What is the Customs Law, and what does it cover?

The Customs Law is used to determine the customs tariffs to be applied to goods and vehicles entering and leaving the Customs Territory of the Republic of Turkey. The entirety of the territory of the Republic of Turkey; including land, internal waters, and airspace, is the customs territory.

The Customs Law regulates import and export transactions. At the same time, it ensures the creation of a fair and transparent trade environment between businesses and consumers.

In this content, we cover many important topics ranging from the application areas of the Turkish Customs Law to customs duties, the use of HS (GTİP) codes, and related violations and penalties. Let's take a closer look at the details you need to know about the customs law. 👇

What is the Customs Law? Basic Concepts

The Customs Law is a legal text that regulates a country's customs policies and determines procedures related to imports and exports. Its basic concepts cover topics such as the rules, taxes, regulations, and various customs regimes applied during customs procedures. This law provides a framework for international trade to function properly.

It also determines the legal and regulatory aspects of trade. The law regulates all details and processes related to moving goods and services from one country's border to another. At the same time, the penalties and sanctions to be applied to customs violations are determined within the framework of this law.

1. Customs Duties

Customs duties in Turkey are determined depending on various factors. The customs duties to be paid in import and export transactions depend on the type, quantity, value, and country of origin of the imported or exported product. The main customs duties in Turkey can be listed as follows: ⬇️

• Ad Valorem Duties: Based on percentage rates determined over the customs value of a good. In other words, this type of tax is calculated depending on the value of a product.

• Special Consumption Tax (SCT): A tax levied on certain consumption goods in Turkey. Products such as alcohol, tobacco, and automobiles are subject to this tax.

• Value Added Tax (VAT): A tax levied on imported goods in Turkey. VAT rates may vary depending on the type and nature of the good.

• Specific Duties: Based on fixed amounts determined over the quantity of a good. In other words, this type of tax is calculated depending on the quantity or size of a product.

• Anti-Dumping Duties: An additional duty levied to offset the situation when a good is imported at a price below its normal value.

• Safeguard Measures: Can be applied in certain cases to protect domestic industries or correct trade imbalances. These measures are usually in the form of additional duties or quotas on imports.

These tax rates and rules may change depending on Turkey's trade agreements, international regulations, and domestic policies. For up-to-date and detailed information, it is necessary to apply to the Ministry of Trade of the Republic of Turkey or the relevant customs administration.

2. Customs Administration

Customs administrations carry out the customs controls of goods entering the Customs Territory of Turkey. In this context, all processes from the entry and exit of goods to the implementation of customs legislation are carried out through customs administrations.

Furthermore, in the case of an international agreement, controls can also be carried out in another country through customs administrations.

3. Customs Declaration

A customs declaration can be made in 4 different ways. These are:

• Written

• Computer data processing technique

• Oral

• Any act or transaction by which the owner of the goods expresses their intention to place the goods under a specific customs regime falls into this scope.

The regulations required to be specified in the customs declaration may vary according to the customs regimes. It generally includes information such as sender-recipient company details, origin, transport information, and taxes to be paid.

If the goods comply with the relevant regulations and are not subject to prohibition or restriction measures, customs authorities carry out the delivery of the goods by checking the information based on the declaration.

However, if the examination of the declaration takes time and there is no need to keep the goods during this period, the goods may be released. How goods that cannot be delivered due to prohibitions or restrictions will be processed is determined by regulation.

Following the delivery of the goods, customs authorities may examine the documents and information regarding the import, export, or subsequent commercial transactions of the goods in order to verify the accuracy of the information included in the declaration. 📜

Suppose that, as a result of the examination of the declaration or post-clearance audit after the delivery of the goods, it is determined that the relevant customs regulations were applied based on incorrect or incomplete information. In this case, the customs authorities carry out the correction procedures of the declaration in line with new findings, in addition to the penal provisions specified in the Customs Law.

4. Customs Rule of Origin

Origin defines the economic nationality of goods. Various rules are applied when determining the origin of goods pursuant to preferential or non-preferential trade agreements. The manner in which customs duties are applied in international trade varies according to the origin of the goods.

Additionally, the country of origin of a good and the country from which it arrived can be different. The rule of origin is divided into two: preferential and non-preferential.

If there is no agreement between the two countries, which are the exporter and importer of the goods, the origin is determined depending on the domestic legislation of the countries.

Origin determined in this way is non-preferential origin. If there is an agreement between two countries and the origin is determined within the framework of this agreement, it is called preferential origin.

5. Customs Tariff Statistics Position (GTİP - HS Code)

GTİP numbers are a 12-digit code used in import and export transactions, uniquely identifying each product or service. The GTİP code consists of a series of numbers that determine the class, subclass, and specific features of a product.

The first 6 digits are determined by the WCO and are fixed worldwide. The subsequent digits reflect the unique requirements and regulations of each country.

When determining the GTİP number of a product, factors such as what the good is, which materials it is made of, what processes it has undergone, and for what purposes it is used are taken into account.

Therefore, these codes determine which category a product belongs to and thus serve to determine the customs duties and other fees to be collected on the product. They also play an important role in international trade agreements and the collection of global statistics.

The correct use of GTİP codes is highly important for both importers and exporters. For example, if a business plans to export, it must know the GTİP code of its products. At the same time, it must determine the relevant customs duties and regulations using this code.

Areas of Application of the Customs Law

The areas of application of the customs law in Turkey focus on goods entering or leaving Turkey's customs territory. These laws, determined by the Ministry of Customs and Trade of the Republic of Turkey, regulate customs transactions located both inside and outside Turkey. 👈

The "Customs Law" (Law No: 4458) of the Republic of Turkey determines the principles and general rules regarding customs law. Relevant persons also act in accordance with this law.

1. Import and Export Procedures

Import is the process of bringing goods or services into a country from another country. Import procedures in Turkey are subject to the customs laws and regulations determined by the Ministry of Customs and Trade.

Imported goods are evaluated according to various criteria, and the customs duties determined as a result of this evaluation are applied. Factors considered in import procedures include the type, quantity, value, and country of manufacture of the good.

Export, on the other hand, is the process of sending goods or services from one country to another country. Export procedures are also subject to Turkey's customs laws. In export procedures, factors such as the country to which the good will be exported, the type, quantity, and value of the good are generally taken into account. 📦

During import and export procedures, all necessary documents and permits must be present for the entry and exit of the goods into the customs territory. In addition, goods are generally subject to customs inspection during import and export procedures. This is done to verify that the goods comply with laws and regulations and that the necessary taxes have been paid.

2. Customs Regimes

When it is desired to place a good under a customs regime, it must be declared to the authorized customs office. The customs regimes that can be utilized are as follows: 👇⬇️

Release for Free Circulation Regime

After a good arrives in the Customs Territory of Turkey, it enters into free circulation after trade policy measures start to be applied, the necessary procedures for the import of the good are completed, and the liable taxes are collected. The cases that will cause a good to lose its free circulation status are as follows:

• Cancellation of the declaration of release for free circulation

• Refund or exemption of customs duties of imported goods subject to the inward processing regime

• The goods being defective or not complying with the terms of the sales contract

Transit Regime

The transit regime is a system applied to the transport of goods, which are not in free circulation or whose customs procedures regarding their export have been finalized, from one place to another within the Customs Territory of Turkey.

The regime of goods placed under the transit regime ends after they reach the customs office of destination. As a result of comparing the documents and information in the customs office of departure with those in the customs office of destination, it is determined that the regime has been terminated in accordance with the rules.

Customs Warehousing Regime

The customs warehousing regime determines the provisions for placing goods, whether in free circulation or not, into a customs warehouse. The date when the goods subject to the warehouse regime are placed in the customs warehouse is recorded by the operator.

Records of goods in warehouses not operated by customs administrations are also kept ready for inspection by the relevant operator.

Inward Processing Regime

Under the inward processing regime, goods not in free circulation are temporarily imported in cases where the processed products are re-exported from Turkey, are not subject to customs duties and trade policies, and duties are secured by a guarantee.

If the goods are exported after processing, the tax guarantee is refunded. Products utilizing the inward processing regime fall under the conditional relief system.

In the event that goods in free circulation are used in the acquisition of processed products and subsequently exported from Turkey, the import duties collected during the release for free circulation stage of the goods are refunded thanks to the inward processing regime. Goods utilizing the inward processing regime in this way are subject to the drawback system.

Processing Under Customs Control Regime

The processing under customs control regime refers to an arrangement where goods not in free circulation undergo a change in their characteristics or status, and as a result, the products obtained can be released for free circulation.

The products obtained through this method are called processed products. Under which circumstances the processing under customs control regime will be applied, which goods will fall under this regime, and the approval of procedures and special cases different from the release for free circulation regime are regulated by the relevant regulation.

Temporary Importation Regime

The temporary importation regime is a regime with provisions that allow goods not in free circulation to be fully exempt from import duties, used within the Customs Territory of Turkey, and re-exported without undergoing any change.

Temporary importation authorization is granted by customs administrations upon the request of the person using the goods. If identity of the goods cannot be established with the imported goods, the temporary importation regime is not applied.

However, considering the character of the goods and the nature of the work to be done, customs administrations may allow the implementation of the temporary importation regime by securing all duties under guarantee.

Outward Processing Regime

The outward processing regime refers to a regime in which rules are set to allow goods in free circulation within the Customs Territory of Turkey to be temporarily exported and subsequently re-enter free circulation without paying import duty.

After obtaining the necessary permissions, some or all of the processed products or goods that have not undergone changes can be temporarily exported out of Turkey for further processing or repair, subject to the provisions of the outward processing regime.

When goods in free circulation are temporarily exported, the export duties and trade policy measures necessary for their exit from the Customs Territory of Turkey are applied.

Export Regime

The export regime is a regulation in which the rules required for sending goods in free circulation in Turkey out of the country are applied. The export procedure is ensured by meeting all requirements for the successful completion of the export, including trade policy measures and various taxes.

A customs declaration is submitted to the authorized customs offices for goods to be exported from Turkey. Situations where goods will not be subject to a customs declaration are determined by regulation.

3. Customs Exemptions and Reliefs

Under the customs law, certain goods to be released for free circulation are exempt from customs duties. These goods are as follows: 🛃

• Goods intended for the needs of the President and the presidential residence

• Goods brought through diplomatic channels

• Vehicles and equipment used in the fight against smuggling

• Products value of which does not exceed 150 euros

• Personal effects that individuals can freely use

• Gift items carried by passengers not exceeding a value of 430 euros

• Honour decorations or awards

• Gifts received within the framework of international relations

• Goods imported without commercial purpose by individuals or organizations designated by the President

• Goods and scientific instruments imported for education, science, and culture

• Medical diagnostic and treatment equipment

• Animals, biological, and chemical substances necessary for scientific research

• Therapeutic substances for human health, blood grouping and tissue typing reagents

• Substances with pharmaceutical properties for quality control

• Products used in national research and development activities

• Imports intended for the needs of commercial enterprises

• Capital goods and other products brought in case of business transfer

• Products brought by farmers operating in the Customs Territory of Turkey from their properties in neighboring countries

• Seeds, fertilizers, and similar products imported by farmers in neighboring countries to be used in their properties in Turkey

• Non-commercial sample products

• Samples and models of negligible value

• Advertising materials and promotional items

• Products needed for trade fairs or similar events

• Goods imported for examination or testing purposes

• Goods used in transport

• Materials that help arrange and protect goods during transport

• Hay, feed, and medicines used during the transport of animals

• Fuel and lubricants contained in transport vehicles and special containers

• Equipping and operating materials of sea and air transport vehicles

• Aircraft, aircraft engines, and parts thereof destined for passenger and cargo transport,

• Import of information material

• Goods sent to organizations holding publication, industrial, and commercial patent rights

• Tourist advertising materials

• Documents and goods of no commercial value

• Import of coffins and funerary items

• Materials for war memorials and cemeteries

• Coffins, urns for ashes, and funerary ornaments

• Other miscellaneous goods

• Special goods for disabled persons

• Relief goods sent to victims of major crises such as natural disasters, radiation, epidemics, and air pollution

• Medicines imported to be used in international sports events organized in Turkey

Violations of Customs Law and Penalties

Turkey's Customs Law defines various violations and corresponding penalties and sanctions. These violations generally include acts such as customs duty evasion, misleading or false declarations, and illegal import or export of goods.

Violations of customs laws usually result in financial penalties. These penalties generally depend on the value of the goods involved and the severity of the violation. For example, a serious violation involving high-value goods can result in an important financial penalty. In some cases, especially in serious or repeated violations, offenders may be sentenced to imprisonment.

In case of repeated violations or severe violations, a business's import or export license may be revoked. This information is intended to provide general guidance and may change due to legislative amendments.

For more detailed and up-to-date information, it is recommended to apply to the Ministry of Trade of the Republic of Turkey or a legal counsel. 👈

Conclusion

Turkey's Customs Law holds an important role in international trade. By regulating import and export transactions, it ensures businesses' access to foreign markets and Turkey's foreign trade balance.

The penalization of violations with severe sanctions guarantees the fair and transparent circulation of goods and services. This ensures both that businesses remain competitive and that consumers' interests are protected.

Therefore, compliance with customs legislation carries critical importance for commercial success. By paying the required taxes on time, businesses prevent legal issues and potential financial sanctions.

Thus, the business's reputation is protected, and its commercial relations are strengthened. In addition, businesses operating in compliance with customs regulations remain flexible and adaptable in the constantly changing international trade environment.

In conclusion, Turkey's Customs Law and compliance with customs legislation are the keys to success for businesses. Both locally and internationally, these laws are indispensable for creating a fair and effective trade environment.

Businesses achieve long-term sustainable success by investing in the resources needed to fully comply with legislation and properly manage customs procedures.