Turkey WT/TPR/S/192/Rev.1 
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II. TRADE AND INVESTMENT REGIMES 
(1) GENERAL FRAMEWORK  
1. Under the 1982 Constitution, Turkey is a multi- party parliamentary democracy, a secular and 
social state governed by the rule of law. The Constitution provides for an independent judiciary and 
fundamental human rights for all citizens.  The Pres ident, elected by Parliament for a non-renewable 
seven-year term1, has broad powers of supervision; he a ppoints the Prime Minister and the other 
Ministers. The President, the Prime Minister, and the Cabinet constitute the executive branch, and are 
responsible to Parliament (legislative).  The Tu rkish Parliament, known as th e Turkish Grand National 
Assembly (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, Military High Court of Appeals, and 
Military High Administrative Court.  On 28 September 2006, Law No. 5548, was adopted by Parliament, in an effort to improve pub lic administration through better regulation
3; it established an 
Ombudsman to handle petitions from natural and lega l persons in relation to administrative acts. 
2. In general, policies are formulated and implemented by means of laws.  Draft laws are 
presented to the Council of Ministers by the relevant  Minister. After adoption by the Council, they are 
submitted to the single-chamber Parliament for  ap proval.  Members of Parliament can also present 
draft laws to the Turkish Grand National Assembly . Bills are first forwarded for assessment to the 
standing sub-commissions of the Parliament, toge ther with non-governmental  organizations (NGOs) 
and other relevant experts and authorities. After the Parliament's approval, the bills are signed by the 
President;  the laws enter into force upon publication in the Official Gazette . Decisions with respect to 
policy proposals can also be made by means of Coun cil of Minister decrees, which must be published 
in the Official Gazette .4 
3. Turkey's overall procedures for the formulati on and implementation of trade policy have 
remained broadly unchanged since its last TPR in 2003.5  The Undersecretariat of the Prime Ministry 
for Foreign Trade (UFT) continues to formulate, ad minister, and coordinate Turkey's foreign trade 
policies. Depending on the nature of the issue, the UFT consults with relevant ministries and other 
institutions that also take part directly or indi rectly in foreign trade policy formulation and/or 
implementation:  the ministries of Foreign Affair s, Industry and Trade, Finance, Agriculture and 
Rural Affairs, Health, Culture and Tourism, En ergy and Natural Resources, Environment and 
Forestry; the undersecretariats of Treasury, State Planning Organization, and Customs; the Central 
Bank of Turkey; the Turkish Patent Institute; th e Competition Authority; the Public Procurement 
Authority; the Banking Regulation and Supervision Agency (BRSA); the Telecommunications Authority; the Energy Market Regulatory Author ity; the Sugar Authority; the Tobacco, Tobacco 
Products and Alcoholic Beverages Ma rket Regulatory Authority; the Public Procurement Agency; and 
the Export Credit Bank of Turkey (Turk Eximbank) . The Undersecretariat of Treasury, through the 
                                                     
 
1 In May 2007, prompted by a ruling of the Constitutional Court, a decision was announced to amend 
the Constitution with a view to electing the President by  popular vote. Following this decision, the elections, 
originally set for November 2007, took place on 22 July 2007. 
2 A party must obtain at least 10% of the votes cast at the national level to participate in the distribution 
of seats. 
3 The Constitutional Court has suspended the validity of Law No. 5548 to investigate whether the 
attachment of the Ombudsman to the TGNA and the appointment of the Ombudsman by the TGNA are compatible with the Constitution. The decision of the Court is pending. 
4 The import and export regimes, safeguard measures, surveillance for imports, and the prevention of 
unfair competition on imports have all been regulated through decrees. 
5 Turkey's overall institutional framework is described in detail in WTO (1998). WT/TPR/S/192/Rev.1 Trade Policy Review 
Page 12 
 
 
General Directorate of Foreign Investment (GDFI) , is responsible for foreign direct investment 
matters in Turkey (section (4) below). 
4. The private sector and NGOs provide inputs to trade policy formulation by communicating 
their views to the UFT either directly or throug h the Union of Chambers and Commodity Exchanges 
of Turkey (TOBB), the Turkish Exporters Asse mbly (TIM), the Turkish Businessmen's and 
Industrialists' Association (TUSI AD), the Independent Businessmen' s and Industrialists' Association 
(MUSIAD), and the Foreign Econom ic Relations Board (DEIK), as  well as individual and local 
chambers of commerce, and exporters' associations. Consultation is sometimes held with universities 
and research institutes, such as the Economic a nd Development Foundation (IKV), the Foreign Trade 
Association of Turkey (TURKTRADE), and th e Export Promotion Centre (IGEME). The UFT 
conducts periodic reviews and assessmen ts of trade policies. In this context, the export and import 
regimes and legislation on standardization are re viewed annually and updated as necessary.  The 
views of the private sector, including NGOs, are cust omarily taken into consideration throughout the 
process (although this is not legally required). 
5. The hierarchy of legal instruments in Turkey is: the Constitution, laws, decrees, regulations, 
implementing regulations, Council of Ministers deci sions, and other administrative Acts such as 
circulars.  International agreements duly put into eff ect, including the WTO Agreements, carry the 
force of law in Turkey:  their provisions would a pply in the case of any inconsistency between them 
and domestic law, which must be amended to refl ect Turkey's international commitments. The WTO 
Agreements, and Turkey's current and future trade relations with the European Communities (EC) are 
the main factors influencing the Turkish trading sy stem. Since its last TPR, Turkey has amended its 
legislation on, inter alia , intellectual property rights, and enacted new legislation, notably on 
safeguards, to comply with its obligations under the EC acquis  communautaire  and the WTO 
Agreements (Table AII.1). The main legislation re lating to international trade is the Foreign Trade 
Regulations Law  (No. 2976 of 19 84); in general, investment is regulated by the Commercial Code, 
and foreign investment, in particular, is governed by the Foreign Direct Investment Law (No. 4875 of 
2003) and the Communiqué Concerning the Law (section (4) below). 
(2) P OLICY OBJECTIVES  
6. The main factor in shaping Turkey’s foreign trade policy has been the Customs Union with 
the EC. Therefore, Turkey has been alig ning its legislative framework with the acquis .  In June 2003, 
Turkey adopted its National Programme for the Adoption of the Acquis (NPAA), and currently a 
National Plan is being prepared in the framework  of the priorities laid down in the "Accession 
Partnership with Turkey" adopted by the Europ ean Council on 23 January 2006 (section (3)(ii)(a)). 
7. At the national level, an export-oriented, t echnology-intensive production structure, with 
emphasis on high-value-added produc ts and services, is one of the basic objectives stipulated in 
Turkey's long-term strategy for 2001-23, prepared by the Undersecretariat of State Planning 
Organization (SPO). The strategy aims to support e xport-oriented activities, particularly of small and 
medium-size enterprises (SMEs) by, inter alia , providing credit, guarantee, and insurance 
mechanisms through the Turk Eximbank; further ha rmonizing foreign investment legislation with EC 
norms; reducing bureaucratic procedures for e xporters;  and improving basic infrastructure. 
8. Turkey has also embarked on a branding strategy as a means to improve its export 
performance. As part of this strategy, the UFT has established programmes aimed at improving the 
image of Turkish products around the world, and pr oviding strategic support to Turkish firms and Turkey WT/TPR/S/192/Rev.1 
 Page 13 
 
 
exporters' or producers' unions. In addition, the Go vernment has set the goal of achieving an export 
level of US$125 billion in 2009, on the basis of its Three Year (2007-09) Export Strategy Plan.6 
9. The main objective of Turkey's Ninth Development Plan, for the period 2007-13, is to 
improve competitiveness by, inter alia , improving the business environment, reducing the informal 
economy, increasing quality and effectiveness of public services, ensuring regional development, and 
modernizing the energy and transportation infrastructure.7 Turkey is also examining various strategies 
for improving its information and communication technology (ICT) infrastructure, as a means of fostering productivity. 
(3) T
RADE AGREEMENTS  
10. Turkey participates in several regional trade arrangements where the Customs Union with the 
EC is its priority. According to the Associa tion Council Decision (Customs Union Decision-CUD) 
No. 1/95 of 6 March 1995, which provides for the Customs Union with the EC, Turkey is progressively aligning its preferential regime with that  of the EC, including the GSP.  Turkey also has 
a free-trade agreement with EFTA and is part of  the Euro-Mediterranean Partnership aimed at 
establishing a free-trade area in the region by 2010.  It  is working to conclude a set of bilateral trade 
agreements with southern Med iterranean countries. Turkey also  participates in the Economic 
Cooperation Organization and the Bl ack Sea Economic Cooperation.  Turkey's membership in several 
arrangements makes its trade regime complex and di fficult to manage. Future trade agreements could 
further complicate the trade regime and detract fr om multilateral efforts, given Turkey's limited 
resources. 
(i) WTO 
11. Turkey became an original Member of the WTO on 26 March 1995.
8  It accords at least MFN 
treatment to almost all WTO Members.9  Turkey is not a signatory to any of the plurilateral 
agreements that resulted from the Uruguay Roun d but it is an observer in the Committees on 
Government Procurement and Trade in Civil Airc raft, and party to the Information Technology 
Agreement (ITA). Turkey’s most recent WT O notifications are listed in Table II.1. 
12. Turkey attaches great importance to the Doha Development Agenda (DDA).  Its main 
interests in the DDA are a fair, competitive, a nd predictable trading environment where trade 
(including export) distorting support measures are el iminated. For Turkey, agriculture is the key issue 
of the DDA; and Turkey attaches utmost impor tance to non-agriculture market access (NAMA) 
negotiations and trade facilitation. A WTO Coordina tion Committee has been established, headed by 
the UFT with the participation of the private sect or and NGOs, to follow up issues related to the DDA 
and to determine Turkey's strategy in multilateral negotiations. In general, Turkey takes the position 
of the EC into consideration in the WTO negotia tions, particularly on non -agricultural products, 
which are fully covered by its Customs Union with the EC. 
                                                      
6 Government of Turkey online information.  Vi ewed at: http://www.intracen.org/execforum/ef2006/ 
Branding-14-16-June-Bucharest/Papers/ASIM-CALIS_Turkey.pdf [1 June 2007]. 
7 Decision No. 877, dated 28 June 2006, on the approval by the TGNA of the Ninth Development Plan 
2007-13. The Eighth Development Plan covered the 2001-05 period (see WTO, 2003). 
8 The full text of the Agreement establishing the WTO was published in the Official Gazette  No. 22213 
of 25 February 1995 (see WTO document G/TBT/2/Add.33, 18 June 1997). 
9 In the context of the accession of the Republic of Armenia to the WTO, Turk ey invoked Article XIII 
(Non-Application of Multilateral Trade Agreements betwee n particular Members) of  the Marrakesh Agreement 
establishing the WTO (see WTO document WT/L/501, 3 December 2002). WT/TPR/S/192/Rev.1 Trade Policy Review 
Page 14 
 
 
Table II.1 
Selected notifications to the WTO, 2007 
WTO Agreement Description of 
requirement Periodicity Most recent notification Comment 
Agriculture (Article 18.2) Domestic support  Annual G/AG/N/TUR/14 
30 May 2002 Domestic support 
commitments for 2001 
Agriculture (Articles 10 and 18.2) Export subsidies Annual G/AG/N/TUR/13 
16 August 2001 Export subsidies 
commitments for 2000 
Agriculture (Article 18.2) Green box measures Annual  Turkey has not 
notified any measures 
Implementation of Article VI of 
the GATT 1994 (Article 18.5) Laws, Decrees, and 
Regulations Once, then 
changes G/ADP/N/1/TUR/3/Suppl.3/
Corr.1 
12 October 2006 Copy of the relevant 
legislation 
Implementation of Article VI of the GATT 1994 (Article 16.4) Anti-dumping actions 
taken Semi-annual G/ADP/N/153/TUR 
22 March 2007 Anti-dumping actions 
taken during 
1 July-31 December 2006 
Implementation of Article VI of the GATT 1994 (Article 16.5) Competent authorities Once, then 
changes G/ADP/N/14/Add.9 
20 October 2004  
Import Licensing Procedures 
(Article 7.3) Questionnaire on 
import licensing 
procedures Annual G/LIC/N/3/TUR/6 
23 October 2006  
Import Licensing Procedures 
(Articles 1.4(a) and 8.2(b)) Laws and regulations Once, then 
changes G/LIC/N/1/TUR/4 
G/LIC/N/3/TUR/5 
30 September 2003 Copy of the relevant 
legislation 
Rules of Origin (Article 5 and Annex (II(4)) Non-preferential and 
preferential rules of 
origin Within 90 
days of the 
Agreement G/RO/N/28 
30 May 2000  
Sanitary and Phytosanitary 
Measures (Article 7, Annex B) SPS to be notified 
promptly Once, then 
changes G/SPS/N/TUR/4 
5 October 2004 Guidelines for 
regulating wood 
packing material in 
international trade 
Sanitary and Phytosanitary 
Measures (Annex B, para. 3) Enquiry point Ad hoc G/SPS/ENQ/21 
21 February 2007  
Safeguards (Article 12.6) Laws  and Regulations Once, then 
changes G/SG/N/1/TUR/3 
16 July 2004 Copies of the relevant 
laws 
Safeguards (Articles 12.1 (a), 12.4 and 9) Initiation of 
investigation and provisional measure Ad hoc G/SG/N/6/TUR/10 
G/SG/N/7/TUR/1 G/SG/N/11/TUR/7 
17 August 2006 Motorcycles 
Safeguards (Article 12. 1 (a)) Initiation of 
investigation  Ad hoc G/SG/N/6/TUR/6 
12 January 2006 Footwear 
Safeguards (Article 12. 1 (a)) Initiation of 
investigation  Ad hoc G/SG/N/6/TUR/11 
23 February 2007 Frames and mountings 
for spectacles 
Safeguards (Article 12. 1 (a)) Initiation of 
investigation  Ad hoc G/SG/N/6/TUR/12 
12 June 2007 Travel goods, 
handbags and similar 
containers 
Subsidies and Countervailing 
Measures (Article 25.1) and 
GATT 1994 (Article XVI:1) Specific subsidies Bi-annual G/SCM/N/123/TUR 
12 January 2006 
G/SCM/N/123/TUR/Add.1 
26 January 2006 New and full 
notification 
Subsidies and Countervailing Measures (Article 25.11) Countervailing 
measures taken Semi-annual G/SCM/N/144/Add.1      18 
October 2006  No countervailing 
actions during 
1 January- 30 June 2006  
Subsidies and Countervailing Measures (Article 25.12) Competent authority Ad hoc G/SCM/N/18/Add.19 
20 October 2004  
Subsidies and Countervailing 
Measures (Article 32.6) Laws and Regulations Once, then 
changes G/SCM/N/1/TUR/3 
17 April 2000 
G/SCM/N/1/TUR/3/ Supp.3/Corr.1 
12 October 2006 Copies of the relevant 
acts 
    Table II.1 (cont'd) 
 Turkey WT/TPR/S/192/Rev.1 
 Page 15 
 
 
WTO Agreement Description of 
requirement Periodicity Most recent notification Comment 
Technical Barriers to Trade 
(Articles 10.1 and 10.3) Enquiry point Once, then 
changes G/TBT/ENQ/29 
12 March 2007 Turkish Standards 
Institution is the 
enquiry point 
Technical Barriers to Trade (Article 15.2) Laws and regulations Once, then 
changes G/TBT/2/Add.33 
June 1991 Copies of the relevant 
laws 
Technical Barriers to Trade 
(Annex 3(c)) Acceptance of code Once, then 
changes G/TBT/CS/N/35 
March 1996  
GATT 1994 (Article XVII:4(a) 
and Understanding on the 
interpretation of Article XVII:1) State trading 
enterprises Annual G/STR/N/7,8/TUR 
18 March 2003 State-trading activities 
of Tekel and Turkish 
Red Crescent (TRCS) 
during 1998-01 
GATT 1994 (Article VII) 
Customs Valuation Implementation and 
administration Ad hoc G/VAL/N/3/TUR/1 
21 September 2004 Information on the 
application of 
Decisions A.3 and A.4 
GATT 1994 (Article VII - 22.2) 
Customs Valuation Laws and regulations Once, then 
changes G/VAL/N/1/TUR/2 
18 May 2000 Customs valuation 
provisions of the new 
Turkish Customs Law 
GATT 1994 (Article XXIV) Notifica tion of RTAs Once WT/REG209/N/1 
21 February 2006 Turkey-Morocco Free 
Trade Agreement 
GATT 1994 (Article XXIV) Notifica tion of RTAs Once WT/REG203/N/1 
15 September 2005 Turkey-Tunisia Free 
Trade Agreement 
GATT 1994 (Article XXIV) Notifica tion of RTAs Once WT/REG204/N/1 
15 September 2005 Turkey-Palestine 
Liberation 
Organization Free Trade Agreement 
GATT 1994 (Article XXIV) Notificati on of RTAs Once WT/REG/GEN/N/2 
7 May 2004 Turkey-Estonia, 
Lithuania, Latvia, Slovenia, Slovak Rep., 
Czech Rep., Poland, 
and Hungary free trade agreements 
GATT 1994 (Article XXIV) Notifica tion of RTAs Once WT/REG156/N/1 
8 September 2003 
WT/REG156/N/1/Corr.1 
16 September 2003 Turkey-Croatia Free 
Trade Agreement 
GATT 1994 (Article XXIV) Notificati on of RTAs Once WT/REG157/N/1  
8 September 2003 Turkey-Bosnia and 
Herzegovina Free 
Trade Agreement 
GATS (Article III:4 or IV:2) Enquiry point Once, then 
changes S/ENQ/78/Rev.9 
1 December 2006  
TRIPS  Checklist of issues on 
enforcement Not specified IP/N/6/TUR/1 
17 May 2000 Responses from 
Turkey 
TRIPS (Article 69) Contact point Once, then 
changes IP/N/3/Rev.9 
8 November 2005  
TRIPS (Article 63.2) Laws and Regulations Once, then 
changes IP/N/1/TUR/C/1/Add.1 
19 April 2004 Copies of the new 
laws and regulations 
Quantitative Restrictions 
(Decision of the Council for 
Trade in Goods (G/L/59)) Notification 
procedures for 
quantitative restrictions Every two 
years, from 31 
January 1996 G/MA/NTM/QR/1/Add.7 
16 June 2000 Changes in Turkey's 
quantitative 
restrictions 
Source:  WTO documents.  
13. Turkey has been involved in  several cases under the WTO Dispute Settlement Mechanism 
(Table II.2). Since its last Review, Turkey has pa rticipated in one new case (Turkey – measures 
affecting the importation of rice), raised by the United States; a panel was established on 
17 March 2006.10 
                                                      
10 WTO documents WT/DS334/ series. WT/TPR/S/192/Rev.1 Trade Policy Review 
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Table II.2 
WTO dispute settlement cases involving Turkey, 1995-07 
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 reque sted on 9 October 2000, under 
GATT Article XXIII and 17 of the Anti-Dumping Agreement (WT/DS208/1). Pending consultation 
Certain import procedures 
for fresh fruit Ecuador/Turkey Consultation re quested on 31 August 2001, under 
GATT Article XXII, Article 11of 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 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 matter would no longer be pursued with the DSB 
 
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). Pending consultation 
Measures affecting imports 
of women's and girl's wool coats United States/India Third party par ticipation requested by Turkey on 25 
April 1996 (WT/DS32/4). Pending consultation 
Measures affecting imports 
of woven wool shirts and blouses from India  United States/India Third party partic ipation by Turkey requested on 24 
February 1997. Appellate Body Report 
adopted on 23 May 1997 (WT/DS33/5). 
Definitive anti-dumping measures on imports of ceramic floor tiles from 
Italy European 
Commission/ Argentina Third party participation requested by Turkey on 
17 November 2000 (WT/DS189/4). Argentina implemented 
DSB's recommendations and rulings 
(WT/DS189/8) 
   Table II.2 (cont'd) Turkey WT/TPR/S/192/Rev.1 
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Dispute Raised by/against Actions Outcome 
Definitive safeguard 
measures on imports of 
certain steel products  European 
Commission/United 
States Third party participation requested by Turkey on 
4 June 2002, under DSU Article 10  
(WT/DS248/15, WT/DS249/9, WT/DS251/10, 
WT/DS252/8, WT/DS 253/8, WT/DS254/8, 
WT/DS258/12, WT/DS259/11). Panel and Appellate 
Body reports adopted 
November 2003 and 
December 2003, respectively 
Provisional safeguard measures on imports of 
certain steel products European 
Commission/United 
States Third party participation requested by Turkey on 23 
September 2002 (WT/DS260/series) Pending consultation 
Protection of trademarks 
and geographical 
indications for agricultural 
products and foodstuffs  United States/ 
European Commission 
Australia/European 
Commission Third party participation requested by Turkey on 
2 May 2003, under DSU Article 4.11. 
(WT/DS174/16 and WT/DS290/9) Pending consultation 
Definitive anti-dumping 
measures on beef and rice United States/Mexico Third party participation requested by Turkey on 7 
November 2003 (WT/DS295/3)  Pending consultation 
Laws, regulations and 
methodology for 
calculating dumping 
margins (zeroing) European 
Commission/United 
States Third party participation requested by Turkey on 30 
March 2004 Appellate Body and 
Panel reports adopted on 
9 May 2006 
(WT/DS294/AB/R)   
Source:  WTO Secretariat.  
(ii) Regional agreements 
(a) Customs Union with the European Communities 
14. The Customs Union (CU) between Turkey and the EC entered into force on 1 January 1996 
under Decision No. 1/95 of the Turkey-EC Association Council (CUD), which is the main decision-
making body of the association.  The CUD provides for free trade in, and a common external tariff 
(CET) on, industrial goods and the industri al component of processed agricultural goods11; there is no 
firm timetable for the integration of agriculture.  However, the free movement of agricultural goods is 
set as a common objective. The CUD also covers TRIPS, and competition policies. Moreover, in 
2000, the two parties began negotiations with the ai m of reaching agreements on trade in services and 
government procurement.12 
15. The scope of the CUD excludes Turkey from some of the crucial aspects of the EC's common 
market: the common agricultural policy (CAP); and me mbership of the euro area. Unlike countries in 
the European Economic Area (EEA), Turkey may al so be subject to anti-dumping and countervailing 
measures by the EC.13  These issues have been under discussi on since the Helsinki European Council 
in December 1999.14 
16. The association relations between Turkey and the EC commenced in 1963, with the Ankara 
Treaty, which provided for several stages to enable Turkey to prepare itself for full membership.  The 
timetable of the current CU was set by an Additiona l Protocol of 1973.  On the specified products, the 
EC eliminated all customs duties and equivalent me asures unilaterally on the entry into force of the 
                                                      
11 During a transition period that ended on 1 January 2001, Turkey had maintained rates of protection 
above those specified in the CET for certain "sensitive" products, i.e. 290 items at the HS 12-digit level 
(passenger cars with engines smaller than 2,000 cm3, bicycles, leather cases and ba gs, footwear and their parts, 
furniture, chinaware and ceramic ware, iron and steel wi res and ropes not electrically insulated, and paper or 
paperboard sacks and bags for cement fertilizers). 
12 These negotiations were planned to resume in autumn 2003 but are now part of Turkey's EC 
accession process. 
13 An anti-dumping investigation was initiated by the EC on imports of hot rolled coils from Turkey 
(among others) in December 2001. The investigation on im ports of welded tubes and pipes (iron and non-alloy 
steel) led to the imposition of provisional duties in March 2002 (WTO, 2003). 
14 See WTO (1998). WT/TPR/S/192/Rev.1 Trade Policy Review 
Page 18 
 
 
Interim Agreement on trade-related provisions of the Protocol in September 1971.  A transition stage 
of 22 years was set for Turkey.  As of 1 January 1996, the parties established the CU in accordance 
with the CUD.  Turkey has already adopted a wide range of EC trade and trade-related legislation on 
manufactured goods.  It has eliminated tariffs and levies on imports of non-agricultural products 
originating in the EC, and it applies the EC's C ET on imports of these products from third countries.  
This has led to a substantial reduc tion of its tariffs on these imports. 
17. At the Copenhagen European Council of December  2002, it was agreed that "if the European 
Council in December 2004, on the basis of a report and a recommendation from the Commission, decides that Turkey fulfils the Copenhagen political criteria
15, the EC will open accession negotiations 
with Turkey without delay". Follo wing a generally favourable report,  accession negotiations were 
launched on 3 October 2005.16 
18. The CUD has consolidated the trade relations between Turkey and the EC (Chapter I(3)(i)). 
The textiles and clothing subsector comprises the la rgest share of Turkey's exports to the EC;  
followed by agricultural and processed agricultural goods, motor vehicles, and electrical goods. Main 
imports from the EC are chemical products, power engineering machinery, and transport equipment. 
(b) Free-trade agreement with the Eur opean Free Trade Association (EFTA) 
19. The free-trade agreement between Turkey and the EFTA entered into force on 1 April 1992 
(September 1992 for Iceland).17 The agreement covers:  industrial products (within HS chapters 25 to 
97);  fish;  and processed agricultural products, with  the exception of nine agriculture-based tariff 
items at the HS six-digit level, including mannitol, sorbitol, casein, egg, milk albumin, and dextrin.  
The agreement also covers intellectual property, co mpetition, state aid and anti-dumping. It is based 
on an asymmetrical model similar to Turkey's agreem ent with the EC.  Since 1 January 1993, Turkey 
has granted non-agricultural imports from EFTA c ountries the same customs duty treatment as to 
those from the EC.  Turkey has provided duty-fr ee treatment on fish and fishery products from  EFTA 
countries.  Trade in processed ag ricultural goods follows the same sy stem as between Turkey and the 
EC, i.e. the Mass Housing Fund (MHF) levy on agricultural components of processed agricultural 
goods was reduced on 1 January 1999 to achieve "tar get agricultural components". On 1 April 1992, 
EFTA countries abolished all customs duties and any charges having equivalent effect on non-
agricultural imports from Turkey, except on textiles and apparel goods; tariffs on textiles and apparel 
products were eliminated on 1 January 1996. 
20. In 2006, some 99% of Turkey's merchandise im ports from EFTA and 90% of its exports to 
EFTA were covered by the agreement (i.e. subject  to zero or reduced tariffs). Total EFTA-Turkey 
merchandise trade is estimated at about US$5, 800 million in 2006 (up from US$2,918 million in 
2002);  Turkey's exports to EFTA countries were main ly textiles, vehicles, and iron and steel products 
(about US$1,200 million), while imports were main ly machinery, mechanical appliances, and 
pharmaceutical products. Turkey accounts for 0. 7% of EFTA's total trade with the world.18 
                                                      
15 See WTO (2004). 
16 The first phase of the accession proce ss, the analytical examination of the acquis  (screening) was 
completed in October 2006. In the view of the EC, some unfulfilled commitments by Turkey relate to, inter alia , 
technical barriers to trade, import li cences, state aid, and enforcement of in tellectual property rights. Progress in 
other areas has been reported (e.g. reduction of mandatory standards). Negotiations on science and research 
were opened and provisionally closed in June 2006, while negotiations were opened on enterprise and industrial policies in March 2007, and on statistics and financial control in June 2007. The 2006 pre-accession financial 
assistance amounted to €500 million (European Commission, 2006). 
17 EFTA comprises Iceland, Liechtenstein, Norway, and Switzerland. 
18 EFTA online information.  Viewed at: http://secret ariat.efta.int/Web/News/turkey_jc [1 June 2007]. Turkey WT/TPR/S/192/Rev.1 
 Page 19 
 
 
(c) Euro-Mediterranean Partnership 
21. In November 1995, the EC and 12 Medite rranean partners embarked on the Euro-
Mediterranean Partnership19, a political, economic, and social programme aimed at creating "an area 
of shared prosperity", including a Euro-Mediterra nean Free-Trade Area by 2010. This is to be 
achieved through the Euro-Mediterranean Association Agreements negotiated between the EC and its 
Mediterranean partners, together with the free trad e agreements among the Mediterranean partners. In 
this respect, Turkey has concluded bilateral trade agreements with Egypt, Israel, Morocco, Tunisia, 
Palestinian Authority, and Syria, and is in th e process of negotiating with Jordan and Lebanon 
(section (iii) below).  Turkey's trade with Mediterranean part ners increased from €2.5 billion in 1995 
to over €8 billion in 2006; fuel and manufactur ed goods constitute the majority of this trade.20 
(d) Economic Cooperation Organization (ECO) 
22. Economic Cooperation Organization (ECO) is an  inter-governmental regional organization 
established in 1985 by Iran, Pakistan, and Turkey  for the purpose of sustainable socio-economic 
development of the member states. ECO is the successor organization of Regional Cooperation for 
Development (RCD), active from 1964 to 1979. In 1992, ECO was expanded to include seven new 
members: Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and 
Uzbekistan. ECO has embarked on several projects in priority sectors of cooperation, including energy, trade, transportation, agriculture, and drug control. 
23. On 6 March 2000, a Framework Agreement w as signed with a view to enhancing trade 
relations among ECO members. After three year s of preparations, the ECO Trade Agreement 
(ECOTA) was finalized and signed between Afghanist an, Iran, Pakistan, Tajikistan, and Turkey on 
17 July 2003. The Agreement foresees the reduction of  tariffs (by not less than 10% per year) to a 
maximum of 15% within a maximum period of eight years after its entry into force.  ECOTA has 
binding provisions on, inter alia , state monopolies, state aid, protection of intellectual property rights, 
dumping and anti-dumping measures, and elimination of quantitative restrictions to trade.  ECOTA is not fully operational yet since it is subject to ratification by all signatory countries.
21 
(e) Black Sea Economic Cooperation (BSEC) 
24. The Black Sea Economic Cooperation (BSEC) aims  to improve and diversify economic and 
trade relations among its eleven members.22  Although the BSEC provides for cooperation in various 
fields, it does not as yet provide for preferential ta riff concessions.  The areas of cooperation include 
banking and finance, and exchange of statistical  data and economic inform ation regarding energy, 
transport, telecommunications, trade and industry,  agriculture and agri-industry, environmental 
protection, tourism, and science and technology.   In this context, the Black Sea Trade and 
Development Bank became operational in 1999.  A decl aration of intent for the establishment of a 
BSEC free-trade area was adopted on 7 February 19 97.  The declaration envisages the examination of 
                                                      
19 The Euro-Mediterranean Partnership currently comprises 37 members: 27 EC member states and 10 
Mediterranean partners.  The original members were: Al geria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, 
Morocco, Palestinian Authority, Syri a, Tunisia, and Turkey.  Libya has observer status (since 1999).  
20 EC online information. Viewed at: http://europa .eu/rapid/pressReleasesAction.do?reference=MEMO 
06/139&format=HTML&aged=0&language=EN&guiLanguage=fr [1 June 2007]. 
21 Afghanistan, Pakistan, Tajikistan , and Turkey have already completed the ratification process, which 
is still pending in Iran. 
22 The BSEC Declaration was signed on 25 June 1992. The original members were: Albania, Armenia, 
Azerbaijan, Bulgaria, Georgia, Gr eece, Moldova, Romania, the Russian Federation, Turkey , and Ukraine. WT/TPR/S/192/Rev.1 Trade Policy Review 
Page 20 
 
 
ways and means for the progressive establishment of such an area, taking into account each country's 
existing and future links with the EC. 
(iii) Bilateral agreements 
25. Under the CUD, Turkey has signed several bilatera l trade agreements with a view to aligning 
its trade regime on the EC’s. Turkey’s free-trade ag reements with Bulgaria, Czech Republic, Estonia, 
Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic, and Sloveni a expired when these 
countries became EC members.23 Currently, Turkey has nine bilateral agreements, six of which 
entered into force during the review period (B osnia-Herzegovina, Egypt, Morocco, Palestinian 
Authority, Syria, and Tunisia); negotiations with  Albania have concluded and the agreement is 
expected to enter into force during 2007 (Table II.3).24 
Table II.3 
Bilateral trade agreementsa, 2007 
Country Date of agreement Entry into force Major Tu rkish exports and imports covered by the 
agreementb 
Israel 14/3/1996 1/5/1997 Phased reduction of tariffs on industrial goods; complete 
elimination on industria l goods on 1 January /2000 
Macedonia (FYR)   7/9/1999 1/9/2000 Phased reduc tion of tariffs on industrial goods;  complete 
elimination on industrial goods by 1 January 2008 
Croatia 13/3/2002 1/7/2003 Phased reduction of tariffs on industrial goods;  complete 
elimination on industrial goods by 1 January 2007 
Bosnia-Herzegovina  3/7/2002 1/7/2003 Phased reduction of tariffs on industrial goods;  complete 
elimination on industrial goods by 1 January 2007 
Palestinian Authority 20/7/2004 1/6/2005 Phased re duction of tariffs on industrial goods;  complete 
elimination on industrial goods by 1 June 2005 
Tunisia 25/11/2004 1/7/2005 Phased reduction of tariffs on industrial goods;  complete 
elimination on industrial goods by 1 July 2014 
Morocco 7/4/2004 1/1/2006 Phased reduction of tariffs on industrial goods;  complete 
elimination on industrial goods by 1 January 2015 
Syria 22/12/2004 1/1/2007 Phased reduction of  tariffs on industrial goods;  complete 
elimination on industrial goods by 1 January 2019 
Egypt 27/12/2005 1/3/2007 Phased reduction of  tariffs on industrial goods;  complete 
elimination on industrial goods by 1 January 2020 
Albania 22/12/2006 ratification pending Phased re duction of tariffs on industrial goods;  complete 
elimination on industrial goods on the 5th year after the 
entry into force of the agreement  
a All agreements include provisions on right of establishment and supply of services, internal ta xation, structural adjustment,  
 dumping, state monopolies, rules of origin , payments, rules of competition, state aid,  balance-of-payments difficulties, prote ction 
 of intellectual property, and government procurement. b See Table III.1 for details on the relevant rules of origin, and Table III.5 for  the coverage and the preferential margin. 
Source : Information provided by the Turkish authorities. 
26. Turkey's bilateral trade agreements have a standard model based on the preferences of each 
party with the EC. Under the agreem ents, bilateral trade has been liberalized on industrial goods at the 
end of a transition period, and mutual concessions  are granted on selected agricultural and processed 
agricultural goods (Chapter III(2)(iii)(e)).  In addition, negotiations are in progress with, inter alia , the 
Faroe Islands, Georgia, Gulf Cooperation Council (GCC)25, Jordan, Lebanon, and Montenegro; while 
exploratory talks have also been held with Ch ile, Mexico, the Southern African Customs Union 
(SACU)26, and Ukraine. 
                                                      
23 See WTO (2004) and WTO (2007). 
24 Internal ratification procedures are under way.  
25 The GCC members are: Bahrain, Kuwait, Oman, Qa tar, Saudi Arabia, and the United Arab Emirates. 
26 The members of SACU are: Botswana, Leso tho, Namibia, South Africa, and Swaziland. Turkey WT/TPR/S/192/Rev.1 
 Page 21 
 
 
(iv) Other preferential trade arrangements 
27. As part of the CUD, Turkey has based its Ge neralized System of Preferences (GSP) on the 
EC's. Under Turkey's GSP regime, preference s are granted to selected non-agricultural goods, 
including raw materials and semi-finished goods. The goods covered by the regime are classified 
according to their "sensitivity". Duties on non-sensiti ve products are fully eliminated, while those on 
sensitive products are reduced. In general, the reduc tion is by 3.5 percentage points on the MFN duty 
rate. However, for HS Chapters 50-63, the reduction is 20% of the MFN duty rate. In addition, where 
the EC's GSP scheme provides for preferential tariff re ductions of more than 3.5 percentage points on 
sensitive products, these higher reductions will apply.  Duties are eliminated for the least-developed 
countries on the basis of the EC's Everything But Ar ms (EBA) Initiative. In lin e with the EC, Turkey 
grants further preferences to 15 countries sel ected under the Special Incentives Arrangements for 
Sustainable Development and Good Governance.27 Beneficiary countries under Turkey's GSP are 
announced annually in the Annexes of Turkey's Import Regime. 
28. Turkish exports receive preferential treatmen t under the GSP schemes of Canada, Japan, New 
Zealand, the Russian Federation, and the United Stat es. Under the preference extended by the Russian 
Federation, imports from Turkey are subject to ta riffs at 75% of MFN rates on all products except 
those on a negative list. The United States extends duty-free treatment on 744 products.28 
29. Turkey is not a member of the Agreement on the Global System of Trade Preferences (GSTP) 
among developing countries. 
(4) I NVESTMENT FRAMEWORK  
30. The Decree on Improving the Investment Environment in Turkey was enacted on 
11 December 2001 as a part of the national strate gy to increase domestic and foreign investments by 
improving the business environment, increasing the ove rall level of income and productivity, and 
raising the level of competitiveness. The Decree also established the Coordination Council for the 
Improvement of the Investment Environment (CCI IE) and technical subco mmittees, to identify and 
remove the remaining regulatory and administrative barriers to private investment. Since then, the 
authorities have implemented several legislativ e measures to further improve the business and 
investment climate, including the adoption of the Foreign Direct Investment Law No. 4875 in 2003, 
and the establishment of the Turkish Investment  Support and Promotion Agency in June 2006. 
However, some restrictions to foreign investment in  real estate have been introduced over the last few 
years.  Furthermore,  a number of sectors are still subject to FDI restrictions (Table II.4). 
31. Key features of the 2003 Foreign Direct Invest ment Law include:  (i) freedom to invest (all 
former FDI-related screening, approval, and share transfer requirements, as well as limitations on foreign ownership, have been eliminated);  (ii) reassurance of existing guarantees of rights to foreign 
investors in one document;  (iii) adoption of inte rnational standards for definitions of "foreign 
investor" (broadened to include Turks living abroad and internati onal organizations), and "foreign 
direct investment" (broadened to include all possibl e types of assets); and (iv) a policy shift from ex-
ante control to a promotion and facilitation a pproach, with minimal ex-post monitoring, to 
                                                     
 
27 These countries are: Bolivia, Co lombia, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, 
Honduras, Moldova, Mongolia, Nicaragua, Panama, Peru, Sri Lanka, and Venezuela. 
28 Turkey benefits from so-called "competitive need limitation waivers" from the United States. Such 
waivers allow particular products from  certain countries to be imported dut y free into the United States without 
being subject to market share and annual import caps.  Turkish exports to the United States under GSP were just 
over US$1 billion in 2006 (Office of the United States  Trade Representative online information. Viewed at: 
http://www.ustr.gov/index.html. WT/TPR/S/192/Rev.1 Trade Policy Review 
Page 22 
 
 
continuously improve an investor-friendly climate for growth and development.  The law guarantees 
national treatment and investor rights. All comp anies established under the rules of the Turkish 
Commercial Code (including existing and newly esta blished foreign companies) are regarded as 
Turkish companies. Therefore, equal treatment is a pplicable to all such companies, both in rights and 
responsibilities as stated in the Constitution and other laws.29 
Table II.4 
Foreign direct investment restrictions, 2007 
Sectors  Legal source Restriction 
Broadcasting Establishment and Broadcasting of Radio and 
Television Law No. 3984 No more than 25% equity participation by 
foreigners. 
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 participation by 
foreigners.  Licences to operate airlines are only granted to locally incorporated companies whose 
management is under the control of Turkish 
citizens and majority of voting shares are owned by Turkish citizens.  Airlin es, of which majority of 
shares are controlled by foreigners, are not 
permitted to carry passengers from one national airport to another.  
To obtain groundhandling services licences, the 
majority authorized administration and representation of the company must be Turkish. 
The contract of such a company 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 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, 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 cannot obtain a fishing licence.  
Vessels owned by foreigne rs also cannot register 
as fishing vessels in Turkey, unless owned by 
Turkish nationals or by companies of which 
majority of voting shares are owned by Turkish citizens. 
Accounting, auditing and book-keeping services Law No. 3568 on Accountancy, Financial Advisory 
and Certified Financial A dvisory Services dated 
1989 Special permission required.  Foreign financial 
advisors that are the citizens of countries which have officially codified the principles of the 
profession of financial advisory may, under 
reciprocal conditions, be authorized by the approval of the Prime Minister upon the proposal 
of  the Ministry of Finance, provided that these 
persons have the qualifications required for the Turkish financial adviso rs 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 Supervision Law No. 5684 Special permission required.  Permission to 
establish a bank, which has to be founded in the 
form of a joint-stock company, or to open the first 
branch of a foreign bank in Turkey, shall be given by the Banking Regulation a nd Supervision Board.   
  Table II.4 (cont'd) 
  
 
                                                      
29 This includes national treatment, a guarantee against expropriation without compensation, transfer of 
proceeds, access to real estate, the right to expatriate pe rsonnel, and access to international arbitration or to any 
other means of dispute settlement. Turkey WT/TPR/S/192/Rev.1 
 Page 23 
 
 
Sectors  Legal source Restriction 
  Only intermediary institutions (including banks) 
established in Turkey and authorized by the Capital 
Market Board can perfor m securities activities;  
however, banks cannot trade in the Istanbul Stock Exchange (ISE) equities market.  Mutual funds 
may be founded only by authorized banks, 
insurance companies, non-bank securities intermediaries;  and pension funds by private 
pension companies established in Turkey.  The 
majority of the members of the board of directors of an investment company must be Turkish nationals.  Portfolio mana gement and investment 
advisory services may be performed by non-bank 
securities intermediaries, non-deposit taking banks and portfolio management companies established 
in Turkey.   
  In insurance, foreign commercial presence or 
presence of foreign natural persons regarding services auxiliary to insurance is permitted only for 
consultancy and risk-management services.  
Establishment of an in surance or reinsurance 
company and opening a branch of a foreign insurance or reinsurance company in Turkey are 
subject to prior permission of the Ministry of State,  
to which the Undersecretariat of Treasury is attached.  Measures regarding special permission 
are applied equally to domestic and foreign 
investors. 
Petroleum Petroleum Law No. 6326 and Petroleum Market 
Law No. 5015 Special permission required.  Foreign enterprises 
may invest in marketing and sales activities 
without restriction.  They may invest in 
exploration and explo itation activities provided 
they are not controlled or owned by a foreign State 
(this restriction may be lifted by the Council of Ministers).  Petroleum related activities can be 
carried out through locally incorporated stock 
companies or Turkish branches of stock companies incorporated abro ad.  For investment in 
refining, transportation through pipelines and 
storage, approval by the Energy  Market Regulatory Authority is required. 
Mining Mining Law No. 3213 Special perm ission required. Foreigners may 
invest only through locally incorporated companies.  
Real-estate trading Land Registry Law No. 2644 Fo reign legal and real persons in Turkey can 
acquire land in accordance with the mutuality principle;  however, acquisition of land of between 
2.5 and 30 hectares is subject  to permission from 
the Council of Ministers. 
Electricity Electricity Market Law No. 4628 Companies cannot have a  market share that will 
enable them to control power in the electricity 
generation, transmission, and distribution 
subsectors. 
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 private education institutions may be set up by real or legal persons 
upon authorization of the Council of Ministers.  
For tertiary education institutions, it is required that the majority in the administrative bodies be 
Turkish nationals. 
Private employment offices Law No. 4904  The persons who have the binding authority to 
represent, act on behalf of, and manage real and 
legal persons that will set up a private employment 
offices should be Turkish.  A foreign company can be established provided that the person authorized 
to represent it in Turkey be Turkish national. 
Source:  Information provided by the Turkish authorities. WT/TPR/S/192/Rev.1 Trade Policy Review 
Page 24 
 
 
32. The legislation to reduce the duration of regist ration to one day, and the number of required 
documents, was approved by the Parliame nt on 12 June 2002 and published in the  Official Gazette  on 
17 June 2003.  The Law on International Arbitration (No. 4686), enacted in July  2001, provides for 
solution through international arbitration of conflic ts arising from public service concession contracts 
where any foreign element is involved. In 2005, a ne w Penal Code, the Code of Criminal Procedures, 
and the Law on Enforcement of Sentences entered into force. In 2006,  the Law on Access to 
Information was amended enabling citizens to dis pute all state agencies' denials of requests for 
information. As a response to the escalation of te rrorism, amendments to the anti-terror law were 
adopted in June 2006.  Turkey acceded to the Gr oup of States against Corruption (GRECO) in 2004, 
whose objective is to improve the capacity of its members to fight corruption by monitoring their 
compliance with the Council of Europe anti-corr uption standards. The UN Convention against 
corruption entered into force in Turkey in June 2006.  
33. A company can be 100% foreign owned in almost all sectors of the Turkish economy. The 
exceptions are:  (i) broadcasting, where foreign share holders' equity participation is restricted to 25%; 
(ii) aviation, and maritime services provided unde r concession agreements, 49%; and (iii) fishing, 
where foreigners cannot get a licence. Acquis ition of between 2.5 and 30 hectares of land by 
foreigners is subject to permission from the Counc il of Ministers.  Special permission is required 
under specific laws (Table II.4), for accounting,  auditing, and book-keeping services; private 
employment offices; and establishments in the financ ial, petroleum, mining, electricity, and education 
sectors. 
34. A variety of schemes provide incentives to investor s; they are equally available to foreign and 
domestic investors, and include tariff and duty exemptions, and subsidized credits 
(Chapter III(2)(ii)(c) and III(3)(iv)). No special in centives are available only to foreign or national 
investors. The authorization requirement by the Undersecretariat of Treasury for outward foreign 
direct investment in excess of US$5 million was abolished on 30 December 2006.30 Turkish residents 
who want to invest or establish a company or a bran ch abroad or be a partner are now free to export 
capital in cash, by bank or in kind in accordance with Customs Regulations. 
35. According to the OECD's overall FDI regulat ory restrictiveness index, Turkey's most 
restrictive subsectors are air and maritime transport, followed by electricity.31 The most liberal sector 
is manufacturing, together with some services su bsectors, such as telecommunications, insurance 
services, and certain business services (Table II.5) . Turkey has undertaken the most significant 
dismantling of foreign equity ownership restrictions among OECD countries since 1998.32 
36. Turkey has signed 79 bilateral agreements (66 at  the time of its last TPR) for the promotion 
and protection of foreign direct investment, so far 62 are in force.33 
                                                      
30 Decision of the Council of Ministers, published in Official Gazette  No. 26392. 
31 Restrictiveness is measured on a 0 to 1 scale, with 0 representing full openness and 1 a prohibition of 
FDI. The OECD's FDI regulatory restrictiveness index c overs three broad categories of restrictions: limitations 
on foreign ownership, screening or notification procedur es, and management and operational restrictions. It 
aims, primarily, to measure deviations from national treatment, i.e. discrimination against foreign investment.  
32 OECD (2006). 
33 Afghanistan; Albania; Argentina;  Austria, Azerbaijan; Bangladesh; Belarus; Belgium/Luxembourg; 
Bosnia and Herzegovina; Bulgaria; China (P.R.); Croatia; Cuba; Czech Republic; Denmark; Egypt; Estonia; 
Ethiopia; Finland; Georgia; German y; Greece; Hungary; Indonesia; Islamic Republic of Iran; Israel; Italy; 
Japan; Jordan; Kazakhstan; Republic  of Korea; Kuwait; Kyrgyztan; Latv ia; Lebanon; Lithuania; Macedonia 
(FYR); Malaysia; Malta; Moldova; Mongolia; Morocco; Netherlands; Pakistan; Poland; Portugal; Romania; 
Russian Federation; Slovakia; Slovenia; Spain; Sweden; Switzerland; Syria; Tajikist an; Tunisia; Turkmenistan; 
Ukraine; United Kingdom; United States; Uzbekistan; and Serbia. Turkey WT/TPR/S/192/Rev.1 
 Page 25 
 
 
37. Since 1987, Turkey has been a member of th e International Centre for Settlement of 
Investment Disputes and the Multilateral Investment Guarantee Agency.  Since 1991, Turkey has also 
been a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards34, 
and of the European Convention on In ternational Commercial Arbitration.35 
Table II.5 
Turkey's FDI regulatory restrictiveness indexa, 2006  
 
Turkey OECD 
Averageb Non-OECD 
Averagec 
Business services    
Legal 0.250 0.221 0.271 
Accounting 0.150 0.196 0.175 
Architecture 0.100 0.094 0.148 
Engineering 0.100 0.094 0.075 
Total 0.150 0.152 0.175 
Telecommunications    
Fixed 0.100 0.198 0.229 
Mobile 0.100 0.143 0.206 
Total 0.100 0.184 0.223 
Construction 0.100 0.074 0.098 
Distribution 0.100 0.072 0.140 
Financial services    
Insurance 0.100 0.135 0.206 
Banking 0.150 0.157 0.211 
Total 0.150 0.152 0.210 
Hotels and restaurants 0.100 0.072 0.071 
Transport    
Air 0.500 0.443 0.461 
Maritime 0.500 0.280 0.246 
Road 0.100 0.106 0.188 
Total 0.416 0.299 0.305 
Electricity 0.400 0.326 0.536 
Manufacturing 0.100 0.076 0.119 
Total 0.173 0.148 0.189 
a 1 = closed;  0 = open. 
b Australia, Austria, Belgium, Canada, Czech Republic, Denmark,  Finland, France, Germany, Gr eece, Hungary, Iceland, Ireland, 
 Italy, Japan, Republic of Korea, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, 
 Sweden, Switzerland, Turkey, Unite d Kingdom, and the United States. 
c Argentina, Brazil, Chile, Israel, Estonia, Latvia, Lithuania, Romania, Slovenia, China (P.R.), India, Russian Federation, and  
 South Africa. 
Source:  OECD (2006), OECD's FDI Regulatory Restrict iveness Index:  Revision and Extension to More Economies . 
 Viewed at:  http://www.oecd.org/dataoecd/4/36/37818075.pdf. 
                                                      
34 Approved by Law No. 3731 of 21 May 1991. 
35 Approved by Law No. 3730 of 21 May 1991.