LOGISTICS & CUSTOMS CON SIDERATION S

IN TURKEY

How to use Turkey as a Gateway for Your Products

Getting your Products into Turkey- Tariff Issues

Presented by Ercan Korkut, BILIN Global Logistics,

3 1 .1 0 .2 0 1 4 , iAdvisory Event, Singapore

1. Turkey is at geographically an ideal location

In the proximity of emerging markets where foreign trade has been growing Links Asia to Europe, Russia to Africa with rail freight , air freight and

maritime corridors

MARMARAY Project (USD 5 Billion) will provide the non-stop transport of goods via railway from China to London.

Potential to be a logistics hub for more than USD 2 Trillion freight

TURKEY CAN BE A GATEWAY FOR SIN GAPORE

TO THE MARKETS OF

EAST EUROPE, CEN TRAL ASIA, N ORTH AFRICA, MIDDLE EAST

BECAUSE

2. Turkey has ambitious targets for 2023 to be one of the top 10 global economies Foreign Trade will hit USD 1.1 trillion, in which USD 500 billion will be exports

Today’s logistics market value of $80-100Billion to reach $500Billion

Very good Logistics performance index by World Bank analysis (pls, see next page)

More than 40 logistics villages to be established with strong infrastructure

The length of highways to be increased from 2250km to 7500km

The length of Fast Train Railway to be increased from 900km to 9000km

Airport passenger capacity to be increased from 165Million to 400 Million

Container handling capacity from 8 Million TEU to 32 Million TEU* *TEU: 20’ container=34cbm

Logistics Performance Index ( LPI)

(LPI) measures the logistic "friendliness" of 155

countries in six categories;

1. The efficiency of the clearance process with border control agencies and customs,

2. Infrastructure quality of trade and transport,

3. Level of competitive pricing for shipments

4. The quality and expertise of logistics services;

5. How well the consignments are tracked and traced;

6. Punctuality of the expected delivery dates

Turkey moved up from 39th place in 2010 to 27th in 2012, among 155 countries

Turkey performed better than 3 out of 4 BRIC countries - Brazil, Russia and India and also, most of the countries in Eastern Europe and the Middle East & Africa.

4,45

3,95

Turkey 3,45

2,95

2,45

1,95

2,9

Source: The World Bank

3,4 3,9 4,4

Infrastructure

Note: 1-very low, 5- very high

Size of the bubble indicates the total score received from the LPI index

Timeliness

Germany

China South Africa

Brazil Argentina Qatar

Thailand

India

Russia

3. Customs infrastructure & legislations allow all types of foreign trade transactions Turkey entered Customs Union with EU in 1996

Continuous liberalizing import regulations to get and retain foreign investment

Turkey customs are compliant to do all world wide trade transactions1

Authorized Economic Operator (AEO)3,

Single window application4 & E-customs allow for easy customs procedures

Limited tariff barriers (pls, see next page)

1 Free Circulation Procedure, Transit Procedure, Bonded WH’ing Procedure, Inward Processing Procedure, Outward Processing Procedure, Processing under Customs Control Procedure and Temporary Import Procedure, ATA Carnet procedure 2 LSP: Logistics Service Provider 3 An international status enabling authorized LSPs to handle customs w/o paperwork at their own premises 4 One stop solution to apply and trace online customs procedures

TURKEY CAN BE A GATEWAY FOR SIN GAPORE

TO THE MARKETS OF

EAST EUROPE, CEN TRAL ASIA, N ORTH AFRICA, MIDDLE EAST

BECAUSE

LIMITED TARIFF BARRIERS

Source: http://www.invest.gov.tr/en-US/Benchmarking/Pages/BenchmarkTurkey.aspx The Benchmark Turkey tool has been designed for the Invest in Turkey users to compare Turkey with other countries in various categories. The charts in this section are generated based on the data obtained from the IMD World Competitiveness Yearbook 2013, the World Trade Indicators 2009 database, and the World Bank Doing Business 2013 report. The Investment Support and Promotion Agency of Turkey shall not be held responsible for the accuracy of the data.

THE EASIEST WAY TO START USIN G TURKEY AS A GATEWAY

As a trading company until you become confident on the market, you can still trade

Without incorporating a legal entity in Turkey -> NO TAX LIABILITY

Only costs are; Bonded WH storage (VAT Free) and customs broker service fee Only risk is the return cost for unsold goods

HOW?

Obtain a potential tax number (brings no tax liability) Sign a contract with a Bonded Warehouse Operator Assign a Customs Broker with a power of attorney Bring your goods to Bonded Warehouse The goods will stay under your ownership until you sell them You may transit the goods to any 3rd country with rich transportation alternatives You may sell it into Turkey upon receipt of firm customer orders (direct sales mode) You may return the goods back to the origin or anywhere else anytime as you wish

GETTIN G YOUR PRODUCTS IN TO TURKEY- TARIFF OF TURKEY

Tariff information is given on 12 digit HS Code (Harmonized System Code) basis

Tariff of Turkey mainly comprises the followings;

Tax rates applicable at import Customs tax rates (Singapore is classified under “ Other Countries”) Value added Tax rates (1%, 8%, 18%)

Special Consumption tax rates (Petroleum, automobiles, tocacco, alcoholic beverages, luxury products)

Tariff preferences

Other Tax measures Anti dumping taxes Countervailing charges Import surveillance Additional funds/duties for

fish and fishery products, processed agricultural products, sugar and flour content

Import Formalities Documents, licenses, certificates, mandatory standards Import prohibitions and restrictions Quantitative limits,

Documentation at importation: 1. Invoice of the goods 2. Packaging and Weight List 3. Shipping License 4. Certificate of Origin 5. ATR or EUR.1 Certificate of Circulation or Form A 6. CMR or Bill of Lading or Airway Bill depending on the transportation mode 7. Insurance Policy 8. Documents depending on type of goods

a. Health Certificate b. Test Reports c. Technical Documents d. Letter of Clearance e. CE documents

GETTIN G YOUR PRODUCTS IN TO TURKEY- TARIFF OF TURKEY

For your individual inquiries,

We will be happy to help you!

Please, contact

ercan.k@bilingroup.com

http://www.bilingumruk.com

Other Sources 1. Republic of Turkey Prime Ministry, Investment Support and Promotion Agency; invest.gov.tr 2. Office of the Commercial Counseller, Turkish Embassy Singapore