 
the provisions of special laws. 
Foreign real persons may acquire real estate in Turkey with some legal 
restrictions. Acquisition of real estate by foreign real persons should be for 
residence or business purposes and separated and registered for these 
purposes in the implemented or localized development plans.  
Electricity Electricity Market Law 
No. 4628 The total market share of any real or private entity, either directly or via 
controlling the generation companies, may not exceed 20% of the total 
installed capacity. This threshold is applied as 10% for wholesale of electricity under same conditions.  Wi thin the context of privatization 
activities foreign real persons and legal entities may not have a market share 
that will enable them controling pow er in the electricity generation, 
transmission, and distribution subsect ors. In 2010, electricity served by 
private distribution companies increased  to approximately 46% of the total 
market. 
Education Law No. 5580 on Private 
Education Institutions 
Legislation on Foundations Foreign real or legal persons may not set up education institutions unless all 
students are foreigners. International pr ivate education institutions may be set 
up by real or legal persons upon authorization of the Council of Ministers. For tertiary education institutions, the majority in the administrative bodies 
must be Turkish nationals. 
Private employment offices Law No. 4904  According to the amendment made in 2007 by Law No. 4904, only Turkish 
citizens may establish, administer or act on behalf of a private employment 
agency.  If a foreign company wishes to  establish an agen cy in Turkey, the 
agency must be represented by a Turkis h citizen.  According to some changes 
in this Law in 2008, the obligation of being a Turkish citizen in order to 
establish, administer and represent an agency has been removed;  foreigners 
may now establish private employment agencies. 
Source: Information provided by the Turkish authorities. 
36. The OECD FDI regulatory restrictiveness index (designed to capture equity restrictions, 
screening and prior approval, measures regarding foreign key personnel, and other operational WT/TPR/S/259/Rev.1 Trade Policy Review 
Page 24 
  
  restrictions) gives Turkey an overall score  below the OECD average (Table II.6).32  According to the 
2010 data, aside from real estate (which is consider ed "closed"), FDI restrictions apply in media, 
transport, and business services.  All other sectors c overed by the index are "open".  However, the 
index does not consider actual enforcement of st atutory restrictions, which is difficult to assess.33  
Table II.6 
Turkey's FDI regulatory restrictiveness indexa, 2010 
 Turkey OECD average Non-OECD average 
Agriculture and forestry 0.000 0.128 0.227 
Fishing 0.000 0.320 0.333 
Mining 0.000 0.122 0.209 
Manufacturingb 0.000 0.030 0.059 
Electricity 0.000 0.123 0.125 
Construction 0.000 0.053 0.055 
Distributionc 0.000 0.029 0.120 
Hotels and restaurants 0.000 0.030 0.077 
Transport 0.208 0.227 0.289 
Media 0.250 0.180 0.316 
Telecom 0.000 0.092 0.174 
Financial servicesd 0.000 0.053 0.132 
Business services 0.125 0.067 0.167 
Real estate 1.000 0.283 0.277 
Total 0.072 0.095 0.157 
a 1 = closed;  0 = open. 
b Average scores for 5 manufacturing sectors. 
c Average scores for retail and wholesale distribution. 
d Average scores for banking, insurance, and other finance. 
Source:  OECD (2010), OECD's FDI restrictiveness Index:  2010 update .  Viewed at:  http:// www.oecd.org/dataoecd/32/ 
19/45563285.pdf. 
37. Investment incentives, such as import duty exemp tions and subsidized credits, are available to 
domestic and foreign investors alike.  Turkish resi dents wishing to invest abroad are free to export 
capital in cash, by bank transfer or in kind in  accordance with Turkey's Customs Regulations.34 
38. Turkey's FDI inflows, which rose markedly from  2004 onwards, in part due to privatizations 
of state-owned companies, appear to have been a ffected by the global financial crisis (Table II.7).  
After a steep decline from 2007 to 2008, the stock of inward FDI peaked in 2010, and is currently back at the pre-crisis level relative to Turk ey's GDP.  According to UNCTAD's Inward FDI 
Performance Index, Turkey ranked 108
th in 2010, down from 94st in 2008 and 71st in 2006.35  Turkey's 
FDI outflows peaked in 2008, but the FDI outward st ock has continued to rise, and stood at almost 
US$22 billion in 2009, up from about US$6 billio n in 2002-03.  According to UNCTAD's outward 
FDI Performance Index, Turkey ranked 77th out of 125 economies for the period 2005-07.   
                                                      
32 In 2006, Turkey's score was somewhat above the OECD average.  A comparison of the 2006 and 
2010 results in absolute values is not strictly approp riate due to changes in the methodology (OECD, 2010b).   
33 According to EU (2011), Turkey's licensing procedures are relatively lengthy.  For example, 
25 different procedures are still needed in order to build a warehouse.  Market exit is difficult too, as closing a 
business still takes 3.3 years on average.   
34 An authorization requirement from the Unders ecretariat of Treasury for outward investment 
exceeding US$5 million was abolis hed at the end of 2006.    
35 UNCTAD (2011).   Turkey WT/TPR/S/259/Rev.1 
 Page 25 
 
 
  Table II.7  
Foreign direct investment, 1995-2010 
(US$ million) 
 1995-2005a 2006 2007 2008 2009 2010 
FDI inflows 2,188 20,185 22,047 19,504 8,411 9,278 
FDI inward stock 33,511 95,076 154,020 80,225 140,493 181,590 
FDI inward stock (% of GDP) 10.2 18.1 23.6 10.8 22.8 24.7 
FDI outflows 484 924 2,106 2,549 1,553 1,464 
FDI outward stock 5,935 8,866 12,210 17,846 22,250 21,570 
FDI outward stock (% of GDP) 2.0 1.7 1.9 2.4 3.6 2.9 
a Annual average (2000-05 average for inward and outward FDI stock). 
Source:  The Central Bank of Turkey. 
39. The peak in FDI inflows in 2007 and the subseque nt decline can to a large extent be ascribed 
to the financial services sector, where FDI am ounted to US$1.6 billion in 2010 down from over 
US$11 billion in 2007, due to the acquisitions of various banks by foreign investors.  Although FDI 
by sector may vary substantially year-to-year, FDI into Turkey is predominantly in services (financial 
intermediation, communications, en ergy supply, and distribution services) and in manufacturing.  
Although FDI in agriculture, hunting, fishing and fo restry has been increasing since 2008, the share in 
total FDI inflows is still negligible, averaging 0. 4% over the period 2005-10, compared with services 
(80%), manufacturing (18%), and mining and quarrying (1.4%).  The European Union, led by the 
Netherlands, Austria, France, Belgium, Greece, a nd Germany, continues to be by far the largest 
investor in Turkey, representing nearly 70% of total FDI inflows during 2005-10.36   
40. Turkey's outward FDI, which averaged US$2 b illion during 2005-10, is primarily directed 
towards services (45.5%), notably financial intermed iation (21%);  manufacturing (35%);  and mining 
and quarrying (18.5%).  During this period, nearly  60% of Turkish overseas investments went to five 
countries; Azerbaijan, the Netherlands , Germany, Malta, and Luxemburg. 
                                                      
36 In the first six months of 2011, FDI inflows into Turkey amounted to US$9.1 billion, primarily in the 
financial sector, energy, and manufacturing.  EU investors, led by Austria and Spain, accounted for more than 
90% of these investments.