WT/TPR/M/331/Add.1

9 May 2016

(16-2529) Page: 1/247

Trade Policy Review Body 15 and 17 March 2016

Original: English/French/Spanish anglais/français/espagnol

inglés/francés/español

TRADE POLICY REVIEW

TURKEY

MINUTES OF THE MEETING

Addendum

Chairperson: H.E. Mr. Atanas Atanassov Paparizov (Bulgaria)

This document contains the advance written questions and additional questions by WTO Members, and replies provided by Turkey. Organe d'examen des politiques commerciales 15 et 17 mars 2016

EXAMEN DES POLITIQUES COMMERCIALES

TURQUIE

COMPTE RENDU DE LA RÉUNION

Addendum

Président: S.E. M. Atanas Atanassov Paparizov (Bulgarie)

Le présent document contient les questions écrites communiquées à l'avance par les Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Turquie. Órgano de Examen de las Políticas Comerciales 15 y 17 de marzo de 2016

EXAMEN DE LAS POLÍTICAS COMERCIALES

TURQUÍA

ACTA DE LA REUNIÓN

Addendum

Presidente: Excmo. Sr. Atanas Atanassov Paparizov (Bulgaria)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito y las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por Turquía.

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QUESTIONS FROM MEMBERS AND ANSWERS PROVIDED BY TURKEY

AUSTRALIA TRADE POLICY REVIEW – TURKEY Questions by Australia (March 2016) Questions on Report by Turkey (WT/TPR/G/331) 2.1 Fiscal Policy (Page 3, paragraph 2.7) Question 1 Australia notes the prioritisation of spending programs in education in the Turkish Government’s medium to long-term fiscal strategy. Could Turkey please outline the opportunities for foreign firms wishing to set up education institutions or provide education services on a cross-border basis in Turkey? Turkey’s Answer : Provision of education services is very much related to public service provision in Turkey, whereby private education institutions are required to provide education services on a non-profit basis. Concerning the provision of education services except for higher education, foreign natural or juridical persons, either directly or by forming partnerships with Turkish citizens, may establish “international educational institutions” including vocational and technical schools, only for foreign students and upon the approval of Council of Ministers. With respect to supply of higher education services, “non-profit foundation higher education institutions” may be founded by the enactment of a specific Law, and can only be established by foundations constituted in accordance with Turkish Civil Code. Turkish nationality requirement exists for the administrative board and the president of the non-profit foundation higher education institution. In addition, Turkish citizens are free to obtain diplomas from foreign universities through online education programs. The equivalence of such diplomas are approved by the Council of Higher Education; and, among other criteria, it is required that an equivalent Turkish online education program exists to obtain diploma equivalence for the foreign online education program. Question 2 Does Turkey see a need to increase competition in education services through removing foreign investment restrictions in this sector? Turkey’s Answer : Currently, there are no plans to alter the above-mentioned requirements for the supply of educational services by foreigners. 3 TRADE POLICIES 3.1.1 Doha Development Agenda (Page 8, paragraph 3.10) Question 3 We note that Turkey says it will ratify the Agreement on Trade Facilitation very soon. Can Turkey outline when it is expected to ratify the Agreement on Trade Facilitation? Turkey’s Answer: The ratification process of the Agreement on Trade Facilitation has already been finalized through a Council of Ministers Decree published on 5th March, 2016. The instrument of acceptance will be conveyed to the WTO this week.

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Questions on Report by Secretariat (WT/TPR/S/331) SUMMARY Foreign Direct Investment (Page 10, paragraph 5 and Page 40, para. 2.57) Question 4 Australia notes that Turkey has a number of initiatives in place for encouraging FDI and that Turkey maintains a relatively open FDI regime in most sectors. However, as the Secretariat Report notes, Turkey continues to impose restrictions in the education, mining, broadcasting, aviation, maritime transport, port services, fishing, accounting, financial, real-estate and electricity sectors. Could Turkey please explain if it plans to take any steps towards removing investment restrictions in these sectors? Turkey’s Answer: As overall assessment of the Turkish Foreign Investment Regime indicates, Turkey has a fairly open FDI regime based on equal treatment of domestic and foreign investors. However there are certain national legislations and regulations relevant to licensing processes and regulations in some sectors, as summarized in Secretariat Report (S331, page 195, Table A2.3). Some of these requirements and restrictions are applied both for foreign and domestic investors such as permission requirements of financial sector and electricity sector. Currently, there is no work carried out regarding further liberalization in these sectors. State-owned Enterprises (Page 11, paragraph 12 and Page 101, paragraph 3.3.4.2) Question 5 Australia notes that state-owned enterprises continue to be involved in a number of sectors of the Turkish economy, including: mining, oil and gas, agriculture, manufacturing, transport and banking. Australia welcomes improvements in terms of transparency and accountability and notes the progress made in Turkey’s privatisation policy, especially in the electricity distribution and power generation industries. Could Turkey please provide an update and any further information on its privatisation program for other sectors? Turkey’s Answer: Please find below the relevant information. Milli Piyango (National Lottery) In accordance with Privatization High Council (PHC) decision, the privatization of national lottery operation will only include the license that transfers the rights to plan and organize the games of chance and execute draws and install systems of games of chance and operation activities. Any asset and liability of National Lottery Administration will not be subject to privatization. The license will be granted to the bidder in the form of a profit sharing method and the duration of the license will be 10 years. The license includes passive drawing game, instant scratch card game, lotto and super lotto, numeric games and new games to be introduced. Regarding the privatization through licensing of National Lottery, Privatization Administration (PA) and General Directorate of the National Lottery Administration are still working on preparatory work in order to determine matters such as privatization method and the method of payment to be applied for the tender. The Port Sector The technical studies to privatize Izmir (operated by Turkish State Railways) and Tekirdağ (operated by TDİ-Turkish Maritime Inc.) Ports will be completed soon. The tender invitations for those ports will be made in 2016. General Directorate of Turkish Electromechanics Industry (TEMSAN) The Company is engaged primarily in the manufacturing of electromechanical parts used in the construction of hydropower dams. The entire shares (100%) of TEMSAN are fully owned by Turkish Privatization Administration. The technical studies to privatize TEMSAN’s shares are continuing. Turkey Petroleum Oil Distribution Co. (TPAO-Türkiye Petrolleri Petrol Dağıtım A.Ş.) Turkish Petroleum Oil Distribution Company which is recently taken into privatization portfolio is

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engaged in the oil and gas distribution. The technical studies are continuing together with consultants. CH 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1.2 Trade facilitation (Page 48, Paragraph 3.18) Question 6 We note that Turkey has notified its Category A commitments under the WTO Agreement on Trade Facilitation and can implement all Articles fully except for Article 7.9 relating to perishable goods. Does Turkey have a timeframe when it believes it will be able to implement Article 7.9? Turkey’s Answer: Turkey has notified all the commitments of the WTO Trade Facilitation Agreement under Category A, with the exception of its commitments relating to perishable goods for which Category B notification has been made. Although there is not a specific timeframe for the implementation of the commitments under the Article 7.9 on perishable goods, Turkey considers that commitment a priority issue and intends to issue a legislative regulation as soon as possible. In the meantime, Turkey will continue to grant priority to perishable goods at the customs. 3.1.9.7 WTO and Bilateral Agreements (Page 75, paragraph 3.9.4) Question 7 Can Turkey clarify its policy on providing mutual recognition of conformity assessment bodies for Good Manufacturing Practice certification for manufacturers of human and veterinary medicines and medical products? Turkey’s Answer: The GMP certificate is a document required for obtaining the pharmaceutical product license. The objective of the relevant legislation on the issuance of the GMP certificates is to protect human health and safety through meeting effectiveness and safety criteria.

Ministry of Health of Turkey has been conducting GMP inspections since 1995 in accordance with the GMP Guidelines for Pharmaceutical Products which comply with the relevant guidelines of the World Health Organization (WHO) and in line with that of the EU.

Until March 2010, in the applications of pharmaceutical licenses, GMP certificates issued by other countries used to be accepted by the Ministry of Health of Turkey. However, as of March 2010, based on the fact that an automatic and unilateral recognition of the GMP certificates issued by other countries without required relevant documentation might pose serious health risks, the Ministry of Health decided to conduct mutual GMP inspections.

GMP certification for veterinary medicinal products production in Turkey is carried out by Ministry of Food, Agriculture and Livestock (MFAL, General Directorate of Food and Control-GKGM). For all producers whether from Turkey or from abroad, GMP Certificates for veterinary medicines are issued by the GKGM. GMP Certificates issued by the participating authorities of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme are also accepted under mutual recognition. If the GMP Certificates issued by the GKGM for the producers of veterinary medicinal products in Turkey are accepted by the relevant authorities of other countries, GMP Certificates issued by those authorities are also recognized by Turkey under similar terms. Question 8 Australia notes that Turkey applied for membership of the Pharmaceutical Inspection Co-operation Scheme (PIC/S) on 3 May 2013, but has not yet been granted full membership. What is the status of that membership application? Turkey’s Answer: Application for membership of the Pharmaceutical Inspection Co-operation Scheme (PIC/S) was made on May 2013. After the assignment of the rapporteurs, the technical questions posed by the rapporteurs had been answered and the assessment at dossier level was completed. An onsite inspection from the Secretariat of PIC/S is expected in May this year.

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Question 9 Under article 7 of the PIC Convention, members of PIC/S are required to provide mutual recognition of inspections of manufacturers of medicines and medical products carried out by other members. What is Turkey’s policy on providing mutual recognition of inspections carried out by PIC/S members while its membership application is being assessed? Turkey’s Answer: Pharmaceutical Inspection Co-operation Scheme (PIC/S)' mission is "to lead the international development, implementation and maintenance of harmonized Good Manufacturing Practice (GMP) standards and quality systems of inspectorates in the field of medicinal products." PIC/S Members do not ask for any mutual recognition of GMP certificates among them automatically. On the other hand, mutual recognition can be a tool for accelerating inspection procedures. Mutual recognition with PIC/S members could be considered by Turkey in case of any proposal. 3.1.10 SPS (Page 75, paragraph 3.94) Question 10 Currently Turkey allows only carcases, half carcases, or half carcases cut into no more than 3 wholesale cuts, and quarters derived from animals younger than 30 months. A number of countries, including the EU, do not apply these conditions to countries with a negligible risk of bovine spongiform encephalopathy (BSE). Australia has a negligible BSE risk rating as recognised by the OIE. Does Turkey plan to harmonise SPS measures with EU, and other countries, and remove the 30 months requirement for beef imports from Australia? Turkey’s Answer: Import procedures on the importation of live animals and animal products in Turkey are carried out by the Ministry of Food, Agriculture and Livestock (MFAL), in accordance with the relevant national legislation as well as international standards set by the OIE of which Turkey is a member. This applies for Turkey’s import procedures related to BSE as well which are regulated in the relevant national legislation, in compliance with the OIE standards. Veterinary Health Certificate for fresh, chilled, frozen meat (carcass) of domestic bovine animals by MFAL defines health conditions for importation and accepted by Australia as well. Turkey’s “30 months requirement” for beef imports is applied because of BSE related concerns whereas the requirements that are asked in the importation of carcass are simply applied to facilitate customs procedures. At present, no change is foreseen in the implementation by authorities. Please also note that Turkey has been harmonizing its national regulations which are already in line with the SPS Agreement with the EU Acquis. Although there exists no requirement for the full harmonization of Turkey’s SPS Measures with that of the EU, a very good level of harmonization has already been achieved. (Please see the Report by the Secretariat for the list of SPS related legislations aligned by MFAL) Turkey will continue its efforts for further alignment with that of the EU legislation. 3.3.6 Intellectual property rights (Page 112 – 116) Page 112, paragraph 3.203 Question 11 We would welcome further information from Turkey of the main features under each of the listed four goals of the National Intellectual and Industrial Property Strategy. Turkey’s Answer: The full text of the National Intellectual and Industrial Property Strategy and Action Plan is available at www.tpe.gov.tr as translated from Turkish to English.

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Page 112, paragraph 3.204 Question 12 Could Turkey provide further information on the national policies for geographical indications. What does Turkey mean by “scientific geographical indicators?” Turkey’s Answer: The term “scientific geographical indicators”, which is considered to be a mistranslation, does not exist in Turkey’s practices or in any legislation. The purpose of the National Geographical Indication Strategy Document and Action Plan is: “Establishing a geographical indication system adopted by the society for the effective protection of geographical indications at national and international level and contributes to national development process by developing added value obtained from geographical indication products.” There are five objectives determined in order to realize the purpose of the strategy; these objectives are:

1- Making legislation and practices in parallel to national and international developments in line with the country’s requirements.

2- Enhancing institutional capacity of relevant institutes so as to support geographical indications, promoting scientific studies in geographical indications, empowering inter-institutional coordination.

3- Increasing consciousness and awareness for geographical indications in all segments of the society.

4- Establishing an effectively functioning control system commencing from the preparatory process of the application and involving scientific criteria.

5- Increasing efficiency of marketing strategies to develop added values of products having geographical indications.

The full text of the Geographical Indications Strategy Document and Action Plan is available at www.tpe.gov.tr as translated from Turkish to English. Page 112, paragraph 3.205 Question 13 What are the main features of the Design Strategy Document and Action Plan, adopted by the High Planning Council in 2014 on genetic resources, traditional knowledge and traditional cultural expressions? Turkey’s Answer: There are not any strategies or actions about genetic resources, traditional knowledge and traditional cultural expressions in Design Strategy Document and Action Plan. However Turkey is at the preparatory stage for a road map on those issues as stated in Secretariat Report. The full text of the Design Strategy and Action Plan is available at www.tpe.gov.tr as translated from Turkish to English. CH 4 TRADE POLICIES BY SECTOR 4.1 Agriculture Question 14 Could Turkey please advise of the total amount that it pays for domestic and or export subsidies to wheat and or wheat flour? Turkey’s Answer: Turkey has the right to provide export subsidy both for wheat and wheat flour, in accordance with its export subsidy commitments under the WTO Agreement on Agriculture. At present, no export subsidy is being provided neither for the wheat nor for the wheat flour. As it is

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stated in the Secretariat Report, there is a domestic support for wheat. The total amount of the support can be declared after the related data are collected. Question 15 Could Turkey please advise of how these subsidies are in accordance with their WTO obligations? Turkey’s Answer: . At present, no export subsidy is being provided neither for the wheat nor for the wheat flour. As it is stated in the Secretariat Report, there is a domestic support for wheat. The total amount of the support can be declared after the related data are collected. Question 16 Could Turkey please provide details on how it manages any surplus production of wheat and/or wheat flour which cannot be absorbed by the domestic market? Turkey’s Answer: As it is the case in every country, excess wheat and wheat flour that have not been domestically consumed can be exported. Wheat in particular is imported as well as exported. Import and export values of wheat and wheat flour for the last three years are: 2013 wheat export 79.3 Million USD, import 1.3 Billion USD 2014 wheat export 35.4 Million USD, import 1.54 Billion USD 2015 wheat export 32.5 Million USD, import 1.1 Billion USD 2013 wheat flour export 947 Million USD, import 146 Thousand USD 2014 wheat flour export 931 Million USD, import 1.6 Million USD 2015 wheat flour export 979 Million USD, import 1.4 Million USD *Source: TURKSTAT HS4 Codes 1001 and 1101. Question 17 Could Turkey please advise when it intends to comply with its WTO notification obligations in respect of its agricultural sector support programs? Turkey’s Answer: Turkey will comply with its export subsidy notification requirements by the next meeting of the Committee on Agriculture, which will be held on 7-8 June, 2016. Turkey also has started a work program to notify its agricultural domestic support programs gradually. In due course, we are looking for understanding of all members to complete this work as soon as possible. 4.1.5 Strategy and policy (Page 129, paragraph 4.20) Question 18 Table 4.9 lists ensuring food security and access to quality agricultural products by protecting agricultural production resources as a key goal of Turkey’s 2013-17 Strategic Plan. Australia would appreciate further information on why Turkey appears to limit food security to domestically produced food, and does not include imported food as a means to improve food security and accessibility for agricultural products, particularly from high quality producers that pose low sanitary and phytosanitary risk. Turkey’s Answer: Although Turkey’s 2013-17 Strategic Plan mentions ensuring food security and access to quality agricultural products through agricultural production as a key policy goal, it would be a misinterpretation to argue that Turkey would only depend on domestically produced foods in terms of ensuring her food security. While self-sufficiency is considered important, Turkey does not rule out imports which can also be an alternative source of food supply. On the contrary, as a net food exporter, Turkey has always argued the important role that open and strengthened food markets can play in terms of enhancing food security objectives.

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All in all, it should be noted that food security with its multi-dimensional nature can only be achieved through an appropriate policy mix, which inherently goes beyond policy areas related to domestic food production and food imports. TABLE A2.3 FOREIGN DIRECT INVESTMENT RESTRICTIONS 2015) Mining Law No. 3213 (page 197): Question 19 Is the restriction likely to cause any legal impediments for Australian Mining Equipment, Technology and Services (METS) firms looking to expand in Turkey? Turkey’s Answer: The only restrictions in the Mining Sector are exploration and exploitation of boron and selling of radioactive minerals (uranium and thorium) for mining industry in Turkey. These restrictions are applied for both domestic and foreign mining companies. Except these fields, the restrictions do not cause any legal impediments for Australian METS companies. Question 20 Aside from any legal impediment, is this likely to result in practical impediments such as the language and cultural obstacles that METS firms similar to the obstacle that METS firms face in accessing supply chains in Latin America? Turkey’s Answer: Well-trained human resources are available in the mining sector with English language capabilities. Currently, many foreign capital mining companies including Australian companies are operating in Turkey without any language and cultural obstacles.

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MEXICO

Preguntas de México para el sexto examen de las Políticas Comerciales de Turquía a llevarse a cabo del martes 15 de marzo al jueves 17 de marzo de 2016. Informe de la República de Turquía (WT/TPR/G/331) Pregunta 1. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.1 Política comercial multilateral: Página 8, párrafo 3.4. Turquía considera que la OMC ha sabido salvaguardar y hacer cumplir las normas comerciales multilaterales que han sostenido el orden económico internacional durante casi 70 años. Las normas comerciales multilaterales han dado una estabilidad y previsibilidad muy necesarias a las relaciones comerciales internacionales. Hoy en día, el entorno del comercio mundial evoluciona muy rápidamente, lo que hace aún más necesario poder contar con un sistema multilateral de comercio eficaz. La resistencia al proteccionismo y el apoyo a un sistema multilateral de comercio sólido siguen siendo una prioridad para Turquía. México pregunta 1: ¿Cómo apoya Turquía un sistema de comercio multilateral fuerte? Turkey’s Answer: As a founding member of the WTO, Turkey has been a staunch supporter of an open, fair and non-distortive multilateral trading system. In agricultural products, Turkey has bound 100% of its tariff lines. Besides, Turkey has actively participated in the Non-Agricultural Market Access Negotiations within the context of Doha Development Agenda and is still committed and will bind its remaining tariff lines according to the agreed final outcome. From the beginning of the Doha Development Round, Turkey has been deeply involved in the negotiations. Turkey always believed any outcome should be balanced and development oriented not disregarding the principles of Special and Differential Treatment and Less Than Full Reciprocity for developing countries. Turkey has acted within the spirit of the Bali Decisions and will be following the same path with regards to the Nairobi Package. During the course of its G20 Term Presidency, Turkey attached great importance to the strengthening of the multilateral system within its trade agenda. Pregunta 2. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.3 Relaciones Turquía-EU; 3.3.1 Acuerdos de libre comercio y preferenciales: Página 11, párrafo 3.31. La Unión Aduanera entre Turquía y la UE constituye el fundamento jurídico de los acuerdos de libre comercio (ALC) y los regímenes preferenciales autónomos de Turquía. En virtud de la Unión Aduanera, Turquía armonizará su política comercial con la política comercial común de la UE. El régimen de comercio preferencial, junto con el arancel aduanero común, constituye la parte más importante de la política comercial de Turquía aplicada a terceros países. México pregunta 2: ¿Qué porcentaje de las líneas arancelarias de Turquía se encuentra alineado con las de la Unión Europea en el marco de esta Unión Aduanera? Turkey’s Answer: With the entry of the Customs Union, Turkey eliminated all customs duties and charges having equivalent effect on imports of industrial products from the EU and started to apply the Community's Common Customs Tariff (CCT) for imports from the third countries with the exception of a limited number of sensitive products such as automobiles, footwear, leather products and furniture, for which Turkey retained customs duties higher than the CCT between 1996 to 2000. However, in 2001 the transition period ended and alignment with the CCT for all of the industrial products was accomplished. Customs Union with the EU requires Turkey to apply same tariff rates towards third countries. Normally, similar treatment is expected to be in place for EU’s FTA partners too. However, delays

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in starting up and/or continuing negotiations with EU’s FTA partners, lead certain deviations such as experienced with Algeria, Mexico and South Africa For the agricultural products that are not covered by the Customs Union, Turkey determines its own tariffs for the imports coming from the EU and the third countries. For processed agricultural products (PAPs), Turkey has established a similar mechanism parallel to the EU practice, which means Turkey charges two separate duties in imports of PAPs. As a result, since the industrial products are within the coverage of the Customs Union, the ad-valorem part of the duty representing the industrial processing has been abolished between the Parties. Yet, Turkey maintains its customs duties for the agricultural raw material component in imports from the EU and the third countries. Pregunta 3. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.3 Relaciones Turquía-EU; 3.3.1 Acuerdos de libre comercio y preferenciales; 3.3.1.2 Actualización de acuerdos de libre comercio vigentes: Página 13, párrafo 3.50. En este proceso, las Partes se proponen revisar los capítulos vigentes del ALC que tratan del comercio de mercancías y ámbitos afines (como obstáculos técnicos al comercio, medidas sanitarias y fitosanitarias, medidas comerciales correctivas), los derechos de propiedad intelectual, la competencia y disposiciones horizontales y jurídicas, así como ampliar el alcance del ALC mediante la inclusión de nuevos capítulos sobre servicios, facilitación del comercio y comercio y desarrollo sostenible. México pregunta 3: ¿Turquía incluirá los capítulos de comercio de servicios; facilitación del comercio, y comercio y desarrollo sostenible en los nuevos Tratados que está negociando? Turkey’s Answer: In recent years, Turkey started negotiating FTAs covering a wide range of areas like intellectual property rights, trade facilitation, trade in services, investment, trade and sustainable development, environment, and public procurement. In this context, the Korea-Turkey FTA, which entered into force in 2013 and initially contained Chapters on Intellectual Property Rights, Trade Facilitation and Trade and Sustainable Development, now has a larger scope with the signing of “Trade in Services Agreement” and “Investment Agreement” in February 2015. FTA with Singapore, which was signed in December 2015, in addition Chapters on Trade Facilitation, Intellectual Property Rights, Services, and investment, includes a comprehensive Public Procurement Chapter for the first time. Turkey is following and will continue to follow this trend in its FTAs. In fact, Turkey’s ongoing FTA negotiations with a number of countries like Peru, Japan, Mexico or Ukraine covers areas of trade facilitation, intellectual property rights, trade in services and investment. Turkey has also initiatives to extend the scope of its FTAs, which are already in force, to the area of services. Pregunta 4. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.4 Turquía en otros foros multilaterales; 3.4.2 MIKTA: Página 14, párrafo 3.62. Para Turquía, desde que se creó como plataforma de consulta intrarregional en 2013, MIKTA ha sido un instrumento valioso para ayudar a las partes a conocerse mejor, fortalecer los lazos bilaterales y encontrar puntos de convergencia que permitan intensificar la cooperación entre los países integrantes. Los países MIKTA son ya todos socios comerciales y económicos importantes de Turquía, a pesar de la distancia geográfica que a menudo impide lograr mayores flujos de comercio e inversión entre ellos. México pregunta 4: ¿Cuando Turquía se refiere a cooperación adicional estaría en posibilidades de implementar esfuerzos de cooperación regulatoria? Turkey’s Answer: Turkey is ready to discuss and evaluate all means of cooperation.

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Informe de la Secretaría de la OMC (WT/TPR/S/331)

Pregunta 5. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 1 ENTORNO ECONÓMICO; 1.2 Balanza de pagos: Página 18, párrafo 1.10. Aunque el déficit por cuenta corriente empeoró en 2013 debido al nivel excepcionalmente elevado de importaciones de oro, dicho déficit (excluido el oro) siguió recuperándose gradualmente. En 2014 disminuyó cerca del 30% -de 65.000 millones de dólares EE.UU. en 2013 a 46.500 millones-, como consecuencia principalmente de los siguientes factores: el descenso de los precios del petróleo, que hizo que se redujera el costo de las importaciones de energía; la depreciación de la lira, que hizo que aumentaran las exportaciones turcas; y la aplicación de medidas macroprudenciales para frenar el crecimiento excesivo del crédito. En 2014-2015, el 90% del déficit por cuenta corriente se financió mediante instrumentos a largo plazo e inversión extranjera directa (IED). En los nueve primeros meses de 2015 ese déficit siguió disminuyendo, debido principalmente a un aumento de las exportaciones de oro y a una recuperación en el balance energético, factores ambos que contribuyeron a la mejora de la balanza del comercio exterior1. México pregunta 5: Cuando Turquía menciona “principalmente al descenso de los precios del petróleo”, ¿se refiere al macro-proceso como un fenómeno global de descenso de precios de un período específico, o a una situación particular del petróleo producido en Turquía? ¿En caso de referirse a un fenómeno, podría especificar el período y países productores de petróleo afectados por la baja de precios? Turkey’s Answer: Oil prices have been decreasing since the beginning of the second half of 2014 because of excess supply of oil. Decrease in oil prices affected global economy. As an oil importer country, Turkey has benefited from this decrease. The effect of this decrease on Turkey’s current account deficit started to be noticeable in the last quarter of 2014 and continued during 2015. Current account deficit decreased by 1.2 billion dollars in Q4 of 2014. In addition to this, in 2015 low oil prices provided 15.4 billion dollars lower current account deficit. Pregunta 6. WT/TPR/S/331• Turquía; Informe de la Secretaría; 1 ENTORNO ECONÓMICO; 1.4 Política monetaria y cambiaria: Página 21, párrafo 1.19. A fin de contener los riesgos macrofinancieros derivados de los desequilibrios mundiales, en 2010 el Banco Central de la República de Turquía cambió su política monetaria convencional basada en un marco para la fijación de objetivos de inflación, que desde 2001 había sido eficaz para reducir la inflación anual de los precios de consumo, por un enfoque con objetivos múltiples con arreglo al cual se emplean diversos instrumentos de política para vigilar la política monetaria y lograr la estabilidad financiera y de los precios. Entre esos instrumentos figuran los tipos del mercado monetario a corto plazo, los coeficientes de reservas obligatorias, el mecanismo de opción sobre las reservas y la banda de tipos de interés.2

México pregunta 6: ¿Cuáles son los objetivos múltiples perseguidos por el Banco Central de Turquía que sustituyeron la fijación de objetivos de inflación a partir de 2010? Turkey’s Answer: Increased volatility in risk appetite and short-term capital flows following the global crisis accompanied by the growing awareness regarding financial stability led the Central Bank of Republic of Turkey to gradually introduce a new monetary policy framework as of late 2010 through modifying the inflation targeting regime that has been implemented since 2006. The

1 CBRT (2015), Balance of Payments Report 2015-I. 2 La banda de tipos de interés, que se determina en función de los tipos deudores y acreedores a un día,

da flexibilidad al Banco Central de la República de Turquía para variar diariamente el costo de la financiación al sector bancario y poder responder así rápidamente a las entradas de capital. El mecanismo de opción sobre las reservas, establecido en 2011, permite a los bancos constituir con divisas (hasta un 60%) u oro (hasta un 30%) sus reservas obligatorias en liras. Mediante ese mecanismo, los bancos incrementaron sus reservas de liquidez en divisas y acumularon alrededor de 50.000 millones de dólares EE.UU. No obstante, al no estar las reservas así acumuladas bajo el control total del Banco Central, este tuvo que celebrar subastas de divisas para contener las presiones de depreciación, ya que durante las turbulencias del mercado financiero registradas en mayo de 2013, en un contexto de costos crecientes de la financiación interna, los bancos no liberaron una gran cantidad de las divisas acumuladas en el marco del mecanismo. OCDE (2014), Turkey Economic Surveys.

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newly-constructed regime preserves the main objective of price stability, while risks to financial stability are also taken into consideration in the conduct of monetary policy. The previous framework has been considerably modified in terms of objectives and instruments compared to a standard inflation targeting regime. Pregunta 7. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 2 RÉGIMEN DE COMERCIO E INVERSIÓN; 2.2 Objetivos de la política comercial: Página 31, párrafo 2.12. El Plan de Acción de la GITES 2013-2015 establece 37 objetivos y 91 medidas concretas.3 Algunos de los objetivos son: reducir la dependencia de las importaciones mediante la promoción de las inversiones en bienes intermedios de alta tecnología, fomentar el uso de insumos nacionales, desarrollar enfoques estratégicos en la contratación pública, facilitar un mayor acceso a las cadenas de valor mundiales para los bienes intermedios y desarrollar una industria de reciclaje. México pregunta 7: En términos generales, ¿podría Turquía señalar cuáles son los medios que el Plan de Acción de la GITES 2013-2015 prevé para fomentar el uso de insumos nacionales, facilitar un mayor acceso a las cadenas de valor mundiales para los bienes intermedios y desarrollar una industria de reciclaje? ¿Podría Turquía también mencionar cuáles han sido los resultados alcanzados hasta el momento con dicho Plan de Acción? Turkey’s Answer: Input Supply Strategy led to structural improvements in legal and administrative infrastructure. In this framework, investment incentive scheme has been revised to attract both foreign and domestic investments for intermediates with high import dependency. A project has been developed to contact potential foreign investors for specific products. Also, disadvantages of input supply from domestic sources against importing have been addressed, which has led to improvement in tax procedures. On the other hand, it is important to underline that the action plan aims sustainable input supply with non-distorted and competitive prices from diversified sources, which is to facilitate access to inputs not only by producing them domestically but also from abroad. In order to bring forth awareness to economic value of recycled materials, GİTES suggested a National Recycling Strategy which will emphasize not only environmental aspects but also economic aspects of recycling. In 2015, National Recycling Strategy was put into action and has been carried out by The Ministry of Environment and Urbanization. With the help of National Recycling Strategy, input supply from domestic recycled sources will increase gradually. Pregunta 8. WT/TPR/S/331• Turquía; Informe de la Secretaría; 2 RÉGIMEN DE COMERCIO E INVERSIÓN; 2.3 Acuerdos y arreglos comerciales; 2.3.2 Acuerdos regionales y preferenciales; 2.3.2.1 Unión Aduanera con la UE: Página 35, párrafo 2.26. Desde 1999, cuando Turquía pasó a ser candidata a la adhesión a la UE, se han tomado medidas de integración adicionales. Como país candidato, Turquía llevó a cabo reformas y el Consejo Europeo de 2004 confirmó que Turquía cumplía los requisitos previos necesarios para iniciar las negociaciones de adhesión. Por consiguiente, la Conferencia Intergubernamental Turquía-UE celebró su primera reunión en octubre de 2005, iniciando así el proceso de adhesión de manera oficial. En el marco de la negociación, el proceso de adhesión de Turquía a la UE consta de 35 capítulos; en diciembre de 2015 había 14 capítulos abiertos y 1 capítulo cerrado temporalmente; otros 14 capítulos estaban bloqueados por otras razones. México pregunta 8: ¿Podría mencionar los nombres los capítulos abiertos, cerrados y bloqueados de su proceso de adhesión a la Unión Europea? Turkey’s Answer: Opened Chapters (15 chapters) are as follows: Science and research (provisionally closed), Enterprise and industrial policy, Statistics, Financial control, Trans-European networks, Consumer and health protection, Company law, Intellectual property law, Information society and media, Free movement of capital, Taxation, Environment, Food safety, veterinary and

3 Consejo Superior de Planificación, Nº 2012/32, 21 de diciembre de 2012. Consultado en:

http://www.resmigazete. gov.tr/eskiler/2012/12/20121225-28-1.pdf.

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phytosanitary policy, Regional policy and coordination of structural instruments, Economic and monetary policy. Chapters (6 Chapters) unilaterally blocked by certain member states: Free movement of workers, Energy, Judiciary and fundamental rights, Justice, Freedom and security, Education and culture, Foreign, security and defence policy. Chapters suspended by the General Affairs and External Relations Council Decision of 11 December 2006 (8 chapters) are as follows: Free movement of goods, Right of establishment and freedom to provide services, Financial services, Agriculture and rural development, Fisheries, Transport policy, Customs union, External relations, Chapters not opened yet (6 chapters) are as follows: Public procurement, Competition policy, Social policy and employment, Financial and budgetary provisions, Institutions (At the end of negotiations), Other issues (At the end of negotiations) Pregunta 9. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 2 RÉGIMEN DE COMERCIO E INVERSIÓN; 2.3 Acuerdos y arreglos comerciales; 2.3.3 Otros acuerdos y arreglos; 2.3.3.2 Organización de Cooperación Económica: Páginas 40 y 41, párrafo 2.38. Como uno de los miembros fundadores de la OCE en 1985, Turquía ha venido colaborando con los otros nueve miembros4 en la promoción de la cooperación económica, técnica y cultural. Uno de los objetivos de la OCE es eliminar progresivamente los obstáculos al comercio y promover el comercio intrarregional, en particular mediante la eliminación de los obstáculos arancelarios y no arancelarios y el desarrollo de un marco reglamentario favorable a las inversiones. La cooperación en la esfera del comercio y las inversiones en el marco de la OCE ha propiciado el Acuerdo Comercial de la OCE (ECOTA), el Banco de Comercio y Desarrollo de la OCE (ECOTDB), la Empresa de Reaseguros de la OCE, el Acuerdo de la OCE para la Promoción y Protección de las Inversiones (APPI) y la Cámara de Comercio e Industria de la OCE (ECO-CCI); también existe cooperación en cuestiones aduaneras. Como se indica en la Visión 2015 de la OCE, "los Estados miembros están decididos a avanzar hacia el establecimiento de una zona de libre comercio en la región de la OCE como una tarea prioritaria", pero, lamentablemente, este objetivo no se ha alcanzado todavía5. México pregunta 9: ¿En qué medida el grado de integración con la UE a través de la Unión Aduanera ha afectado la compleción del objetivo de crear una zona de libre comercio entre los miembros del OCE? Turkey’s Answer: Article 16 of the Customs Union Decision requires Turkey to align with EU’s preferential customs regime including EU’s preferential agreements with third countries. On the other hand, the Decision has also a perspective that takes into account of possible outcomes that may arise from Turkey’s membership to certain organizations, in particular to the Economic Cooperation Organization. In this respect, Turkey’s Statement on Article 16 reads that “Turkey may seek consultation within the Association Council regarding the obligations that may arise for it as the result of its membership of the Economic Cooperation Organization”. Accordingly, with respect to its initiatives taken under Economic Cooperation Organization, Turkey takes its commitments stemming from the Customs Union into account and where necessary, holds consultations with the EU. Pregunta 10. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.1 Procedimientos y requisitos aduaneros: Página 52, párrafo 3.9. Se llevan a cabo análisis del riesgo de plagas sobre la base de los procedimientos de la OMC y otras organizaciones conexas. Para la evaluación se utilizan el programa sobre análisis del riesgo de plagas y otros documentos de la Organización Europea y Mediterránea de Protección de las Plantas (OEPP), y se tienen en cuenta las normas de la Convención Internacional de Protección Fitosanitaria (CIPF). Cuando un vegetal y/o un producto

4 Afganistán, Azerbaiyán, Irán, Kazajstán, Pakistán, República Kirguisa, Tayikistán, Turkmenistán y Uzbekistán.

5 ECO Statistical Report 2014, "ECO Trade", Economic Cooperation Organization, abril de 2014. Consultado en: http://www.ecosecretariat.org/in2.htm.

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vegetal se importa por primera vez desde cualquier país, se somete al procedimiento de análisis del riesgo de plagas. Una vez realizada esa evaluación, se determinan los requisitos de importación para ese producto. De conformidad con el artículo 13 del Reglamento de Cuarentena Vegetal, cuando los vegetales, productos vegetales u otras sustancias destinados a la importación están contaminados por organismos perjudiciales que no figuran en las listas de los anexos 1 y 2, o por organismos de cuya presencia en Turquía no se tiene constancia, la importación de esos productos no está permitida y se lleva a cabo un análisis del riesgo. Se toman medidas de cuarentena hasta que concluya el análisis del riesgo perjudicial, y si se constata que las mercancías representan un riesgo, no se permite la importación de esos productos. México pregunta 10: ¿En caso de vegetales, productos vegetales u otras sustancias destinadas a la importación contaminados por organismos perjudiciales que no figuren en las listas de los anexos 1 y 2, o por organismos de cuya presencia en Turquía no se tenga constancia, cuánto tiempo tarda Turquía, en promedio, en realizar su análisis de riesgo perjudicial? Turkey’s Answer: On average, completing risk analysis takes 7-15 days at customs. Pest risk analyses are completed within 2 years for the product that is imported for the first time. Pest risk analysis could be finalized between 15 to 20 days in case of imports of plants, plant products and other substances that are contaminated by harmful organisms which are not included in the list. There is no time limitation at ISPMs determined by IPPC related to PRA. In carrying out risk analysis, researchers do also literature search. In cases where literature is limited, researchers may ask national researchers for their opinion as well. Since new contamination with a harmful organism not listed in Quarantine Regulation is considered as quarantine organism to Turkey, these studies are carried out in-depth and further information could be required. In such cases, periods mentioned above may be longer. Pregunta 11. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.2 Facilitación del comercio: Página 53, párrafo 3.18. En julio de 2014, Turquía notificó a la OMC sus compromisos de la categoría A en virtud del Acuerdo sobre Facilitación del Comercio. Ha designado en la categoría A todas las disposiciones de la Sección I del Acuerdo, que se aplicarán en su totalidad cuando entre en vigor el Acuerdo, salvo el párrafo 9 del artículo 7 relativo a las mercancías perecederas.6 México pregunta 11: ¿Cuáles son las dificultades que enfrenta actualmente Turquía para aplicar el párrafo 9 del artículo 7 del Acuerdo sobre Facilitación del Comercio relativo a las mercancías perecederas? Turkey’s Answer: In line with the Article 7.9 of the Agreement on Trade Facilitation, we are prioritizing the customs procedure of perishable goods such as foods, medical apparatus and blood products in Turkey. We are just planning to make some improvements in existing legislation infrastructure and customs procedures to expedite the release of perishable goods.

Pregunta 12. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.9 Normas y otras prescripciones técnicas; 3.1.9.1 Evolución: Página 78, párrafo 3.68. Durante el período examinado, Turquía ha seguido centrándose en armonizar su legislación técnica con la de la UE, un proceso en curso desde hace más de un decenio en el marco de la Decisión No 1/95 del Consejo de Asociación UE-Turquía, por la que se estableció la Unión Aduanera. Este compromiso exige que se eliminen los obstáculos técnicos al comercio derivados del hecho de que las prácticas reglamentarias aplicadas a las mercancías son distintas. La armonización es un proceso, y está previsto que continúe mientras se prepara nueva

6 Documento WT/PCTF/N/TUR/1 de la OMC, de 16 de julio de 2014.

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legislación de la UE. Antes de este esfuerzo de armonización, Turquía aplicaba reglamentos técnicos nacionales basados principalmente en normas internacionales. México pregunta 12: ¿En qué organismos internacionales basaba Turquía sus reglamentos nacionales antes de entrar en la Unión Aduanera con la Unión Europea, y basarlos en los reglamentos de la última? Turkey’s Answer: Before the establishment of the Customs Union with EU, Turkey was implementing national technical regulations mostly based on international standards such as ISO Standards. Pregunta 13 WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.9 Normas y otras prescripciones técnicas; 3.1.9.1 Evolución: Página 79, párrafo 3.69. El instrumento más importante de Turquía en materia de reglamentación técnica es la Ley sobre la elaboración y aplicación de la legislación técnica sobre productos. No obstante, el Decreto Ministerial sobre reglamentación técnica y normalización para el comercio exterior, modificado en 20137, es el principal instrumento legislativo sobre reglamentación técnica y seguridad de los productos aplicable a los productos objeto de comercio exterior. Las modificaciones introducidas no eran significativas y tenían por finalidad lograr una mayor integración de los reglamentos sobre seguridad de los productos y ofrecer más transparencia. México pregunta 13: Específicamente, ¿a qué se refiere con que Turquía pretendía “ofrecer más transparencia”? Turkey’s Answer: “Ministerial Decree on the Regime Regarding Technical Regulations” (no: 2013/4284) which repealed the “Ministerial Decree on the Regime Regarding Technical Regulations and Standardization for Foreign Trade” entered into force in 2013 to further integrate regulations on product safety and provide greater transparency. “To provide more transparency” indicates that the text of the former Decree was reformulated in order to clarify the meaning and avoid doubt. Pregunta 14. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.3 Medidas que afectan a la producción de y al comercio; 3.3.1 Marco empresarial; 3.3.1.1 Código de Comercio; Cuadro 3.23 Panorama general de las principales modificaciones introducidas por el nuevo Código de Comercio y por la nueva legislación en materia de empresas y sociedades de Turquía. México pregunta 14: ¿Podría Turquía explicar en qué consiste su nuevo sistema de capital social registrado? ¿de qué manera sus normas relativas a los nombres comerciales aumentan la transparencia y fiabilidad? Y ¿qué sociedades están sujetas a las auditorías legales? Turkey’s Answer: According to Turkish Commercial Code, in capital stock system, the decision of general assembly is required to increase the capital of the company. However, in companies having adopted registered capital system, an upper limit is determined by the general assembly of the company and board of directors is authorized to increase the capital up to this amount freely. In this way, companies may perform capital increase without dealing with long and onerous procedures. This authorization is given to board of directors by general assembly for at most 5 years. With the new Turkish Commercial Code non-public joint-stock companies can also participate in registered capital system. Both the entering and leaving from the registered capital system of non-public joint stock companies are subjected to permission of Ministry of Customs and Trade. The principles and procedures are regulated in The Communique on Registered Capital System in Non-Public Joint Stock Companies which was published in the Official Gazette dated 19th October 2012 and numbered 28446. The initial capital of non-public joint stock companies having adopted registered capital system shall not be under one hundred thousand Turkish Liras and the upper limit of registered capital shall not exceed five times of the initial capital of the company at the participation to the system. This upper limit may be raised up to 5 times of the issued capital of the company in the next periods. On the other hand, the principles of registered capital system in public companies are laid down in Capital Market Legislation.

7 Decreto No 2013/4284.

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Turkish Commercial Code regulates explicitly how the business name should be determined for each of the company types. According to Article 39 of the Code, the registered business name shall be posted legibly at an easily visible spot of the commercial enterprise and the documents for the records made to commercial letters and trade books that the trader prepares in relation to his enterprise shall include the trader’s business name. On the other hand, with the new Turkish Commercial Code, the business name of sole traders is gotten also under protection within country-wide. Before that, these business names were under protection within only in their registered area. Regarding statutory audit, the latest Cabinet Decree adopted in 2015 set the criteria for determining the entities that will be subject to audit as:

• Balance sheet total ≥ 50 million TL, • Annual net turnover ≥ 100 million TL, • Employee headcount ≥ 200.

In addition, regardless of these criteria, companies such as:

• Listed companies and other capital market institutions, • Financial institutions and their associates, joint ventures and subsidiaries, • Insurance firms and their associates, joint ventures and subsidiaries, • Companies that broadcast nationwide and provide media service, • Intermediary companies of precious metals which are allowed to operate as a member of the Istanbul Gold Exchange, • Joint-stock companies that are engaged in the production or trade of precious metals and that are allowed to operate as a member of the Istanbul Gold Exchange metals, • Agricultural product warehouse companies that are established as joint-stock companies are subject to audit in accordance with the Cabinet Decree.

Pregunta 15. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.3 Medidas que afectan a la producción de y al comercio; 3.3.3 Política de competencia y controles de precios; 3.3.3.1 Controles de precios: Páginas 106 y 107, párrafo 3.162. Salvo en el caso de la electricidad, el gas natural, los productos farmacéuticos, las telecomunicaciones y el transporte, los precios vienen determinados por el mercado. El organismo responsable de los controles de precios depende del producto de que se trate:

la Autoridad de Reglamentación del Mercado de la Energía está encargada de aprobar las tarifas de transmisión y distribución, el precio al por mayor de la Corporación Turca de Comercio y Contratación de Energía Eléctrica (TETAS) y las ventas al por menor a consumidores que no reúnen ciertas condiciones. Está encargada asimismo de aprobar la venta al por menor, la transmisión, el almacenamiento y las tarifas de distribución de gas natural a las ciudades;

la Autoridad de Tecnologías de la Información y las Comunicaciones, como organismo de reglamentación de las telecomunicaciones, regula o aprueba los servicios prestados por los operadores99;

el Ministerio de Sanidad utiliza un sistema de precios de referencia para determinar los precios de los productos farmacéuticos, tomando como referencia los precios al por mayor más bajos de algunos Estados miembros de la UE. Actualmente, los precios de referencia se convierten a liras turcas aplicando un tipo fijo de 2,0787 liras turcas por euro8.

México pregunta 15: En el párrafo 3.162 señalan que la Autoridad de Tecnologías de la Información y las Comunicaciones, como organismo regulador de las telecomunicaciones, aprueba los servicios prestados por los operadores y las tarifas. Al respecto, ¿cuál es la metodología usada para la determinar las tarifas de los servicios de telecomunicaciones? Turkey’s Answer: Information and Communication Technologies Authority (ICTA) may impose on operators with significant market power in the relevant market obligation to set their access tariffs

8 Tokgöz T (2014), The Turkish Pharma Market, exposición realizada por Turgut Tokgöz, Secretario

General de CPhl Worldwide 2014. Consultado en: https://prezi.com/cnbs28xrddtd/the-turkish-pharma- market/; e información facilitada por las autoridades.

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on cost basis. Upon request of ICTA, the obliged operators have to prove that their tariffs have been set on cost basis. In case ICTA determines that the obliged operators have not set their tariffs as cost-oriented, it shall be entitled to set their access tariffs as cost-oriented. Until it does so, ICTA shall be entitled to set the tariffs and/or to introduce upper limit by taking into account the implementations of other countries, the prices applied beforehand, and interrelationship between the service which is subject to regulation and other services offered in the same and/or similar markets at wholesale and retail levels, to the appropriate extent. It is obligatory to comply with the tariffs set by ICTA. Whilst the tariffs are being determined as cost-oriented, the following factors shall be taken into account. a) It is essential that cost-oriented price for access services is determined as the sum of forward

looking long-run incremental cost of efficient service provision including an appropriate return on capital employed for the provision of service and the total of the common costs that can be attributed to the service.

b) ICTA may decide to use the different types of long term incremental cost method or other methods that are being used in electronic communications sector, taking into account the parameters such as the interrelationship between access services and other services for which the same infrastructure is used, and availability of data envisaged to be used in calculation of costs.

c) In case the costs exceed cost of efficient service provision, exceeding part is assumed unnecessary expense and cost in respect of cost of efficient service provision. Such expenses and costs are taken into account insofar as they stem from a statutory obligation or they are proved as being indispensable for other reasons.

Pregunta 16. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.3 Medidas que afectan a la producción de y al comercio; 3.3.3 Política de competencia y controles de precios; 3.3.3.2 Política de competencia: Página 107, párrafo 3.167. Además, la TCA ha publicado varios comunicados encaminados a mejorar su efectividad, entre los que cabe citar los siguientes: un Comunicado de 2012 sobre el procedimiento de reclamación en caso de infracción de la legislación sobre competencia en el que se facilita una lista de la información exigida a los reclamantes y que tiene por objeto evitar el uso indebido de los derechos de reclamación por parte de las empresas o los consumidores; el Comunicado de exenciones por categorías relativo a acuerdos de especialización (2013); y el Comunicado sobre los procedimientos y principios que han de aplicarse en la presentación de prenotificaciones y solicitudes de autorización a la Autoridad de Defensa de la Competencia para que las adquisiciones mediante privatización tengan validez jurídica (2013).9 México pregunta 16: En el párrafo 3.167 se explica el Comunicado de 2012 de la Autoridad de Defensa de la Competencia, referente al procedimiento de reclamación en caso de infracción de la legislación sobre competencia en el que se facilita una lista de la información exigida a los reclamantes y que tiene por objeto evitar el uso indebido de los derechos de reclamación por parte de las empresas o los consumidores. Al respecto, ¿qué funciones cumple la Autoridad de Defensa de la Competencia relacionadas a la protección de los derechos de los consumidores? Turkey’s Answer: Communiqué 2012/2 of Turkish Competition Authority (TCA) on the Application Procedure for Infringements of Competition sets the required information that the complaints should carry in order to be responded. The purpose of issuing the Communiqué is to identify a minimum standard for making complaints to the TCA. For example, the Communiqué states that ambiguous claims that do not point specific undertakings or specific type of infringements are not going to be responded. By doing so, the Authority aims not to diminish the number of complaints but to allocate its resources efficiently. The Authority is actually encouraging the applications. Application to the Authority may be in the form of information, complaints and Ministry requests. Applications may be filed by natural

9 Los Reglamentos, comunicados y directrices publicados por la TCA de conformidad con la Ley de

Defensa de la Competencia pueden consultarse en línea en la siguiente dirección: http://www.rekabet.gov.tr/ en-US/Communique-List/Communiqu-List.

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persons as well as by institutions, organizations, associations and similar legal entities. In addition, the Authority may open an investigation and end an infringement ex officio. The overall goal of the Authority is to enhance the consumer welfare. To this end, the TCA is taking decisions. In addition the TCA believes that competition advocacy is an important tool to provide competition culture in the society that favors consumer welfare. Competition culture mainly involves being informed about the benefits introduced by competition, and the formation and development of the necessary awareness in the society as to the role possessed by the implementation of competition rules in securing such benefits. The TCA is carrying out symposium, seminar, conference and educational activities, utilize printed and visual media channels, and publish explanatory guides in relation to the practice and the legislation for the formation and development of a competition culture. The TCA has made public recently a handbook for consumers and the handbook for SME’s. Pregunta 17. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.3 Medidas que afectan a la producción de y al comercio; 3.3.3 Política de competencia y controles de precios; 3.3.3.2 Política de competencia: Páginas 107 y 108, párrafo 3.168. La TCA ha tendido a centrar sus actividades en los siguientes sectores: transporte, productos químicos, alimentos y bebidas, telecomunicaciones, servicios y suministros de construcción y finanzas. En sus informes anuales, la TCA suele indicar que se necesitan mecanismos de cooperación entre los legisladores y las autoridades públicas encargadas de la reglamentación de esos sectores para examinar las medidas que hace falta adoptar en relación con los sectores que son constantemente objeto de infracciones o reclamaciones en materia de competencia, a pesar de las investigaciones realizadas por la TCA y de las medidas adoptadas como resultado de dichas investigaciones.10 México pregunta 10: En el párrafo 3.168 se especifica que la Autoridad de Defensa de la Competencia ha centrado su atención, entre otros sectores, a las telecomunicaciones. Al respecto ¿qué medidas, lineamientos o decisiones se han tomado para fomentar la competencia en ese sector? Turkey’s Answer: In 2015, there were not any new legal regulation with respect to competition law and policy in the telecommunication sector. The current two main legal documents are still The Law No 4054 on the Protection of Competition and the Electronic Communications Law No 5809. However, within the framework of the protocol between TCA and Information and Communication Technologies Authority (ICTA), any complaints and applications submitted to the TCA regarding the sector in question are subject to the review and cooperation of the ICTA. When it comes to implementation, in the sector which competition supervision is deemed crucial for preventing dominant position, 25 cases have been filed. While 10 of mentioned cases dealt with competition violation, 14 of them were regarding with merger control and the rest of it contained an exemption evaluation. In 2014, 15 of the cases were about competition violations and 7 decisions were about merger controls. On the other side, with the purpose of increasing current awareness and ensuring adaptation to the recent development in the field, the professional staff of the TCA were provided with attendance to certain international workshops, trainings and meetings. Pregunta 18. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.3 Medidas que afectan a la producción de y al comercio; 3.3.3 Política de competencia y controles de precios; 3.3.3.2 Política de competencia: Página 108, párrafo 3.170. Los casos de infracción de la legislación sobre competencia se investigan de conformidad con el artículo 4 (relativo a los acuerdos anticompetitivos) y el artículo 6 (relativo al abuso de posición dominante) de la Ley de Defensa de la Competencia. Esos casos representan una gran proporción de las investigaciones totales realizadas por la Autoridad de

10 Turkish Competition Authority (2015), Annual Report on Competition Policy Developments in Turkey

2014, páginas 3 y 4. Consultado en: http://www.rekabet.gov.tr/en-US/Annual-Report-List.

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Defensa de la Competencia (cuadros 3.28 y 3.29). Según la TCA, las investigaciones sobre cárteles han constituido una importante actividad: en 201411 se emitieron 10 decisiones y en 2013 5, entre las que figuraba 1 relativa al sector bancario, en el que la TCA constató que 12 bancos habían incurrido en prácticas anticompetitivas al fijar conjuntamente los tipos de interés y las cargas por la prestación de diversos servicios (depósitos, préstamos y tarjetas de crédito), lo que dio lugar a la imposición de multas superiores al total de todas las multas aplicadas anteriormente por la mencionada Autoridad.12 México pregunta 18: En el párrafo 3.170 se abordan las investigaciones relativas a los acuerdos anticompetitivos y al abuso de posición dominante. Al respecto, ¿la Autoridad de Defensa de la Competencia ha iniciado alguna investigación relacionada al sector de telecomunicaciones? Turkey’s Answer: Number of decisions in telecommunications sector is among the top four sectors with the highest number. In 2012, there were 44 decisions taken in information and communication technologies. In 2013, this number was 44. In 2014, 28 cases finalised and ended up with a decision. In 2015, investigations regarding telecommunication sector had a considerable share among other investigations. For the details of investigations any related party could refer to TCA. Pregunta 19. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 4 POLÍTICAS COMERCIALES, POR SECTORES; 4.1 Agricultura; 4.1.3 Comercio; 4.1.3.2 Contingentes arancelarios: Página 136, párrafo 4.14. Las normas de administración de los contingentes arancelarios se modificaron en 201013, fecha en que se derogó el antiguo Reglamento sobre la Administración de Contingentes de Importación y Contingentes Arancelarios de 2004 y en que la Decisión del Consejo de Ministros14 pasó a ser la legislación aplicable a la administración de los contingentes arancelarios de importación. Con arreglo a esta Decisión, las normas específicas aplicables a los contingentes en cuestión se establecen en distintos comunicados, sobre la base de un análisis económico del producto o grupo de productos de que se trate. Según las autoridades, estos contingentes se aplican de conformidad con los principios de transparencia y no discriminación. Los contingentes se asignan a todos los importadores, cuyas solicitudes se evalúan sobre la base de sus resultados anteriores. Además, se procura que los contingentes se asignen en cantidades que representen valor económico. México pregunta 19: ¿Cuáles es el criterio que utiliza Turquía para evaluar los resultados anteriores de los importadores solicitantes a fin de, sobre esa base, posteriormente asignarles contingentes arancelarios? Turkey’s Answer: Past performance of importer is regarded as the actual performance by the importer in a reference period in announced specific quota allocation regulation. Pregunta 20. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 4 POLÍTICAS COMERCIALES, POR SECTORES; 4.3 Servicios; 4.3.1 Servicios financieros; 4.3.1.3 Valores: Página 167, párrafo 4.113. Los bancos no pueden llevar a cabo ninguna transacción apalancada con divisas. Los bancos de desarrollo e inversión, además de los servicios y actividades de inversión que pueden llevar a cabo los bancos, pueden realizar también las siguientes actividades: gestión de carteras; asesoramiento de inversores; suscripción de instrumentos del mercado de capitales sobre la base de un compromiso firme; y colocar instrumentos financieros sin una base de compromiso firme.

11 Turkish Competition Authority (2015), Annual Report on Competition Policy Developments in Turkey

2014, página 4. Consultado en: http://www.rekabet.gov.tr/en-US/Annual-Report-List. 12 OCDE (2014), Annual Report on Competition Policy Developments in Turkey - 2013,

DAF/COMP/AR(2014)8, página 5. 13 Reglamento Nº 27613, de 16 de junio de 2010. 14 Decisión Nº 27599, de 2 de junio de 2010.

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México pregunta 20: ¿Cuáles son los motivos por los cuales no se permite a los bancos llevar a cabo transacciones apalancadas con divisas? Turkey’s Answer: Under Article 3 of the Capital Markets Law, leveraged forex transactions are listed among derivative instruments. Banks and securities intermediary institutions can engage in trading of derivative products (including, but not limited to, futures and options) in compliance with the CMB legislation. However, specific limits of authorization for each type of institution are defined in terms of instruments and services in CMB legislation based on the authority provided for in the Capital Markets law. Pursuant to Capital Market Law No. 2499 amended by Law No. 6111 “Leveraged trading or intermediation to the trade and other related services of foreign exchange, goods, precious metals or other assets to be designated by the Capital Markets Board is determined as a capital market activity”. Capital Market Law No.2499 Art. 34 states that the principles related to the intermediation activities of intermediary institutions shall be regulated by the Board. The Board is authorized to make such regulations for each intermediation activity to be engaged by different institutions. Within the principles that shall be specified by the Board, intermediary institutions may engage in other capital market activities provided that they obtain permission to do so. Under this authority, the CMB has regulated specific investment services that may be performed by each type of institution. Such policies are determined with prudential concerns as well as with the goal of providing for a higher degree of specialization and higher service quality in investment services and investment banking activities. Accordingly under current regulation, investment firms (intermediary institutions) and investment banks may be licensed to provide intermediation in leveraged forex transactions. On the other hand commercial banks may conduct leveraged transactions for their own portfolios but in terms of intermediation, they may be involved only indirectly through their subsidiaries licensed as an investment firm. Investment

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COLOMBIA

Documento de la Secretaría: WT/TPR/S/331 2 TRADE AND INVESTMENT REGIME 2.3.2 Regional and preferential agreements 2.3.2.2 Reciprocal trade agreements El párrafo 2.28 del informe de la Secretaría indica que… “There are currently 18 FTAs in force for Turkey, with a combined value of US$13.3 billion of 2014 imports benefitting from these agreements, thus approximately 5.5% of Turkey's total imports. Many of Turkey's FTA partners are relatively small trade partners except for perhaps EFTA and the Republic of Korea, which still only accounted for 2% and 3% of total Turkish imports in 2014. Thus, of Turkey's top 10 sources of imports for 2014 (excluding the EU), only the Republic of Korea and Switzerland (through EFTA) had an FTA with Turkey. Turkey maintains a positive trade balance with most FTA partners, and a trade deficit with only four, however, the large trade deficit with the Republic of Korea contributes significantly to an overall trade deficit with FTA partners. The percentage of imports entering through the FTAs varies widely, from 2.8% (Montenegro) to 99.5% (Jordan) (Table 2.3).” 1. ¿Cuál es el enfoque de Turquía en relación con los procesos de negociación comercial que adelanta con países de América Latina? Turkey’s Answer: Turkey’s first Free Trade Agreement (FTA) with the Latin American countries is the one with Chile, which was signed in 2009, and entered into force in 2011. Following that and by taking into account the EU’s FTA perspective towards Latin American countries, Turkey launched FTA negotiations with Colombia and Ecuador in 2011. During these negotiations considerable progress has been achieved however the FTAs have not been concluded yet. In addition, the FTA negotiations with Peru and Mexico which were started in 2014 are still continuing. Turkey’s goal is to finalize these processes as early as possible to establish the legal framework for deeper and enhanced economic relations with its Latin American partners. 2. ¿Cómo gestionaría Turquía los efectos de los nuevos acuerdos bilaterales en relación con las complejidades que se derivan de su pertenencia tanto al Sistema Multilateral de Comercio como a la Unión Aduanera con la Unión Europea? Turkey’s Answer: Turkey believes WTO and the multilateral trading system it represents continue to be a unique platform for wider economic cooperation. There is much to expect from multilateral trade liberalization in a way contributing to a strong, sustainable and balanced growth. On the other hand, RTAs have become a hugely prominent part of the global trading system. In face of this reality, it is essential that global trading system works efficiently with strong coherence across all its elements, including bilateral, regional, plurilateral and multilateral agreements. On the other hand, Turkey negotiates and concludes bilateral free trade agreements in line with its obligations stemming from the Customs Union Decision (CUD) and the WTO Agreement. In recent years, Turkey started negotiating Agreements covering a wide range of areas like intellectual property rights, trade facilitation, trade in services, investment, public procurement etc. like many countries in the world. The provisions contained in these Agreements are fully in line with our commitments reflected both in the WTO Agreement and the CUD. Where necessary, Turkey takes the steps to build the legal environment for the implementation of these comprehensive Agreements within the framework of its international undertakings. 2.3.2.3 Unilateral preferential regimes El párrafo 2.35 del informe de la Secretaría señala que… “In terms of country coverage, Turkey is also following the reforms to the GSP that the EU has taken, namely to focus preferences on countries most in need by removing high- and upper middle-income countries and countries that benefit from other privileged arrangements. Thus, Turkey's beneficiaries have been reduced from 177 to 91 at present. Turkey deviates slightly from EU country coverage by excluding Armenia: on Armenia's accession to the WTO, Turkey invoked Article XIII of the Marrakesh Agreement on the non-application of multilateral trade agreements. Since the entry into force of the EU's new GSP

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regime, Turkey has reflected the restrictions made by the EU in the country coverage in its GSP scheme through the amendments in the import regimes of 2014 and 2015. Accordingly, since 2014 countries that were excluded from the EU's GSP regime are also not covered by Turkey's GSP scheme. As for the changes envisioned at the beginning of 2016 for certain South American countries, Turkey is undertaking the necessary evaluation and amendments, and plans to make the necessary changes through the import regime of 2016.” 3. ¿Podría Turquía compartir los objetivos y criterios bajo los cuales se está haciendo la evaluación del SGP y qué modificaciones se espera introducir en su aplicación a los países de América del Sur mencionados en el Informe de la Secretaría? Turkey’s Answer: Currently, Regulation No 978/2012/EU of the European Parliament and of the Council is the main reference for Turkey’s GSP scheme in terms of both the beneficiary countries and the preferences granted under general GSP arrangement as well as special incentive arrangements. Regulation No 978/2012/EU introduces new criteria for determination of the beneficiary countries. In that respect, some overseas countries and territories; countries with other preferential market access arrangements with the EU; and high and upper-middle income countries no longer benefit from the preferential treatment provided by the EU’s GSP regime. Therefore, since 2014 a number of Latin American countries namely Ecuador (2015), Peru, Colombia, Honduras, Nicaragua, Panama, Costa Rica, Guatemala and El Salvador (2016) have been removed from the EU’S GSP regime as either they have other preferential market access arrangements with the EU or they are qualified as high and upper-middle income countries Accordingly, in line with its alignment requirement with the EU’s GSP regime, Turkey removed the same countries from its GSP scheme with the amendments made through the Import Regime Decrees of 2015 and 2016. Bolivia and Paraguay, on the other hand, continue to be beneficiaries of Turkey’s both GSP and GSP+ schemes in parallel to the EU. 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.5 Tariffs 3.1.5.1 Applied MFN duties El párrafo 3.35 del informe de la Secretaría señala que... “Turkey's implementation of the Customs Union Decision, and thus the EU common external tariff on industrial products, yields a marked difference between tariff protection afforded to the agricultural sector versus manufacturing industries. For agricultural products the simple average applied rate was 49.1% in 2014 (WTO definition) compared to non-agricultural products (5.5%). Furthermore, the high standard deviation for agricultural products (51.1) shows a higher variability among tariff rates as well as higher protection (Table 3.3 and Chart 3.2). The highest tariff rates of 225% apply to 76 tariff lines, namely fresh, chilled, or frozen meat and edible offal of bovine animals; swine; sheep; goats; horses; asses; and mules or hinnies.” 4. ¿Se prevén cambios o reformas tanto en su política de sostenimiento al sector agrícola como en materia arancelaria, en relación, por ejemplo, con las líneas de arancel cuyas tasas se sitúan alrededor del 225%? Turkey’s Answer: Tariffs for agricultural products are determined according to WTO commitments and other international obligations of Turkey and taking into account domestic legislation. Tariff rates for 2016 were released in Official Journal dated December 31, 2015. 5. ¿Cabe esperar una mayor adaptación del sector agrícola a las condiciones del libre comercio? Turkey’s Answer: Turkey as a country in which agricultural sector still continues to play an important role for socio-economic life, is in need of attaining sustainable level of production of safe and quality agricultural goods and preserving natural resources that agricultural activity depends on.

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Although Turkey has undergone certain changes in the last two decades in terms of reforming her agricultural policies, it is well –recognized that agricultural transformation is a long and complex process with potential effect on wider economic and social policies. Turkey sustains her efforts to make its agricultural market more competitive while fully respecting aforementioned considerations. Efforts towards harmonizing agricultural policies with EU’s common agricultural policies and continuing FTA negotiations with certain countries and/or country groupings are believed to be tools to carry forward Turkish agricultural sector to more open and competitive environment. More importantly, with its huge potential to level the playing field, successfully concluding WTO agricultural negotiations is considered to be a giant step towards more trade friendly climate for all.

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SINGAPORE

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT V APPENDIX TABLES QUESTIONS: Trade and Investment Regime Page 195 (Table A2.3) 1. We note that some services sectors continue to be subjected to Foreign Direct Investment restrictions. For instance, foreign equity participation in maritime transportation and aviation is limited to 49 per cent. Firstly, we would like to understand the rationale for such foreign equity participation restrictions. Secondly, we wonder if Turkey is open to considering lifting such foreign equity participation restrictions for Turkish subsidiaries of foreign companies whose home country does not impose those restrictions. Turkey’s Answer: For aviation and maritime transportation, transportation of goods or passengers between two places in Turkey by a company with more than 49% foreign equity participation is restricted. These types of laws are applied in most countries for the sustainability of the domestic services industry, to preserve infrastructure for national security purposes and to ensure safety. These rules are applied for all foreign companies in Turkey even if the home country of the foreign company does not have those restrictions. We do not foresee any liberalization in the near future for the areas where foreign equity participation is restricted or prohibited.

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JAPAN

Report by the Secretariat (WT/TPR/S/331 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.6 Other charges affecting imports 3.1.6.4 Other taxes and charges (Question 1: Page 65, Paragraph 3.52) Subject to Resource Utility Support Fund (RUSF), it is reported that RUSF of 6% is applied and levied on originating goods on credit based import. - RUSF seems to be a type of fund but it seems to have a similar effect on imported goods as tax.

Is RUSF collected as a tax? Turkey’s Answer: The Resource Utilization Support Fund (the RUSF) is a fund levied on only credit based importation. Thus, all importation is not subject to the RUSF. RUSF is collected on credit based importation or credit based transaction when any credit is used. If the price of the good is transferred before the customs liability has started, according to customs regulation, RUSF is not collected; if the price is transferred after this date then this credit based transaction is subject to RUSF because importer is credited. There is no distinction for collection of the RUSF depending on any criteria such as the type of imported good or country of origin. - If RUSF is collected as a type of fees or charges in relation to payments for imported goods, is

the full amount of collected RUSF finally paid to the government as national revenue? What is the relation of RUSF with any governmental authority of Turkey? Turkey’s Answer: The RUSF is not a charge or a fee. RUSF revenues are transferred to the general state budget. Turkish Revenue Administration is responsible for the implementation of this fund. - If RUSF is neither a tax nor a charge/fee, what is RUSF and what is the nature and purpose of

RUSF? Turkey’s Answer: The RUSF is levied on below mentioned credit-based transactions:

a-Consumer loans which are obtained from domestic banks. b-Loans obtained from abroad by the taxpayers who are residents in Turkey. c-Credit based importation regardless of whether the user is a real person or a legal entity.

- How does Turkey maintain RUSF in conformity with GATT VIII?

Turkey’s Answer: RUSF has no relation with any type of fee or charge that are mentioned in GATT Article VIII but rather a policy tool which is applied to goods imported using credit and consumer loans and also loans obtained abroad. In addition RUSF by nature does not represent an indirect protection to domestic products or a taxation of imports.

3.3 Measures Affecting Production and Trade 3.3.1 Business framework 3.3.1.1 Commercial Code (Question 2: Page90) The Secretariat Report notes that “In 2011 Turkey passed legislation for its new commercial code, which came into force as of 1 July 2012 to replace the outdated code that had been in place for over 50 years.” Could Turkey provide us with English version of the revised Turkish Commercial code?

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Turkey’s Answer: English version of the revised Turkish Commercial Code is not available, whereas the Turkish version of the mentioned Code is accessible via the following web site: http://mevzuat.basbakanlik.gov.tr/Metin.Aspx?MevzuatKod=1.5.6102&MevzuatIliski=0&sourceXmlSearch=&Tur=1&Tertip=5&No=6102. 3.3.6 Intellectual property rights (Question 3: Page 115, Paragraph 3.211. Table 3.44 Summary of Turkey's protection of intellectual property rights, 2015) Please provide the rationale for linking the period of regulatory data protection with the period of patent protection. Table 3.44 [Main legislation] Human Medicinal Products Licensing Regulation (Article 9), [Duration] Data exclusivity period of six years to commence as of first registration data in the Custom Union Area. With regard to those products which benefit from patent protection in Turkey, the data exclusivity period is limited to the term of the patent. Turkey’s Answer: WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Article 39.3, requires member countries to establish protections for submitted test data. Article 39.3 aims at preserving the confidentiality of the information submitted for marketing approval without any time limit. In this sense, TRIPS Article 39.3 can be interpreted as flexible. Therefore, it can be applied differently by many countries which acceded to the agreement. In our view, TRIPS Article 39.3 concerns data protection and protection without exclusivity is compatible with the minimum standards set forth in Article 39.3. Consolidated 2001/83/EC medicinal products directive which defines the details on data exclusivity is taken as legal basis by Turkey. Turkey decided to implement data protection from the beginning of the application to the end of whole life cycle of a dossier. On the other hand, data exclusivity period is defined in Turkish legislation as six years which is limited with patent term. Additionally, Article 33 of TRIPS determines the Term of Patent Protection, which is not legally related to the term of data protection. 4 TRADE POLICIES BY SECTOR 4.1 Agriculture 4.1.6 Export Subsidies (Question 4: Page131, Paragraph 4.24) According to the paragraph 4.24, Turkish authorities express the reason for not submitting the notification of the Committee on Agriculture, but it is not clear. What was the specific reason why the government has not notified to the Committee on Agriculture even for 15 years since the last notification? By what time will the government notify them to the Committee on Agriculture? Turkey’s Answer: Turkey will comply with its notification requirements by the next meeting of the Committee on Agriculture which will be held on 7-8 June, 2016.

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UKRAINE

Report by the Secretariat (WT/TPR/S/331) 2 TRADE AND INVESTMENT REGIME 2.3 Trade Agreements and Arrangements 2.3.2 Regional and preferential agreements 2.3.2 Regional and preferential agreements 2.3.2.1 Customs Union with the EU According to paragraph 2.21 (page 31), “Turkey's preferential trading relationship with the EU … was deepened in 1973 with the Additional Protocol and in 1996 with the conclusion of the Customs Union. Thus, customs duties, quantitative restrictions, and similar measures have been removed on industrial goods since 1996.” Question 1 : Could Turkey kindly clarify provisions concerning Turkey-EU Customs Union and market access to Turkey for other countries due to explanation of the next situation. For example country-X has an FTA with EU. Within Turkey-EU Customs Union established zero rate for a certain good which country-X exporting to EU. Is it possible for country-X to export to Turkey such good at zero tariff rate?

Turkey’s Answer: In line with the Customs Union, trade of industrial products between Turkey and the EU takes place on the basis of principle of free circulation of goods. In other words, the rules of origin are not relevant in order for the industrial products that are subject to trade between the Parties to benefit duty free treatment. The important thing is that the products should meet the conditions to be released for free circulation by the Parties. Trade between the FTA partners, on the other hand, takes place on the basis of rules of origin. More specifically, any product that is subject to bilateral trade needs to meet the FTA’s respective rules of origin in order to benefit from the tariff concessions introduced by the FTA. Article 3 of the Customs Union Decision lays down in detail the conditions under which the products would be considered in free circulation. In this respect, products from third countries shall be considered to be in free circulation in the EU or in Turkey if import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in the Community or in Turkey, and if they have not benefited from a total or partial reimbursement of such duties or charges. Furthermore, Article 4 stipulates that customs duties and charges having equivalent effect shall be abolished between the EU and Turkey. Finally, Article 13 requires Turkey to apply the EU’s Common Customs Tariff for the imports coming from third countries. So, a third country with which the EU has an FTA but Turkey has not, can export an industrial product to the EU by benefitting from the concessions provided by the FTA and put this product into free circulation by completing the necessary import formalities. And, since the product is in free circulation now, this third country can export the product to Turkey at zero tariff rate by avoiding the Common Customs Tariff applied by Turkey for third country imports. According to the Customs Union Decision, in case discrepancies in the implementation of the commercial policy cause to impairment of free circulation of goods or deflection of trade as in the case described above, any party may take measures to remedy the injury. Such situation is specifically defined in Article 58/2 of the Decision. In fact, in line with this provision, an additional fiscal duty is currently in application for the motor vehicles originating in Mexico, which are exporting to Turkey over the EU. This is not an application resorted by Turkey frequently or systematically. However, if similar cases of trade diversion are detected, such measures might be extended to other products/countries.

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3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.5 Tariffs 3.1.5.1 Applied MFN duties Paragraph 3.30 (page 50) notes that “…Law No. 474 on the Customs Tariff Schedule allows the Government to increase the applied MFN rates when these are deemed insufficient to provide “adequate” protection to domestic industries. …. the Government may replace applied MFN rates by 150% of the corresponding rates of the statutory tariff to ensure higher protection to local industries.” Question 2: Could Turkey kindly provide an explanation concerning preconditions (criteria) for applying increased import duty rates (up to 150%) for some agricultural products to protect appropriate agricultural sectors in accordance with provision of Paragraph 3.30? Turkey’s Answer: Turkey has bound all of its tariffs for agricultural products and stays within bound rates, in consistent with her WTO commitments However when deemed necessary, applied MFN tariff rates for agricultural products can be increased up to bound level, considering market conditions (domestic and international prices, demand and supply etc.). According to paragraph 3.31 (page 50) “…The compound duties affect mainly processed agricultural products such as yoghurt, bread, pastry and pasta. Variable duties apply to items such as dairy spreads, sugar confectionary, and chocolate. … the compound and variable duties are linked to the implementation of Turkey's customs union commitments with the EU, where the Turkish lira equivalents of the components expressed in euros are to be paid into the Mass Housing Fund.” Question 3: Could Turkey kindly elaborate on reasons for forming the Mass Housing Fund at the expense of duties collected from agricultural products?

Turkey’s Answer: Turkey has adopted the EU’s system of processed agricultural products in line with its commitments emanating from the Customs Union with the EU. Therefore, the importation of processed agricultural products such as chocolate, pastry, sugar confectionery is subject to agricultural component (namely the Turkish lira equivalents of the components expressed in euros are to be paid into the Mass Housing Fund), which in total per product the MFN is rate respected. According to the Table 3.2 contained in paragraph 3.34 (page 52) applied tariff rates exceed the bound tariff rates.

Questions 4: Could Turkey kindly provide an explanation on the intention of Turkey to reduce tariffs to the bound rates levels pursuant to the WTO rules? Has Turkey any timeframe for this process? Turkey’s Answer: In the framework of EU-Turkey Customs Union, Turkey has the obligation to undertake EU’s Common Customs Tariffs regarding the imports from the third countries. The case for the 47 tariff lines, the applied MFN rates have been implemented as the same rates with the CCT rates, apparently exceeding Turkey’s bound rates in certain tariff lines. Turkey is planning to consult this issue with the EU Commission with a view to finding a solution both preserving WTO bound commitments and its Customs Union requirements without causing trade diversion. 3.3 Measures Affecting Production and Trade 3.3.1 Business framework 3.3.1.3 SMEs Paragraph 3.150 (page 91) notes that “Small and medium-sized enterprises (SMEs) are an important part of the Turkish economy, accounting for 99.8% of total enterprises, 75.8% of employment, and 54.2% of value added at factor cost. They are also important to Turkey's trade …”. According to paragraph 3.151 “Turkey's SMEs are supported by the Small and Medium

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Enterprises Development Organization (KOSGEB)”. Paragraph 3.153 notes about the SME Strategy and Action Plan for 2015-18. Question 5: Could Turkey kindly explain what concrete measures of National Entrepreneurship Strategy and Action Plan of Turkey (2015-2018) was prepared by KOSGEB and describe cooperation between KOSGEB and other similar SME support institutions in other countries. Turkey’s Answer: The purpose of National Entrepreneurship Strategy and Action Plan of Turkey (GİSEP) is to “generalize the culture of entrepreneurship in Turkey, form a strong ecosystem and improve entrepreneurship”. The plan which was approved by Higher Planning Council on June 18th, 2015 by decision number 2015/18 has come into force upon having been published in the Official Gazette on July 1st, 2015. GİSEP includes strategic goals in six intervention areas defined to achieve overall goals and actions and projects that shall be executed by relevant institutions and organizations in the 2015-2018 period.

1. Develop entrepreneur friendly regulatory framework 2. Support Innovative entrepreneurship 3. Develop a sustainable support system for priority thematic areas and general areas such

as Women’s entrepreneurship, young entrepreneurs, Eco entrepreneurship, Social entrepreneurship and Global entrepreneurship and ensure execution

4. Develop a culture that embraces entrepreneurs and entrepreneurship in our country 5. Generalize entrepreneurship trainings at level of formal and mass educations and develop

consultancy system entrepreneurs oriented 6. Facilitate entrepreneurs’ access to finance

Entrepreneurship Council is responsible for taking decisions on monitoring and evaluation of GISEP. Revisions can be made when deemed necessary by the Council and new actions can be added. The Council may create working groups when necessary. KOSGEB is responsible for the overall coordination and secretariat plans. Organizations responsible for the action, prepares annual progress reports for each action and sent them to KOSGEB on a date determined again by KOSGEB. Technical Committee composed of representatives of organizations responsible for the actions, to discuss the progress of these actions, meets once a year chaired by Undersecretary of the Ministry of Science, Industry and Technology. KOSGEB consolidates progress reports annually and presents them to the Entrepreneurship Council. The Council takes the necessary routing decisions at its meeting which is done at least once in every year.

Question 6: Is there evaluation of effectiveness of SME Strategy and Action Plan due to the end of 2015? If yes, what were the results and what institution was preparing this report (KOSGEB or other)? Turkey’s Answer: The implementation process of SME Strategy and Action Plan (SSAP) 2011-2013 was extended one year and it ended in 2014. Monitoring and evaluation of SSAP was carried out by Monitoring and Steering Committee of SSAP. This committee was responsible for plan management and chaired by the Undersecretary of Ministry of Science, Industry and Technology. The other representatives of committee are listed as follows: KOSGEB, Undersecretariat of Treasury, Ministry of Finance, Ministry of Economy, Ministry of Development, Ministry of National Education, Ministry of European Union, Ministry of Customs and Trade, Ministry of Labour and Social Security, Ministry of Environment and Urban Planning, Council of Higher Education, Turkish Statistical Institute, TÜBİTAK, Union of Chamber and Commodity Exchanges, Confederation of Turkish Tradesmen and Craftsmen. According to Monitoring and Steering Committee 74 actions of 82 were accomplished successfully by the responsible institutions. However, Final Evaluation of SSAP 2015 - 2018 will be executed by independent competent company/agency which will be selected by a sub-working group which will be established in May 2017. Question 7: Could Turkey kindly inform of influence on SME development regarding Turkey-EU relations (especially Customs Union). Does it have an impact on SME internationalization?

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Turkey’s Answer: The Customs Union Decision does not include provisions specifically dealing with the SMEs. Yet, this does not mean that the Customs Union does not have a positive impact on the SMEs particularly in terms of SME internationalization. The Customs Union has certainly become the core of the economic integration between Turkey and the EU and so far played a crucial/undeniable role in Turkey’s transformation to a more dynamic, open, and competitive economy. It has restructured and liberalized the foreign trade regime of Turkey. Moreover, introduction of a wide range of legislation from competition and state aids to technical legislation and protection of intellectual property rights has resulted in improved/disciplined market conditions and provided a more secure, transparent and foreseeable trading and investment environment for economic operators. Commitments undertaken in connection with the Customs Union consolidated Turkey’s overall reforms in terms of restructuring and modernization of the manufacturing sector. In sum, the Customs Union has locked-in legislative and structural reforms initiated by Turkey particularly in the areas governing economy and trade. Consequently, with the Customs Union, SMEs have gained improved market access conditions first in the EU market and in the markets of the FTA partners; increased their competitiveness by having an enhanced quality infrastructure; found the possibility to operate in a more convenient economic environment and integrated into the EU market. Question 8: What chapters of Association Agreement that are in the process of negotiations (of 14) are linked to SME development? What advantages SMEs will obtain in fact? What changes needed to be done in national legislation? Turkey’s Answer: Within the framework of accession negotiations to the EU, SMEs are mainly covered under Chapter 20 on Enterprise and Industrial Policy. In that respect, in 2014, Turkey and EU have signed an agreement for Turkey to join the EU’s Competitiveness of Enterprises and SMEs Program (COSME), which aims to strengthen the competitiveness and sustainability of the enterprises, encourage an entrepreneurial culture and promote the creation and growth of SMEs. Besides, “European Small Enterprises Act Principles” has entered into force with Prime Ministerial Circular in 2011 in Turkey for the coordination of harmonization of the 2008 Small Business Act (SBA) for Europe. This Circular aims to improve the approach to entrepreneurship in Turkey, simplify the regulatory and policy environment for SMEs, and remove the remaining barriers to their development. According to Turkey 2015 Progress Report, with the adoption of the new SME strategy a progress was recorded in terms of developing policy in Turkey. Moreover, Turkey is currently participating in the assessment exercise on the SBA and initial results confirm that Turkey is performing well in a considerable number of dimensions. Question 9: What measures were implemented due to the trade agenda items of Turkey’s G-20 Term Presidency […ii) policies for enhancing the participation of Small and Medium Sized Enterprises (SMEs) and LIDC’s into the Global Value Chains (GVCs)…]? Turkey’s Answer: Implementing policies for fostering greater integration of SMEs and LIDCs into the GVCs was an essential priority for the G20 Turkish Presidency under the trade pillar within the framework of the focus on “inclusiveness” as well as “implementation”. In this sense, the issue was studied thoroughly during our Term Presidency. At the G20 Trade Ministers’ Meeting held on October 6, 2015, ways to better integrate SMEs and LIDCs into the Global Value Chains (GVCs) were discussed in depth. It was acknowledged by all that the integration of SMEs and LIDCs to world trade would definitely be a stimulus for global growth and GVCs could be a crucial instrument in order for this to happen. Discussions about possible policy actions that can increase the inclusiveness of GVCs were productive. G-20 countries expressed strong will to implement the much needed policies in order to increase participation of SMEs and LIDCs into GVCs.

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In the same vein, at the end of the G20 Leaders Summit on November 15-16, 2015, G20 Leaders declared as follows: “Inclusive Global Value Chains (GVCs) are important drivers of world trade. We support policies that allow firms of all sizes, particularly SMEs, in countries at all levels of economic development to participate in and take full advantage of GVCs and encourage greater participation and value addition by developing countries”. Question 10: What part of Vision 2023 related to SME development, including Tenth Development plan (specify short and long-term goals and specific measures)? Turkey’s Answer: The Tenth Development Plan identifies specific development goals and measures regarding SMEs under section 2.2.12. Entrepreneurship and SMEs. According to the plan, it is essential to strengthen SMEs in issues such as succeeding in increasing global competition, accessing sufficient capital, breeding innovative projects and developing collaborative businesses and partnerships. The need to increase the number of entrepreneurs and their skills is an ongoing process, whereas access to finance needs to be improved considering both supply and demand. The primary objective is to increase competitiveness of SMEs and consequently increase their contribution to economic growth. In this context, it is essential to support high growth or high potential enterprises and those that have innovative products, services or business models. Developments and Targets in Entrepreneurship and SMEs for the year 2018 are listed below in Table 1.

Table 1 Developments and Targets in Entrepreneurship and SMEs 2006 2012 2013 2018 The Number Of Newly Established Firms (Thousand) 53 39 50 75

The Ratio of Small and Medium Enterprises (%)1 1,7 2,4

2 3,0 4,0

The Number Of Enterprises Located In Industrial Estates 35.000 41.000 45.000 65.000 The Number Of Completed Industrial Estates 130 153 160 200 The Amount Of SMEs’ Exports (Billion Dollars) 50 90 100 150 The Number Of Exporter SMEs (Thousand) 44 50 52 60 SME Expenditures on R&D (%) 10,03

14,92 17,0 20,0

The Number Of Enterprises Located In Technology Development Zones

604 2.174 2.500 4.000

Source: 2006 and 2012 data are from TURKSTAT, Ministry of Science, Industry and Technology and The Union of Chambers and Commodity Exchanges of Turkey (TOBB). 2013 and 2018 data are estimates of the Tenth Development Plan. (1) Includes small and medium enterprises with 20-249 employees. (2) 2010 figure (3) Estimate of the Ministry of Development Policies 1. Entrepreneurial culture will be further improved by disseminating formal and informal programs at every level of the education system, increasing the quality of existing entrepreneurship training programs and promoting and awarding entrepreneurial role models. 2. In-house capabilities and collaboration capacity of all institutions that provide services and support within the entrepreneurial ecosystem will be improved. Professional associations that bear a public entity legal status will be restructured to support entrepreneurship and increase their contribution to the entire economy. 3,. Quantity and quality of incubators, business development centers and accelerators will be improved to better serve entrepreneurs. Support models will be designed by collaboration of public, private and non-governmental institutions. 4. State support for entrepreneurship and SMEs will be provided on the basis of innovation, productivity and employment, growth and collaboration, as well as giving priority to women, youth

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and social entrepreneurship. Monitoring and evaluation of implementation will be enhanced and contribution of the supports to the economy will be measured by employing impact analyses. 5. Access to finance for startups and SMEs will be facilitated by improving angel investments, venture capital, credit guarantee fund, applications of micro-finance and by exploring other capital market opportunities. 6. Internationalization of SMEs will be augmented by improving their R&D, innovation and export capacity. 7. SMEs will be supported for further organized activities and forming clusters among themselves and with larger enterprises, universities and research centers. 8. SMEs will be ensured to become brands, institutionalize and generate innovative business models. 9. Implementation of OIZ, TDZ, SIZ and Industrial Zones will be improved to ensure higher quality service delivery through proper institutionalization and effective management. 10. Essential transformation of artisans and craftsmen enforced by the changing economic and social circumstances will be supported, while preventing negative impact of malls on smaller artisans and craftsmen. 11. Activities for becoming co-operatives will be encouraged in order to increase the contribution of individuals and small businesses to economic and social development. 4 TRADE POLICIES BY SECTOR 4.1 Agriculture 4.1.4 Support programmes According to paragraph 4.18 (page 128) “Turkey's agriculture support has undergone many changes over the last 20 years leading to the maintenance of relatively high supports, at least in comparison to other OECD countries.” Question 11: Could Turkey kindly provide information on possible state support (excluding export subsidies) for agricultural products, export of which tends to increase (according to the Table 4.3 contained in Paragraph 4.8, page 123), in particular with respect to the following commodities:

- 1704 (Sugar confectionery, not containing cocoa) and 1806 (Chocolate and other food preparations containing cocoa);

- 1512 (Sunflower-seed, safflower or cotton-seed oil); - 0702 (Tomatoes, fresh or chilled).

Turkey’s Answer: Turkey does not provide domestic supports for 1704 (sugar confectionary, not containing cocoa), 1512 (sunflower-seed, safflower or cotton seed oil) and 1806 (chocolatte and other food preparations containing cocoa) For 0702 (tomatoes, fresh or chilled), there is decoupled domestic support in use. 4.1.9 Marketing Boards 4.1.9.1 Turkish Grain Board Paragraph 4.38 (page 136) notes that “TMO's activities cover a range of grains and other commodities, including wheat, barley, rye, oats, triticale, maize, paddy rice, hazelnuts, and poppy. Its role in the grain market is to purchase, hold stocks, and sell as necessary and is determined by annual production and the price situation in Turkey.” According to the Table 4.3 contained in Paragraph 4.8 (page 123) exports of some agricultural products (related with grain) increased in the 2010-2014 period: wheat or meslin flour - from US$598 to 933 million; pasta, whether or not cooked or stuffed - from US$186 to 507 million;

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bread, pastry, cakes, biscuits and other bakers' wares - from US$487 to 939 million; meat and edible offal, of the poultry of heading 01.05 - from US$203 to 651 million. Question 12: Could Turkey kindly provide more detailed information on the activity of the Turkish Grain Board concerning stock management and grain purchases for further selling to:

flour milling enterprises, which produce flour for export; flour milling enterprises, which produce flour for further selling to pasta industry and confectionery enterprises that export goods of tariff lines 1902 and 1905; enterprises as raw materials for producing feeds designed for poultry industry.

Turkey’s Answer: Depending on domestic demand conditions, grain that is purchased by the Turkish Grain Board (TMO) may either be marketed domestically or be exported. TMO imports quality wheat in line with needs of domestic market when necessary. TMO’s wheat purchasing activities from the domestic market is carried out in accordance with the “Implementing Regulation on TMO’s Purchase and Sale Principles of Grain”. This Implementing Regulation is parallel to the EU legislation. Wheat in the TMO stocks is categorized into quality standards, and sales in the domestic market are carried out in line with the needs of processers and the feed market. ADDITIONAL QUESTIONS Question 13: Possibility of weakening protection requirements of the domestic Turkish market and the liberalization of access of Ukrainian goods in the framework of the WTO mechanisms. Turkey’s Comment: Turkey has always been a staunch supporter of the multilateral trading system which WTO represents and it has been involved in negotiations towards further trade liberalization. To this end, Turkey has actively participated in the Non-Agricultural Market Access Negotiations within the context of Doha Development Agenda. Besides, Turkey’s agricultural products are 100% bound and Turkey has a transparent and predictable import policy. Question 14: How to avoid complications during the certification of Ukrainian enterprises in Turkey (Turkish companies are facing similar problems while supplying goods to Ukraine? Eventual concluding of bilateral agreement on mutual recognition of conformity certificates or settlement in the framework of the negotiating FTA.).

Turkey’s Answer: In line with the requirement stemming from the Customs Union, Turkey has been continuously aligning with the EU’s technical legislation. This alignment concerns both the technical regulations of products and horizontal legislation on quality infrastructure covering areas of standardization, accreditation, conformity assessment, and metrology. Within this context, mutual recognition of conformity assessment certificates/procedures between Turkey and the EU is possible only on the condition that Turkish Accreditation Agency (TÜRKAK) has signed multilateral agreements (MLA) with the European Accreditation in relevant areas. Turkey is fully aligned with the EU’s respective product legislation and the horizontal rules on conformity assessment; and this alignment is confirmed by the Turkey-EU Customs Union Joint Committee. Currently, following the structure described above, Turkey and the EU has accomplished mutual recognition of conformity assessment certificates for a number of products covered by the EU’s New Approach Directives. Nevertheless, within the context of the Customs Union, currently Turkey’s practice on mutual recognition of the conformity assessment certificates is limited to the EU and the EFTA states, which are applying exactly the same product/horizontal regulation as the EU.

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EUROPEAN UNION

WT/TPR/S/331 EU Question N°1: Page 13, Future and economic trade policy goals The EU understands that under the Government's Action/Reform plan (46th Article), certain imported medical and pharmaceutical goods will be removed from the list of those reimbursed by the State. Could Turkey give more details about the products that would be covered? Turkey’s Answer: Based on the statement “Healthcare tools and equipment and the reimbursement, pricing and registration processes of strategic and local medicines will be improved” in Action No. 46 in the 2016 Action Plan of the 64th Government, published on December 10, 2015 and its explanation as “Import Products to be delisted from the reimbursement list shall be designated, provided that the provision of treatment is ensured”, the sales amount of the products with an import registration which have multiple generics have been assessed in line with the Action Plan. In order to avoid a supply shortage in the market, a time frame has been set in the first phase as a result of the meetings held with relevant associations and pharmaceutical companies for the localization of products with a domestic manufacturing share of 50% and above. EU Question N°2: Page 16 paragraph 1.16 "Turkey dropped five ranks in the "ease of doing business" ranking in 2016". Economic operators express concerns in terms of legal security that seems to have diminished. EU views is that operators are looking for proper application of jurisdiction, transparent decisions based on coherent regulations, full application of existing regulations or sufficient period of transition when regulations are changed. Is Turkey aware of these above mentioned concerns expressed by the economic operators? What are Turkey's plans in order to address these considerations and improve the business climate? Turkey’s Answer: Turkey would like to note that above-mentioned concerns on legal security, application of jurisdiction or transparency are not measured by the World Bank’s Doing Business Report- “ease of doing business index” which is an Index based on limited number of parameters on a narrow economic perspective. Although Turkey closely monitors its progress on “ease of doing business index”, Turkey is also very well aware of the shortcomings of the Report. Since 2006’s Doing Business Report, Turkey’s ranking increased 38 steps from 93 to 55. Since 2006, major changes were made on the basic laws such as Turkish Commercial Code, Code of Obligations and Code of Civil Procedure in order to improve the legal and judiciary framework which significantly contributed to this progress. Furthermore, Turkey became a crucial participant of global FDI flows with its outstanding performance in the last 13 years and managed to host USD 12.7 billion of FDI in this period annually. Although global FDI fell sharply in 2014, Turkey demonstrated a positive performance and the amount of FDI was realized as USD 12.5 billion. In 2015, upward trend in FDI inflows have pursued with a 32.4% increase and inflows reached up to USD 16.6 billion despite domestic election period and persistent regional tensions. However, Turkey is aware that improving investment climate is an ongoing process. Accordingly, improving investment environment is among the priorities of the 64th Government Program Action Plan which is to be completed in 2016 within the framework of Turkey’s strong, sustainable and inclusive growth objectives. Main objectives of improving the investment climate in the Action Plan are as the following:

The transaction costs of both domestic and foreign direct investors will be reduced. The bureaucratic procedures for both domestic and foreign direct investors will be simplified.

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The efficiency of judicial system will be improved. The functioning of market surveillance and control system will be evaluated and an efficient

implementation mechanism will be established. Some of the action items towards improving the efficiency of judicial system are set as the following:

Istanbul Arbitration Center will become functional, Specialized courts especially on financial and IT sectors will be established, The structure and operation of labour courts will be revised, dispute resolution mechanisms

for labour disputes will be incorporated in Turkish legal system. In addition, The Development of Business and Investment Environment Programme is being implemented as one of the 25 Priority Transformation Programmes within the framework of 10th Development Plan which covers the period between 2014 and 2018. This programme focuses on problems that are of the highest priority and aims to improve existing mechanisms in order to reduce uncertainties faced by investors and to foster investments. “Improvement in legal processes” is one of the four components of the Programme with “improvement of bureaucratic processes”, “facilitation of investment site provisions”, and “improvement of governance of the business and investment environment at the regional level”. Furthermore, possible concerns of international investors in Turkey are taken into account through the Coordination Council for the Improvement of Investment Environment (YOIKK) Platform which has been conducting its studies through annual action plans by prioritizing the needs of the private sector regarding investment regulations. The structure and working mechanisms of the YOIKK were revised on January 4, 2016 with a view to further increase efficiency of decision making process. The chair of the Council was upgraded to the level of the Deputy Prime Minister and line Ministries in charge of investment policies became represented at ministerial level. This recent revision of the Council structure strengthened political ownership of the reform process to take quick and more decisive steps to deal with needs and priorities of private sector while enhancing their presence in Turkish market. EU Question N°3: Page 29, paragraphs 2.9, 2.12 and 2.13, Trade policy objectives The Secretariat reports that "The programme for reducing import dependency aims at reducing the foreign trade deficit by supporting domestic production" and that "Turkey's Input Supply Strategy (GITES) aims for, inter alia, promoting the use of domestic inputs and developing strategic approaches in public procurement (…) "The Renewable Energy Sources (RES) Law No. 5346, providing purchasing guarantees to electricity produced from certain renewable resources at differentiated prices for a period of 10 years" The law stipulates that electricity generation can benefit from a Renewable Energy Resources (RER) Support Mechanism, and where domestic mechanical and/or electro-mechanical components are used for the generation, the prices shall be topped up for a period of five years. The EU notes that the relevant legislation is not listed among the policy outcomes of the GITES listed in paragraph 2.13. The EU is concerned that the feed in tariff for renewable energy is connected to a local content policy. Could Turkey precise how the above mentioned measures can be considered as compatible with Article III(4) GATT, Article 2 TRIMS or 3.1(b) and 3.2 of the SCMA? Turkey’s Answer: Input Supply Strategy (GITES), which is coordinated by the Ministry of Economy, does not cover energy sector as energy policies have distinguished characteristics and should be handled separately. On the other hand, Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy was enacted in 2005. The aim of the Law is to increase the share of renewable energy sources in total electricity production. The Law was amended in December 2010 and the article regarding the “use of domestic products” was incorporated in the Law. With this amendment, incentives for the use of domestic products are provided for a limited period of time. As a matter of fact, the EU Climate and Energy Package sets a major objective as “Raising the share of EU energy consumption produced from renewable resources to 20% up to 2020”. Similarly, Turkey aims to raise renewable energy resource share in electricity production to 30% at

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least, by 2023 according to Electricity Energy Market and Supply Security Strategy Document. In order to reach this target and to prevent increase in the current account deficit, Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy provides the legislative base to supply an additional tariff for the renewable energy produced by using domestic equipment. For developing countries, the best solution to reduce the dependence on the imported energy is introducing renewable energy which is environmentally friendly and sustainably sourced. However, importing this technology from other countries for those which do not have the manufacturing technology of renewable energy, leads to another dependency. This application does not require an obligatory use of domestically produced equipment to benefit from the existing feed-in-tariffs (FIT) program. It brings an additional FIT amount for the local products which will help to support the recently starting renewable industry development in the country. Also, it will bring an important amount of job creation to produce this equipment locally, either by domestic or foreign companies. Another important point to mention is that this application is temporary. Only the production facilities in the renewable energy sector, which are commissioned before December 2020, can benefit from the application. This additional tariff is provided for a term of five years from the commissioning of the production facility. Additionally, it is optional to benefit both from the 10 years feed in tariff guarantee application and the 5 years additional price guarantee of the government. The producer can choose to sell the energy produced by renewable resources to the market in any suitable way instead of enjoying these incentives. EU Question N°4: Page 38 paragraph 2.49 on business climate and investment related issues The EU views the current conditions which impose that a foreign-owned company must at least hire five local people from the Republic of Turkey for each foreign employee as a real impediment to FDI. At the workplace for which a work permit is requested, at least five persons who are citizens of the Republic of Turkey must be employed according to the Law N° 4817 on foreigners' work permit and the implementing regulation Article 13. In fact we also ask that a foreigner requesting work permit who is a co-partner of a company, must respect the same condition. In the sector of tourism, the number of foreigners to be employed by tourism enterprises cannot exceed 10% of total employees. The ministry can increase this limit to 20%. (i.e. at least five Turks for each foreigner), according to the Law No: 2634 on Tourism Incentives Law, Law No: 4817 on foreigners' work permits, Implementing regulation Article 13). Lastly, the regulation on work permits for foreigners under temporary protection” requires that the number of foreigners under temporary protection working at a given workplace cannot exceed 10 % of Turkish employees. At work places where the total number of employees is less than 10, maximum one foreigner can be employed. However, the quota requirement may be lifted, if the employer obtains from a competent authority a document certifying that the employer could not find a suitable Turkish employee having the same skills in four preceding weeks (Article 8). Is Turkey aware of the counterproductive effect on FDI that the above measures can have? Is Turkey considering measures to facilitate FDI? Turkey’s Answer: In accordance with Turkey’s GATS commitments (GATS/SC/88), administrative and technical personnel of a foreign service provider (i.e. “executives-managers” and “specialists” as defined in our Schedule) that are going to be temporarily employed in the branch, subsidiary, affiliate or representative office of that foreign service supplier are required to obtain work permits in accordance with the legislation concerning the employment of foreigners. Turkey’s GATS commitments do not specify any labour market test for the categories of natural persons in its Schedule. Sector-specific limitations on Mode 4 are also specified in the Schedule which include the numerical quotas for the foreigners that can be employed by hotels and restaurants covered by Turkey’s GATS commitments. Turkey observes its GATS obligations in the approval process of work permits for the employment of foreigners. Turkey aims to improve the core competencies of qualified workforce of Turkey via its policy implementations and also would like to create an enabling environment to share skills and knowledge base between local and foreign employees.

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The work permit criteria for the foreign personnel to be employed at critical investment projects and key personnel, who are qualified foreign expatriates, is more enabling and the work permit process for those are completed in a speedy manner. The work permits for foreigners in FDI and public projects are finalized in 15 days rather than in a month applicable for other/non-qualified work permit applications. On the other hand, after the Law no. 6458 on Foreigners and International Protection became effective on April 11, 2014, there were substantial amendments made on the work permit system. The most important change is making work permits replace residency permits from the above mentioned date onwards. A draft new Law on Work Permits for Foreigners has been prepared and submitted to the Parliament on February 9, 2015 since the Law on Work Permits for Foreigners, no. 4817 has no longer met the current needs. The draft Law was accepted by the Committee on Health, Family, Employment and Social Affairs. The works about the draft Law is also related to the action items 88, 89 and 90 of 64th Government Action Plan:

The work for “Turquoise (Turkuaz) Card System” shall be completed. Means to attract qualified workforce living abroad shall be promoted. The process for employing foreign experts in R&D projects shall be simplified.

Page 45 paragraph 3.3 pre–arrival declaration in operation in Turkey since January 2012. EU Question N°5: The EU notes that information about imported spirits, including information on the product, manufacturer, ingredients and a copy of the labels, is submitted online prior to their arrival in Turkish customs warehouses. Despite the benefits provided by the online measures, the EU is of the view that Turkey’s import documentation requirements could be considerably alleviated. Is Turkey considering means to improve import procedures for spirits importers? Turkey’s Answer: In accordance with the “Regulation on Official Controls of Import of Plant Products and Fodder Crops published in the Official Gazette No: 28145, dated December 17th, 2011, the importer has to submit a preliminary notification via Food Security Information System (GGBS) before the actual importation of spirits. The content/component of the product for which preliminary notification is submitted and product label are registered in GGBS and the documents and the registered information in the GGBS are controlled by the inspectors. Given the import procedure is carried out electronically, the controls have to be made in 2 workdays, no additional documents other than certification are required from the exporting country, the component/content list and labels can be prepared by the exporting country. The importation procedures for the spirits are improved to facilitate entrance of products. EU question N°6: Page 46 paragraph 3.6 on custom procedures The report states that "Turkey is ranked in 62nd place out of 189 economies in the World Bank's Doing Business Report 2016 subcategory on "trading across borders"". According to the Report, Turkey requires 13 import documents and the average time to import at the border is 3 days with a cost of border compliance of US$655". What measures does Turkey intend to take to reduce those costly delays and possible administrative burden? Turkey’s Answer: Turkish Customs Administration takes necessary measures like using risk analysis methods and implementing single window project to reduce import costs. Turkey was ranked in 90th place out of 189 economies in the World Bank's Doing Business Report 2015 subcategory on "trading across borders". According to the 2015 report, Turkey requires 8 import documents and the average time to import is 14 days with a cost to the importer of US$1,235 per container. A Consulting Report on the Review of The World Bank Doing Business Report 2015 was

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prepared in May 2015 by the Internal Audit Department of the Ministry of Customs and Trade. According to the Consulting Report, average time to import is 5 days, required document number is 5 and the cost is US$938. Major discrepancies between the World Bank data and the data obtained by the Consulting Activities are: 1) Data providers do not have adequate proficiency in accurately responding to the detailed questionnaires covering the entire import/export process of the customs clearance. 2) There was no participant from the relevant Customs Offices amongst data providers. 3) Data issued by the World Bank are generally deemed accurate without any questioning. Nonetheless, World Bank's Doing Business Report 2016 proves that Import costs in Turkey are reducing. EU Question N°7: Page 49, paragraph 3.23, Customs valuation The Secretariat notes that "there have been no changes during the review period in Turkey's basic provisions on customs valuation and that the primary basis for customs value is the transaction value". Also, the report indicates that "the primary basis for customs value is the transaction value. The transaction values used by Turkish customs are c.i.f. values". In some cases, it seems that the set value for surveillance are much higher than the selling price. Could Turkey provide information on how value-based surveillance is implemented at the customs for imports which are below the customs value set for the surveillance but lack a surveillance license? Doesn't this give rise to declarations of a "fictional" customs value which is above the actual transaction value by the importers who fail to obtain a non-automatic license to be able to import below the set value? Is it normal that this practice does not create difficulties as to customs value determination and does not circumvent the use of the transaction value as the primary basis for customs value which is defined as price actually paid or payable for the imported goods in Agreement on Implementation of Article VII of the GATT, in compliance with Turkey's obligations? Turkey’s Answer: Purpose of the import surveillance system is to closely monitor and to collect specific data regarding the imported products. In many cases, the surveillance is only implemented to products below a certain c.i.f. value in order to make the least effect on other trade. But, there are surveillance practices with no set price criteria thus monitoring all trade. This determination is based on the characteristics of the product itself or the target of the surveillance application. On the other hand, in order to avoid administrative procedures, importers usually submit a customs declaration voluntarily in which the customs value of the imported goods is declared above the price threshold set in the surveillance Communiqué. In principle, the primary basis for customs value is the transaction value which is c.i.f. value. Customs declaration above the transaction value is an exceptional case and this declaration is made voluntarily by the importers. In the customs value declaration these cases are negligible and can be ignored. On the other hand, importers’ specific problems relating to the issuance of surveillance licenses have always been welcome by the Turkish authorities. EU Question N°8: It seems that in certain cases the set values for the surveillance are artificial and much higher than the market values and consequently, taxes collected at customs are higher than what is normally payable. In particular for VAT, the importer would structurally remain in the position in which it should be reimbursed VAT from the Turkish Administration. It is understood that the importer can carry forward that VAT amount to the next fiscal period, however, if the situation is structural, the importer will continue to carry forward increasing amounts of VAT and will never be reimbursed by the Turkish Administration. So, eventually, that VAT amount will be a loss for the importer. In contrast, for domestic producers, VAT is computed on transaction value. Could Turkey confirm that such a situation can happen? If yes, how does Turkey justify this with its obligations under Article III of the GATT? Turkey’s Answer: Purpose of the import surveillance system is to closely monitor and to collect specific data regarding the imported products. In many cases the surveillance is only implemented to products below a certain c.i.f value in order to make the least effect on other trade. But, there

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are surveillance practices with no set price criteria thus monitoring all trade. This determination is based on the characteristics of the product itself or the target of the surveillance application. On the other hand, in order to avoid administrative procedures, importers usually submit a customs declaration voluntarily in which the customs value of the imported goods is declared above the price threshold set in the surveillance Communiqué. In this case, customs duties and the value added tax (VAT) are collected over the value that is normally payable. This is the preference of importers as the importers carry forward the VAT amount to the next fiscal period. VAT paid by the importers is offset with their receivable other VAT accounts which then lessens the financial burden of the system. It should be noted here that the surveillance system does not create any structural problems and thus does not contradict with Article III of GATT. EU Question N°9: Page 4, paragraph 3.27. According to the report "Turkey has been part of the Pan-European Origin Cumulation System since 1999 and that diagonal cumulation has been extended to a number of euro-Mediterranean countries. Among them, the report refers to Algeria and Kosovo". Can Turkey confirm the above? If so, can Turkey explain how the above has been enforced given that there is (according to EU information) no agreement between Turkey and respectively Algeria and Kosovo? Turkey’s Answer: As mentioned in para. 3.27, for the diagonal cumulation stipulated in the Pan-European cumulation system (currently system of Pan-Euro-Mediterranean cumulation of origin) to be operational among the Parties, rules of origin need to be identical through the FTAs already in force between them. Turkey has a network of FTAs with all the members of the Pan-Euromed system with the exception of Kosovo and Algeria. With Kosovo, an FTA is signed and internal ratification procedures have been completed in Turkey. With Algeria, despite Turkey’s all the efforts an FTA process could not be initialized due to Algeria’s reluctance. However, that does not hinder the application of the system of diagonal cumulation among the rest of the participants. EU Question N°10: Page 58, paragraph 3.43 provides that "all shipments requiring formal clearance by the Turkish customs authorities are subject to a bill of lading fee of US$100 per customs declaration and a stamp duty of TL 60.50 for 2015." The EU would tend to think that this is standard application of the customs legislation. Could Turkey explain the reasoning behind the imposition of that fee? What is the basis for collection of that fee? Are there services supplied? If yes, which ones and how do these services costs compare with the above values? Turkey’s Answer: Ordino was replaced by bill of lading in 2000 as a document submission of which to the customs office became a necessity to prove the ownership of the goods. However, Turkish customs authorities do not impose any fee on the bill of lading. The mentioned services cost is only a private law issue between the consignee, consigner and the transporter. EU Question N°11: Page 60 paragraph 3.46 notes that "SCT on imports is primarily collected when goods are cleared through customs, and for domestically produced goods upon delivery to the customer". The EU would like to stress that, unlike domestic producers, importers of spirits but also of cigarettes, of motor vehicles and of cosmetics (inter alia) do not benefit from a duty deferment period. While local producers can delay payment of excise by several weeks, importers have to pay duty before their products can be released onto the market. This puts importers at a competitive disadvantage.

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Does Turkey plan to harmonise SCT payment conditions for imported and domestic products? If the answer is positive, when would this harmonisation take place and would it cover all products? If not, what is the rationale? Turkey’s Answer: According to Special Consumption Tax Law (Law No: 4760), when determining the subject of the tax or taxable event, there is no difference between domestic producer or importer. Both the domestic producers and importers of spirits but also of cigarettes, of motor vehicles and of cosmetics (inter alia) are taxed under the same status and conditions, in the course of production, delivery and importation. The below lists indicate products where SCT are charged;

-List (I) is related to petroleum products, natural gas, lubricating oil, solvents and derivatives of solvents.

-List (II) is related to land, air and sea vehicles (cars and other vehicles, motorcycles, planes, helicopters, yachts etc.)

-List (III) is related to alcoholic beverages and cola soda pops, cigarettes and other tobacco products,

-List (IV) is related to other consumption goods (caviar, furs, mobile phones, white goods and other electrical household machines etc.) According to Article 3 of above-mentioned Law, taxable event for goods laid down in List (I) occurs on delivery of the goods or conditions regarded as delivery, not on importation. For List (II) products, there is no SCT liability on the importation of vehicles subject to recording and registration while taxation of their initial acquisition phase. As regards vehicles not subject to recording and registration, SCT liability arises during the phase of importation or during the delivery phase for the domestically produced vehicles. Thus SCT is charged only once during the phase of free movement or supply to the market, without any discrimination between the imported and domestically manufactured vehicles. For List (III) and (IV) products, like cigarettes, spirits and cosmetics, the application of SCT is similar to vehicles not subject to recording or registration. Therefore, since SCT does not discriminate between domestically produced and imported products, we do not see any need for an alteration in the legislation at the moment. EU Question N°12: Page 66, section 3.1.7.2, Import restrictions and licensing The Secretariat refers to work in the Import Licensing Committee and reports that the EU requested clarification on certain licensing requirements which were not included in Turkey's recent notification, namely: its regime for old second-hand renovated goods; its surveillance licence regime on imports of certain products and its certificate of conformity regime for supplying non-fuel petroleum products from domestic and foreign sources. In this context, Turkey stated that "it will do its best to fulfil its obligations stemming from the WTO agreement on Import Licensing". Could Turkey clarify whether it intends to notify the abovementioned measures as import licensing requirements? If the answer is yes, what is the timeframe? Turkey’s Answer: Turkey is consistent with its previous notification commitment officially declared in its replies to questions posed by the EU. Turkey will notify the abovementioned measures in its next annual notification. EU Question N°13: Page 66, Import restrictions and licensing and page 72 section 3.1.9.3 on standards and alignment to the EU para 3.76 on medical devices The EU would like to add to the description of the WTO Secretariat the following information. Turkish Ministry of Health in 2009 issued requirements that in order for a pharmaceutical product

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to be imported to Turkey the manufacturer must submit a certificate of Good Manufacturing Practice (GMP) issued by the Turkish Ministry of Health or an authority of another country with which Turkey has reciprocal certification agreement. Therefore, since 1 March 2010, Turkey does not accept the EU GMP certificates as it was the case since many years. Instead, the manufacturers need to apply and wait to be inspected by the Turkish official inspectors for receiving this certificate for the registration of new medicine or variations of existing products. The introduction of this measure and Turkey’s limited capacity to implement these requirements and deliver the GMP certificate within a reasonable period of time, has led to significant delays in the registration of new pharmaceutical products in Turkey. These requirements coupled with the limited enforcement capacity of the Turkish authorities are de facto banning imports of new pharmaceutical products to Turkey and have created a huge backlog of de facto unprocessed requests. What measures does Turkey intend to take to remedy the above described situation? Turkey’s Answer: Pharmaceuticals and Medical Devices Institution under the Ministry of Health of Turkey has the competence to inspect just like the other competent authorities in other countries. This right has been mentioned for the first time in the GMP Regulation dated 1984 and mentioned again in the Article 13 of the ‘’Regulation on Manufacturing Plants of Medicinal Products for Human Use’’, which is currently in force. This Regulation was prepared in accordance with Directive 2001/83/EC of EU through harmonization. In addition, during the inspections, scientific guidelines that are accepted on an international level are used (PIC/S, FDA, ICH guidelines etc.). The GMP certification process is conducted whether the manufacturer is foreign or domestic. During this process, following amendments were made in order to facilitate and accelerate GMP certification process:

On 06.03.2015, the period of validity of the GMP inspections of the foreign manufacturing plants conducted by the Ministry of Health/the Agency and/or the GMP certificates that were regulated in accordance with the conducted inspections that exceeded the 3-year-validity-period were prolonged starting from 31.12.2009 until 30.06.2016. Thus, prolongation of the validity period of certificates available without the need to inspect has been provided in the foreign manufacturing facilities that meet the relevant criteria (published and announced as a guideline).

Furthermore, the number of GMP inspectors and the corporate capability of GMP department

in the agency have been reinforced.

Another important progress that has been made is the fact that the agency has formally applied for full membership in the PIC/S (Pharmaceutical Inspection Cooperation Scheme). As the Country/Agency that has applied for full membership, all committee meetings of the PIC/S are attended regularly. Currently, the document based inspections are finalized and “visit and on-site inspection” is being awaited.

Draft Regulation on Manufacturing Plants of Medicinal Products for Human Use has been

reevaluated according to views of stakeholders. And it is planned to be finalized during the first half of 2016 and to be sent to European Commission.

EU Question N°14: Page 72 Paragraph 3.76 and 3.77 The EU notes that regulatory changes are still often introduced without prior consultation or notification and are often required to be implemented over tight timeframes which are not realistic. This adds unnecessary complexities and uncertainties to the trading environment. The EU also is concerned that operators are not informed sufficiently in advance of changes in legislation. What are the measures, if any, that Turkey is taking or intends to take to enhance consultations with stakeholders on draft legislation? What measures is Turkey intending to take (if any) to ensure that sufficient time is left to operators to adjust to changes of legislation? Could Turkey confirm its intention to take into account comments received from trading partners and from relevant stakeholders when preparing its legislation, for example when finalising the draft spirit drinks and food labelling legislation?

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Turkey’s Answer: Turkey considers that prior consultation and notification are very important for the implementation of the legislation. In accordance with the Regulation on Procedures and Principles of Preparation of Legislation, published in the Official Gazette numbered 26083 and dated 17.02.2006, the authorities shall circulate the draft regulations to relevant public institutions as well as other stakeholders including universities and NGOs to gather consultations. Besides, draft regulations are brought to public attention, if it deems necessary. In the harmonized area, Turkey sends its draft legislation to exchange opinions at the draft stage, giving considerably enough time for the Commission to send its comments. Turkey waits for the final comments of the Commission, unless there is an emergency situation for Turkey. In 2015, Turkey has sent 8 draft legislation to the Commission in the harmonised area. The opinion exchange on this legislation is still going on and Turkey waits for the final positive opinion of the Commission before publishing the drafts in the Turkish Official Gazette. In the non-harmonised area, Turkey also sends its draft legislation to the Commission via TRIS database and waits for the opinion exchange for a period of 3 months unless there is an emergency situation for Turkey. In 2015, Turkey has notified 16 draft legislations. To illustrate, the rules and conditions regarding the import control system of Turkey are regulated by the product-specific Communiqués, which are annually republished. In case, there are changes that require a comprehensive adjustment for the operators, Turkey takes appropriate measures to enhance consultations with stakeholders on draft legislation. For example, draft legislation is negotiated by the relevant Ministries and stakeholders, offered for consideration in writing, posted on the web site, and discussed at meetings held with the participation of relevant sector, public and private institutions and Ministries. The authorities that are responsible for preparation of legislation generally post them on their own websites at the draft stage. Hence, the technical regulations are accessible through the websites of relevant national authorities. All the legislation, including technical regulations, in Turkey is published in the Official Gazette, and uploaded to the Official Gazette website. Turkish legislation is available through internet and upon request, any further information regarding technical regulations is provided by the national enquiry point of Turkey the Ministry of Economy under the TBT Agreement. The Enquiry Point promotes and urges legislation making authorities to notify draft technical regulation and conformity assessment procedures. This process is strengthened through information exchange. Furthermore, these authorities are reminded of their liability of notifying every new legislation and any amendment and update thereof. As being the national enquiry point of Turkey under the TBT Agreement, the Ministry of Economy (DG Product Safety and Inspection) has designed a website, www.teknikengel.gov.tr, to facilitate the access to TBT notifications of other countries by private and public sector and to get the business opinion on the relevant field. Turkey has been an active supporter and user of the on-line TBT Notification Submission System (TBT NSS). As for the draft spirit drinks and food labeling legislation, Turkey shall notify the draft to the EU Commission in a short period of time. EU Question N°15: Page 79 paragraph 3.106, SPS The EU considers that sanitary barriers hinder exports of live cattle to Turkey. Turkey requires that imports of live bovine must come from countries free from the Bluetongue disease. However, Turkey applies these requirements in a discriminatory manner, allowing imports from countries with the same epidemiological status than others whose products are prohibited. In addition, Turkey does not accept the import of live cattle from country areas that are considered as free from the Bluetongue disease. To EU views, Turkey implements measures that discriminate between Members where identical or similar conditions prevail. These measures are not based on international standards, guidelines or recommendations. Turkey does not recognize the concepts of pest or disease-free areas and areas of low pest or disease prevalence. This is not consistent

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with Turkey's obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)." What measures does Turkey plan to adopt to bring its import conditions and administrative import procedures for live cattle, small ruminants and red meat in full alignment with international standards and with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures? Turkey’s Answer: The Ministry of Food, Agriculture and Livestock (MFAL) follows its import procedures related to live animals and animal products in accordance with the national legislation and standards set by OIE of which Turkey is a member. With respect to importation of live bovine animals, there is no restriction towards EU Member States with the controlled or negligible BSE risk status. Following official applications to be made to the MFAL by relevant authorities of countries willing to export live animals to Turkey, approval procedure is initiated and in order to ensure the compliance and equivalence with animal health legislation of Turkey, the MFAL carries out inspection and/or controls in the exporting countries, and the countries which are approved are included in the list of permitted countries (the list of eligible countries for the importation of bovine animals can be found in the Report by the Secretariat, page 134, Table 4.13). Within this framework, examinations were executed in Belgium, Romania, Bulgaria and Denmark in 2015 and upon their approval, Denmark and Belgium were included in the list of permitted countries. With respect to red meat importation, in accordance with Regulation on Setting Special Rules for Official Controls of Food of Animal Origin prepared in line with Council Regulation of EU No:854/2004/EC, country/region and enterprise lists are formed. Within this context, visits were paid to France, Poland and Belgium in 2015. Health certificate requirements requested from member states do not vary from country to country. EU Question N°16: Page 89 paragraph 3.144, Land purchase Are there any plans or measures foreseen to encourage the acquisition of land by foreign investors? Turkey’s Answer: In Turkey, the real estate acquisition by foreigners is quite liberal as seen in the Secretariat Report (Page 195, Table: A2.3). Currently, there are no new plans or measures on the acquisition of land by foreign investors. EU Question N°17: Page 94, paragraph 3.157, subsidies and competition The EU understands that the secondary state aid legislation has not yet been enacted, despite the fact that Turkey had undertaken to do so by the end of 2015, at the latest. Is our above mentioned understanding correct? If so, what are the reasons for the fourth postponement of the deadline for adoption? When does Turkey intend to enact the secondary state aid legislation? Turkey’s Answer: Law No. 6015 on Monitoring and Supervision of State Aids is amended by the Law No. 6518 on 6 February 2014. The amendments envisage that the Council of Ministers has the authority to extend the entry into force of the regulations regarding notification and supervision of state aids twice a year. The Council of Ministers had two consequent decisions one in 2014, the other in late 2015. The Council of Ministers extended the entry into force of the secondary regulation until the end of 2015 and then until the end of 2016 in order to allow aid granting institutions to make their adaptations for the newly introduced system. In the meantime, General Directorate of State Aids under the Undersecretariat of Treasury pursues a capacity development

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process by training activities and programs held in collaboration with the EU such as TAIEX and NEPT (National Expert in Professional Training). Currently, the secondary legislation (regulations regarding notification and supervision of state aids) has to be promulgated by the end of 2016 in accordance with the Council of Ministers’ Decision dated 21 December 2015. EU Question N°18: Page 82, Paragraph 3.126 on ban of export and re-export. In December 2014 a ban on transit trade came into effect which stopped the re-export of certain foodstuffs, including alcoholic drinks, but also tobacco, salt, sugar and bananas, from Turkey. The ban on transit trade had a disruptive effect and costly impact on spirits importers who used to re-export their products from Turkey to neighboring countries. What is the rationale behind Turkey’s ban on transit trade for alcoholic beverages? Does Turkey intend to lift the ban in the (near) future? Turkey’s Answer: Since 20.12.2014, transit of alcoholic drinks, tobacco and tobacco products, banana, tea and meat (except preserved meat) under warehouse procedure has not been allowed based on the reason of high risk of fraud and the findings of the customs authorities concerning the increase in the smuggling of these goods at customs warehouses. Turkey has no intention to lift the ban in the near future. EU Question N°19: Page 96, Paragraph 3.162 "The Ministry of Health uses a reference price system to determine prices of pharmaceuticals using the lowest wholesale prices in some EU member States as the reference. Currently, the reference prices are converted into Turkish Lira at a fixed rate of TL 2.0787 to the euro". The EU notes that the exchange rate for determining drug prices has not been updated to reflect currency changes. This, combined with mandated high discounts, has resulted in significant losses for foreign pharmaceutical companies. Does Turkey intend to rectify this situation by amending the pricing methodology for pharmaceuticals so that it reflects the currency exchange rates? Turkey’s Answer: Provision regarding “The rate of 1 (one) Euro in the form of Turkish Lira used in the pricing of medicinal products for human use shall be determined by multiplying the yearly average Euro rate that will be calculated based on the indicative daily Euro selling rate of exchange of Central Bank of Republic of Turkey which have been published in the Official Gazette of the previous year with the adjustment coefficient which is 70%. Price Assessment Committee shall annually meet on the first 5 (five) workdays of January and shall announce the rate of 1 (one) Euro that will be used in the pricing of medicinal products for human use in accordance with the procedures mentioned above.” is laid down in Paragraph 2 of Article 2 of the Decision published in Official Gazette dated 10.07.2015 No. 7752. Thus, Price Assessment Committee (PAC) decided at its meeting on 08.01.2016 to update the rate of 1 (one) Euro from 2.0787 TL to 2.1166 TL. In accordance with the provision regarding “The changes in the rate of Euro used in the pricing of medicines shall be implemented 45 days after the Committee’s announcement” in Paragraph 3 of Article 7 of the Decision, the date of validity of the rate of Euro that has been raised to 2.1166 TL starts from 45 (forty-five) days after PAC’s decision. Currently, exchange rate used in the pricing of medicines is 2.1166 TL for both locally produced and imported pharmaceutical products. EU Question N°20: Page 111 section 3.3.6 on Intellectual property rights Is Turkey going to take any measures to strengthen the IP laws and fight counterfeiting?

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Turkey’s Answer: The steps Turkey has taken to strengthen the IP laws and fight against counterfeiting can be summarized as follows: Ministry of Customs and Trade has been engaged in «Border Enforcement of IPR Project» in the context of the EU Instrument for Pre-Accession Assistance. Main objective of the Project is to establish a modernized and effective system of border protection of IPR in a way to ensure operational control throughout Turkish Customs Territory. With the amendments to the Turkish Customs Law and its Implementing Provisions in October 2009, the articles pertaining to customs enforcement of IPR have been, to the greatest extent, harmonized with that of EU Regulation 1383/2003 which is replaced by the recent EU Regulation 608/2013. With the aforementioned Project, Ministry of Customs and Trade will draft the necessary amendments for harmonizing national IPR border legislation with the new EU regulation 608/2013. There is an ongoing process for strengthening the existing IP Decree Laws. New draft law has been prepared and it has been made public for comments till 04/03/2016. The draft law in Turkish language is accessible at www.tpe.gov.tr. Copyright Law (Law on Intellectual and Artistic Works (No. 5846), is undergoing a further amendment by the Ministry of Culture and Tourism in order to take into account developments at national and international level and to fully harmonize it with international conventions and the EU acquis. Furthermore, the National Intellectual and Industrial Property Strategy of Turkey was published in Official Gazette dated 04/07/2015 which provides an overall strategy for the sector for 2015-18. It has four main goals: legislation and practice in line with Turkey's need to improve intellectual property rights with effective implementation; ensuring adequate human and institutional capacity for the judicial, customs and law enforcement services actively involved in protecting intellectual property rights; to improve the effectiveness of the mechanisms for commercialization, market perception, and infrastructure in developing intellectual property rights; and increase public awareness about the intellectual property rights system, with the target of becoming an information and knowledge-based society. Enforcement in the field of copyright and fight against piracy In the field of copyright, as it was reported with previous documents, Turkey has set up specialized Inspection Commissions to combat copyright infringement in its 81 provincial police departments and district directorates, which are authorized to inspect pirated goods. With a view to strengthen the administrative capacity and increase the efficiency of Provincial Inspection Commissions established for fight against piracy; training seminars on related legislation, operation procedures and on securing uniformity in enforcement are being organized regularly. Between 2011 – 2015; 12 regional seminars were organized in cooperation with Ministry of Culture and Tourism and Ministry of Interior, on related legislation, operation procedures, application system of banderole and certification, new methods of combating piracy as well as of the working procedures and on securing uniformity in enforcement, with the participation of more than 100 representatives of these Commissions for each seminars. Participants were instructed in the aforementioned issues by prosecutors and judges working in the field of intellectual property rights. 55 QR code readers being able to detect the authenticity of intellectual and artistic works through the brand new banderoles and to access to the rights management information of these works were distributed to the Provincial Inspection Commissions from 2012 to 2015 with a view to consolidate the technical infrastructure of combats against piracy. In the meantime, banderole security was tightened with the renewed “Encrypted Laser Code System” piloted for the first time in 2015 through new banderoles and 200 Laser Code Reader Devices were distributed to 81 provinces of Turkey to render inspections swifter. Project of Banderole Inspection with Smart Phones Within the scope of the “Banderole Inspection with Smart Phones Project”, which is initiated with the aim of extending the anti-piracy inspections, a new software is currently being developed in

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order to help officials and concerned citizens to detect the improper or fraudulent banderole use, through all iOS or Android based smart phones. EU Question N°21: Page 116, paragraphs 3.212 and 3.213 regarding a possible change of the law on patents and the enforceability of patents protection. What steps are being taken to improve the clarity of the decisions relating to the granting of intellectual property rights by the Turkish Patent Institute? This is specifically related to giving more detailed information as to why a decision has been made, to assist with understanding and any potential appeals process. Turkey’s Answer: With regards to patents, examination reports are issued before granting or refusing the patent application. In the examination report, a justification is given why the patent is granted or rejected. Turkish Patent Institute has already applied to be assigned as international search authority (ISA) before WIPO in 2016. In this context, TPI is implementing the quality management system so that the search and examination reports will be reviewed by another patent examiner (four eyes principle) and the quality of decisions shall be further improved. As regards trademarks, in 2011 a comprehensive trademark examination guideline has been prepared with the participation of stakeholders and international partners such as OHIM and German Federal Patent Court as part of a Twinning Project. This trademark examination guideline is regularly updated by taking into account emerging issues, the new case law, and international practices. Examination and opposition divisions of TPI use this guideline to provide consistent and harmonized decisions and the decisions given by these divisions contain the grounds for refusals. The decisions given by Re-Examination and Evaluation Board also contain detailed reasoning and grounds for the decisions also referring to the national and international case law. On the other hand, in order to provide transparent, consistent and harmonized decisions regarding trademarks a quality management system has been adopted to evaluate the decisions given by examination division. Senior trademark examiners control and check the quality and consistency of the decisions regularly. In addition, there are regular weekly meetings among trademark examiners working at examination division. There are also meetings between the Trademarks Department, legal division and Re-Examination and Evaluation Board as necessary. Furthermore, TPI participates in the Convergence Program administered by OHIM that aims approximating decision making principles. EU Question N°22: Page 114, paragraph 3.211. The Secretariat states that "Although the copyright law is considered as being substantially aligned with international conventions and the EU acquis, the law is undergoing a further review by the Ministry of Culture and Tourism in order to take into account developments at national and international level and to fully harmonize it with international conventions and the EU acquis. Key aspects of the envisaged amendments include the strengthening of the mechanism to fight digital piracy and changes to make collecting societies function more effectively." The EU notes that under the Turkish legislation, CMO membership criteria are defined by two requirements: local establishment and local production. It is immaterial that foreign producers could set-up subsidiaries in Turkey that could be eligible to become full members – few companies have resources to do that and it is not reasonable or proportionate to require foreign producers to establish local subsidiaries solely for the purpose of full membership of a CMO. This is particularly unreasonable in the publishing and music industry, where there is a high number of SMEs. Could Turkey inform about the scheme for the collection and distribution of private copy levies? Turkey’s Answer: According to Article 44 of the Copyright Law (Law on Intellectual and Artistic Works (No. 5846), natural and legal persons who manufacture or import for commercial purposes any kind of materials such as blank cassettes, computer discs, CDs, DVDs and any kind of technical devices enabling reproduction of works are obliged to deposit a certain amount which is not exceeding 3% of the manufacturing or importation costs. (Decision of the Council of Ministers

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No. 2013/5260 on Determining the Amount to be Deducted from the Production or Importation Costs). Definition Percentage Machinery and devices peculiar to printing and other copying devices (Scanner, Fax Machine, Printer, Photocopier)

0,5%

Automatic data processing machinery and units peculiar to them, (Hard Discs)

0,5%

Sound recording devices 3% Video recording devices 2% Blank carrying materials used for sounds, images or similar records (CD, VCD,DVD, Audio Tape (Cassette), Video Tape, Memory Cards

3%

One quarter of the amount (¼) shall be transferred to the general budget. The remaining amount (¾) shall be used for strengthening IPR system and supporting cultural and artistic activities within the frame of the provisions of the Regulation on “Procedures and Principles Regarding the Use of Deductions Made from the Costs of Blank Carrying Materials and Technical Devices Used to Copy of Works”. EU Question N°23: Does Turkey contemplate a revision of its legislation in order to comply with CMOs’ obligations and put an end to this above mentioned discrimination and open membership to all right holders eligible for protection in Turkey if they fulfil objectively justified membership criteria? Turkey’s Answer: Ministry of Culture and Tourism has been working on amendments for the Law No. 5846, “Intellectual and Artistic Works”. In this context, in line with the amendments on the main Law, secondary legislations regarding collective management organizations will be revised and updated. Within the context of this process, the issue of open membership to all right holders will also be considered. EU Question N°24: More generally, as regards the collective management of rights, does Turkey promote the transparency of collective management organisations, in particular as regards the revenues they collect, deductions applied to such income, the use of the royalties collected, the distribution policy and their repertoire? What plans does Turkey have for the distribution of copyright levy revenues? Turkey’s Answer: Duties and responsibilities of collective management organisations (CMOs) are clearly listed in the Law on Intellectual and Artistic Works and Regulation on Collecting Societies and Federations. According to Turkish Copyright Law, collective management organisations shall notify the Ministry of Culture and Tourism of all the information concerning their members and repertoires they represent as well as update this information, every three months, which shall be open to concerned parties. Additionally, they shall give the above mentioned information to persons who make written requests. On the other hand, CMO’s shall send written information about distribution plans to the Ministry. This information also includes total revenues they collect. The amount of deductions applied to income and distribution rules shall be stated at the Statutes and internal directives of CMOs, which is determined by the General Assembly. These rules are open to public via their own web sites. EU Question N°25: Table 3.44 “Summary of Turkey's protection of intellectual property rights" Exclusions of patentability include: discoveries, scientific theories and mathematical methods, games, surgical techniques, and plant and animal species, or methods of plant or animal breeding based on biological principles".

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Could Turkey provide details on these above listed exclusions, notably the approach to biotechnological inventions, the secondary medical uses and combination products? Does the Turkish legislation on patent explicitly define these types of inventions? Turkey’s Answer: In the Turkish Patent Decree Law, there is no provision indicating that secondary medical use is not patentable. Similarly, the Decree Law does not prohibit the patentability of biotechnological inventions. Inventions related to secondary medical uses and biotechnologies are patentable as long as they fulfil the patentability requirements. EU Question N°26: As regards the protection of undisclosed information, the EU notes that the data exclusivity period of six years starts as of the first registration date in the Customs Union Area. Moreover, with regard to medicinal products for human use which benefit from patent protection in Turkey, the data exclusivity period is limited to the term of the patent. Turkey sets the starting date of the Regulatory Data Protection period with the first authorization in the Customs Union, and not to the first authorization in Turkey. Considering the extended regulatory approval times and delays that could take two to three years to register, does Turkey plan to change the starting date of the data exclusivity period from the date of first authorization in the Customs Union to the first authorization date in Turkey? Turkey’s Answer: As a candidate member to the European Union, Turkey harmonized the EU Directives 2001/83/EC and set the duration of the data exclusivity as six years accordingly. But afterwards, EU has extended the duration to (8 + 2 + 1) for member states, and provided transition period to some new member states. This issue is the subject to further negotiotions for full membership with the EU. Currently, Turkey does not plan to make any changes on this provision. EU Question N°27: Regulatory Data Protection is limited to the period of patent protection which can significantly shorten this period. Does Turkey envisage reforming this mechanism? Turkey’s Answer: Turkish legislation on data protection is compatible with the standards set forth in Article 39.3 of TRIPS. Additionally, Turkey put in to force a data exclusivity provision in 2005 for pharmaceutical products. Currently, Turkey does not plan to make any change on this provision. EU Question N°28: Page 118 Section 3.225 Counterfeiting issues What actions is Turkey taking to prevent the manufacture of counterfeit goods within the country? What actions is Turkey taking to prevent the transit of counterfeit goods through the country? Turkey’s Answer: In order to effectively fight against the Intellectual Property Crimes, almost 7000 staff were trained by the Ministry of Interior on IP Crime Expertise, Bandrole Database and Bandrole Validity Appraisal Commissions since 2010. The staff continously informed by workshops, seminars and regional meetings. Number of operations are carried out regarding IPR protection, seizure of pirated goods, counterfeit food and beverages, illegal importation of counterfeit goods with the coordination of Turkish National Police and participation of various countries. Besides, according to the Article 101 of the Implementing Regulation of the Customs Code pertaining to border enforcement of IPR, customs authorities proceed according to border enforcement of IPR provisions related with goods which are subject to any customs approved treatment or use, including goods changing vehicle in Turkish Customs Territory, when these goods are suspected of infringing intellectual property rights or are in nature of infringing those rights.

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Regarding market surveillance activities, the Ministry of Customs and Trade is responsible for the safety of consumer products. In addition, protection of trademarks is subject to “Decree Law No.556 Pertaining to the Protection of Trademarks”. Vehicle Tracking Systems (VTS) are used for transit of goods which possess high risk of smuggling, according to Annex 33 of Customs Regulation. If found suspicious, customs officers use VTS in order to prevent transit of counterfeit goods. Vehicles in transit are followed with the VTS devices both at the local level and the Command and Control Centre located in Ankara. Transit vehicles coming to/going from the country are scanned by x-ray equipment at the sea ports and land border gates. In addition, the vehicles in transit are controlled by density measurement devices, videoscopes, mobile monitoring systems, closed circuit TV systems (CCTV), plate recognition systems, etc. EU Question N°29: Page 119, paragraph 3.234 Judicial procedures concerning trademark infringements are reported with experience as very slow and cumbersome. One of the reasons is that in many cases experts need to be involved". The EU welcomes that Turkey recognised the slow judiciary process as one of the weaknesses of the enforcement systems. The use of experts seems to be due to a lack of judicial specialisation on IPR. How does Turkey plan to tackle this? How does Turkey plan to speed up and streamline civil judicial procedures concerning trademark infringements? Turkey’s Answer: Average judicial process in Civil Courts of Intellectual and Industrial Rights was reduced to 377 in 2014 from its 2013 level of 425. Statistics regarding 2015 is not yet published. Within the scope of the European Union Pre-Accession Assistance Instrument (IPA), “Improved Court Expert System Twinning Project” was conducted with German IRZ Foundation in coordination with the DG for Civil Affairs of the Ministry of Justice since the beginning of 2013 in order to develop court expert system. With this Project, it was aimed to:

Decrease the number of recourse to court expert, Minimize the number of additional reports, Reduce the objections to court expert reports to minimum, Increase the quality of court experts, Shorten the duration of judicial procedures,

and official closing meeting of the project was conducted on 23/06/2015. With the above-mentioned Project, symposiums, conferences and study meetings were held in designated pilot cities so as to settle problems arising from court expert system in civil and an administrative justice, and in various cities by bringing all actors of judiciary together; problems arising from court expertise were identified and solution offers were collected. A large number of court experts from different fields received training and its certification was ensured. Studies started with regard to the “Activity of Strengthening the Institutional Capacity of Court Experts”, which was included in the 2015 Programming as the second stage of the completed “Improved Court Expert System Twinning Project”. The new project aims to improve the current deficiencies of the court expert system, which are already stated as priorities in the revised Judicial Reform Strategy. Under the Activity, a compulsory Basic Court Expert Training Curriculum will be devised, comprising basic principles of law and procedural law, reporting techniques as well as inspection principles and ethic codes for court experts. The institutional capacity of court experts will be strengthened through defining 4 problematic areas, which are labour law (accidents) cases in civil justice, traffic accident cases, malpractice cases in criminal justice and public works/construction cases in administrative justice, in order to be used as corrective measures for the planned new draft law on court experts. The result of the IPA I Project regarding the quality of expert reports as well as attitudes of

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judges/prosecutors on expert system requires the expert system to be improved and will be used as a baseline. Moreover, in 2016 Action Plan of the 64th Government which was made public on 10 December 2015, it was announced that court expert practice would be re-addressed. In this scope, “Draft Law on Court Expert” was prepared by conducting a study on court experts for the identification of problems with broad participation by the Ministry of Justice. In addition to arrangements which will prevent sharing of jurisdiction of judges with court experts and prevent taking of court expert reports on the issues which may be resolved with professional knowledge of a judge, the Draft contains provisions for developing accreditation system for court experts by determining expertise areas of court experts, determining standards for the selection and assignment of court experts and moving into the system of certification. With regard to “improving the civil and criminal justice systems goal”, one of the objectives of Judicial Reform Strategy (http://www.sgb.adalet.gov.tr/Yargi-Reformu-Stratejisi_2015_ingilizce. pdf) which was declared to the public by Prime Minister on April 17, 2015, is “revising and restructuring the court expert system”. The strategies under this objective are as follows:

The identification of the problems experienced within court expert institution and conducting studies for their solution,

Training of judges and prosecutors regarding the court expert practices, Setting the objective selection of court experts for objective criteria and setting out quality

standards, Establishing an institutional structure that will manage the process of accreditation and

certification when preparing an expert list or registry Collaborating with universities, bar associations and professional associations, Establishing an effective judicial expert audit system, Updating the legislative infrastructure of Forensic Medicine Institution, Proceeding with the strengthening of the capacity of Forensic Medicine Institution in terms of

physical infrastructure and human resources and disseminating the services throughout the country,

Ensuring the drafting of forensic medicine reports within the framework of European Court of Human Rights’ jurisprudence,

Preventing the deferrals regarding the reports that should be prepared after judicial medical examination,

Proceeding with the works regarding the accreditation of forensic sciences laboratories, Establishing forensic science academies, Conducting legislative works regarding the court expertise,

English versions of some provisions governing court expert in the Civil Procedure Code, no.6100, which entered into force on 1 October 2011, are presented as Annex. EU Question N°30: Does Turkey envisage the establishment of an independent body to assess a list of the experts specialized in the related fields of commerce and be able to prepare reliable and impartial written reports about the seized materials? Turkey’s Answer: It is foreseen to establish a Department and a Court Expert Advisory Board within the Ministry of Justice to ensure the selection, certification, accreditation of qualified court experts, selection of proper and qualified court experts by determining the main and sub expertise areas in the Draft Law on Court Expert prepared by the Ministry of Justice. Advisory Board will provide solution offers about the problems experienced in the performance of court expert services. Main duties of the Department are as follows:

Identifying the main and sub expertise areas in court expert services Determining the qualities required to be possessed by court experts based on main and sub

expertise areas Determining ethical principles required to be followed in performance of their duties Determining guiding principles to be followed and standard of the reports to be prepared by

court experts based on main and sub expertise areas

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Determining procedures and principles regarding basic training of court experts, authorising educational institutions and other institutions which will provide training and listing these institutions and organisations and publishing them electronically

Determining procedures and principles regarding to be exempt from training or registered in the list by having regard to their expertise and scientific qualifications

Determining procedures and principles regarding the audit and performance of court experts Determining procedures and principles regarding admission to court expert

Determining number of works which will be monthly handled by court experts according to their main and sub expertise

Determining the qualities required to be possessed by private law legal entities and people who will work as court expert within this legal entity

Authorising or cancelling the activities of private law legal entities, auditing their activities and reports

Determining main and sub expertise areas and judicial districts and formulating their lists Preparing annual activity report and the activity plan of the following year Monitoring practices relating to court expert, identifying problems, developing solution offers Collecting any statistical data in the field of court expertise and conducting planning

regarding this field Keeping the register and list of court expertise Keeping a list, and publishing, of those removed and those prohibited from being court

experts. EU Question N°31: Page 131 Paragraph 4.1.6 states that "Turkey has not notified export subsidies to the WTO Committee on Agriculture during the review period. Further to that, Nairobi WTO Ministerial Decision on Export Competition states in footnote 5 that "Notwithstanding this paragraph, a developing country Member shall eliminate its export subsidy entitlements by the end of 2022 for products or groups of products for which it has notified export subsidies in one of its three latest export subsidy notifications examined by the Committee on Agriculture before the date of adoption of this Decision." Finally, paragraph 10 of the same Ministerial Decision establishes that "Members shall seek not to raise their export subsidies beyond the average level of the past five years on a product basis." Does Turkey intend to submit export subsidies notifications covering the last five years to the WTO Committee on Agriculture, for the purpose of verification of compliance in accordance with paragraph 10 of the same Ministerial Decision? Turkey’s Answer: Turkey will comply with its notification requirements by the next meeting of the Committee on Agriculture which will be held on 7-8 June, 2016. EU Question N°32: Is Turkey going to make use of footnote 5 of the Nairobi WTO Ministerial Decision on Export Competition? Turkey’s Answer: As one of the developing countries with export subsidy reduction commitments, Turkey is going to benefit from the longer time-frame extended through the footnote 5 of the Nairobi Ministerial Decision on Export Competition to eliminate export subsidy entitlements, for some products or groups of products. EU Question N°33: Paragraph 4.25 refers to Turkey's export subsidies which are provided to develop Turkey's export potential in processed agricultural products." The subsidies take the form of a deduction of debts to public corporations (taxes, social insurance premium costs, energy costs, telecommunication costs) from the subsidy entitlement. Goods eligible are those of Turkish origin and products may be exported to all markets". However, information obtained at public media refers to the fact that Turkish government would be subsidising their exports of Food & Vegetable to compensate for the loss of the Russian market15. The aids seem to be regulated by a Turkish

15 (http://www.fruitnet.com/eurofruit/article/167897/turkey-helps-out-exporters).

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law applicable from 1 January 2016 and consist of subsidies per tonne of fruits (fresh, canned or frozen), dried fruit, fruit juice and vegetable. This seems to be in contradiction with the above paragraph of the WTO report related to export subsidies. Could Turkey confirm whether such types of export subsidies are currently in place? Will Turkey notify these export subsidies in accordance to the WTO transparency obligations? Answer: No export subsidies have been granted to compensate any loss of the Russian market. EU Question N°34: Notifications on the Subsides and Countervailing Measures Agreement do not mention citrus fruits as eligible products. Could Turkey confirm that no subsidy has been granted to citrus fruits since 1999? Turkey’s Answer: Turkey confirms that no subsidy has been granted to citrus fruit since 1999. EU Question N°35: Pursuant to its subsidy notifications to the Committee on Subsides and Countervailing Measures, Turkey's export subsidies vary significantly depending upon the product. During the review period there have been no changes in the percentage share of the products eligible to receive the subsidy during 2013-15. Since 2013, the export subsidy rate notified has been changed from U.S. dollars to Turkish Lira. The maximum payment rate has declined slightly in a number of cases (Table 4.10). According to the authorities, Turkey's WTO commitments and its budgetary constraints determine the percentage share eligible to receive the subsidy and its variations. Although Turkey has notified its export subsidies to the Committee on Subsides and Countervailing Measures on 2015, the fact is that it performs this notification not using absolute values but percentages. The notification on absolute values would be desirable in order to know the amount of subsidized export. Could Turkey confirm that since 2000, its budgetary outlays and eligible quantity referring to export subsidies have remained in line with its commitments? Turkey’s Answer: Turkey is ready to fulfill its export subsidy notification commitments by the upcoming meeting of the Committee on Agriculture where all members will be informed on the level of compliance. EU Question N°36: Page 126 Section 4.16, domestic support on Agriculture. When does Turkey intend notify domestic support subsidies in agriculture (DS:1)? Turkey’s Answer: Turkey has started a work program to notify its pending agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. EU Question N°37: Could Turkey clarify its agricultural policy strategy against the background of the increase of its coupled (output-based) payments, which are, according to the WTO understanding, supposed to be trade distortive (see paragraph 4.18)? Turkey’s Answer: As mentioned by the Secretariat Report, Turkey’s agricultural support has undergone many changes over the last 20 years. Although the Report notes increase for the PSE over the review period, it should be emphasized that it is calculated by the OECD using different parameters than that of the trade distorting support calculation method of WTO AoA.

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As an indicator of the annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers, PSE provides an indication rather than an actual use of any support. Paragraph 4.18 evaluates Turkey’s agricultural support based on OECD calculations. Higher PSE rates in OECD calculations may stem from increase in the number of products covered by support programmes as well as other parameters taken for PSE calculations. As is known, the important point in amber box calculations is not the number of products covered but the ratio between support amount and value of the production. Agricultural support policies in Turkey are implemented in a way that promotes production in the most suitable basin. What is important to note is that the main purpose of basin based support programmes is not increasing production level but shifting production to more suitable areas. Agricultural basins are determined by MFAL based on number of criteria, including, climate, soil, topography, land classes and land usage. EU Question N°38: Could Turkey confirm that its Aggregate Measure of Support (AMS) constantly remained since 2002 below the de minimis level? Turkey’s Answer: Turkey has started a work program to notify its pending agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. EU Question N°39: Could Turkey indicate the Value of Production for each of the products listed in Table 4.8 on page 128 for the year 2014? Turkey’s Answer: Turkey has started a work program to notify its pending agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. EU Question N°40: Could Turkey specify the total input subsidies for the years 2011 to 2014 (2,233 billion TL) provided for Fuels subsidies, Fertiliser, Certified Seed support and soil analyses? Turkey’s Answer: The input subsidies which are mentioned at page 128, Table 4.8 of the Secreteriat Report are paid on an area basis. For the details, one may refer to the website of MFAL. EU Question N°41: Could Turkey indicate the total budget outlay for all the products above-listed for the year 2014? Turkey’s Answer: Turkey has started a work program to notify its pending agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. EU Question N°42: Paragraph 4.1.8.1 The report indicates that total payments for area based income in the years 2010-2015 totalled 3.57 billion TL. However in table 4.8 no amount is mentioned for Hazelnuts.

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Is this amount of 3.57 billion TL in addition to the amounts mentioned in table 4.8? Turkey’s Answer: Support given to hazelnuts is additional to the amount mentioned in Table 4.8. of the Secretariat Report. EU Question N°43: Para 4.1.9.1 refers to the Turkish Grain Board (TMO). The EU asked, during the last TPR of Turkey in 2012, extensive information and clarification about the functioning of the TMO, including confirmation that the purchasing prices announced by the TMO are those used as administered prices in the calculation of Turkey's market price support in the domestic support notifications. Could Turkey confirm that the purchasing prices announced by the TMO are those used as administered prices in the calculation of Turkey's market price support in the domestic support notifications? Turkey’s Answer: Purchasing prices announced by the TMO are not administered but market based prices. Thus, Turkey does not include TMOs purchasing prices in the calculation of its domestic supports. EU Question N°44: On 17 December 2015 the government of Turkey has announced the paddy purchasing price for 2015-16 at around TL 1,580 (around $534) per ton. This leads to the following: Could Turkey indicate how many tons benefitted from this and the total cost for TMO that this measure represents? Turkey’s Answer: Prices announced for the paddy purchasing were not set by the Government. They are determined by TMO’s Board of Directors. Since the 2015-16 season has just started, there is no way to know how many tones any company including TMO in Turkey may buy. EU Question N°45: How will Turkey implement the Nairobi decision on Export Competition with respect to its agricultural State Trading Enterprises? Turkey’s Answer: Ministerial Decision on Export Competition adopted at Nairobi includes disciplines on agricultural exporting State Trading Enterprises so as to ensure that their operations do not circumvent any other disciplines contained in the said Decision and that the use of export monopoly power is exercised in a manner that minimizes trade distorting effects, among others. As the Report by the Secretariat notes there are four marketing boards in Turkey for agricultural products, each with autonomous status and simple regulatory authorities in their respective markets. Neither of them can be considered as the user of export monopoly power within the meaning of paragraph 21 of the Ministerial Decision on Export Competition. EU Question N°46: Does Turkey intend to modify the functioning of its TMO agency so as to respect its WTO obligations under the Nairobi decision on Export competition, in particular paragraph 20? Turkey’s Answer: Paragraph 20 of the Nairobi Ministerial Decision on Export Competition notes that Members shall ensure that agricultural exporting state trading enterprises do not operate in a manner that circumvents any other disciplines contained in that Decision. It is further noted in the paragraph 21 of the same Decision that members shall make their best efforts to ensure that the use of export monopoly power by agricultural exporting state trading enterprises is exercised in a manner that minimizes trade distorting effects and does not result in displacing or impeding the exports of another member.

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Please note that TMO as a fully autonomous entity in its commercial activities neither operates as the sole buyer or seller in the domestic market nor holds an export monopoly status. In other words, functioning of the TMO does not contradict with the letter and spirit of the Nairobi Ministerial Decision on Export Competition. EU Question N°47: Paragraph 4.1.9.3 refers to the Meat and Milk Board-ESK. This board holds the rights and decides among others, on the distribution of import licenses. How can the Turkish authorities ensure that the control, distribution and use of licenses are not taken on a non-arbitrary, transparent and non-discriminatory way as in accordance with WTO provisions? Turkey’s Answer: Import licenses for the importation of meat by ESK were issued only in 2015. Control, distribution and use of licenses are in accordance with WTO provisions. EU Question N°48: What is the share of ESK in Turkey's production of meat, number of slaughtering's and share of sales of meat in Turkey? How are profits and losses from these operations used and eventually covered by the government? Turkey’s Answer: The share of ESK in total meat production in Turkey was reported as 1.43% in 2015. By the same year, the number of slaughtering was 60,542 (1.61%) for bovine and 124,465 (1.8%) for cattle and sheep. No loss was reported by the ESK out of its activities in 2015. EU Question N°49: Page 138, section 4.44 The ESK has been given exclusive right to import meat under tariff quotas. Once allocated the import right the ESK is not obliged to actually use the import right and can simply refrain from importing. How can Turkey reconcile this non-use of import rights with its obligation to respect WTO international provisions? Is this practice also applied by Turkey in other sectors? Turkey’s Answer: Procedures and principles related to the administration and allocation of the TRQs are determined through the Communiques published in the Official Journal. Meat and Milk Board has been listed as the institution with priority in allocation with respect to the tariff quotas for meat. In this regard, if Meat and Milk Board applies for the TRQ, the import license is issued to the Meat and Milk Board. The administration of the TRQs is transparent and known by everyone in detail. Depending on the market conditions, Meat and Milk Board in some cases may not use the import licence despite its all efforts to utilize it timely. The Board does not consider non-utilization of the TRQs as a policy tool. At present, there is no such practice in other sectors/goods. EU Question N°50: Page 131. Paragraphs 4.24- 4.25 and Table 4.10. Export subsidies and fisheries subsidies Reference is done to the information contained in the table 4.10 on export and fisheries subsidies. Recalling that Art. 3 of the Agreement on Subsidies and Countervailing Measures provides: "Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited: (a) subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance; (b) subsidies contingent, whether solely or as

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one of several other conditions, upon the use of domestic over imported goods", the EU would like to ask: How does Turkey justify granting export subsidies to fisheries products in view of the disciplines in Article 3 of the SCM Agreement? Why are those subsidies limited to products of Turkish origin? Turkey’s Answer: Turkey is entitled to grant export subsidy to prepared or preserved fish, crustaceans and molluscs under HS 16.04, which is included in the export subsidy commitment schedule of Turkey. EU Question N°51: Page 146 Telecoms and postal services. The EU notes that for a few months now, some postal service enterprises have encountered the following problems when delivering so-called economy packages (non-priority deliveries) by road in Turkey: upon arrival, Turkish customs authorities have repeatedly complained that CN documents (UPU documents) in combination with the CMR (document for transport by road) do not provide sufficient documentation for mail to be carried across the border into Turkey. Turkish customs authorities demand that under customs law mail be declared as freight by using a so-called T document (transit declaration). However, this is not consistent with UPU rules which state that under the Universal Postal Convention CN documents and CMR are recognised as documentation for international mail that is sent by road. All countries accept these rules except the Turkish customs authorities. This conduct results in unnecessary delays and extra work. What are the views of Turkey on the above? What measures are considered to improve situation and take into account the rules of the Universal Postal Convention. Turkey’s Answer: Turkey fails to find a reference with regards to telecoms in the mentioned page and to postal services throughout the whole Secretariat Report. Still, although there are no complaints or submissions received from postal service enterprises regarding the mentioned implementation, Turkey would like to express its good will in examining the situation. EU Question N°52: Page 163, paragraph 4.3.3., Telecommunications The EU would like to add to information provided by the Secretariat that Turkey imposed local content requirements in the tender specifications defined for the 4.5 G mobile tender that was concluded in August 2015. Local content requirement ratios for the hardware and software investments were set as 30%, 40% and 45% for the first three years respectively. Additionally, operators were required to procure at least 10% of their investment-related product materials from small and medium sized enterprises (SMEs) that are established and manufacturing in Turkey. How does Turkey consider the compatibility of these local content requirements with its obligations under WTO law (including in particular the TRIMS agreement)? Turkey’s Answer: Telecommunication services is a strategic sector providing necessary infrastructure for the conduct of a wide range of economic activities. Therefore, strengthening the telecommunications sector and the infrastructure is a strategic objective of the Turkish Government. In accordance with the Electronic Communications Law No: 5809, authorization for the installation and operation of any kind of electronic communications equipment, systems and networks; assignment of the necessary frequencies, numbers, satellite positions and associated resources and the arrangements thereof are under the State’s terms of reference. When granting the right of use for scarce resources such as frequencies, certain principles are to be observed, including the creation and maintenance of an open and competitive environment, protection of consumer rights and interests, consideration of the objectives of development plans and government programs as well as the strategies and policies set by the Ministry of Transport, Communications and Maritime Affairs, and ensuring non-discrimination among subscribers, users and operators who are under the same conditions.

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The authorization process for the allocation of 4.5 G frequency bands was conducted in line with the principles set by the Electronic Communications Law, and the conditions imposed on the mobile operators are non-discriminatory. Turkey neither imposes foreign equity restrictions in the telecommunications market, nor discriminates on the basis of foreign equity participation. EU Question N°53: Paragraph 4.165 "The Ministry is responsible for implementing the universal telecommunication services, while Türk Telekom is responsible for providing such services and auditing the quality and standard of them." Could Turkey please explain why it has chosen to let the universal service provider, and not the telecom regulator ICTA, audit the quality of the service it is providing? Turkey’s Answer : The regulation about auditing the quality and standard of universal service is set out in the Article 6.1.u “Competencies of the Authority (ICTA)” of Law No. 5809 on Electronic Communications Law dated 11/5/2008, and is as below: Art 6.1.u) “Under the provisions of the relevant law; to set, to inspect and to have third parties inspect the quality and standards of service for all kinds of electronic communications including the quality of service and standards of universal services when required, and to determine the procedures and principles pertaining thereto.” As stated in this provision, the competence for auditing the quality of universal service is given to ICTA, the regulatory authority, not to the universal service provider. EU Question N°54: Paragraph 4.167. The EU would like to share that several telecom operators are concerned about a asymmetry in the wholesale termination rates charged by Turkish operators. Does ICTA monitor if international termination rates charged by operators active in Turkey, whether for mobile or fixed communications, are reasonable, transparent and cost-oriented? Turkey’s Answer : ICTA; as the regulatory authority in electronic communications sector, follows the mobile market very closely and takes necessary actions in order to sustain competitive environment and the best quality of service. According to this approach, the regulator may intervene to remove anti-competitive conditions in the telecommunications market if it deems necessary following a market review process. With the Board decisions taken in 2011 and 2012 respectively, mobile and fixed termination rates for the calls originated abroad and terminated within Turkey have been excluded from price control regulation. Therefore, currently mobile network operators in Turkey set their termination rates commercially for calls originated outside of Turkey. EU Question N°55: Paragraph 4.197 tourism services Could Turkey explain its licencing system (the requirements, procedure etc.)? Turkey’s Answer: Three types of travel agency licenses such as (A), (B) and (C) are granted by Ministry of Culture and Tourism pursuant to the Travel Agents and Association of Travel Agents Act no. 1618 and Travel Agents Regulation. According to the legislation, Travel Agent License is granted only to legal entities established in Turkey. The process is carried out as follows: 1- The Travel Agent Title registration with an application letter shall be requested from the Ministry of Culture and Tourism.

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2- The travel agent title found appropriate by the mentioned Ministry shall be notified to the applicant and Association of Turkish Travel Agencies (TURSAB). 3- The legal entity which is entitled as travel agent by the Ministry shall lodge an application to TURSAB with the documents as follows: a) Letter of Application (Such application letter must include clear notification of the request, the full name, signature, telephone and fax numbers, street address of the person authorized to represent and bind the company and the date of application). b) Original copy of the declaration which specifies the date and issue of the Trade Registry Gazette, in which the articles of association were published, in which tourism and business operations as a travel agent were covered within the field of activity of the applicant entity. c) Original copy of the Certificate of Trade Registry, which also includes the authorized signatory or signatories. d) Letter of undertaking regarding the travel agent title. e) For the purposes of applicant joint-stock companies, original copy of the declaration of Turkish Identity Number and criminal record of the board members and persons who are authorized to represent the company, and for the purposes of other companies, of all partners and the persons who are authorized to represent the company. f) Original or certified copy of the list of signatories authorized to represent the legal entity. g) The document pertinent to the personnel of the Travel Agent and the declaration containing the Social Security Institution Business Place code and the Turkish Identity Number of the personnel. h) Warranty and letter of guaranty specified by the Ministry. ı) TURSAB membership fee. 4- The application document is evaluated by TURSAB and travel agent establishment audit shall be made. If deemed suitable, the document shall be submitted to the Ministry of Culture and Tourism. 5- The application document lodged to the Ministry is investigated and evaluated by the Ministry. If deemed appropriate, the travel agency certificate is issued regarding the applicant group. The issued license is submitted to Provincial Directorate of Culture and Tourism. The certificate is obtained from Provincial Directorate of Culture and Tourism following the certificate document payment. For detailed information please visit: http://yigm.kulturturizm.gov.tr/seyac.html. WT/TPR/G/331 EU Question N°56: Page 14, table 1 and page 16 table 3 mention "Turkish Republics” Which territories are included in this term? Turkey’s Answer: There has been a typing error. That will be corrected in WT/TPR/G/331/Rev.1.

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KINGDOM OF SAUDI ARABIA

Q 1: We commend Turkey for its economic performance during this review period and in particular admire the growth of the automotive sector. Therefore, we would appreciate Turkey’s comments on the following: 1. Para. 4.64 (p.141) of the secretariat report, stated that in the automotive sector, several problems have emerged that could affect further expansion, including: integration of the main automotive industry and its related industries; the need for a qualified workforce, particularly in related industries; limited access to finance for related industries; and high taxes on vehicles and fuel that reduce demand in the domestic market. Another report noted that the main issues affecting the automotive sector included, in order of importance: taxes on automotive sales; excessive price competition; legislation on emissions; investment incentive policies; and car scrappage incentives and similar sales supports. Could Turkey share with us its strategies and measures to address these challenges? Answer: “The Strategy Document for Turkish Automotive Sector” was revised with the aim of identifying the problems faced by the automotive sector and at providing the Turkish automotive sector with a sustainable global competitiveness power via exploring solutions to these problems. Currently, the strategy document is at the stage of approval by the High Planning Council. In the aforementioned strategy document, Turkish automotive sector was handled in a way that covers the supply sector and its related sectors. However, some problems faced by the automotive sector affect not only the automotive sector but also other sectors of the economy, and thereby, these problems cannot be overcome by the interventions that will be developed special to the automotive sector. In this scope, the following targets are planned to take place in the Action Plan: Establishment of center of excellence so as to create a knowledge-base in our country for the

production of internal combustion engine and to grow qualified work force, Performing the tests for Design and R&D operations and the ones for operations in the

framework of type approval regulation within the country, and making initiatives to enforce Type Approval Certificates given by Ministry of Science, Industry and Technology to be accepted on a global scale,

Updating the investment incentive system by modifying provisions in the scope of « Decision on the State Assistance for Investments »,

To develop projects directed to the manufacturing of the products with high added value in order to reduce dependence on imports,

Conducting studies to determine the locations with favorable conditions for local and foreign enterprises that are going to make investments to supply industry,

Promote the use of environmentally friendly vehicles with low emission levels Adjusting regulations to realize necessary investments (such as charging stations) to reach the

widespread use of alternative fuel vehicles. Q 2: In the secretariat report 4.3.2.8 (p.161) about Health tourism subsector, the Kingdom of Saudi Arabia commends Turkey for the progress of the Health tourism sector and would appreciate Turkey’s comments on the following: 1. Para. 4.147. (p.160) of the secretariat report about incentives, could Turkey elaborate more about the investment incentive programme, in particular regarding hospital and medical centers investments? Answer: Details about Investment Incentive Program are summarized in the Secretariat Report (Page 40, paragraph 2.60 and 2.61 and Page 41, Table 2.5). Under the Investment Incentive Program, all hospital investments (surgical hospital services, medical hospital services, hospital services related to obstetrics, rehabilitation, and psychiatry, other services related to hospital) with the prior authorization issued by the Ministry of Health that

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are made in each region can be supported within the framework of the Regional Investment Incentive Scheme. Medical centers (requiring prior authorization issued by the Ministry of Health), dialysis centers, analysis laboratories, magnetic imaging centers, assisted reproductive treatment care centers, radiotherapy and oncology centers, physical therapy and rehabilitation centers, oral and dental health centers, and hereditary disease diagnosis investments, that are capable of getting a license from the Ministry of Health, can be supported within the framework of the General Investment Incentive Scheme. (See paragraph 4.147 and Table 4.29)

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HONG KONG, CHINA

Questions on the Secretariat Report A. Trade Policies and Practices by Measure

Exports Strategy

(WT/TPR/S/331: Page 30, paras 2.14-2.15)

The Turkish Exports Strategy for 2023 was developed to increase exports to a target level of US$500 billion by 2023. The specific goals or actions being undertaken as part of the plan include: carrying out projects on R&D and the development of international competitiveness in order to increase sectoral export capacity; creating sectoral clusters for gaining competitiveness in international markets.

Question 1:

Could Turkey share with us more about the projects on R&D? Are particular sectors or clusters being focused? If so, how are they chosen?

Turkey’s Answer: Priority Sectors on R&D were determined in National Science and Technology Policy. Priority sectors are also updated and revealed according to the decisions of Supreme Council for Science and Technology which is the highest council to take decisions on S&T in Turkey under the presidency of Prime Minister.

Moreover, in order to reach the goals mentioned for the country’s export amount in 2023, the transformation in manufacturing industry is compulsory. Turkey aims to transform the structure of manufacturing industry from low to high and medium high technology sectors. Thus, several policy tools have been put in place. For instance, Turkey Industrial Strategy Document (2015-2018) came into force and in this document it can be seen that one of the policy tools –namely Policy 1- is “The transformation in manufacturing industry will be realized.” Under this policy 15 actions were determined in order to achieve this goal.

Turkey, like many other European countries (Denmark, Germany, France, Portugal etc.), has national cluster program. The main objective of the program is to support and promote clustering initiatives bearing a particular potential of competitiveness and sustainability. Turkey does not give any financial support to create clusters. All clustering initiatives, which have already been developed, can apply to the program without any exclusion. This reflects inclusiveness of Turkish cluster support program.

All applications are evaluated in a competitive manner. Cluster Support Program has very strong focus of cross-sectoral collaboration because it has become essential to enable cross-sectoral collaboration between cluster actors from different industries.

Activities in specific technologies such as biotechnology, nanotechnology and ICT bonus points are granted in evaluation. 50 % of the total business plan budget will be supported as a grant from national budget.

Technology Development Zones

(WT/TPR/S/331: Pages 42-43, paras 2.64-2.66)

The Technology Development Zones (TDZs) are zones specialized in developing the high technology sector in Turkey by supporting and encouraging R&D activities. There were 48 TDZs in operation in Turkey as of September 2015. The benefits for companies establishing in TDZs are: exemption from income, VAT, and corporate taxes for software development until 2024; exemption from all taxes for R&D and support staff until 2024; production of the R&D product in the zone if deemed suitable; and payment of 50% of the employer's social security payments by the Ministry until 2025.

It is noted in Table 2.7 that less than 5% of the companies operating in TDZs are foreign companies.

Question 2:

Are the criteria for admission and the benefits for local and foreign companies the same in all TDZs? Does Turkey consider the number of foreign companies on the low side? Are there any plans to attract more foreign companies?

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Turkey’s Answer: Admission conditions and benefits are the same for all companies in TDZs.

In addition, a new R&D reform package has been accepted and published in Official Gazette No. 29636 and dated 26 February, 2016.

Among the changes in existing legislation, there is also a decision to facilitate the employment of foreign R&D and design personnel in TDZs and R&D centers.

SMEs

(WT/TPR/S/331 Page 91, para 3.151)

Turkey’s SMEs are supported by the Small and Medium Enterprises Development Organization (KOSGEB), a Turkish public organization that aims to increase SMEs’ share in the economy and help them develop their businesses. Today, it covers specified sectors pursuant to the Council of Ministers’ decision.

Question 3:

Could Turkey advise what specified sectors are covered by KOSGEB? What factors have been taken into consideration in arriving at the Council of Ministers’ decision on the specified sectors?

Turkey’s Answer : Currently KOSGEB has 8 support programmes within the scope of “KOSGEB Support Programs Regulation”. It is stated in Law 5891 that “Sectoral and regional priorities for enterprises which will utilize supports and services given by to enterprises within this Law will be determined by the Council of Ministers according to the social and economic conditions of the day.” So, it is under the discretion of the Council of Ministers to determine the specific sectors covered by KOSGEB.

State-owned enterprises (SOEs) and Privatization

(WT/TPR/S/331: Pages 101-104, paras 3.178-3.186)

Between 2011-14, SOEs exhibited significant growth in income and assets of 46% and 27% respectively. Profitability initially increased during this period but then decreased, in particular in 2014 when it turned negative. The decrease in profitability mainly stemmed from the accounting rules related to the privatization process. The number of employees of SOEs fell by 7.5% over the period. Thus, SOEs had become more efficient users of state resources over the period.

SOEs covers various sectors including manufacturing, mining, energy, oil and natural gas, agriculture and livestock, transport, banking, telecommunications, broadcasting, and post.

Two hundred and four organizations had been completely privatized as of September 2015. Most of these privatizations had been in the electricity distribution and power generation industries. Furthermore, a number of organizations had been in the privatization portfolio for a long time without being privatized due to economic, social, and political reasons.

Question 4:

Are there any medium-term or long-term targets for the privatization process? Are there any specific target and timeframe to decrease public ownership in sectors other than electricity and power generation? How will the global economic slowdown affect the speed of privatization in Turkey?

Turkey’s Answer : Privatization process in energy sector started with distribution companies in 2008. The share of private sector in Distribution and Retail sectors reached 100 % in 2014.

The objectives of generation privatization are to improve electricity generation capacity, increase the availability of existing generation facilities and raise their capacity utilization factors, and activate private sector resources to enhance competition in the sector. In this context, a total capacity of 6.000 MW (10 thermal power plants and 59 hydroelectric power plants) has been privatized since 2008. Share of private sector in total installed capacity was 72% in 2016. Privatization of power generation is supposed to accomplish the objective of decreasing the public share in the market and focusing on the regulation of the market. After the privatization process, the share of private sector is expected to reach at least to 90% in total installed capacity. There are no specific timeframe about it.

In near future Turkey plans to privatize, inter alia National Lottery, İzmir and Tekirdağ sea ports, toll motorways and Bosphorus bridges, sugar factories and real estate of various governmental institutions. So far, Turkey was not adversely affected by the global economic slowdown.

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B. Trade Policies by Sector Banking Services

(WT/TPR/S/331: Page 148, paras. 4.90 & 4.91)

The Banking Regulation and Supervision Agency (BRSA) oversees the implementation and supervision of banking regulations and may issue amendments and clarifications to existing banking laws and regulations. BRSA’s permission is required for banks resident in Turkey to merge, liquidate, or establish partnerships with individuals or corporations based abroad. The BRSA is led by a board of seven members, each of whom holds office for five years.

Question 5:

How long does it usually take for a bank to obtain permission from the BRSA for merger or liquidation, or establishing partnerships with individuals or corporations based abroad? What factors would the BRSA take into account when deciding on the permission? Are banks with foreign capital subject to the same treatment as domestic banks during BRSA’s consideration?

How are the seven members of the board leading the BRSA selected? Are they appointed as government representatives or representatives of certain banking organisations in Turkey?

Turkey’s Answer: Banks should obtain permission from BRSA for licensing (Article 6, 10 of Banking Law-BL), transfer of ownership (Article 18 of BL), merger with other banks (Article 19 of BL), voluntary liquidation (Article 20 of BL) and investing in cross-border corporations (Article 14 of BL). BRSA should assess the operation licensing applications within maximum three months from the date of the initial permission application. For other permissions, the BRSA commences its assessment in similar time frame after all the documentation that is required in BL and sub regulations are provided by the applicants. BRSA gives permission after its assessment to those that fullfill the conditions laid down in BL and sub regulations. Foreign banks and domestic banks are subject to same treatment by BRSA.

The members of the Banking Regulation and Supervision Board shall be appointed by the Council of Ministers amongst the people who have at least 10 years of experience after completing higher education or who have worked as members of faculty member in one of the above disciplines for minimum 10 years. Minimum one of the members must be a graduate of law faculty and one must have worked as vice chairman, main service unit manager or professional staff in the Agency. The Council of Ministers shall appoint one of the members as the Chairman and another member as the Vice Chairman. The appointment decree of the Council of Ministers shall be published in the Official Gazette. (Article 84 of BL -Appointment of Members).

Insurance Services

(WT/TPR/S/331: Page 150, para. 4.100)

All insurance and reinsurance companies operating in Turkey and branch offices of foreign companies in Turkey are members of the Association of the Insurance and Reinsurance Companies of Turkey. Insurance companies are subject to a self-regulatory function through the Association as well as the Law on Protection of Competition (No.4054 of 1994).

Question 6:

Is the Association independent of the Turkish government? What are the measures taken to ensure the impartiality of the Association?

Turkey’s Answer: The Association is independent of the Turkish Government. It is a professional organization that has the status of a public legal entity.

Healthcare Services

(WT/TPR/S/331: Page 160, para. 4.148)

Establishment of Health Free Zones is under consideration by the Turkish government. Similar to Free Zones, these Health Free Zones will be special areas to provide health services and include hospitals, rehabilitation centres, thermal tourism facilities, nursing homes, health techno-cities, and R&D centres. Tax incentives, cost-effective infrastructure, and employment of foreign doctors are some of the considerations for Health Free Zones.

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Question 7:

What is the latest development of the Health Free Zones? Would there be measures to encourage or attract foreign investments into these Zones? Are foreign companies eligible to receive tax incentives? Are there any special arrangements to facilitate the employment of foreign doctors in Health Free Zones?

Turkey’s Answer: Currently, Health Free Zones do not cover the services trade. The free zones law in force provides any incentive and opportunities for the investments regarding medicines, medical devices and cosmetics except for the services trade. Legal regulations are ongoing for the health services.

Telecommunications Services

(WT/TPR/S/331: Page 167, para. 4.178)

After the privatisation exercise in 2005, there are plans for the Turkish government to further privatise Türk Telekom by selling 6.7% of the total shares of the company currently owned by the Turkey state treasury. Currently, the Turkish state treasury holds 30% of the company’s total shares.

Question 8:

Please share with us the latest development of the further privatisation plans for Türk Telekom and the reasons for the Turkish government to retain 23.3% of the company’s shares. Has the Turkish government considered any method and timeline for the disposal of all the shares?

Turkey’s Answer: There is no determined strategic plan to privatise the remaining shares of Türk Telekom.

Distribution Services

(WT/TPR/S/331: Page 177, para. 4.224)

The Law on Regulating Electronic Commerce provides regulations on general information liability for a commercial activity; commercial communication; contracts made by means of electronic devices; information to be provided before the contract or during the order; and other issues about the intermediary service providers.

Question 9:

Does the law apply to cross-border supply of services through electronic commerce? If so, how is the law enforced against foreign service suppliers? Turkey’s Answer: Since Turkey’s jurisdiction is territorial; the implementation of Electronic Commerce Law is also applied within the territory of Turkey.

Therefore the requirements set by the Law and its implementation regulations need to be observed by natural or juridical persons engaged in e-commerce activities in Turkey, and the consumers that can benefit from complaint and remedy mechanisms established with the e-commerce legislation need to be resident in Turkey.

However, there are also judicial review mechanisms for consumer complaints related to commercial contractual relationships, which are also available to consumers abroad.

In addition, Turkey is a member of International Consumer Protection and Enforcement Network (ICPEN), and our consumer protection authority collaborates with the authorities of member countries for the protection of consumers with respect to cross-border e-commerce activities, as well.

Question 10:

Could Turkey give examples of intermediary service providers providing the platform for electronic commerce at which the law is targeted? What are the requirements imposed on these providers? Turkey’s Answer: Intermediary service providers are defined as the natural or juridical persons providing the electronic commerce platform (an online marketplace) to third parties engaging in economic and commercial activities. E-commerce service providers enabling the sale of multiple brands on their websites but who do not own those brands would fall within this definition.

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Intermediary service providers are required to comply with general obligations imposed on other service suppliers. However, they are not obliged to control the content provided by natural or juridical persons using their online platform, nor are they required to investigate whether there is any illegal activity or aspect concerning the good or service that is the subject of the third party content. The Law on the Regulation of Electronic Commerce no. 6563 (E-Commerce Law) was published in the Official Gazette on 05.11.2014, and no. 29166 entered into force on 01.05.2015. By this Law, intermediary service providers;

shall provide up-to-date information such as company name, address, phone number etc.

shall provide sufficient, accessible and appropriate technical equipment to the recipient before the order to (be able to) determine data errors and also fix them.

shall provide information about technical steps required to form a contract.

shall enable recipients keep contract terms and standardized terms of contract.

shall inform recipients about whether it will be possible to access the contract formed via

electronic devices later on and also to keep the contract.

shall enable recipients see total amount of purchase during the ordering process and will make sure that the order has been received via electronic devices.

shall be responsible for keeping the data collected during each step of e-commerce process

and also for the security of the relevant data.

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SWITZERLAND

Trade Policy Review of Turkey (March 15 and 17, 2016) Questions by Switzerland A. General Switzerland has been informed that the Turkish government presented in December 2015 its 64th Government Action Plan. Among other things, this Plan contains a measure that provides for de-listing imported medicines from the reimbursement list in favor of locally produced medicines.

Could Turkey please explain the legal and policy rationales behind the de-listing of imported medicines from the reimbursement list in favor of locally produced pharmaceutical products?

Turkey’s Answer: Based on the statement “Healthcare tools and equipment and the reimbursement, pricing and registration processes of strategic and local medicines will be improved” in Action No. 46 in the 2016 Action Plan of the 64th Government, published on December 10, 2015 and its explanation as “Import Products to be delisted from the reimbursement list shall be designated, provided that the provision of treatment is ensured”, the sales amount of the products with an import registration which have multiple generics have been assessed in line with the Action Plan. In order to avoid a supply shortage in the market, a time frame has been set in the first phase as a result of the meetings held with relevant associations and pharmaceutical companies for the localization of products with a domestic manufacturing share of 50% and above.

How is the Turkish government planning to implement the measure in practice and

when is it foreseen to enter into force? Turkey’s Answer: Meetings were held with relevant pharmaceutical associations and pharmaceutical companies in Turkey to identify ways and means to increase the production capacity through foreign and domestic investments.

The capacity evaluation relating to the manufacturing sites in Turkey has been conducted and it has been identified that the manufacturing sites avail sufficient capacity. At this stage the Government now is working with the interested companies to receive their suggestions on conditions to produce in Turkey. This work will be completed by the end of this month.

Could Turkey clarify how this measure complies with Turkey’s existing WTO commitments, in particular in relation to the non-discrimination principle?

Turkey’s Answer : The objective of the activities conducted within the framework of the Action Plan is not to delist imported products from the reimbursement list but to promote local manufacturing within a predictable period. B. Report by the Secretariat [WT/TPR/S/331– February 9, 2016) 3.1.1 Customs procedures and requirements Para. 3.14 Turkish importers of textiles and clothing must provide information about export company’s contact details, size, sales (including to other export destinations) and international quality certificates, etc. Can Turkey explain the usage of these data and the rationale behind this mandatory requirement for import of textiles and clothing? What measures have been taken by Turkey to assure the confidentiality of these data?

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Has Turkey evaluated the administrative cost on the importers of this requirement? If yes, could Turkey share the figures? Turkey’s Answer: Trade diversions, circumventions and other unfair trade practices have often been observed especially in textile, apparel and footwear sectors. Also, there have been anti-dumping measures in force including these sectors. In order to prevent possible attempt of trade diversion, these sectors need to be monitored in an updated database closely. Export registration requirement is serving that purpose without creating unnecessary burden and paperwork for traders Collected data under this system is kept strictly confidential. Moreover, parts of the exporter registry form that are regarded as addressing commercial secrets, could be waived as “Firm’s commercial secret”. Additionally, submissions under the Communique 2010/1 are made via Internet. Therefore, submission procedures do not create additional administrative costs for importers either. Para. 3.15 BILGE is the Turkish customs software package which carries out all aspects of the customs formalities and which includes a risk analysis programme. According to para 3.15 of the TPR Secretariat’s report some goods may only be imported through specialized customs offices in order to make the customs offices more disciplined, to ensure that standards are met, or to make effective controls on tariffs, etc. The evaluation of correct clearance can best be done by means of aggregation and analysis of data stored in the customs system. Can Turkey explain why certain goods may still only be imported through specialized customs offices since other means less stringent for the trade could be implemented to serve the objectives of the measure? Turkey’s Answer: The reasons that Turkey applies specialized customs practice for specific goods are to make the customs offices more disciplined, to specialize in customs procedures for certain goods and canalize these goods to specialized customs offices with appropriate equipment and personnel, in order to protect the obligatory standards expected to be met for the imported goods and finally to make effective customs controls on tariff, customs value, origin matters. Thus, application of specialized customs does not imply imposing or maintaining prohibitions or restrictions on the importation of those products. Besides, not all goods but only some specific goods such as metal waste, petroleum products, motor vehicles and their spare parts which requires special customs control procedures and/or hardware (for instance radiation detection etc.) are subject to specialized customs application. 3.1.2 Trade facilitation Para. 3.22 Holders of the Authorized Economic Operator (AEO) benefit from several privileges as the right of local clearance, authorized consignor and recipient status, the use of lump-sum or partial guarantees, reduced data requirements for summary declaration, green line facilitation, etc. The facilitations accorded are mainly related to customs procedures. Does it mean that Turkey has concentrated different previous customs status in the AEO status? If yes, could Turkey enlighten the main benefits that this harmonization has brought to the operators and the customs administration? Turkey’s Answer: Before the AEO status, benefits like the use of lump-sum or partial guarantees and the blue line facilitation etc. were given to the Trusted Traders, on the basis of general criteria such as number of workers, export and import amounts etc. With the AEO status, Turkey demands criteria on financial solvency, safety and security, adequate traceable records, reliability.

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Privileges of local clearance, authorized consignor and recipient status are granted only to holders of the AEO status as they meet the safety and security criteria. With these privileges, operators benefit from faster clearance times and lower costs while customs administrations benefit from less work load. With the AEO status, privileges like the use of partial guarantees, reduced data requirements for summary declaration, and green line facilitation are granted without any additional requirements. On the other hand, for acquiring the privileges of local clearance, authorized consignor and recipient status, the AEOs are required to fulfill additional criteria. 3.1.5.1 Applied MFN duties Para. 3.34 and table 3.2 The report of the WTO Secretariat indicates that "for 47 tariff lines, the applied MFN rates exceed bound rates." For the lines listed in table 3.2 could Turkey indicates how and when it intends to align its MFN applied rates to the level of the bound rates for the said 47 tariff lines? Turkey’s Answer: In the framework of EU-Turkey Customs Union, Turkey has the obligation to undertake EU’s Common Customs Tariffs regarding the imports to the third countries. The case for the 47 tariff lines, the applied MFN rates have been implemented as the same rates with the CCT rates, apparently exceeding Turkey’s bound rates in certain tariff lines. Turkey is planning to consult this issue with the EU Commission with a view to finding a solution both preserving WTO bound commitments and its Customs Union requirements without causing trade diversion. 3.1.7.2 Import restrictions and licensing Para. 3.56 Does Turkey still apply licensing requirements for refurbished machinery? If yes, could Turkey inform about the rationale of fixing a minimum price that is higher than the real price of the machine? Could Turkey also explain the rationale of fixing a minimum import price based on the weight (X $ per kilogram) of the machines? Turkey’s Answer: Used goods license can be obtained automatically after online application by importers. Since the price of a good is one of the main indicators for age, quality, durability and efficiency, a more liberal licensing procedure has been implemented requiring no license for the products with a price higher than the threshold. The used machinery falling under the threshold are being evaluated for the issuance of license with respect to criteria based on energy efficiency and productivity, depreciation expenses and maintanence costs, health risks posed by the old technology. 3.1.8 Contingency measures 3.1.8.1 Anti-dumping and countervailing measures Para. 3.58 Para 3.58 states that according to Turkey’s anti-dumping legislation definitive measures remain in force for five years from the date of imposition or from the conclusion of the most recent review covering both dumping and injury. Switzerland would like to know, if Turkey’s anti-dumping legislation provides for the possibility to suspend or cancel such measure before the expiry of the five-year-period. Turkey’s Answer: According to Regulation on the Prevention of Unfair Competition in Imports (Official Gazette, 30.10.1999 / 23861) Article 34 “An interim review may be initiated for the review of the measure in force provided that at least one year has elapsed since the imposition of the definitive measure. An investigation shall be initiated where the request contains sufficient evidence that the continued imposition of the measure is no longer necessary to offset dumping or subsidy” However, suspension of measures is not possible according to Turkish legislation.

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3.2.2 Export taxes, charges, and levies Para 3.119 As indicated in paragraph 3.119. Turkey currently applies export taxes on three different products. Based on what criteria did Turkey choose these specific products? Is it possible that in the future other products will be subject to export taxes too? How does Turkey ensure that such measures do not negatively affected net food importing countries? Turkey’s Answer: As a traditional sector in Turkey, leather and fur manufacturers are in need of continuous supply of raw skin and hide. Therefore, export tax is a tool to ensure the continuation of the needed supply. Hazelnut is another traditional export product of Turkey. Export tax on hazelnuts is channelled for promotion purposes. At the moment, there is not any plan to introduce new export taxes. 3.2.3 Export prohibitions, restrictions, and licensing 3.2.3.3 Export prohibitions Para 3.126 As indicated in section 3.2.3.3 of the Secretariat’s report, Turkey maintains exports prohibitions on several foodstuffs. What are the reasons for these prohibitions? Is Turkey considering to change its current regime in the near future? If yes, what changes are planned? How does Turkey ensure that net food-importing countries are not negatively affected by such measures? Turkey’s Answer: Turkey’s export prohibitions are applied on the grounds of public security, the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property in accordance with GATT Article XX. Furthermore, as can be seen from the list, the prohibition does not include any foodstuff. It includes, among others, certain plants, bulbs, seedlings of protected species, which are not imminent concern for net-food importing countries. 3.2.3 Export prohibitions, restrictions, and licensing 3.2.3.4 Export licensing Para 3.130 According to paragraph 3.130 Turkey requires export licenses for 26 products including sugar. E.g. Table 3.24 states that the sugar authority is responsible for sugar production, pricing, and marketing. What are the reasons for these export requirements? Based on which criteria were these 26 products chosen? Based on which criteria are licenses granted? How do these export licenses affect Turkish export figures? Is Turkey considering any changes regarding the export regulation of any of these 26 products? Turkey’s Answer: Turkey requires export licences for these products based on its commitments deriving from several international agreements on protecting environment, species, human health, such as Wassenaar Agremeent, ICCAT, Basel Convention etc. 3.3.2 Incentives, state aid and subsidies Para. 3.156 Para. 3.156 states that due to ongoing accession negotiations with the EU, Turkey is moving towards adopting a state aid law, including inter alia general conditions for state aid. Could Turkey please elaborate on these general conditions? How will the future Turkish state aid law be aligned to EU state aid rules, in particular case law such as decisions by the European Court of Justice and guidelines by the EU Commission?

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Turkey’s Answer: Law No. 6015 on Monitoring and Supervision of State Aids (hereinafter referred to as the Law) is enacted on 13 October 2010 and entered into force on 23 October 2010. In compliance with the related provisions of the bilateral Agreements and decisions between the Republic of Turkey and the European Union, it determines the rules and the procedures for monitoring and supervision of state aids.

The law determines general conditions for state aids. In other words it defines state aid, sets the rules for what shall constitute compatible state aid and determines the framework of state aids that may be considered by the State Aids Monitoring and Supervision Board (Board) to be compatible.

Any state aid other than that exempted either by the law or by the decision of the Board is prohibited. The regulation under the Law further covers the notification requirements and examination rules of state aids, withdrawal of notification, revocation of a decision, unlawful aid and recovery of aid rules on existing state aids. Both the definition and the rules and procedures regarding state aids are designed to be in full compliance with the articles 107 and 108 of the TFEU.

By the Law an operationally independent State Aids Monitoring and Supervision Board (hereinafter referred to as the Board) is established. The Board is responsible for the following duties:

- to determine the framework, guidelines and the principles of state aids, to prepare the related regulation,

- to monitor, supervise and evaluate the compatibility of state aids, and - to make necessary notifications to the European Commission and other related authorities

upon collection of the implementation results from the granting authorities”.

The Board had its first meeting in January 2011 and convenes on a monthly basis. The secretariat services of the Board are carried out by the General Directorate of State Aids (hereinafter referred to as GDSA). Currently, besides the other duties given by the Law, GDSA has been working on the design and the revision of the secondary legislation. Further alignment to EU state aid rules, particularly the guidelines regarding state aids and decisions by the European Court of Justice will be established via transposition following the entry into force of the secondary legislation to be promulgated by the end of 2016. Para. 3.157 According to para. 3.157, Turkey’s newly enacted legislation on the Monitoring and Control of State Aids provides for the establishment of a Board for the Monitoring and Supervision of State Aids under the Undersecretariat of the Treasury of Turkey (hereinafter referred to as the Board). Could Turkey please provide more information on the composition of the Board? How will the Board provide for expertise in all economic sectors? What will be the relationship between the Board and the Turkish Competition Authority (TCA)? Turkey’s Answer: State Aids Monitoring and Supervision Board is established to carry out the duties assigned by Law on Monitoring and Supervision of State Aids and other Laws. The Board is entitled to determine the framework, guidelines and the principles of state aids and to prepare the related legislation in conformity with the agreements between Turkey and European Union, to monitor, supervise and evaluate the compatibility of state aids, to make necessary notifications to the European Commission and other related authorities upon collection of the implementation results from the granting authorities.

In addition to that, the Board is not established or organized under the Undersecretariat of Treasury; it is independent in its decisions and the decisions adopted are decisive.

The Board constitutes of seven members, six of them appointed to the positions from the relevant institutions and seventh one being the General Director of State Aids, who is also the head of the Board. Other Members of the Board are assigned from Ministry of Science, Industry and Technology, Ministry of Economy, Ministry of Development, Ministry of Finance, Undersecretariat of Treasury and Turkish Competition Authority.

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The nomination basis of the members of the Board provides the necessary expertise since the main duties and responsibilities of those institutions are directly related with design and implementation phases of economic, competition and state aid policies of the country. Furthermore according to the Law No. 6015 on Monitoring and Supervision of State Aids, the members should be senior in their positions and have expertise on the state aid policies; currently all the members of the Board are the highest representatives of their respective authorities.

One of the members of the Board is from the Turkish Competition Authority; other than that neither the Board nor the General Directorate of State Aids (hereinafter referred to as GDSA) has an organizational connection with that Authority. While duties and authorities of the Board is restricted to the monitoring and supervision of state aids, Turkish Competition Board is engaged in the competition issues other than state aids such as antitrust, cartels and mergers

The Board convenes on a regular basis at least once monthly as foreseen in the Law in order to overview the studies pursued by GDSA, keep up with recent developments in EU state aid rules and scrutinize measures implemented by different aid granting institutions.

It should also be mentioned that secretariat services of the Board is carried out by the GDSA which is organized under the Undersecretariat of Treasury. GDSA has the capacity to provide support to the Board when required with its technical and expert staff who have been recruited among the treasury experts and assistant experts from the other directorates of Treasury. Well equipped with EU state aid and competition rules and policies, GDSA staff is specialized in different branches of economy and implementation of different forms of public interventions. Furthermore it improves its expertise specifically on the supervision of state aid measures with several training courses and programs held in collaboration with the EU such as TAIEX and NEPT (National Expert in Professional Training). 3.3.5 Government procurement Para. 3.201 The Secretariat's report indicates that Turkey has been participating as an observer in the WTO Committee on Government Procurement since June 1996. The report also informs that Turkey has not concluded any regional trade agreements with government procurement chapters providing market access rights to foreign suppliers. Switzerland estimates that Members of the OECD should also be Members of the GPA and reinforce the membership of the GPA. What are the views of the Turkish authorities with regard to the objective of joining the GPA? What are, if any, the major obstacles to be eliminated for achieving full membership? Turkey’s Answer: Turkey’s membership to the GPA is an issue that will be discussed in the medium and long-term in coordination with relevant public institutions. On the other hand, Turkey is a candidate country for the EU. When Turkey becomes a full member of the EU, it will automatically be part of GPA. 3.3.4 State trading, state-owned enterprises, and privatization 3.3.4.3 Privatization Para 3.184 According to para 3.184 the overarching goal of the privatization process in Turkey is improvement of productivity in the market and the reduction of state expenditure. With regard to productivity i.e. competitive markets, do privatized organization retain their monopoly status, respectively their former advantage in the market? How does Turkey guarantee a level playing field in sectors with incumbents? Are there regulations that ensure competition in sectors concerned with privatization? Turkey’s Answer: Increase in productivity and efficiency subsequent to privatisation is the aim of the privatisation philosophy. Furthermore, Turkey aims at further enhancing functioning market economy through ensuring openness and competitiveness, upgrading productivity, strengthening the investment climate- attracting much more Foreign Direct Investment (FDI) encouraging private initiative/entrepreneurial skills and as a result promoting employment. Therefore, major legislative changes took place in Turkey in recent years such as;

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Electricity Market Law, Natural gas Market Law, Petroleum Market Law, Telecommunications Sugar Law, Tobacco Law, Banking Law, FDI Law, Company law, Law concerning the elimination of FDI restrictions in some sectors, Law regarding several amendments which is aimed at accelerating privatization and provisions authorizing real estate purchases to foreigners.

Consequently, Regulatory Bodies to govern the liberal sector are established. Such regulatory arrangements had the favorable affect over privatization applications. 3.3.6 Intellectual property rights (A. Ongoing reforms) Para 3.203. and Para 3.204 The Secretariat’s report states in Para 3.203. and Para 3.204 that Turkey has instituted a number of strategies that will have an impact on its IP policy, such as the “National Intellectual and Industrial Property Strategy paper” that provides an overall strategy for the sector for 2015-18 and a “National Geographical Indication Strategy Document and Action Plan” also covering the period 2015-2018. Could the Turkish authorities provide more information on the purpose and contents of those Strategy Documents? Are translations or summaries of these documents available in English? Will new draft regulations and policies be open for public comment? Turkey’s Answer: Full texts of the “National Intellectual and Industrial Property Strategy and Action Plan”, “Design Strategy and Action Plan”, and “National Geographical Indication Strategy Document and Action Plan” are available at www.tpe.gov.tr. These policy documents have been open to public in Turkish language since the date of their adoption. A new draft law governing IP rights has been prepared and it was made public for comments till 04/03/2016. The draft law in Turkish language is accessible at www.tpe.gov.tr . Para. 3.204 In Para. 3.204, it is stated that a “Working Group on identifying national policies” for GIs was established. It is however unclear if this process is still ongoing or if it ended with the adoption of the “National Geographical Indication Strategy Document and Action Plan”. Could Turkey specify what measures are foreseen to implement its strategy regarding GIs? What are the timelines of the revision of Turkey’s regulations and policy on the protection of geographical indications? Turkey’s Answer: The process of identifying national policies has been completed with the adoption of the National Geographical Indication Strategy Document and Action Plan. The full text of the Geographical Indications Strategy Document and Action Plan is available at www.tpe.gov.tr. The plan would be renewed upon its completion by the end of 2018 in line with the results obtained after its implementation. A new draft law governing IP rights, including geographical indications, has been prepared and it was made public for comments till 04/03/2016. The draft law in Turkish is accessible at www.tpe.gov.tr . The Turkish government aims for its ratification in the first half of 2016. Para 3.210 Para 3.210 states that Turkey's copyright law has undergone changes in Article 47 (Expropriation), in which works that are deemed important for the culture of the country can be expropriated under

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certain conditions after the death of the author but before the expiry of the term of protection. Could Turkey please provide more detailed information about the conditions for expropriation?

Turkey’s Answer: Turkish Constitutional Court struck down Article 47 of the Law, on “Intellectual and Artistic Works” by its decision dated 14/5/2015 (Publication date on Official Gazette:11/06/2015). Turkish Constitutional Court delayed the date of enforcement of this struck/abolishment decision for one year after the official publication date in order to prevent the legal gap. Following this suspension period, as of the date of 11 June 2016, Article 47 will be repealed.

Para 3.213 The report states in Para 3.213. that in 2013 a draft law containing provisions related to patents, trademarks, designs and geographical indications was prepared in consultation with relevant stakeholders but that it was not adopted by the Parliament. The report further states that, as of December 2015, work on the preparation of a draft law for industrial property rights resumed. Could Turkey provide information on the timetable and the changes currently contemplated for its industrial property rights system? Turkey’s Answer: The draft law which was submitted to the Turkish Grand National Assembly in 2013 has been revised after the General Elections. A new draft law governing IP rights has been prepared and it was made public for comments till 04/03/2016. The draft law in Turkish is accessible at www.tpe.gov.tr . The Turkish government aims for its ratification in first half of 2016. The contemplated changes can be summarised as follows : In general: Storage and facilitated destruction of infringing goods Criminal + Civil sanctions for Trademarks (TMs) / Civil sanctions for patent, industrial design and Geographical Indications (GI) infringement cases Ownership of university inventions and designs will be regulated Recruiting new staff for improving Turkish Patent Institute (TPI)’s administrative capacity Some administrative changes in the TPI’s structure Legal basis for an Intellectual Property (IP) Academy Patents: Elimination of system for granting patents without substantive examination Introduction of post-grant oppositions Preparation of search reports for utility models Administrative improvement in registration process Industrial Designs: Ex-officio novelty examination Reduction of opposition period Regulations on multiple applications and complex products Elimination of ‘feature statement’ requirement TMs: Restoration of some of the revoked Articles by the Constitutional Court decisions Genuine use of registered TMs will be sought in opposition procedures Administrative improvement in registration process GIs: Establishment of GI Department Introduction of protection for Traditional Specialities Guaranteed (TSGs) Introduction of official GI and TSG logos Easement of registration process Enabling amendments in the register Improving inspection process of registered GIs

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(B. Test Data Protection) Table 3.44 Table 3.44 states that, regarding the protection of undisclosed information submitted in the context of marketing approval procedures for pharmaceuticals, a data exclusivity period of six years is granted under Turkish law as of first registration date in the Customs Union Area between the EU and Turkey. EU centralized marketing authorizations, however, grant approval only for the territory of the European Economic Area, while national authorisations by an EU member State still need to be recognized among EEA States. Could Turkey explain how a medicine authorized in the EU or in one EU Member State will be approved for the Turkish market and why the term of protection should not rather start with the marketing authorization in Turkey? Will the planned reforms modify the current regime? Turkey’s Answer: As a candidate member to the European Union, Turkey harmonized the EU Directives 2001/83/EC and set the duration of the data exclusivity as six years accordingly. But afterwards, EU has extended the duration to (8 + 2 + 1) for member states, and provided transition period to some new member states. This issue is the subject to further negotiotions for full membership with the EU. Currently, Turkey does not plan to make any changes on this provision. Table 3.44 Table 3.44 further states, that with regard to those pharmaceutical products which benefit from patent protection in Turkey, the term of protection is limited to the term of the patent protection. According to Article 39.3 TRIPS, however, undisclosed information is a distinct and separate subject-matter of protection from the subject-matter protected by a patent. Could Turkey explain how such linking of the period of regulatory data protection to the period of patent protection complies with the obligations contained in Article 33 and 39.3 of the TRIPS Agreement respectively? Will the planned reforms modify the current regime? Turkey’s Answer: WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Article 39.3, requires member countries to establish protections for submitted test data. Article 39.3 aims at preserving the confidentiality of the information submitted for marketing approval without any time limit. In this sense, TRIPS Article 39.3 can be interpreted as flexible. Therefore, it can be applied differently by many countries which acceded to the agreement. In our view, TRIPS Article 39.3 concerns data protection and protection without exclusivity is compatible with the minimum standards set forth in Article 39.3. Consolidated 2001/83/EC medicinal products directive which defines the details on data exclusivity is taken as legal basis by Turkey. On the other hand, data exclusivity period is defined in Turkish legislation as six years which is limited with patent term. Additionally, Article 33 of TRIPS determines the Term of Patent Protection, which is not legally related to the term of data protection. Table 3.44

a) Table 3.44 only relates to medicinal products for human use whereas Article 39.3 of the TRIPS agreement expressly provide protection also for undisclosed data regarding agricultural chemical products. Could the Turkish authorities provide information on the protection granted to undisclosed data regarding agricultural chemical products?

b) Article 39.3 protects undisclosed information submitted in the marketing authorisation procedure of products which utilize new chemical entities. It seems however that the Turkish authorities do not grant such protection for undisclosed information submitted for marketing authorisation procedures regarding products combining different chemical entities. Could Turkey please clarify if it grants protection to undisclosed information related to a new chemical entity when this entity is combined with an already known product? If this should not be the case, could the Turkish authority specify how this complies with the obligation of Article 39.3 and if the planned reform will modify the current regime?

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Turkey’s Answer: a) Documents given by licence holders regarding plant protection products are not made publicly available if the documents are classified as confidential by the licence holders. These records are kept as “confidential” by the Ministry of Food, Agriculture and Livestock (MFAL). In case an applicant provides MFAL with industrial or commercial information, MFAL keeps this information as “confidential”. This confidentiality is not valid for the following;

Physico-chemical data regarding active agents or plant-protection products, Every kind of method that renders the active agent or the plant protection product

harmless, Results of the tests conducted to determine that efficiency of the active agent or plant

protection product and these agents or products are not harmful to animals, plants or the environment.

Methods and measures recommended for the reduction of risks related to usage, storage, transport and fire etc.

Methods of analysis Methods regarding the destruction of plant protection products or their packages. Procedures to be followed for cleaning in case of accidental spillage or leakage.

Applicants are required to notify the Ministry when they disclose previously confidential information. The protection period in the EU is ten years while the protection period in Turkey is seven years for agricultural chemical products.

b) In Turkey, regardless of the content of the combination, all new chemical entities are granted with a period of 6 years data exclusivity, after first authorization of related new chemical entity in Turkey-EU Customs Union Area.

4.1.4 Support programmes Para 4.16 The report of the Secretariat notes in Para. 4.16 that Turkey has not notified its domestic support programmes to the Committee on Agriculture in the review period. May we ask Turkey to explain what exactly has prevented it from fulfilling its notification obligation to the Committee on Agriculture and when it will submit the required notifications? Turkey’s Answer: Turkey has started a work program to notify its pending agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. Para 4.17 We note in Para. 4.17 of the Secretariat’s report that Turkey supports agricultural crop production, inter alia, by diesel fuel and chemical fertilizer supports. We would like to ask whether the Turkish authorities plan to undertake reforms of these support programmes in order to eliminate incentives with potentially adverse effects on the environment and climate change. Turkey’s Answer: As of September 30th 2015, Turkey declared her Intended Nationaly Determined Contributions to UNFCCC. In that declaration, Turkey expressed its intention, inter alia, for controlling the use of fertilizers and fuel savings which will help the reduction of emmissions. In order to achieve this goal, Turkey will be in a position to re-evaluate its support policies in the years to come. 4.1.5 Strategy and policy Para 4.19 According to paragraph 4.19 Turkey’s recent agricultural transformation also included a rural development strategy. Regarding its rural development strategy, what are Turkey’s objectives? Are there specific measures for mountainous regions?

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Turkey’s Answer: The main objective of the rural development policy of Turkey is to improve and sustain the living and working conditions of rural population in their own area in line with the conditions in urban areas in order to raise the minimum standard of living to average country standards. The subgoals set for achieving this objective are as follows; -Consideration of the agricultural and nonagricultural economic activities concomitantly in order to improve the rural economy in terms of production and employment, -Protection of rural environment and natural sources within the framework of adaptation to climate changes and green growth, -Investing in infrastructure in order to support production activities, raising landscape value of rural settlements and the quality of life, -Activating social policy practices as part of improving human capital and fighting poverty, -Developing innonative practices through giving priority to the layout patterns and demographical structure of the rural areas and local administration structures. There are no specific measures maintained for mountainous regions. 4.1.6 Export subsidies Para 4.24 The report of the Secretariat notes in Para. 4.24 that Turkey has not notified its export subsidies to the Committee on Agriculture in the review period. May we ask Turkey to explain what exactly has prevented it from fulfilling its notification obligation to the Committee on Agriculture and when it will submit the required notifications? Turkey’s Answer: Turkey will comply with its notification requirements by the next meeting of the Committee on Agriculture which will be held on 7-8 June, 2016.

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CHINESE TAIPEI

PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/331) SUMMARY Page 12 (Para 16) Over the past three decades, much of Turkey's economic development has been based on the country's large and diverse manufacturing base. Turkey's relatively low labour costs, well-trained workforce, and strategic location have helped build a strong manufacturing sector focused on medium- and high-value-added goods. In 2014, the industrial sector accounted for 17.8% of GDP, 76.7% of total goods exports and 20.5% of employment. Turkey's key industrial export sectors are automotives, textiles and clothing, chemicals, machinery, iron and steel, electronics, and jewellery. Small and medium-sized enterprises (SMEs) constitute a key part of the industrial sector in Turkey. Under the Tenth Development Plan, the Input Supply Strategy, and Turkey Vision 2023 the Government has set out multiple objectives for manufacturing, including increasing production of intermediate and finished goods in order to, inter alia, reduce the trade deficit. Question 1 Please describe the main points of the“Input Supply Strategy.” Turkey’s Answer: “Input Supply Strategy” (GITES) and its Action Plan (2013-2015), whose preparatory work dates back to 2010, was officially established with the publication of the Official Gazette No 28508 on 25 December 2012. GITES was established in order to eliminate/reduce the uncertainities regarding the sustainability of inputs, the regional imbalances in input supply and the risks about the future of natural sources, which is expected to decrease import dependency in intermediates and to increase competitiveness in export-oriented production. Question 2 Will the targets of the“Turkey Vision 2023”be revised if the external environment changes? Turkey’s Answer: All programs and strategies particularly “Turkey’s Export Strategy for 2023” are formed in accordance with the needs and demands of private sector brought by the present global economic and political circumstances. Since it is planned as a long-term perspective, it has a dynamic and flexible structure to adapt to the new external terms and changes caused by the risks and opportunities created in the world economy. Althought there exists no such plan, it is always possible to consider the developments within the global economic environment. Question 3 Which agencies are responsible for formulating the“Tenth Development Plan”and“Turkey Vision 2023”? If there are two different agencies in charge, how do they collaborate to achieve the targets? Turkey’s Answer: “Tenth Development Plan” and “Turkey’s Export Strategy for 2023” are formulated and being implemented by two different Ministries, respectively the Ministry of Development and the Ministry of Economy. Apart from these, all public programs like “Tenth Development Plan”, “Medium-Term Plan” are focusing on short-term targets and action plans, conversely the “Turkey’s Export Strategy for 2023”, which has a dynamic, flexible and collaborative structure, comprises of long-term projects and policies to reach 2023 targets. So, in other words, the objectives of the Tenth Development Plan and other public plans are identical with the long lasting targets of “Turkey’s Export Strategy for 2023” and the ultimate goal is to reach 2023 targets together. 3 TRADE POLICIES AND PRACTICES BY MEASURE (1) 3.1 Measures Directly Affecting Imports (i) 3.1.5 Tariff Page 50 (Para 3.32) Turkey's simple average applied tariff rate has increased slightly over the review period, from 12.2% in 2011 to 12.8% in 2015 (Table 3.1). This is mainly due to tariff rate increases (see Table A3.1) and higher AVEs due to lower import unit prices. Turkey raised the rates of certain customs duties in response to requests from domestic producers.

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Question 4 What is the main consideration for increasing tariff rates? Does it affect the extent of market access to the Turkish market? Does it comply with the WTO trade liberalization commitment to gradually decrease tariff rates? Turkey’s Answer: After 2008 global crisis, there has been a difficulty in entering foreign markets worldwide. Turkey has always drawn the attention of other countries to this reality. Turkey’s applied rate for non-agricultural products has been 5.5%, whereas 49.0% for agricultural products in 2015. Although there are slight increases in some tariff lines, affecting the general average, Turkey believes that reducing the commitment levels is a matter of WTO rounds. Page 51 (Para 3.34) A full comparison between Turkey's bound and applied rates was not possible due to nomenclature differences (Turkey's bound commitment schedule is in the HS 2002 nomenclature, while its applied tariff schedule is based on the HS 2012 nomenclature). Nevertheless, it appears that for 47 tariff lines, the applied MFN rates exceed bound rates (Table 3.2). However, this is likely underestimated because 5% of tariff lines could not be compared due to nomenclature differences. Question 5 The report points out that Turkey's bound commitment schedule uses the HS 2002 nomenclature, while its applied tariff schedule is based on the HS 2012 nomenclature. Has Turkey considered adjusting its bound commitment schedule by uniformly using the HS 2012 nomenclature? If so, when will this be completed? If not, what is the rationale? Turkey’s Answer: Turkey has been in the process of adjusting its WTO List of Concession Schedule to HS 2012. The drafting already has been completed and will be notified to the WTO Secretariat as soon as possible. Question 6 The report points out that it appears that for 47 tariff lines, the applied MFN rates exceed bound rates. Will Turkey decrease those tariff rates in accordance with its WTO commitment? Turkey’s Answer: In the framework of EU-Turkey Customs Union, Turkey has the obligation to undertake EU’s Common Customs Tariffs regarding the imports to the third countries. The case for the 47 tariff lines, the applied MFN rates have been implemented as the same rates with the CCT rates, apparently exceeding Turkey’s bound rates in certain tariff lines. Turkey is planning to consult this issue with the EU Commission with a view to finding a solution both preserving WTO bound commitments and its Customs Union requirements without causing trade diversion. (ii) 3.1.7 Import prohibitions, restrictions and licensing Page 66 (Para 3.54) Various goods are subject to import licensing, inter alia, to enforce compliance with international conventions, and for national security or public/ worker safety (Table 3.16). There are no restrictions on the importers eligible to apply for import license. In all cases the licensing requirements apply to goods imported from all countries, except for certain fertilizers imported from the EU(see below). Table 3.16 (Import requiring a license, Item 3, Description on Energy Sector, Electricity and Natural Gas) Description (legal basis and number of tariff lines affected)

Requirements and rationale

Energy sector: Electricity and natural gas Petroleum and LPG

Imports are only allowed by companies licensed by the Energy Market Regulatory Authority (EMRA) in order to ensure effective operations in market activities and to comply with relevant legislation. Imports are only allowed by companies licensed by EMRA in order to prevent the unorthodox use of those items out of purpose and to ensure fuel quality.

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Question 7 Table 3.16, regarding imports of the energy sector, mentions that the electricity, natural gas, petroleum, and LPG imports are only allowed by companies licensed by the Energy Market Regulatory Authority (EMRA). Also, as said by the Secretariat, there are no restrictions on the importers eligible to apply for import license. What is the current licensing mechanism of the EMRA? Has consideration been given to the principle of national treatment when dealing with both domestic and foreign companies? Turkey’s Answer: Licensing mechanisms are described in respective regulations issued by EMRA. All necessary regulations are published on EMRA’s website. Pertaining to licenses regarding energy imports, all applicants are required to be established as limited liability company or joint stock company according to Turkish Commercial Law No 6102. With regard to petroleum market, private legal entities those are conducting market activities in Turkey and that are established as equity companies in accordance with foreign states legislation are deemed as located in Turkey, as per the provisions of the legislation on the Protection of the Value of Turkish Currency. Question 8 In addition to those energy sectors mentioned above, are there any other standards required for energy imports to be issued the EMRA license? Turkey’s Answer: For electricity imports from the countries of which synchronous parallel operating scheme has not been established, political assessment of the Ministry of Energy and Natural Resources and technical assessment of the Turkish Electricity Transmission Corp is required before granting the import permission. Natural gas imports through pipelines from the countries with which BOTAS has import contracts are not allowed for private companies. (iii) 3.1.8 Contingency measures Page 68 (Para 3.59) Turkey remains a significant user of the anti-dumping instrument. Over the period 1995-2014, it was ranked in 10th place among WTO members in terms of the number of anti-dumping investigation initiated and in 7th place in terms of the number of anti-dumping measures imposed. Page 69 (Para 3.64) Turkey has been the third biggest user of safeguard measures since the WTO’s inception, initiating 21 safeguard investigations over the period 1 January 1995 to 30 April 2015 and taking 14 safeguard actions over the same period. Question 9 It is well-known that the aim of imposing anti-dumping and safeguard measures is to protect local industries. However, we have noticed that quite a number of these measures have been imposed for several years (textiles products for example) and resume after sunset reviews. In this regard, we would like to know if Turkey has considered or implemented any effective sector policies to accelerate the development of local industries. Turkey’s Answer: In Turkish national legislation on trade remedies, the conditions necessary to initiate investigations for safeguard measures are clearly stated and if domestic producers make proper applications, the investigating authority has to take them into consideration. Turkey is well aware of the fact that safeguard measures are designed for addressing exceptional trade circumstances and Turkey uses safeguard measures accordingly. Since the inception of WTO, Turkey has taken 14 safeguard measure but for the last 7 years Turkey has taken only 3 safeguard measures. Currently 4 safeguard measures are in effect and one of which is about to be phased out in April 2016. Furthermore, all the safeguard measures are progressively liberalized in order to ensure the adaptation of the local industries to international competition. Turkey has been the 17th largest economy in the world, and also one of the fastest growing countries. In this regard, it can be confirmed that Turkey implements special sectoral policies to accelerate the development of local industries, which are in conformity with Turkey’s international commitments. Question 10 We have noticed recently that Turkey has changed some of its practices in trade remedy investigations. For example, questionnaires and supporting documents are now required in

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Turkish, while before English was acceptable. What were the aims and considerations for this change? Were any announcements made? Turkey’s Answer: For the trade remedy investigations, questionnaires are standard documents, and like many other WTO members, Turkey also asks these documents in its official language, which is Turkish. However, the requests of interested parties for extensions in the duration for translation purposes are accepted. On the other hand interested parties can always send additional information or supporting documents in English. These documents are also taken into consideration. Page 69 (Para 3.62) Turkey's legal framework for the imposition of safeguard measures consists of Decree No. 2004/7305, amended by Decree No. 2007/12850 and the Regulation on Safeguard Measures for Imports, as revised in 2011 and 2013.47 The 2013 amendment extends the investigation period of a safeguard measure in two respects. Firstly, following the announcement of the initiation of an investigation a 40-day, rather than 30-day, period is allowed for interested parties to submit their views in writing, provide information, and apply to be heard orally. Secondly, while the investigation period remains the same (9 months), this period can now be extended for six months in exceptional circumstances (rather than two). With respect to the duration and review of safeguard measures, the 2013 amendment clarifies that a new investigation to extend the duration of a safeguard measure may be initiated either upon application or ex officio.48

Footnote 47: Regulation on Safeguard Measures for Imports published in the Official Gazette No. 254486

on 8 June 2004, revised by the Regulation on Amendment of the Regulation on Safeguard Measures for Imports (Official Gazette No. 27961 of 11 June 2011 and Official Gazette No. 28836 of 29 November 2013). As reported in Turkey's previous review, the 2011 amendment extends the scope of safeguard measures to imports of parts of components of a product subject to a safeguard measure, or parts or components incorporating the value added to be safeguarded by the imposed measure. Question 11 According to the Regulation on Amendment of the Regulation on Safeguard Measures for Imports (Official Gazette No. 27961 of 11 June 2011) mentioned in footnote 47, the scope of safeguard measures can be extended to imports of parts of components of a product subject to a safeguard measure, or parts or components incorporating the value added to be safeguarded by the imposed measure. Please explain when it is decided in a case to extend the scope of products in safeguard measures. If a decision is not made until safeguard measures are about to be applied, please explain the justification for such practice. Turkey’s Answer: The mentioned amendment regarding the inclusion of components of a product subject to a safeguard measure was made through adding a new paragraph to the end of Article 6 of Decree No. 2004/7305 of the Council of Ministers on Safeguard Measures for Imports, dated 10 May 2007. The rationale is to prevent the circumvention of a safeguard measure through basic assembly of the product subject to safeguard measure after importation. (2) 3.3 Measures affecting production and trade (i) 3.3.3 Competition policy and price controls Page 103 (Para 3.183) Privatization methods, pursuant to the law, are provided by sale, lease, grant of operational rights; establishment of property rights other than ownership; and a profit-sharing model and other legally defined methods depending on the nature of the business. Foreign investors may participate in the bidding in accordance with the Foreign Direct Investment Law No. 4875 enacted on 5 June 2003. In addition to the privatization of strategic sectors, the law provides for the privatization of public services to be achieved through the granting of operational rights subject to a separate law put in place for such services. The privatization law also provides for sales to foreigners through sales to foreign investors and international offerings. Foreign investors in real estate sales are subject to the Land Registry Law No. 2644. There is no legal limit on sales of SOEs to foreigners.

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Question 12 For privatization of state-owned power generation plants, which method (e.g. sale, lease, grant of operational rights, establishment of property rights other than ownership, profit-sharing model, etc.) is carried out? Turkey’s Answer: For privatization of state-owned power generation plants, privatization methods are transfer of operational rights and sale of assets. Hydropower plants are privatized through a Transfer of Operational Rights method for a maximum of 49 years. With all costs and profits belong to the company, the ownership still remains at the government/EUAS. At the end of 49 years, operational rights are returned to Government. New Operator Company is free to make any additional investment on its own cost. Thermal power plants are privatized through an Asset Sale method and, if any, related mining licenses and mining sites covered by these licenses are privatized through a Transfer of Operational Rights method for a maximum of 49 years. Question 13 Are foreign investors eligible to invest in power generation plants? Turkey’s Answer: Foreign investors are eligible to invest in power generation plants. Both foreign and domestic power generation investors should be certified by a licence issued by the Electricity Market Regulatory Authority (EMRA). (ii) 3.3.5 Government Procurement Page 111 (Para 3.201) Turkey has been participating as an observer in the WTO committee on Government Procurement since June 1996. Turkey has not concluded any regional trade agreements with government procurement chapters providing market access rights to foreign suppliers. Question 14 Currently, Turkey’s government procurement is not open to foreigners. Foreign companies need to cooperate with local Turkish companies to access bids for business in order to overcome difficulties in either information disclosure or procurement procedures. To encourage more FDI for government procurement projects, has Turkey considered opening this market by becoming an official member of the GPA? Turkey’s Answer: In principle, domestic and foreign tenderers may submit tenders for any procurement within the scope of the Public Procurement Law No. 4734. However, a discretionary power is provided for the contracting authorities allowing them to make arrangements in favour of the domestic tenderers by this Law. In this context, Article 63 of the Law No. 4734 provides that in procurement of services and works, estimated costs of which are above the thresholds, a price advantage up to 15% may be applied in favour of domestic tenderers and in procurement of goods, a price advantage up to 15% may be applied in favour of tenderers who offer domestic products; and in cases where the estimated costs are below the thresholds, only domestic tenderers may be allowed to participate in public tenders provided that it is expressly laid down in tender document. Therefore, closing up the procurement market to foreign tenderers by the contracting authorities is only possible for the cases where the contract value is below the threshold. Above the thresholds, all public contracts are open to foreign participation, however a price advantage up to 15% may be applied for the awarding of such contracts. In principle domestic price preference is not mandatory and using it is in the discretion of the contracting authorities. However, in the procurement of some medium and high technology industrial products listed by the Ministry of Science, Industry and Technology, it is compulsary to apply price advantage up to 15% to tenderers offering domestic goods. As a result, it can be deduced that public procurement legislation and implementation in Turkey do not impose a significant barrier for participation of foreign tenderers to public contracts awarded in Turkey and most of the public contracts are open to foreign tenderers. In addition, other than price preference, foreign and domestic tenderers have same rights regarding any procurement proceedings and information disclosure.

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On the other hand, Turkey is a candidate country for EU membership. When Turkey becomes a full member of EU, it will automatically be part of GPA. (iii) 3.3.6 Intellectual property rights Page 119 (Para 3.229) Turkey has 23 courts located in Istanbul, Ankara and Izmir, specialized to hear IP-related dispute cases; 13 of these are civil IPR courts and 10 are criminal IPR courts. IP cases in other geographical areas are handled by general civil courts and general criminal courts. Right holders may ask for the following civil measures in civil courts of first instance: precautionary measures; prevention or cessation of infringement; damages; confiscation of the products and equipment/machinery used in the production of pirated and counterfeit goods; transfer of ownership, or destruction, of the products and the means of production seized. The average length of conclusion of cases in specialized civil IP courts was reduced from 468 in 2011 to 377 days in 2014 and in criminal cases it decreased from 291 to 249 days over the same time-period. Question 15 Are these 23 specialized courts and general courts the first instance courts? If so, are there any specialized appeal courts and supreme courts that handle the second and third instance of IP litigations? Turkey’s Answer: Turkey has 23 courts located in Istanbul, Ankara and Izmir specialized in IP-related cases; 13 of these are civil IPR courts and 10 are criminal IPR courts. IP cases in other geographical areas are handled by general civil courts and general criminal courts (If there are general civil and criminal courts less than three, the first one is the competent court to handle with IPR cases. If there are more than three general civil and criminal courts, third one is the competent court to handle with IPR cases in accordance with the Decision of High Council of Judges and Prosecutors. In the Court of Cassation; 11th Civil Chamber is the competent chamber to review decisions rendered by civil courts of

first instance, 19th Criminal Chamber is the competent chamber to review decisions rendered by criminal

courts of first instance, Question 16 May the accused infringer argue the validity of the issued patent in a patent infringement civil litigation? How does the civil court deal with the validity issue during the trial? Turkey’s Answer: It is not sufficient to submit the allegation that the patent which is the subject matter in a case regarding patent violation does not have the conditions for validity solely as a defense. This allegation should be submitted in a counter litigation to be brought or in a litigation to be separately brought in due time. Where such a litigation is brought, the court primarily determines whether the patent is valid or not. If it is held that the patent is valid, it is evaluated whether there has been a violation or not. The reason of that is the provision in the article 131 of the Decree-Law on the Protection of Patent Rights. “Article 131: A (Court) Decision ruling that the patent is invalid, shall have retroactive effect. Thus, within the context of invalidation, the legal protection secured for an application for patent or for a patent under this present Decree-Law shall be deemed not to have been borne at all. The retroactive effects of invalidity, without prejudice to claims for compensation for damage caused by acts of bad faith on the part of the holder of the patent, shall not extend to/affect the following situations: a) Any final decision for infringement of the patent reached and enforced prior to the decision of invalidity; b) Contracts concluded and executed prior to the decision of invalidity. However, reimbursement, in whole or in part, of sums paid under the contract may be claimed on grounds of legitimate reasons and of equity to an extent justifiable by the circumstances. A decision of invalidity having become res judicata shall produce effect against all.”

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Question 17 How long does it take general civil and criminal courts to conclude IP cases? Turkey’s Answer: The table illustrating the average trial periods of the cases handled in Civil and Criminal Courts of Intellectual and Industrial Rights are given below: Trial Period of Civil and Criminal Cases (Days) Years

2010 2011 2012 2013 2014

Civil Courts of IPR

544 468 521 425 377

Criminal Courts of IPR 321 291 261 260 249 Page 119 (Para 3.234) Turkey's National Intellectual and Industrial Property Strategy recognizes the slow judiciary process as one of its weaknesses. As noted by the EIU, while the courts have been effective in working with Turkish Internet Services Providers to block access to websites in response to complaints about copyright infringement, there are concerns about Turkey's enforcement regime regarding the role of ISPs in internet piracy; the need to compel ISPs with knowledge of infringement to cooperate with right holders seeking relief; and facilitate the identification of copyright infringers who may use ISP services to hide their identities. The International Intellectual Property Alliance (IIPA) has drawn attention to the growth in use of circumvention tools, allowing internet and mobile users to override or neutralise the technological measures taken to protect software. Apparently those subsectors especially affected by internet piracy are providers of music; online video streams; books; and educational, business and entertainment software. Question 18 What measures does Turkey have to make the judiciary process more effective? Turkey’s Answer: According to the Article 72 of “Law on Intellectual and Artistic Works” No. 5846, any person, who produces, puts up for sale, sells or possesses non-private use programs and technical equipment which aim to circumvent additional programs developed to prevent illegal reproduction of a computer program shall be sentenced to imprisonment from six months to two years. The judiciary implements the provisions in the legislation and uses the competences given by the legislation. Therefore, if more effective procedures are provided in the related articles of the Law No:5846 by the Ministry of Culture and Tourism through the amendment of the Law, the Judiciary can take more effective measures on the issue. (3) 4.3 Services (i) 4.3.3 Telecommunications Page 167 (Para 4.178) Türk Telekom was established in 1995 as part of the reforms to split the post, telegraph, and telephone monopoly into separate entities. The company was privatized in 2005 and the shareholders presently are: Oger Telekomünikasyon A.Ş (55%); the Turkish state treasury (30%); and the remaining 15% of the shares are publicly traded. In January 2013, the Government announced plans to further privatize the company by selling 6.7% of Türk Telekom's total shares currently owned by the treasury. Question 19 What restrictions are there on foreign investment in telecommunications in Turkey? Turkey’s Answer: Turkey does not impose any restriction on foreign investment in telecommunications. The only requirement for the supply of telecommunication services is the establishment of commercial presence. Investors should find a company in the form of incorporation or limited liability company in accordance with the laws of Turkey for the purpose of performing activities within the scope of authorization to supply telecommunications services. In addition, there is no limitation regarding nationality.

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REPUBLIC OF KOREA

PART I: Comments Regarding the Secretariat Report Page 69 (Para 3.1.8.2) Turkey has been the third biggest user of safeguard measures since the WTO's inception, initiating 21 safeguard investigations over the period 1 January 1995 to 30 April 2015 and taking 14 safeguard actions over the same period. Comment 1 The government of the Republic of Korea would like to raise its concern that the frequent resort to safeguard measures by the government of the Republic of Turkey could undermine transparency and predictability of the Turkish market, creating an unfavorable business environment for foreign producers and investors. Safeguard measures are designed to act as a trade remedy for addressing exceptional trade circumstances, not as a tool to promote ones' own domestic industry. Furthermore, when the application of the measures do not meet the WTO requirements, it could result in unnecessary trade disputes which is against the commercial interests of all Turkish industries, having a negative impact on both Turkey’s economic growth and trade facilitation efforts. Therefore, decisions regarding investigation and imposition of safeguard measures should be made objectively and carefully. Comment by Turkey: In Turkish national legislation on trade remedies, which are totally in line with WTO Agreements and practice, the conditions necessary to initiate investigations for safeguard measures are clearly stated and if domestic producers make proper applications, the investigating authority has to take them into consideration. Turkey is well aware of the fact that safeguard measures are designed for addressing exceptional trade circumstances and Turkey also acknowledges the importance of transparency and predictability in achieving growth in international trade and for creating a favorable business environment for foreign producers and investors. However, it should be noted that for the last 7 years Turkey has taken only 3 safeguard measures which can by no means regarded as frequent. PART II: Comments Regarding the Turkey Report Page 10 (Para 3.43.) In 2014, Turkey’s exports to Korea were US$471 million, while Turkey’s imports from Korea were US$7.6 billion. Comment 1 Although trade volume between the two countries show imbalances, the overall evaluation of bilateral economic relations should take into consideration broader aspects. First, imports of components and intermediary goods to Turkey contribute to Turkey’s exports to European countries since they are assembled into Europe-bound final products. Second, Korea’s production facilities in Turkey hire local labor force, again contributing to the employment of Turkish young workforce. Furthermore, Korean businesses are open to transfer of technology and know-how to Turkey's local businesses, which rarely occur between European or other advances industrial nations and Turkey. Lastly, invisible trade balance including large influx of Korean tourists should be taken into account. Surpassing 250,000 in number of its tourists visiting Turkey 2015, Korea is contributing local economy of Turkey. All in all, trade imbalance is one of inevitable phenomenon that a country has to go through during the transition phase of industrialization, and Korea had the same experience with Japan throughout the last 30 years. Turkey has trade deficits with all its close trade partners, and Korea is not an exception. Rather, it is open to manage trade relations with Turkey in a way Turkey could benefit from them. A comprehensive understanding of the balance of trade would better serve the interest of Turkey.

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Comment by Turkey: As a country with 18 Free Trade Agreements (FTAs) in force and 5 others that are under internal ratification process, Turkey has an explicit and sound understanding with respect to all aspects of its FTAs. Turkey aims to expand its relation with Korea to a broader perspective. Based on this understanding, Turkey has completed its first deep and comprehensive free trade agreement with Korea with the signing of the Agreement on Trade in Services and the Agreement on Investment under the Free Trade Agreement as referred to under paragraph 3.45. In fact, Turkey does not have trade deficit with its all close trade partners as mentioned in Korea’s comment. Yet, the trade imbalance of 7.1 billion dollars in favor of Korea is the highest compared to Turkey’s other FTA partners. Additionally, Turkey is aware of the fact that the trade deficit slightly decreased in the year of 2015. In order to sustain an effective economic relationship between Turkey and Korea, which is growing and deepening on the mutual benefit of both sides, the two sides have to work collaboratively to further diminish the trade imbalance.

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CHILE

Documentos: WT/TPR/G/331 y WT/TPR/S/331 I. Informe de la Secretaría: I.1 Párr 3.1.8.1 Medidas antidumping y compensatorias Párr 3.59 ‘Turquía sigue recurriendo a los procedimientos antidumping con frecuencia. Durante el período comprendido entre 1995 y 2014, ocupó el décimo lugar entre los Miembros de la OMC en lo relativo al número de investigaciones antidumping iniciadas y el séptimo lugar en cuanto al número de medidas antidumping impuestas. La mayoría de esas medidas afectaron a las líneas arancelarias de las Secciones VII (plástico y caucho y sus manufacturas), XI (materias textiles y sus manufacturas) y XV (metales comunes y manufacturas de estos metales) del SA.42 En septiembre de 2015, Turquía mantenía en vigor medidas antidumping respecto de 23 Miembros de la OMC. China era objeto del mayor número de medidas, seguida por Indonesia, el Taipei Chino, la India, Malasia, Tailandia y Viet Nam. Durante el período examinado, se han prorrogado varias medidas antidumping (cuadro A3.2). Diversas medidas en vigor incluyen medidas contra la elusión’. Pregunta 1) El párrafo 3.59 menciona que Turquía tiene algunas medidas contra la elusión. Chile agradecería a Turquía dar mayor información de estas medidas, además de la legislación pertinente para la aplicación de las mismas. Turkey’s Answer: Anti-circumvention Legislation is a part of Regulation on the Prevention of Unfair Competition in Imports. Anti-circumvention provisions are stated under the Articles 4 and 38. The legislation can be reached through the link below: http://www.ekonomi.gov.tr/ portal/content/conn/UCM/uuid/dDocName:EK-218393. I.2 Párr 3.1.8.2 Medidas de salvaguardia Párr 3.62 ‘El marco jurídico que rige la imposición de medidas de salvaguardia en Turquía está constituido por los siguientes instrumentos: el Decreto Nº 2004/730545, modificado por el Decreto Nº 2007/1285046, y el Reglamento sobre las Medidas de Salvaguardia relativas a las Importaciones, revisado en 2011 y 2013.47 La modificación de 2013 amplía el período de investigación correspondiente a una medida de salvaguardia en dos sentidos. En primer lugar, tras el anuncio de iniciación de una investigación, se concede un período de 40 días, en lugar de 30 días, para que las partes interesadas presenten sus opiniones por escrito, aporten información y soliciten una audiencia. En segundo lugar, aunque el período de investigación sigue siendo el mismo (nueve meses), ahora puede ser prorrogado por seis meses (en lugar de dos) en circunstancias excepcionales. Con respecto a la duración y el examen de las medidas de salvaguardia, la modificación de 2013 aclara que se puede iniciar una nueva investigación para prorrogar la duración de una medida de salvaguardia previa solicitud o de oficio’. Pregunta 2) El párrafo 3.62 menciona que en la modificación de 2013 se cambiaron algunos aspectos de la duración y el examen de las medidas de salvaguardia. Al respecto, aclara que es posible iniciar una nueva investigación para prorrogar la duración de una medida de salvaguardia previa solicitud o de oficio. Chile agradecería a Turquía entregar información que detalle el procedimiento para los exámenes de vigencia (o revisión administrativa) de sus medidas de salvaguardia. ¿Este cambio significa que es necesario iniciar una nueva investigación para prorrogar las medidas o lo establece solamente como una opción? Turkey’s Answer: Administrative procedures of a safeguard measure has been set forth by the Decree on Safeguard Measures for Imports as well as by the Regulation on Safeguard Measures for Imports. These legislations were notified to the WTO with the documents G/SG/N/1/TUR/1, G/SG/N/1/TUR/2 and G/SG/N/1/TUR/3 as well as with their Supplements and Revisions. On the other hand, according to the Paragraph 3 of the Article 11 of the Regulation on Safeguard Measures for Imports (G/SG/N/1/TUR/3/Suppl.2):

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“The duration of the measure may be extended in accordance with the results of a new investigation to be initiated upon application or ex officio, provided it is determined that the safeguard measure continues to be necessary to prevent or remedy serious injury and there is evidence that the domestic producers are adjusting to the conditions of the internal market. An extended measure shall not be more restrictive than it was at the end of the initial period, and shall continue to be liberalized. The total period of application of a safeguard measure shall not exceed ten years for the members of the WTO.” In this article “new investigation” does not mean a new measure. In fact, original measure continues to be in effect, however for an extension, a new investigation has to be conducted. This clause was also effective before the 2013 amendments in the regulation. I.3 Párr 3.3.2 Incentivos, ayuda estatal y subvenciones (Cuadro 3.26 Características principales de los programas de ayuda estatal) Pregunta 3) Chile agradecería a Turquía proporcionar mayores antecedentes sobre ayuda entregada en materia de certificación. ¿Para qué tipo de certificación, en el ámbito ambiental, está dirigido este programa? y ¿a qué sectores está orientada? Turkey’s Answer: Certain amount of fees for laboratory analysis and for certificates required by importing countries to ensure compliance with standards, technical regulations, such as environmental safety, animal and human health, product safety and quality etc are provided. All sectors, without any discrimination, can benefit from this aid. I.4 Párr 3.1.9 Normas y otras prescripciones técnicas 3.1.9.2 Política y marco Pregunta 4) ¿Existe un mecanismo formal de coordinación con todos los Ministerios o agencias regulatorias liderado por el Ministerio de Economía?

Turkey’s Answer: Decision of Council of Ministers No. 97/9196 states that the Ministry is assigned as the coordinator authority with respect to the harmonization of EU legislation. In this line, all competent authorities send their draft legislations to the Ministry for consultation. The Ministry provides opinion for the drafts and submits the final drafts to the European Commission to get its opinion.

Pregunta 5) Cuál es el plazo mínimo de entrada en vigor de los reglamentos técnicos? ¿Está definido de manera centralizada?

Turkey’s Answer: The period of entry into force of technical regulations varies depending on the content and urgency of the regulation. In some cases, the legislation enters into force at the time of publication in the Turkish Official Gazette, whereas in some cases transitional period is given.

Pregunta 6) ¿Existe un proceso estandarizado para la elaboración de reglamentos técnicos que deben cumplir las agencias competentes? Si es así, en qué instrumento o figura legal está definido?

Turkey’s Answer: Turkey considers that prior consultation and notification are very important for the implementation of the legislation. In accordance with the Regulation on Procedures and Principles of Preparation of Legislation, published in the Official Gazette No. 26083 and dated 17.02.2006, the authorities shall circulate draft regulations to relevant public institutions as well as other stakeholders, including universities and NGOs for consultation. Besides, draft regulations are disclosed to public attention, if it deems necessary.

However, there is no individual process for the development of technical regulation.

3.1.9.2.1 Adaptación a la UE Pregunta 7) ¿Existe un plazo para la adecuación de la legislación de Turquía a la legislación de la UE?

Turkey’s Answer: Decision No. 1/95 of the EC-Turkey Association Council Decision (ACD) requires Turkey to incorporate into its internal legal order the Community instruments relating to the removal of technical barriers to trade within five years from the date of entry into force of the

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Customs Union. In fact, in ACD No. 1/95, harmonization of the EU’s technical legislation is designed as one of the very basic elements for meeting the principle of free circulation of industrial goods between the Parties. In this respect, ACD No. 2/97 listed the EU’s technical legislation with which Turkey would align in this 5-year period and Turkey has accomplished to transpose the EU legislation listed in ACD No. 2/97 to a very large extent. This alignment included both horizontal rules on accreditation, standardization, conformity assessment and metrology and technical regulations of products. On the other hand, ACD No. 1/95 defines ‘legislation on the abolition of technical barriers to trade in industrial products’ as one of the areas of direct relevance to the operations of the Customs Union. Therefore, for the proper functioning of the Customs Union, Turkey’s continuous alignment with the EU legislation is required with respect to EU’s technical legislation. In fact, the evolving nature of the EU’s technical legislation also necessitates a dynamic approach for alignment. So Turkey, in order to meet the requirements of the Customs Union Decision and to fully benefit from the principle of free circulation of goods between Turkey and the EU, has an approach towards aligning with the EU’s technical legislation on a continuous, substantial and timely basis. 3.1.9.5 Infraestructura de la calidad Pregunta 8) Respecto a los acuerdos multilaterales sobre el reconocimiento de sus actividades de acreditación que ha suscrito TURKAK, cuáles son específicamente?

Turkey’s Answer: TURKAK has signed a multilateral agreement (MLA) with EA and mutual recognition agreements (MRAs) with national accreditation bodies of members of both ILAC and IAF on its accreditation activities.

Pregunta 9) ¿TRUKAK tiene MLA suscritos ante el IAF (International Accreditation Forum)?

Turkey’s Answer: As is mentioned in the previous answers, TÜRKAK has MRA with IAF.

Pregunta 10) En relación a la evaluación de la conformidad, ¿reconoce Turquía certificaciones extranjeras? Si es así, a través de qué mecanismos opera dicho reconocimiento? ¿es mediante acuerdos específicos? ¿En qué sectores?

Turkey’s Answer: Turkey recognizes the certificates from EU-based conformity assessment bodies in line with its Customs Unionwith the EU. It is provided in the Regulation on Conformity Assessment Bodies and Notified Bodies which was published in the Official Gazette of Turkey and entered into force on 23 February 2012 that “Accreditation of the conformity assessment bodies established in Turkey shall be performed by TÜRKAK. Conformity assessment bodies may apply to the national accreditation bodies of the Member States of the European Union which have successfully undergone peer evaluation in case TÜRKAK does not perform accreditation or its peer evaluation has not been finalized regarding the conformity assessment procedure for which accreditation is sought. The competent authorities, without prejudice to the principle of reciprocity, recognise the equivalence of the services rendered by the national accreditation bodies of the Member States of the European Union.

Preguntas generales en materia OTC: Pregunta 11) ¿Realiza Turquía evaluaciones de impacto regulatorio? Si es así, ¿utiliza alguna metodología específica? ¿Qué agencia lo coordina?

Turkey’s Answer: Regulatory Impact Analysis (RIA) is a process through which positive and negative effects of any proposed regulation or legislation are assessed. In Turkey, RIA was started with “By-Law on Principles and Procedures of Drafting Legislation" on 17 February 2006, by the Council of Ministers. On 3 April 2007, the Prime Ministerial Circular about the RIA was issued in Official Gazette. Prime Ministry became the Coordinating Body for the RIA. The owner of proposed regulation or legislation is responsible to coordinate with all other stakeholders and complete the RIA before it submits RIA and the draft regulation or legislation to the Prime Ministry. In RIA, both qualitative and quantitive assessments including cost-benefit analyses are carried out according to subject area.

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Pregunta 12) ¿Chile agradecería a Turquía entregar información sobre cómo se efectúa la coordinación con la industria para estas materias?

Turkey’s Answer: As stated in the Prime Ministry's Circular, during the RIA process the views and evaluations of the related public institutions, sector representatives as well as non-governmental organizations should be collected and included in the analysis.

I.5 Párr 3.1.10 Prescripciones sanitarias y fitosanitarias 3.1.10.3 Marco Pregunta 13) Respecto a las evaluaciones de riesgo que lleva a cabo la Dirección General de Alimentación, Agricultura y Ganadería, ¿Se realizan para todos los productos bajo el ámbito sanitario y fitosanitario? ¿Existe un procedimiento general establecido?

Turkey’s Answer: For all products under WTO Agreement on SPS Measures, there are specific risk assessment procedures being carried out by the MFAL. The MFAL follows its import procedures related to live animals and animal products in accordance with the national legislation and standards set by OIE of which Turkey is a member. The MFAL observes current animal health status of the countries and permits imports of live animals from all countries provided that the requirements of animal health certificate are fulfilled. In accordance with Article 4 of Law on Veterinary Services, Plant Health, Food and Feed Law No:5996, whole country or only one region of the country where an outbreak of a disease is observed may be restricted or prohibited totally or partially. Scope of the prohibition may be narrowed or expanded depending on the course of the disease. Following the official applications to be made to the MFAL by relevant authorities of the countries willing to export live animals to Turkey, approval procedure is initiated and in order to ensure the compliance and equivalence with animal health legislation of Turkey, the MFAL carries out inspection and/or controls in the exporting countries, and the countries which are approved are included in the list of permitted countries. With respect to imports of animal products, in accordance with Regulation on Setting Special Rules for Official Controls of Food of Animal Origin prepared in line with Council Regulation of EU No:854/2004/EC, country/region and enterprise list is formed. In the context of International Plant Protection Convention (IPPC), in case of first importation of plant and plant products from the countries or if there is a change in plant health conditions in these countries, pest risk analysis which is in compliance with international plant health standards may be required. According to the analysis results of plant and plant products in recent years, for detected risks and product groups, intensified inspections and controls are carried out. 3.1.10.4 Bioseguridad Pregunta 14) Además de la regulación del tránsito de productos OGM, ¿qué otros tipos de regulaciones asociadas a estos productos existen?, ¿existen regulaciones en materia de etiquetado para estos productos? Pregunta 15) Respecto al sistema de control de las exportaciones que ha implementado Turquía, ¿existe una coordinación con la industria respecto al funcionamiento de este sistema? Turkey’s Answer to Questions 14 and 15: Import controls are carried out in accordance with Law on Biosafety, Regulation on GMO’s and products thereof. The products which are allowed to enter into country shall be put on the market as labeled. Threshold for labeling is 0.9%. Regarding the export control system, there is a regular coordination system with private sector.

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I.6 Párr 2.4.2 Política de inversión

Párr 2.55

El párrafo señala que cada año, el YOIKK prepara un plan de acción para definir la orientación de sus trabajos. Los planes de acción se centran en cuestiones tales como el establecimiento de prioridades en los incentivos a la creación de empleo, el sistema de transacciones garantizadas, la adjudicación de terrenos para las inversiones, la ordenación territorial, la reglamentación del mercado ferroviario, el impuesto sobre el timbre, los incentivos a las actividades de I+D, la tributación de las sociedades, las transferencias de capital, los procedimientos de exportación, los permisos de perfeccionamiento activo, la ventanilla única, la propiedad intelectual y las garantías de créditos. Pregunta 16) Chile agradecería a Turquía explicar cómo pretende llevar a cabo la adjudicación de terrenos para las inversiones y cuál es el estado legal actual del impuesto sobre el timbre. Asimismo, dar información acerca de la ventanilla única, específicamente si Turquía tiene una medida similar en materia de servicios. Turkey’s Answer: Following the ongoing studies of YOIKK’s Technical Committee of Investment Location, Environment and Zoning Permits, Ministry of Economy conducted a project with the World Bank to identify the obstacles for industrial land allocation framework of Turkey in September 2013. As a result of that project, a Working Group was formed under the YOIKK Platform, and the output of that Group was reflected to the Priority Transformation Program for the Development of Business and Investment Environment. On the other hand, the Stamp Tax Law has been revised by the Ministry of Finance in order to accelerate the firms’ transition to the formal economy and to promote economic activity by decreasing the burden on investment, production and trade. Documents listed in Table 1 annexed to the Stamp Tax Law No. 488 are subject to stamp tax. Documents listed in Table 2 annexed to this Law are exempted from stamp tax. In the paragraph 7 of Chapter “IV-Documents related to commercial and civil acts” of Table 2, it is regulated that documents related to grants and inheritance of real estates, limited property rights and ships are exempted from stamp tax. The transfer of real estates and limited property rights is possible with an official document arranged only before the land registry officer and the record of this transaction by the land registry officer is called grant and transition proceedings. Thus, the proceedings related to the transfer of real estates and limited property rights arranged officially before the land registry officer, are exempted from stamp tax due to paragraph IV/7 of Table 2 annexed to this Law. However, in case of presence of other documents other than official documents related to the transfer of real estates and limited property rights, aforementioned documents figured in Table 1 are subject to the stamp tax. With regard to the question relating to the existence of a “single window”-like-measure on services, currently the duty to provide information regarding authorization and application procedures for different service sectors are carried out through various different public authorities and professional associations; which, for most of the time, also serve as the points of application, depending on their respective fields of competence and specialization. Nevertheless, as a part of the alignment with the EU’s Services Directive (2006/123/EC) and under a joint EU-Turkey project, Turkey is now exploring the ways and means of establishing a “Point of Single Contact (PSC)”, an e-government portal for entrepreneurs in the service sector, which will be designed to serve as the single access point about the rules, regulations and formalities that apply to service activities and will enable to complete most of the administrative procedures online. The Project is still at a technical level, and the outcomes of the Project needs to be upheld at the political level, before PSC can be established.

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I.7 Párr 4.3.1.2 Seguros

Párr 4.100

El párrafo 4.100 señala que todas las compañías de seguros y reaseguros, nacionales o extranjeras, que operan en Turquía, y las sucursales de empresas extranjeras en Turquía, son miembros de la Asociación de Compañías de Seguros y Reaseguros de Turquía. Pregunta 17) Chile agradecería a Turquía indicar si la afiliación a la Asociación de Compañías de Seguros y Reaseguros de Turquía es obligatoria, y de ser afirmativo, indicar si dicha obligación se encuentra consagrada en la ley. Turkey’s Answer: According to the article 24 of the Insurance Law No. 5684, insurance, reinsurance and private pension companies are required to be members of the Association of the Insurance and Reinsurance Companies of Turkey. El mismo párrafo 4.100 dispone que el principal objetivo de la Asociación es asegurar el desarrollo de la profesión de asegurador; asegurar la solidaridad entre las compañías de seguros; y adoptar y aplicar todas las medidas necesarias para controlar la competencia desleal. Pregunta 18) Chile agradecería a Turquía indicar si dicha Asociación es una entidad estatal, y qué medidas puede adoptar para controlar la competencia desleal. Turkey’s Answer: The Association of the Insurance and Reinsurance Companies of Turkey is a professional organization that has the status of a public legal entity. The Association establishes examination and research committees to detect and investigate the existence of unfair competition in the market. The Association has the authority to take measures to prevent unfair competition if arises. I.8 Párr 4.3.2.5 Marco legal y reglamentario

Párr 4.137

El párrafo 4.137 señala que el Ministerio de Sanidad de Turquía ha concertado una serie de acuerdos bilaterales o acuerdos de seguridad social con otros países que ayudan a promover el comercio de servicios sanitarios (…). Por su parte, el párrafo 4.138 explica que en todos estos acuerdos se prevén prestaciones de asistencia sanitaria por ejemplo para las personas que tienen un contrato de trabajo con uno o más empresarios y que reciben unos ingresos/pensión en este contexto, así como las personas que dependen de ellos. La única excepción a esta cobertura es Alemania, donde las disposiciones son ligeramente distintas. Pregunta 19) Chile agradecería a Turquía indicar a grandes rasgos en qué se diferencia el acuerdo de seguridad social con Alemania del suscrito con los otros 26 socios. Turkey’s Answer : Bilateral Social Security Agreement concluded with Germany covers also health care benefits. This agreement’s provisions on health care benefits regarding Turkey were only applicable to persons who have an employment contract with one or more employers. However, it has been mutually agreed with the German Sickness Insurance Institution and Liaison Body of Sickness Insurance that self-employed persons, public officers and retired persons who are receiving pensions/benefits and their dependents can also enjoy from the health insurance provisions of Bilateral Social Security Agreement between Turkey and Germany. Among Social Security Agreements that are in effect, Bilateral Social Security Agreement between Turkey-Montenegro, which entered into force on 01/12/2015, also covers all kinds of insured persons, namely the persons who have an employment contract with one or more employers, self-employed and public officers, have the right to receive health care benefits in addition to the agreement with Germany.

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I.9 4.3.2.7 Incentivos

Párr 4.147

El párrafo 4.147 señala que de conformidad con el programa de incentivos a la inversión, algunos sectores relacionados con la salud son considerados sectores prioritarios y se benefician del Plan de Inversiones Prioritarias. Pregunta 20) Chile agradecería a Turquía indicar en qué consiste el Plan de Inversiones Prioritarias. Turkey’s Answer: Under Regional Investment Incentive Scheme, the supported industries for provinces are determined according to the economic potential of provinces. The support rates and terms are changing according to the development level of provinces. However the industries under Priority Investment Scheme are supported in all provinces with equal rates and terms. These industries are listed in the Secretariat Report. (See: S331, Page 41, Table 2.5). The Program prioritizes these investments in all provinces due to the urgent need for these investment areas in Turkey.

II. Informe de Gobierno: II.1 Párr 3.3.1.1 Nuevos acuerdos de libre comercio Se destaca en esta sección que Turquía ha comenzado a incluir nuevas disciplinas en los acuerdos de comercio, por ejemplo, con Corea del Sur se incluyó un Capítulo de Comercio y Desarrollo Sostenible, en tanto que el Acuerdo de Libre Comercio entre Turquía y Malasia incluye los temas de cooperación en el ámbito ambiental. Pregunta 21) Chile agradecería Turquía proporcionar mayores antecedentes sobre la implementación de los temas ambientales, en específico de las actividades de cooperación ambiental que se han llevado a cabo en el marco de estos acuerdos. Turkey’s Answer: Turkey’s Free Trade Agreements (FTAs) provide broad provisions on environmental issues. These provisions generally aim to present the importance of environmental protection, reaffirm the commitment to the effective implementation of the multilateral environmental agreements to which the Parties of the FTA are party, and facilitate the exchange of views in this area. The FTAs with Bosnia-Herzegovina, Albania, Georgia, Montenegro, Serbia, Palestine and Israel, which are currently in force, include general provisions on protection of environment within the preambles or the provisions on Security Exceptions, while the FTAs with Chile, South Korea, Lebanon and Malaysia cover more detailed provisions on environmental protection. In the Turkey-Chile FTA, the Parties recognize the importance of strengthening capacity to protect the environment and promote sustainable development and reaffirm their intention to continue to pursue environmental protection, and to fulfill their respective multilateral environmental commitments. Furthermore, the Parties, agreed to cooperate in the field of environment; biodiversity and conservation of natural resources; management of hazardous chemicals; air quality; water management; waste management; marine and coastal ecological conservation and pollution control; strategic environmental impact assessment; improvement of environmental awareness. In the Turkey-South Korea FTA, the Parties recognize the significance of trade-related aspects of environmental policies, and set out an indicative list of areas of cooperation. In the Turkey-Lebanon FTA, which is not in force yet, the Parties agreed to encourage cooperation in preventing deterioration of the environment, controlling pollution and ensuring the rational use of natural resources, with a view to ensuring sustainable development. In the Turkey-Malaysia FTA, the Parties set out the areas to implement a work program for environmental cooperation.

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DOMINICAN REPUBLIC

PREGUNTAS ELABORADAS POR LA REPÚBLICA DOMINICANA PREGUNTAS 1) Ventanilla Única de Comercio Exterior (VUCE) (Sección 3.114): ¿Cual institución encabeza el proyecto de Ventanilla Única? ¿Cuál institución está a cargo del sistema informático BILGE? Turkey’s Answer: Ministry of Customs and Trade leads the Foreign Trade Single Window and is in charge of BILGE information system. 2) OEA (Sección 3.22): ¿Cuántos operadores han recibido la Certificación OEA? ¿Han irmado acuerdos de reconocimiento mutuo, en caso afirmativo, con cuales países? Turkey’s Answer: As of March 2016, 25 operators have received the AEO Certification. Turkey has signed a mutual recognition agreement with the Republic of Korea on June 9th, 2014. As of now, it is at the pilot implementation phase. 3) Acuerdo de Facilitación de Comercio de la OMC (Sección 3.1.2/ 3.18): ¿Turquía ha ratificado el acuerdo? ¿Han creado un Comité Nacional de Facilitación de Comercio, en caso afirmativo, como se ha organizado este?. Turkey’s Answer: Turkey has ratified the WTO Trade Facilitation Agreement on 5 March 2016. In line with Article 23/2 of the Agreement, the work on establishment of a National Trade Facilitation Committee is going on. The organization of the Committee has not been decided yet. 1.6 Inversión extranjera directa (página 27): 1.37. Tradicionalmente, la mayor parte de la IED se ha dirigido al sector financiero y de seguros, el sector manufacturero y el sector de la informática. En 2014, los tres principales sectores receptores fueron el manufacturero (2.890 millones de dólares EE.UU.), al que correspondió el 33% de las corrientes totales de IED destinadas a Turquía; el sector financiero y de seguros (1.540 millones de dólares EE.UU.); y el comercio al por mayor y al por menor (1.170 millones de dólares EE.UU.). De 2013 a 2014, las entradas totales de IED en el sector manufacturero aumentaron un 31,1% y las destinadas al comercio al por mayor y al por menor se incrementaron un 20,9%; las inversiones en el sector financiero y de seguros disminuyeron un 55%. Dentro del sector manufacturero, los principales subsectores fueron en 2014 el de ordenadores y dispositivos electrónicos, y el de alimentos, bebidas y tabaco (gráfico 1.6). Preguntas: ¿A cuánto ascienden los montos de inversión extranjera directa (IED) para el sector de informática en los últimos tres años?; Turkey’s Answer: Since 2002, FDI inflows amount in information sector were realized as USD 11.8 billion cumulatively while in 2013, 2014 and 2015, FDI inflows realized as USD 110 million, USD 214 million and USD 150 million respectively. ¿Cuáles son los principales subsectores receptores de la inversión extranjera directa en el sector de la informática?; Turkey’s Answer: According to FDI statistics disclosed by Central Bank of Republic of Turkey, there is no information on sub-sector breakdown of FDI. ¿Cuáles son los incentivos para la atracción de la IED. De manera particular, favor indicar si existen incentivos a través de una legislación especial para el sector de informática o sus subsectores?. Turkey’s Answer: Investment Incentive Program, which is equally available for foreign capital companies aims to support all production and service industries. In terms of investment incentive

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system design, Ministry of Economy has considered technology classification and positive spillover potential of the sectors. High value added, technology intensive industries have priority in terms of support instruments of the Program. 2.4.2 Política de inversión (página 43). 2.55. Cada año, el YOIKK prepara un plan de acción para definir la orientación de sus trabajos. Los planes de acción se centran en cuestiones tales como el establecimiento de prioridades en los incentivos a la creación de empleo, el sistema de transacciones garantizadas, la adjudicación de terrenos para las inversiones, la ordenación territorial, la reglamentación del mercado ferroviario, el impuesto sobre el timbre, los incentivos a las actividades de I+D, la tributación de las sociedades, las transferencias de capital, los procedimientos de exportación, los permisos de perfeccionamiento activo, la ventanilla única, la propiedad intelectual y las garantías de créditos. Preguntas: ¿Cuáles incentivos se otorgan para las actividades de I+D? Turkey’s Answer : Tax incentives are provided to firms conducting R&D studies. Private Sector R&D centers are supported under the Law No:5746. (Law about the Support of Research and Development Activities). With this law, it is aimed to support and encourage

Production of technological knowledge Innovation in product and production process Increase in product quality and standards Commercialization of technological knowledge Development of precompetitive collaboration Entrepreneurship and investment Acceleration of direct foreign investment for R & D and innovation Increase in employment of R&D personnel and skilled labor

Private sector R&D centers are the entities of narrow tax payer companies that are able to:

Employ at least 30 full-time equivalent R&D personnel, Implement R&D activities in Turkey, Have R&D management capability and capacity regarding to technological assets, R&D

human resources, intellectual property, project and information resources, Have facilities which physically control the working time of R&D and support staff in

R&D Center, Have R&D and innovation programs and projects with the issue, time, budget and

personnel needs being defined. When a company is found eligible for having R&D center certificate, tax incentives and exemptions are provided to them for their R&D activities. These include R & D allowance (all R&D and innovation expenditures are exempt from income tax), exemption from withholding of income tax, insurance premium support and stamp tax exemption. The government also provides tax incentives for companies operating in Technology Development Zones which are designed to attract investments in high technology fields and support R&D activities in these zones (Law of Technology Development Zones (TDZ) No: 4691):

Corporate tax exemption of the profits derived from software development and R&D activities in TDZ, until December 31, 2023.

VAT exemption of the deliveries of application software produced exclusively in TDZ, until December 31, 2023.

100% income withholding tax exemption of the employees employed in R&D activities in TDZ, until December 31, 2023.

0% social security exemption of the employer’s share of the social security Premium during a period of 5 years, until December 31, 2024.

Within the scope of Income Tax Law No. 193 and Corporation Tax Law No. 5520;

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Total amount of R&D expenditures for the quest of New Tecnology and Information may be subject to deduction on the tax return.

Half of the income arising as a result of the commercialization of inventions arising as a result of the R&D activities in Turkey, are exempt from corporation tax; leasing, transfer or sale of intangible rights related to this invention, are exempt from value added tax.

Institutions and organizations which are exclusively operating in scientific R&D activities, are exempt from corporation tax.

Within the scope of Law on Support of Research and Development Activities (16.02.2016 dated and 6676 numbered) and Certain Law and Decree Laws Amending Law (R&D Reform Package);

Design actions were taken to support coverage such as R&D activities. 100 percent of design projects and design expenditures which are realised in design centers will be subject to tax deduction.

The gains derived from design activities which are realised in the regions of technology development have been exempt from income tax and corporation tax.

Imported goods have been exempt from customs duty and all kinds of fund, fees and stamp duty, to be used in R&D, projects of design and innovation.

On-demand R&D and design activities are included in the scope of the incentives, to encourage the participation of all companies especially the SME’s.

To enable flexible working for R&D and design personnel, Council of Ministers can specify the times to be considered within the scope of income tax withholding, for works outside the R&D and design centers and Technology Development Zones.

¿Cómo han influido las decisiones del Consejo de Coordinación para la Mejora de las Condiciones de Inversión (YOIKK) en los incentivos para las actividades de I+D? Turkey’s Answer: Activities regarding R&D is among the permanent agenda items of YOIKK’s private sector stakeholders and public-private dialogue on R&D. Furthermore, upon the request of private sector stakeholders, a Technical Committee of R&D was established. That Committee significantly contributed to the enactment of Law on Supporting Research and Development Activities (Law No. 5746) in 2008. The main institutions concerning the incentives for the R&D activities are the Ministry of Finance and the Scientific and Technological Research Council of Turkey (TUBITAK), which are also represented in the YOIKK Platform. If there is any issue that needs coordination of associated institutions to be clarified or solved, YOIKK is the suitable platform for that with the participation of the private sector representatives. For instance, one of the actions of YOIKK 2015-2016 Action Plan under the responsibility of the Technical Committee of Taxes and Incentives is “Revising the issues concerning incentives for R&D”. A new regulation has been recently drafted and submitted to the Turkish Parliament regarding that action. ¿Qué legislación crea el Consejo de Coordinación para la Mejora de las Condiciones de Inversión (YOIKK) y donde se establecen sus atribuciones? Turkey’s Answer: YOIKK is a coordination platform which aims to improve consultative process of private sector and to solve the problems of implementation with public-private dialogue. By contributions of YOIKK studies since 2012, almost 40 legal and 20 secondary regulations have been put into force about investment environment. Some of them are listed as follows:

Law No: 6325 Law on Mediation in Civil Disputes which was published in Official Gazette on June 22, 2012.

The Article 138th of the Capital Market Law No: 6362 which was put into effect with Official Gazette publication at December 30, 2012.

Law No: 6458 Foreign and International Protection Law was published on April 11, 2013. Law No: 6460 Law on Amending in Civil Procedures Law and Some Laws was published in

Official Gazette on April 17, 2013. Law No: 6461 Law on Liberalization of Turkish Railway Transportation Sector was published

in the Official Gazette dated May 1, 2013. Law No: 6570 Law on the Establishment of Istanbul Arbitration Center was published in

Official Gazette on November 29, 2014.

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Cuadro 4.12 Panorama general del sector de la ganadería, 2011-2014 (página 146). 4.34. En cuanto al comercio, las importaciones de animales vivos y de carne son escasas (en 2014, las importaciones de reses vivas ascendieron a 110,3 millones de dólares EE.UU. y las importaciones de carne de bovino a 5,2 millones de dólares EE.UU.), lo que refleja los elevados aranceles existentes y las estrictas medidas aplicadas por razones sanitarias y fitosanitarias. El Ministerio de Alimentación, Agricultura y Ganadería permite las importaciones de ganado de aquellos países que cumplen determinados criterios de sanidad animal y certificación veterinaria. Preguntas: ¿Cuáles son los criterios de sanidad animal y certificación veterinaria que son requeridos por el Ministerio de Alimentación, Agricultura y Ganadería para las importaciones de ganado? Turkey’s Answer: Import procedures on the importation of live animals and animal products in Turkey are carried out by the MFAL, in accordance with the relevant national legislation as well as international standards set by the OIE of which Turkey is a member. Veterinary Health Certificate for fresh, chilled, frozen meat of domestic bovine animals by MFAL defines health conditions for importation. Comentarios: Durante la revisión del EPC de Turquía, obtuvimos la información que mediante la Decisión No.1/95 del Consejo de Asociación UE-Turquía, se estableció una unión aduanera, y por lo tanto, Turquía aplica el arancel externo común de la Unión Europea (Párrafo 3.35, pág.59 del EPC). Además, Turquía aplica el Reglamento UE No.978/2012 como base del SGP que otorga a otros países (Párrafo 2.35, págs. 39 y 40 del EPC); implicando esto que la República Dominicana no se encuentra entre los países beneficiarios del SGP de Turquía a diciembre del 2015. En ese sentido, los países excluidos del régimen SGP de la UE tampoco están abarcados por el esquema SGP de Turquía. Como puede ser comprobado en una nota al pie del documento EPC (pág.40) se lista los países con preferencias SGP otorgados por Turquía y son los siguientes: 27 Al 1º de diciembre de 2015, los beneficiarios del SGP de Turquía eran los siguientes: Botswana, Camerún, Columbia, Congo, Côte d'Ivoire, Filipinas, Fiji, Ghana, Honduras, India, Indonesia, Iraq, Islas Cook, Islas Marshall, Kenya, Kirguistán, Micronesia, Namibia, Nigeria, Nicaragua, Nauru, Niue, Pakistán, Sri Lanka, Swazilandia, Tayikistán, Turkmenistán, Tonga, Ucrania, Uzbekistán y Viet Nam. Los beneficiarios del GSP+ son los siguientes: Bolivia, Cabo Verde, Costa Rica, El Salvador, Georgia, Guatemala, Moldova, Mongolia, Panamá, Paraguay y Perú. Los PMA beneficiarios de la iniciativa "Todo menos armas" son los siguientes: Afganistán, Angola, Bangladesh, Benin, Bhután, Burkina Faso, Burundi, Camboya, Chad, Comoras, Djibouti, Eritrea, Etiopía, Gambia, Guinea, Guinea-Bissau, Guinea Ecuatorial, Haití, Islas Salomón, Kiribati, Lao, R.D.P., Liberia, Lesotho, Madagascar, Malawi, Malí, Mauritania, Mozambique, Myanmar, Níger, Nepal, República Centroafricana, República Democrática del Congo, Rwanda, Samoa, Santo Tomé y Príncipe, Senegal, Sierra Leona, Somalia, Sudán, Sudán del Sur, Tanzanía, Timor-Leste, Togo, Tuvalu, Uganda, Vanuatu, Yemen y Zambia. Comment by Turkey: The Customs Union Decision requires Turkey to align progressively with the EU’s preferential customs regime. This alignment concerns both autonomous regimes and preferential agreements with third countries. Accordingly, since 2001 Turkey has been granting unilateral preferences parallel to the EU’S Generalized System of Preferences (GSP) schemes for products covered by the Customs Union, namely industrial products excluding ECSC products and processed agricultural products.

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Currently, Regulation No 978/2012/EU of the European Parliament and of the Council is the main reference for Turkey’s GSP scheme in terms of both the beneficiary countries and the preferences granted under general GSP arrangement as well as special incentive arrangements. Regulation No 978/2012/EU introduces new criteria for determination of the beneficiary countries. In that respect, some overseas countries and territories; countries with other preferential market access arrangements with the EU; and high and upper-middle income countries no longer benefit from the preferential treatment provided by the EU’s GSP regime. Accordingly, in the beginning of 2014 the Dominic Republic was removed from the EU’S GSP regime with other CARIFORUM countries since it has a preferential market access arrangement with the EU. Similarly, in line with the alignment requirement with the EU’s GSP regime, Turkey removed the Dominic Republic from its GSP scheme as of 1 January 2016.

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NEW ZEALAND Report by the WTO Secretariat (WT/TPR/S/331) 1. ECONOMIC ENVIRONMENT 1.6 Foreign Direct Investment Section 1.6, page 26, paragraph 1.39 The Secretariat’s report at paragraph 1.39 states that “Turkey has several investment incentives and schemes to promote foreign investment. There are five principal incentive schemes with nine different incentive instruments, some restricted to certain regions in Turkey. In 2015, the Government introduced new investment incentives for companies which included, inter alia, additional tax breaks, more insurance premium supports, reduced input costs for industrial imports, and guarantees for business loans (Section 2.4.4). However, a number of investment restrictions for foreigners remain, varying by sector, size and type of investment (Section 2.4.3).” Additionally, in paragraph 21 of the Summary of the Secretariat’s report, it states that “further growth depends on investment and Turkey has a comprehensive system of incentives, but their complexity, along with restrictions in some sectors – particularly agriculture – distorts trade and production while the low level of tariff bindings for non-agricultural goods and high applied tariffs for agricultural goods create uncertainty for those trading partners not covered by trade agreements.” Question: Given that Turkey’s complex system of incentives and restrictions in certain sectors, such as agriculture, distorts trade and production,

What steps will Turkey take to address the resulting uncertainty for investors? Turkey’s Answer: Both foreign and domestic investors can easily benefit from Investment Incentive Program with equal rights and terms, including agricultural production industry. The assessment about the complexity of the Program does not reflect the factual situation. The Program has been put into force in 2012. Since then, Ministry of Economy has issued incentive certificates for 16.723 investors for a total investment amount of 321 billion TL between June 2012- February 2016. Moreover, 881 incentive certificates with a total investment amount of 66 billion TL were issued for foreign investors in the same period. According to OECD FDI Regulatory Restrictiveness Index 2014, Turkey is ranked 28th most liberal country among 58 countries, including all OECD and G20 countries with index value of 0,059 where OECD average is 0,068. (Index value= 0 (open)- 1 (closed)) 2. TRADE AND INVESTMENT REGIME 2.3 Trade Agreements and Arrangements Section 2.3.2.1, page 32, paragraph 2.25 The Secretariat’s report, at paragraph 2.25, notes that “in 2014, the World Bank conducted an evaluation of the EU-Turkey Customs Union in which it found there were positive economic and trade benefits for both parties. The report highlighted that trade integration between the two parties has increased over the last two decades and provided greater benefits than a free trade agreement. But a changing global economy had shown the weaknesses in the customs union and the report recommended reforms in certain areas. In particular, the World Bank suggested widening the customs union to cover agriculture and services; reforms to address issues with road transport permits and the use of trade defence instruments by both parties; a functioning dispute settlement mechanism; alignment of trade agreements with third parties; and reducing the restrictiveness of EU visas for business travellers. In addition, the Report by the Government of Turkey notes, at paragraph 3.30, that “in the beginning of 2014, during the high level meetings, Turkey agreed with the EU Commission to negotiate the update of the Customs Union. In this context, the report, which forms the main

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framework for the negotiations, was endorsed in May 2015 by the parties. It is expected that the negotiations will be initiated in the last quarter of 2016.” Question:

New Zealand understands that a significant focus of the updated EU-Turkey Customs Union will be the inclusion of services in the agreement. In this context, and in light of the World Bank’s evaluation of the Customs Union in 2014, how does Turkey foresee agriculture being included as part of the renegotiated terms of the Customs Union?

Turkey’s Answer: With the update of the Customs Union, Turkey and the EU aim to improve the current functioning of the Customs Union. Another important target is to improve the bilateral trade relations through enhancing the scope of the preferantial trade in agricultural products as well as exploring the possibilities for mutual market openings in areas of public procurement and services. When it comes to inclusion of agriculture, currently basic agricultural products are not covered by the Customs Union. Instead, agricultural trade is governed by separate Association Council Decisions where the Parties grant preferential access for certain products under different modalities like duty reduction or exemption from customs duties either limited with tariff quotas or unlimited. Processed agricultural products, on the other hand, are covered in the Customs Union. Bilateral trade of these products takes place on duty free basis in terms of their industrial component; however specific duties are eliminated only by tariff quotas. Accordingly, with respect to agriculture, the updating exercise will basically concern improvement of the current concessions between the Parties both in agricultural and processed agricultural products. Besides, SPS measures will be another important subject of the upcoming negotiations. 2. TRADE AND INVESTMENT REGIME 2.3 Trade Agreements and Arrangements Section 2.3.2.2, page 33, paragraphs 2.29 and 2.30 The Secretariat’s report at paragraph 2.29 notes that “As a result of the Turkey-EU Customs Union, Turkey’s policy on FTAs emanates from this legal basis as it is to align its commercial policy, including preferential agreements with third countries, with EU commercial policy. As such, Turkey negotiates and concludes FTAs in parallel with the EU. To Date, Turkey’s FTAs, as notified to the WTO, only cover trade in goods, and not services and investment. This reflects Turkey’s early policy on FTAs as reflected in EU and other FTAs at the time, which focused on trade in goods. Most of Turkey’s FTAs therefore typically cover WTO subjects like GATS, investment, intellectual property, procurement, and competition by reference to WTO Agreements and do not contain any additional parameters or further market access.” At paragraph 2.30, the Report notes that “changes in EU policy as well as world trends for deeper, fuller, and more ambitious commitments in FTAs has had an impact on Turkey’s FTA policy. Recently, with the concluded Republic of Korea FTA, Turkey embarked on a new pathway for FTAs and has started to include commitments on investment and services, as well as deeper commitments and disciplines on TBT, SPS, intellectual property, competition, despite settlement, and trade remedies, reflecting WTO plus commitments...” Question:

Does Turkey see this increased inclusion of investment, services, and other commitments and disciplines as a continuing trend for its future FTAs?

Turkey’s Answer: Turkey has been adapting its FTA policy in line with the demands of the new global trade environment, increasingly being shaped by bilateral, regional or mega-regional trade agreements. New generation FTAs not only cover issues of tariff elimination; but also regulate a variety of areas such as sustainable development, intellectual property rights and technical standards.

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Accordingly, Turkey has adjusted itself to this relatively new trend and currently is negotiating and concluding deep and comprehensive FTAs covering not only services and investment but also chapters on SPS, TBT, IPR, competition, trade remedies, or dispute settlement introducing WTO+ provisions. The Korea-Turkey FTA, the scope of which was broadened in February 2015 with the signing of “Trade in Services Agreement” and “Investment Agreement”, is regarded as the first comprehensive FTA of Turkey. In addition to that, the Singapore FTA, which was signed in 14 November 2015, includes, inter alia, Chapters on Public Procurement, Services and Investment. Moreover, deep and compherensive FTAs with Peru, Japan, Ukraine and Mexico are under negotiation process. In this regard, Turkey considers the continuation of this trend, not only desirable, but also inevitable, given the current stage of global trade relations. 3. TRADE POLICIES AND PRACTICES BY MEASURE 3.3.3 Competition policy and price controls Section 3.3.3.1, page 96, paragraph 3.162 The Secretariat’s report, at paragraph 3.162, states that “with the exception of electricity, natural gas, pharmaceuticals, telecommunications, and transport, prices are determined by the market. The authority responsible for price controls depends on the product.” Question:

New Zealand understands that Turkey has a good story to tell on progress on energy pricing, not only in terms of the liberalisation of its downstream fuel market, but also in terms of improving cost-recovery in the electricity sector as well as improving transparency around producer subsidies. With regards to subsidies in the fossil fuel sector, has Turkey considered utilising the G20 peer review process for reform of fossil fuel subsidies as a mechanism for both reviewing its fossil fuel policies (such as subsidies to coal producers) and sharing lessons learned from Turkey’s previous reform efforts and progress on energy pricing?

Turkey’s Answer: With regard to reform efforts regarding energy pricing, Turkey aims liberalizing the market based on eligibility of consumers. Accordingly, for non-eligible consumers, prices are determined by Energy Market Regulatory Authority (EMRA), but for eligible consumers, prices are being determined in the market. Eligibility limit is being decreased year-by-year by EMRA. Final target is to set all the consumers as eligible consumers. On the other hand, G20 peer review process is ongoing between two countries, namely United States and China and this process has not been completed yet. 3. TRADE POLICIES AND PRACTICES BY MEASURE 3.1.5 Tariffs Section 3.1.5, pages 50-58 The Summary of the Secretariat’s Report, at paragraph 6, states that “In terms of tariff protection, Turkey’s overall applied tariff average increased slightly during the period to 12.8% due to tariff increases in response to requests by domestic producers. Furthermore, Turkey has the scope to increase tariffs further because 50% of its tariff schedule is unbound (tariffs are bound for 100% of agricultural tariff lines and 34% of industrial tariff lines), and in many cases there is a significant gap between bound and applied rates… Tariff protection remains particularly high, averaging over 80%, on meat, dairy, sugar and confectionary, and agricultural products.” Questions: According to paragraph 6 of the Summary, “Turkey has the scope to increase tariffs further because 50% of its tariff schedule is unbound.”

A stable trading environment alert to market signals is critical for a thriving economy, including the agricultural sector. Has Turkey considered binding more of its tariff lines?

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Turkey’s Answer: Turkey has been actively involved in the Non-Agricultural Market Access Negotiations within the context of Doha Development Agenda and is still commited and will bind its remaining tariff lines according to the agreed final outcome. On the other hand, 100% of agricultural tariff lines of Turkey are bound. According to paragraph 6 of the Summary, “There are significant differences [in tariffs] in the rates of agricultural versus industrial products, as average rates for agriculture are 49% and only 5.5% for industrial goods.”

How have low tariffs on industrial goods benefitted Turkey’s industrial goods producers and consumers?

Turkey’s Answer: In 1996 Turkey established Customs Union, where tariff rates for non-agricultural products were diminished to a level of 4% on average. Since then, the domestic competition has improved and foreign direct investment to Turkey has increased significantly. As a result Turkey’s trade volume reached almost US$ 400 billion and total stock of FDI reached to US$ 146 billion. Very recently, World Bank (WB) has analyzed the effects of the Customs Union on Turkish economy with a report that can be reached from the WB website. According to the Report by the Government of Turkey, “resisting protectionism and supporting a strong multilateral trading system continues to be Turkey’s priority” (paragraph 3.4, page 7) and “trade liberalisation at all fronts, with its potential to deliver new trading opportunities, will be carrying Turkey forward towards accomplishing its 2023 Vision” (paragraph 4.5, page 13).

New Zealand welcomes Turkey’s desires to resist protectionism and pursue the process of trade liberalisation. In this context, given the significant difference in tariff rates between industrial and agricultural products, and noting the impressive development that Turkey has seen over recent years through further integrating itself into the global economy and reducing barriers to trade in industrial goods, is Turkey considering a similar approach in the agricultural sector?

Turkey’s Answer: In the last 20 years, Turkey has maintained a considerable level of liberalization within the context of both its Customs Union with the EU and the Free Trade Agreements it has concluded. In line with this, Turkey’s foreign trade in agricultural and non-agricultural products has increased significantly. To this end, it will continue to support all kinds of trade liberalization attemps at both bilateral and multilateral levels. 3. TRADE POLICIES AND PRACTICES BY MEASURE 3.3.3 Measures Affecting Production and Trade Section 3.3.1, page 89, paragraph 3.143 The Secretariat’s report, at paragraph 3.143, states that “Turkey ranked 55th out of 189 countries in the World Bank’s “Ease of Doing Business 2016” index; it dropped four places in rank compared to 2015. In terms of the sub-category rank for starting a business, Turkey ranked 94th…The costs, as a percentage of per capita income, are also significant at 16%”. Question:

In an increasingly competitive global environment, countries have to work hard to attract and retain new trade and investment through promoting a business friendly climate. What is seen to have driven Turkey’s fall in the World Bank’s survey and, more importantly, what measures is Turkey taking to address this development?

Turkey’s Answer: First of all, World Bank’s Doing Business Report- “ease of doing business index” is an Index based on limited number of parameters on a narrow economic perspective. Although we closely monitor Turkey’s progress on “ease of doing business index”, we are very well aware of its shortcomings. On the other hand, Turkey frequently cooperates with the World Bank’s Doing Business Team to inform the Coordination Council for the Improvement of Investment Environment (YOIKK) stakeholders about the methodology of the Report via workshops and special meetings. Thanks to these efforts,

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Turkey’s ranking increased 38 steps from 93 to 55 since 2006’s Doing Business Report. Furthermore, Turkey became a crucial participant of global FDI flows with its outstanding performance in the last 13 years and managed to host USD 12.7 billion of FDI in this period annually. Although global FDI fell sharply in 2014, Turkey demonstrated a positive performance and the amount of FDI was realized as USD 12.5 billion. In 2015, upward trend in FDI inflows have pursued with a 32.4% increase and inflows reached up to USD 16.6 billion despite domestic election period and persistent regional tensions. However, Turkey is aware that improving investment climate is an ongoing process. Accordingly, improving investment environment is among the priorities of the 64th Government Program Action Plan which is to be completed in 2016 within the framework of Turkey’s strong, sustainable and inclusive growth objectives. Main framework of improving investment climate agenda is set as the following:

The transaction costs of both domestic and foreign direct investors will be reduced. The bureaucratic procedures for both domestic and foreign direct investors will be simplified. The efficiency of judicial system will be improved. The functioning of market surveillance and control system will be evaluated and an efficient

implementation mechanism will be established. In addition, The Development of Business and Investment Environment Programme is being implemented as one of the 25 Priority Transformation Programmes within the framewotrk of 10th Development Plan. This programme focuses on problems that are of the highest priority and aims to improve existing mechanisms in order to reduce uncertainties faced by investors and to foster investments. The programme has four components: improvement of bureaucratic processes, improvement in legal processes, facilitation of investment site provisions, and improvement of governance of the business and investment environment at the regional level. Furthermore, possible concerns of international investors in Turkey are taken into account through the YOIKK Platform that has been conducting its studies through annual action plans by prioritizing the needs of the private sector regarding investment regulations. The structure and working mechanisms of the YOIKK was revised on January 4, 2016 with a view to further increase efficiency of decision making process. The chair of the Council was upgraded to the level of the Deputy Prime Minister and line Ministries in charge of investment policies became represented at ministerial level. This recent revision of the Council structure strengthened political ownership of the reform process to take quick and more decisive steps to deal with needs and priorities of private sector while enhancing their presence in Turkish market. 4. TRADE POLICIES BY SECTOR 4.1 Agriculture Section 4.1, page 128, paragraph 4.18 The Secretariat’s report, at paragraph 4.18, states that “Turkey’s agriculture support has undergone many changes over the last 20 years leading to the maintenance of relatively high supports, at least in comparison to other OECD countries. The use of decoupled-payments ceased in 2009 while output based payments increased.” In addition, the Summary of the Secretariat’s report, at paragraph 15, notes that “Turkey has not notified its domestic support of export subsidy programmes to the WTO Committee on Agriculture during the review period, but based on other sources of information Turkey has introduced changes leading to the maintenance of relatively high supports, at least in comparison to other OECD countries, and payments based on agricultural output have increased thus leading to distortions.’ The Secretariat report further notes that “Agricultural supports to the livestock sector are significant and have increased during the period, in particular direct subsidy payments” (paragraph 4.35, page 135).

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Questions:

When is Turkey planning to update its domestic support and export subsidy notifications to the WTO?

Turkey’s Answer: Turkey will comply with its export subsidy notification requirements by the next meeting of the Committee on Agriculture, which will be held on 7-8 June, 2016. Turkey also has started a work program to notify its agricultural domestic support programs on a gradual basis. In due course, we are looking for the understanding of all Members to complete this work as soon as possible.

Given that Turkey’s agriculture subsidies are “relatively high, at least in comparison to other OECD countries“ (paragraph 4.18, page 128), and have increased over the review period 2011-2014, is Turkey planning to reduce, remove or otherwise limit existing distortionary agricultural subsidies? Does Turkey have any plans to return to the use of less distortionary decoupled payments?

Turkey’s Answer: Turkey’s agricultural support has undergone many changes over the last 20 years. Direct income support (DGD) in Turkey was started with ARIP, a World Bank Project. However, because of certain challenges met in the implementation phase, Turkey ended the programme in 2009. Although, not being used at present, DGD can still be a tool for agricultural supports, according to the Agriculture Law no 5488. In terms of trade distorting supports Turkey is bound with de minimis level for developing countries in the WTO Agreement on Agriculture. In developing domestic support programs, Turkey needs to consider deep rooted structural problems existing in the agricultural sector including those stemming from fragmented farm lands, small scale of farms and insufficient agricultural productivity. It would not be fair to argue that Turkey provides high level of support to its agriculture, albeit 21% of the rural employment, vis-a vis to many other countries with billions of expenditures to agricultural sector. Having said that, Turkey takes into account policy developments towards less disruptive support measures. Lastly, although the Report by the Secretariat notes an increase for the Price Support Estimate (PSE) over the review period, it should be emphasized that it is calculated by the OECD using different parameters than that of the trade distorting support calculation method of WTO AoA. As an indicator of the annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers, PSE provides an indication rather than an actual use of any support. 4. TRADE POLICIES BY SECTOR 4.1 Agriculture Section 4.1, page 133, paragraph 4.28 The Secretariat’s report, at paragraph 4.28, notes that “there have been some changes to the institutional framework. In 2011, the Ministry of Agriculture and Rural Affairs was re-organized and became the Ministry of Food, Agriculture and Livestock. It is responsible for policy formation, monitoring, and inspection activities for food, agriculture and livestock. The main activities of the Ministry are development of agricultural policies; food safety and security; rural development; conducting research; development of production; implementation of agricultural support programmes; and protection of land, water and biodiversity. It covers the plant, animal, aquaculture, and fishery sectors.” Question:

Could Turkey please elaborate on any specific policies it has for encouraging sustainable fisheries management and the maintenance of marine biodiversity?

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Turkey’s Answer: The main objective of the Ministry of Food, Agriculture and Livestock (MFAL) regarding fisheries is to ensure sustainable exploitation of and protection of aquaculture resources in seas and inland waters. The main principle in aquaculture farming is to make use of resources/production potential by using environmentally friendly farming techniques. The Ministry takes into consideration scientific, economic, social and environmental aspects while drafting legislation on fishing, via receiving opinions/comments of the stakeholders periodically. These regulations bring up certain obligations for fishermen, including those related to fishing equipment, fishing methods, fishing areas, fishing periods, minimum size of species. Sanctions would be imposed in case of the violation of the regulations according to the Law on Aquaculture, No: 1380. Sustainability of fishery sector has been aimed through legislation on the basis of precautionary principle, with a view to enabling reproduction of aquatic animals at least once in their life. 4. TRADE POLICIES BY SECTOR 4.3.3 Telecommunications Section 4.3.3, page 168, paragraph 4.182 The Secretariat’s report, in paragraph 4.33, states “Turkey's Vision 2023 was initiated in 2003 and is composed of four sub-projects focusing mainly on technology and information systems. For ICT, including the telecommunication sector, the Vision aims to reach 30 million broadband subscribers; provide internet connection for 14 million households reaching a speed of 1,000 Mbps; increase the ICT's share of GDP to 8%; reach a computer literate rate of 80%; become one of the top ten countries in e-transformation; increase the number of companies to 5,500 and employees to 65,000; and increase the sector's size and market growth year on year. In 2013, the Vision was updated for ICT including the telecommunications sector. The revised Vision aims to reach 60 million broadband subscribers; increase the ICT's share of GDP to 10%; reach a broadband internet usage rate of 80%; and provide broadband access via next generation networks for every household and business. The number of broadband subscriptions has already reached 41.2 million. The ICT's share of GDP in 2014 is almost equal to 4%. The ratio of the population using internet is 55.9 % as of April 2015.” Question:

We note that the emphasis of Turkey’s Vision 2023 on developing Turkey’s ICT sector and infrastructure. Considering Turkey’s efforts to reform its telecommunications sector, and consistent with Turkey’s support for initiatives aimed at liberalizing services trade, has Turkey considered other reforms that would enable the use of telecommunications/internet as a means of supplying services, for example the removal of local presence and nationality requirements in specific sectors?

Turkey’s Answer: Although strengthening ICT sector and infrastructure is a key strategic objective for Turkey, the local presence and nationality requirements in specific sectors are independent of the reforms and efforts made in the ICT area. These requirements originate from specific laws, and the underlying reasons for such requirements are mostly related to the exercise of supervisory and regulatory functions that cannot be performed beyond the jurisdiction of Turkey. Currently, there is not an overarching reform agenda for the elimination of local presence and nationality requirements existing in the Turkish legislation. 5. APPENDIX TABLES Section 5, page 195, Table A2.3 The Secretariat’s report, in table A2.3 ‘Foreign Direct Investment Relations’, details (in the ‘Aviation’ section) “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 the majority of voting shares are owned by Turkish citizens. 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 ground handling services licences (A and C Group 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.”

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Additionally, in paragraph 5 of the Summary of the Secretariat’s report it states “Turkey continues to recognize the importance of attracting foreign direct investment through its many programmes of incentives, schemes, and free zones. The main framework law for investment, the 2003 Foreign Direct Investment Law, continues to provide the main elements for investment such as national treatment, transfer of proceeds, etc., and has not undergone significant revision. However, there have not been any major changes to investment restrictions either and Turkey continues to impose restrictions in the broadcasting, aviation, maritime transport, port services, fishing, accounting, financial, mining, real-estate, electricity, and education sectors.” Additionally, in paragraph 3.18 of the Report by Turkey (WT/TPR/G/331) it states that Turkey “supports initiatives aimed at liberalizing services trade and believes that there is untapped potential to be released by way of trade in services negotiations. Turkey believes that as for a post-Bali priority and as being an enabler of international trade, transport and logistics should be on top of the list of services to be liberalized…” Question:

Given the priority Turkey’s places on the liberalisation of trade in transport and logistics services, is Turkey considering domestic reform of its investment restrictions in the aviation sector?

Turkey’s Answer: Detailed explanation regarding aviation restrictions and the underlying legislation are reported in Appendix Table A2.3 of the Secretariat Report. Currently, there are no plans to alter restrictions in the aviation sector.

Report by Turkey (WT/TPR/G/331 2. ECONOMIC ENVIRONMENT 2.4.2 Services Trade Sction 2.4.2, page 6, paragraph 2.31 In the Report by Turkey, it states, in paragraph 2.31 “Within the services sector, the importance of visual services has been increasing rapidly. According to the “Theatrical Market Statistics 2014” of the “Motion Picture Association, Turkish box office has been ranked 15th among international box office markets in 2014 with a revenue of US$30 million.” Additionally, in paragraph 2.32 it states “As a recent phenomenon, Turkish serials’ popularity is increasing worldwide. It is estimated that Turkish serial productions have an audience of about 400 million in over 70 countries.” Question:

We are interested to note the growing significance of audio-visual services for Turkey. Given this success, has Turkey considered how this might be reflected in its policy towards this sector in current or future services trade negotiations?

Turkey’s Answer: As noted, the audio-visual services, especially the Turkish serials are gaining popularity worldwide and providing for an increased potential for Turkey’s trade in services. The sector has become a priority area in terms of Turkey’s trade negotiations, as well. In its bilateral FTA negotiations, Turkey aims at increased market opportunities for the distribution and production of audio-visual products; also, as relevant, works towards incorporating audio-visual co-production arrangements or provisions within these agreements.

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Canada Government Report -Turkey (G331) Part 3. Trade Policies: Plurilateral Negotiations under the WTO: section 3.1.2, page 8 The Environmental Goods Agreement and Trade in Services Agreement are mentioned here, however, there is no discussion regarding the recently-concluded expansion of the Information Technology Agreement. Question 1 Does Turkey intend to join the expanded Information Technology Agreement in the near future? Turkey’s Answer: As an original signatory to the Information Technology Agreement of 1996, Turkey has constructively engaged, until the very last stage, in the negotiations aiming at the expansion of product coverage of the ITA. However, despite all its efforts, due to the reservation of one specific country on Turkey’s schedule, Turkey did not take part among the parties to the Expansion Agreement at the MC 10 in Nairobi. Currently, there is no work in joining the Agreement. Part 3. Trade Policies: Free Trade Agreements under Negotiation, paragraph 3.53, page 12. It is noted that “Turkey has launched initiatives to start negotiations with 11 countries/country blocks, which are the USA, Canada, Thailand, India, Indonesia, Vietnam, Central American Countries, other ACP Countries, Algeria, South Africa and Pakistan.” Question 2 Could Turkey please elaborate on the meaning of “launched initiatives to start negotiations”, including the respective status of each initiative? Turkey’s Answer: In parallel to the common commercial policy of the EU, Turkey conducts FTA negotiations. After the EU Commission receives mandate from the Council to initiate FTA negotiations with a certain country, Turkey also extends its invitation to initiate a similar process. With many of these countries, Turkey either concluded an FTA or is at the negotiation stage. However, some of the countries that are already covered under the EU’s FTA policy did not respond positively to Turkey’s invitation for the initiation of bilateral FTA talks. These countries are classified under this category. Secretariat Report -Turkey (S331) Part 2. Trade and Investment Regime; Organized Industrial Zones, paragraph 67-68, page 43. It is noted that Turkey’s has over 213 Organized Industrial Zones (OIZs) in operation and that they were established to provide an investor-friendly environment for businesses through a variety of incentives. Listed in the advantages for companies establishing in OIZs is the exemption from environmental taxes. Question 3 Which environmental taxes subject to exemptions are generally offered to OIZs as incentives to businesses? Turkey’s Answer: Although there is no support measure such as environmental tax exemption under the Investment Incentive Program, investors operating in the OIZs can benefit from the following advantages (exemptions from environmental taxes): No VAT for land acquisitions. Exemption from real estate duty for 5 years starting after the construction of the plant. Low water, natural gas, and telecommunication costs. For unification and/or separation of plots, no tax to be paid. Exemption from municipality tax

for construction and usage of the plant. Exemption from the municipality tax on solid waste if the OIZ does not benefit from the

municipality service.

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Table: Environmental Tax Exemptions to enterprises in the OIZs TAX TYPE OIZ LEGAL ENTITY Sewage Drain Fee Free

(The Regions Operating Central Sewage Drain Facility) Electricity and Gas Consumption Tax

Free (For the electricity and gas that the OIZs’ administrations’ own buildings consume)

Building Construction Fee and Occupancy Permit Fee

Free

Environment Cleaning Tax

Free (For the OIZs that are located within municipality boundaries and municipal adjacent areas but do not make use of environment cleaning services of the municipalities)

Question 4 How are these environmental tax exemptions consistent with Turkey’s domestic environmental laws? Turkey’s Answer: Legal regulations on environment in Turkey are listed in Turkey’s “EU Integrated Environmental Approximation Strategy (IEAS) (2007-2023)” http://www.ab.gov.tr/files/ardb/evt/2_turkiye_ab_iliskileri/2_2_adaylik_sureci/2_2_8_diger/ab_entegre_cevre_uyum_stratejisi.pdf (p. 74). These regulations on environment are listed in the webpage of the Ministry of Environment and Urbanization, and the Ministry of Forest and Water Affairs as well: http://www.csb.gov.tr/gm/cygm/index.php?Sayfa=sayfa&Tur=webmenu&Id=266 http://www.ormansu.gov.tr/osb/osb/mevzuat1.aspx?sflang=tr (Currently, there is no English translation for these regulations). Environmental tax exemptions are provided to enterprises to provide protection and sustainability of the environment. Question 5 Could Turkey please explain whether and how OIZs effectively contribute to resource efficiency, environmental protection and meeting the challenges of climate change? Turkey’s Answer: The implementation of OIZ project (their establishments and making them prevalent) in Turkey has made the contributions and duties of the establishments/enterprises/institutions operating in the areas of innovation and technology development more explicit, and thereby prevented the repetitions. Taking Turkey’s tech-development system into account as a whole, Turkey’s total productivity and resource efficiency increased in this way. Part 3. Trade Policies and Practices by Measure: Measures Directly Affecting Imports; Tariffs, paragraph 3.30, page 50. It is noted that Law No. 474 on the Customs Tariff Schedule allows the Government to increase the applied MFN rates when these are deemed insufficient to provide “adequate” protection to domestic industries. In addition, it is understood that Turkey applies a statutory tariff that is different from the applied MFN tariff, and that the Government may replace the applied MFN rate by 150% of the corresponding statutory tariff rate to ensure higher protection to local industries. This statutory tariff is only applied for tariff lines that are unbound or fall outside of the scope of the Customs Union. For bound tariff lines or lines covered by the Customs Union, any increase in the applied MFN rate is capped by Turkey’s commitment levels. Question 6 Could Turkey explain what Law No. 474 determines as constituting “adequate protection”?

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Turkey’s Answer: Law No. 474 is only an authorizing law that does not directly set tariff rates but sets limits for the government in adjusting tariffs within maximum and minimum rates without referring to Turkish Grand National Assembly’s consent. Turkey sets its tariff rates in compliance with its WTO commitments, Customs Union and other FTA obligations. Question 7 Could Turkey explain if use of the statutory rate is a common or relatively rare practice? Turkey’s Answer: Please see reply to Question 6.

Part 3. Trade Policies and Practices by Measure: Measures Directly Affecting Imports; Tariffs, paragraph 3.32, page 50.

It is noted that Turkey raised the rates of certain customs duties in response to requests from domestic producers. Question 8 Could Turkey briefly describe the process or mechanism for responding to domestic producers requests in such instances? Is there a legal and regulatory framework that outlines such a process? Turkey’s Answer: Domestic producers or interested parties apply to the relevant authority if they detect any market disruption. The administration evaluates the request in the light of the international obligations and if it deems necessary, it could take measures by taking into account the obligations under the WTO, the EU Customs Union and the FTAs. Part 3. Trade Policies and Practices by Measure: Measures Directly Affecting Imports; Tariffs, paragraph 3.35, page 53. The highest applied MFN tariff rates of 225% on agricultural products apply to 76 tariff lines, namely fresh, chilled, or frozen meat and edible offal of bovine animals, swine; sheep; goats; horses; assess; and mules or hinnies. Question 9 Could Turkey indicate whether there is scope for reducing the applied MFN tariff on such agricultural products going forward? Turkey’s Answer: So as to maintain the balance in the market, when deemed necessary, the tariff rates for agricultural products can be altered considering domestic and international prices, demand and supply, domestic production, exchange rates as well as the local necessities. To give an example, in 2010, the tariff rates for some live animals and fresh/chilled or frozen meat were reduced with the purpose of preventing the increase in the domestic prices. Similarly, in the beginning of 2014, taking into consideration the reductions in the production and increases in the domestic prices, the tariff rate for dried beans was eliminated for a period of 8 months for the purpose of maintaining the balance in the domestic market. Part 3. Trade Policies and Practices by Measure: Measures Directly Affecting Imports; Sanitary and phytosanitary measures, paragraph 3.111, page 79. It is noted that Turkey's "Biosafety Board forms scientific committees and makes its decisions on a scientific basis reflected in the scientific risk assessment and socio-economic evaluation". Question 10 With respect to the consideration of socio-economic evaluation in biosafety regulatory decisions, and given the importance of ensuring that all regulatory systems and regulatory decisions regarding agricultural products are transparent, predictable and based on scientific evidence; could Turkey please elaborate on the Biosafety Board’s approval process?

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Question 11 Could Turkey please expand upon how the Biosafety Board’s approval process differs from that of the EU, for example what other considerations are being taken into account in Turkey’s approval process? Part 3. Trade Policies and Practices by Measure: Measures Affecting Production and Trade; Government Procurement, paragraph 3.190, page 109 It is noted that “Exemptions to the procurement law are also granted to the relevant ministries for matters related to defence, security, or intelligence. Certain sectors or areas such as utilities, prisons, schools, state railways, air transport, and research and development activities are also not covered by PPL. However, there is no institution in which purchases are totally outside of the scope of PPL. Furthermore, an exemption does not cover all public procurements of certain sectors or areas, but it covers only some specific purchases. Goods, services and works procurement, which are decided by the relevant Ministry to be related to defence, security or intelligence, can be completely outside the scope of PPL. Moreover, procurement of goods and services, including offsets, for the purposes of innovation, naturalization, and technology transfer are outside the scope…” Turkey’s Answer to Questions 10 and 11: In this decision making process, the Biosafety Board that includes scientists, evaluates reports by Scientific Committees and takes public opinion into consideration. Reports prepared by Scientific Committees -with the exception of simplified process- are shared with the public for public consultations. Reports are uploaded and shared publicly through the web site of Turkish Biosafety Information Exchange Mechanism (www.tbbdm.gov.tr). Board provides explanatory scientific reports for the rejections and approvals. While carrying out evaluations, Scientific Committees consider several documents including those submitted by importers and number of international institutions such as EFSA, WHO, FAO, FDA as well as the results of scientific researhes. More specifically,

1- Applications are conveyed to Board by the Ministry of Food, Agriculture and Livestock (MFAL). Board sends its evaluation regarding the application whether it is applied or not applied to the MFAL in 90 days. The MFAL informs the applicant in 15 days.

2- Decision Process starts after applicants are notified regarding decisions taken in first evaluation by the MFAL and this period can not exceed 270 days.

3- Elapsed time arising from requests for additional information and documents are not taken into account for this period.

4- In a period of 270 days, Biosafety Board sets up scientific committees, the committees prepare their scientific reports, prepared reports are consulted with public, and public opinions are evaluated by committees. Finally, Board makes its decision and shares its decision with the MFAL

5- Approvals are published in Official Gazette. Rejections are notified to the applicant. Applicant has the right to object to rejections in 60 days. Board evaluates the objection and makes a decision in 60 days. Question 12 Could Turkey explain, what rules if any, apply to procurements that are not covered by PPL? Turkey’s Answer: There is no single regulation for procurements which are not covered by the Public Procurement Law. Procedures and principles regarding exceptions are determined by the relevant ministries and public institutions by taking the opinion of Public Procurement Authority. Question 13 Could Turkey explain whether foreign-based entities can bid on tenders not covered by the PPL, and if so, would they be treated the same as domestic bidders?

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Turkey’s Answer: Unless otherwise stated in the tender document, foreign tenderers can participate in public tenders not covered by the Public Procurement Law. A price preference may be applied in favour of domestic goods or suppliers provided that it is indicated in tender documents. Part 3. Trade Policies and Practices by Measure: Measures Affecting Production and Trade; Government Procurement, paragraph 3.195, page 110. It is noted that suppliers who feel that they have suffered a loss of right or damage due to unlawful procedures or actions within the tendering process may file a complaint to the contracting entity and then an appeal to the PPA. A bidder can also find recourse through the courts. It is also noted that the number of appeals submitted to the Public Procurement Authority is approximately 4% of public procurement contracts per year. Question 14 Could Turkey explain whether foreign bidders can file a complaint through these processes? Turkey’s Answer Foreign economic operators have right to submit complaints to contracting entity, the Public Procurement Authority and the Courts. Question 15 If yes, could Turkey provide information on the percentage of appeals that are submitted by foreign bidders to the Public Procurement Authority? Turkey’s Answer The below table shows the numbers and percentages of appeals that are submitted by foreign bidders in 2014 and 2015. 2014 2015 Total (2014-

2015) Number of Appeals by Foreign Bidders

17 8 25

Total Number of Appeals 3,837 3,498 7,335 Percentage (%) 0.44 0.23 0.34

Part 3. Trade Policies and Practices by Measure: Measures Affecting Production and Trade; Government Procurement, paragraph 3.198, Page 111. It is noted that “… regardless of the value of the contract, whether below or above the threshold, in procurement of service and works, up to a 15% price advantage may be granted for all domestic tenderers, and in procurement of goods, up to a 15% price advantage may be granted for tenderers who offer domestic products, as determined by the Ministry of Science, Industry and Technology and other relevant institutions. However, this provision is not applicable for the domestic tenderers who participate in the tender proceedings by forming joint ventures with foreign tenderers. The percentage of price advantage is determined solely by the contracting entity or by a related Ministry contracting entity within the range of 0 to 15%.” Question 16 Could Turkey explain whether bidders are informed whether a price preference applies at the time of bidding and, if so, are they advised of what the percentage will be? Turkey’s Answer: It is indicated in the contract notices and tender documents whether a price preference applies or not and information on the relevant percentage is also provided. Question 17 If not, when are bidders informed that a price preference will apply? Turkey’s Answer: All bidders are informed at the publication time of contract notices whether there is a price advantage for domestic tenderers or domestic goods. Part 3. Trade Policies and Practices by Measure: Measures Affecting Production and Trade; Government Procurement, paragraph 3.200, Page 111.

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It is noted that “The application of both above-mentioned types of national preferences is not mandatory; it is an option which the contracting entity may utilize, but it is not obliged to do so. However, in February 2014, the 'omnibus' law amended various aspects of Turkish public procurement legislation and introduced restrictive measures that make the previously optional domestic price advantage of up to 15 % compulsory for 'medium and high-technology industrial products'. These industrial products will be determined by the PPA with the input of the Ministry of Industry each year in January but generally cover medical devices and pharmaceutical products.” Question 18 Could Turkey provide information on where interested bidders can find the list of ‘medium and high-technology industrial products’ to which the mandatory price preferences will apply? Will it be published annually? Turkey’s Answer: Interested bidders can find the list of medium and high technology industry products on the website of Public Procurement Authority (PPA). The list is published every year in January. Part 4. Trade Policies by Sector; Chemicals, paragraph 75, page 144-145. It is noted that Turkey’s Chemical Industry Strategy and Course of Action Document has six strategic targets. One of the Strategy’s targets is to produce high-value-added, environmentally-friendly chemical products to develop the exports market and another target is to increase demand for locally produced chemical products to reduce foreign trade. Question 19 Could Turkey please explain how it plans on both expanding production of its environmentally-friendly chemical products exports while at the same time creating local demand for these products and reducing their imported demand? Turkey’s Answer: Turkey believes that there is a misunderstanding due to a mistranslation in Turkey’s Chemical Industry Strategy and Course of Action Document. The target of “Increase demand for locally produced products to reduce foreign trade” does not exist in the original Turkish Strategy Document. Correct translation for the mentioned target would be “By increasing worldwide demand for Turkish domestic products, current account deficit will be improved”. Appendix Tables, Table A2.3 Foreign direct investment restrictions, 2015, page 197: It is noted that Turkey permits foreign investment in the mining subsector only through companies established in Turkey, and that the exploration and exploitation of boron are reserved for the Government. Question 20 Could Turkey provide references (perhaps as an annex) to the various licencing and permit regimes in place on mining projects involving foreign investors, including a summary of the regulatory requirements and the actual practice with respect to the issuance of licences and permits? Turkey’s Answer : Article 6 of the Mining Law No:3213 describes mining rights as “Mining rights shall be granted to the Turkish citizens who are qualified to exercise the civil rights; to the legal entities established in accordance with the laws of Turkish Republic and the Statute of which prescribe that mining is included in their field of activity; to the state economic enterprises (SEEs) authorized on this matter and to their entities, affiliates and associates; and to the other public institutions, agencies and administrations.”. Meeting one of the specified conditions mentioned in Article 6 is sufficient in order to obtain mining licence in Turkey. The law does not discriminate between domestic and foreign companies and there are no specific licencing and permit regimes in place on mining projects regarding foreign investors.

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BRAZIL

Secretariat Report

3.2.4.2 Export support programmes

“3.136. Turkey's Ministry of Economy has a number of government support programmes which are intended for all companies operating in commercial or industrial bases (Table 3.21). These programmes provide certain types of support to exporters. (See Sections 3.3.1 and 3.3.2 for SME supports, and business incentives and subsidies, which may also support exports). In addition, each year the Ministry of Economy provides a list of target and priority countries for export.”

Question 1:

Could Turkey indicate which industries and individual products have most benefitted from such support in the last few years? Turkey’s Answer: In terms of merchandise exports, the sectors and individual products that have benefited from such supports to the SMEs are, inter alia, live animals, fresh fruits and vegetables, dried fruits, hazelnuts, cereals, pulses, oil seeds, olive oil, tobacco, chemical products, textiles, apparels, leather and leather products, machinery and parts of machinery, automotive industry, electrics and electronics, forestry products, iron and steel products, mining products, vessels and yachts, jewelry, fishery products, ornamental plants, carpets, cements and products of soil. In terms of services, health and software industries have most benefitted from such support in the last few years.

4.1.4 Support programmes

“4.18. Turkey's agriculture support has undergone many changes over the last 20 years leading to the maintenance of relatively high supports, at least in comparison to other OECD countries. The use of decoupled payments ceased in 2009 while output-based payments increased. Turkey's Producer Support Estimate (PSE) as reported by the OECD has generally increased over the review period, except for a slight decline in 2012. Market-based supports comprise the largest share of the PSE, accounting for 76% in 2014, an increase from 72% in 2011. The largest market-based supports are for beef and potatoes (Table 4.8)”.

Question 2:

Is Turkey taking measures to reduce this high level of agriculture support? If yes, could Turkey elaborate on them?

Turkey’s Answer: First of all, in terms of trade distorting supports Turkey is bound with de minimis level for developing countries in the WTO Agreement on Agriculture. In developing domestic support programs, Turkey needs to take into consideration deep rooted structural problems existing in the agricultural sector including those stemming from fragmented farm lands, small scale of farms and insufficient agricultural productivity. It would not be fair to argue that Turkey provides high level of support to its agriculture, albeit 21% of the rural employment, vis-a vis to many other countries with billions of expenditures to agricultural sector. Having said that Turkey takes into account policy developments towards less disruptive support measures.

Question 3:

According to the Secretariat report, beef is one of the products receiving most support from the Turkish Government. Could Turkey elaborate on the types and amounts of support its beef producers and exporters receive?

Turkey’s Answer: As a traditional agricultural activity in Turkey, livestock sector has a great deal of importance. As can be seen from Turkey’s 2023 Vision for Agriculture, livestock sector is aimed to be further developed through use of modern technologies and effective support tools which will enable more competitive livestock industry and increased productivity. Existing support programmes, details of which can be examined from the Table 4.14 in the Secretariat Report, aims to increase yield per animal through artificial insemination, along with disease control through vaccination of the newborn calves with Brucellosis vaccine etc.

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4.1.8.2 Livestock

“4.35. Agricultural supports to the livestock sector are significant and have increased during the period, in particular direct subsidy payments. Livestock subsidies, as a percentage of Turkey's overall agricultural subsides, have increased. The share of the livestock sector eligible for subsides was 24% in 2011, rising to 30% in 2015”.

Question 4:

Which measures has Turkey taken to ensure that such increased subsidies to livestock do not distort trade and do not generate barriers to imports of beef and poultry? Turkey’s Answer: As a traditional agricultural activity in Turkey, livestock sector has a great deal of importance in terms of socio-economic development. While Turkey aims to further develop livestock sector through use of modern technologies and effective support tools, it does not pursue policies that are aimed to generate barriers to imports. Sustainability of rural communities that depend on livestock farming is the key goal defining the overall support policies for the livestock sector.

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PERU

PREGUNTAS DEL PERU AL EXAMEN DE POLİTICAS COMERCIALES DE TURQUİA Sobre la base de lo senalado en la documento WT/TPR/S331 del 9 de febrero de 2016, el Peru tiene las siquientes preguntas: Pregunta 1 4. POLÍTICAS COMERCIALES, POR SECTORES 4.3 Servicios 4.3.1 Servicios financieros 4.3.1.1 Banca Parrafo 4.87.- Según el FMI, los bancos turcos están bien capitalizados y en 2014 mantenían una relación entre los préstamos y los depósitos del 118%. Los activos de los bancos han crecido a lo largo del período objeto de examen, pero se mantienen en un nivel razonable, el equivalente del 114% del PIB de Turquía; y la relación entre los créditos improductivos y los préstamos totales se mantiene en el 2,9%. No obstante, el sistema bancario está sometido a un riesgo importante de refinanciación debido al aumento de la financiación externa en divisas. El FMI también ha señalado que Turquía, en octubre de 2014, había sido eliminada de la lista de países del Grupo de Acción Financiera con insuficiencias estratégicas en sus marcos jurídicos para combatir el blanqueo de dinero y la financiación del terrorismo. Esta eliminación se produjo después de que se adoptasen medidas de penalización de la financiación del terrorismo y se estableciesen procedimientos para identificar, congelar y confiscar los activos terroristas. (El subrayado es nuestro) Pregunta.- El Peru desea conocer cuales son estas medidas de penalizacion y que procedimientos se han establecido para hacerlas efectivas Turkey’s Answer: Within the scope of criminalization of terrorist financing offence and mechanism for asset freezing, three main legislative instruments entered into force: 1. Law No.6415 on the Prevention of the Financing of Terrorism (TF Law) entered into force on 16 February 2013 within the scope of effective fight against terrorism and financing of terrorism for the purpose of determining the principles and procedures on implementing the “International Convention for the Suppression of Financing of Terrorism” dated 1999 and the United Nations Security Council Resolutions related to combating terrorism and the financing of terrorism within the context of this Law, on establishing financing of terrorism offence, and on freezing of asset with the aim of preventing financing of terrorism. 2. Regulation on the Proceeds and Principles Regarding the Implementation of Law on the Prevention of the Financing of Terrorism (Regulation on TF) entered into force on 31 May, 2013 for the purpose of regulating principles and procedures regarding making, executing, revoking of the asset freezing decisions, and management and control of frozen assets within the scope of effective fight against terrorism and financing of terrorism. 3. Financial Crimes Investigation Board (MASAK) General Communiqués No.12 entered into force on 21 June 2014 for the purpose of effective implementation of the TF Law and the Regulation on TF. The scope of the Communiques consists of explanations on the enforcement of decisions on freezing of asset by the persons, institutions and organizations holding assets in their care or keeping the record of assets in accordance with the provisions of the Law and Regulation and on the management of frozen assets in accordance with provisions of the Law within the scope of the permission granted by MASAK.

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1. Criminalization of TF Offence

TF offence is criminalized by the Articles 3 and 4 of the TF Law as follows:

Article 3 “(1) It is forbidden to provide or collect funds for perpetration of the following acts: a) Acts intended to cause death or serious bodily injury for the purpose of intimidating or suppressing a population or compelling a government or an international organisation to do or to abstain from doing any act, b) Acts set forth as terrorist offences within the scope of the Anti-Terror Law No.3713 dated 12/04/1991, c) Acts that are forbidden and stipulated as offence in; 1) Convention for the Suppression of Unlawful Seizure of Aircraft, 2) Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, 3) Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents, 4) International Convention against the Taking of Hostages, 5) Convention on the Physical Protection of Nuclear Material, 6) Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, 7) Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation, 8) Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf, 9) International Convention for the Suppression of Terrorist Bombings to which Turkey is a party.”

Article 4

“(1) Any person who provides or collects funds for a terrorist or terrorist organisations with the intention that they are used or knowing and willing that they are to be used, even without being linked to a specific act, in full or in part, in perpetration of the acts that are set forth as crime within the scope of Article 3 shall be punished by imprisonment for a term of five to ten years, provided that his/her act does not constitute another offence requiring a heavier punishment.”

These provisions encompass criminalization of financing of all terrorist acts including those against Turkey and/or other countries. In addition, as it is clearly stated in Article 4, providing or collecting funds for an individual terrorist or a terrorist organization is explicitly criminalized.

Abovementioned provisions are in line with the international standards. 2. Asset Freezing Mechanism on TF

The Regulation on TF and MASAK Communique No.12 has been established in order to implement UNSC Resolutions. Obligations within the new TF Law for implementing asset freezing decisions with regard to all relevant public and private institutions and other legal entities including financial institutions and DNFBPs are clearly set and defined in this legislation. With the Regulation on TF following important aspects of the new asset freezing system are stipulated in detail and more clearly:

Definitions of some concepts in the TF law (Article 3),

Further clarifications with regard to definitions of fund and freezing of asset in the TF law, in line with “funds or other assets” definition of the FATF (Article 3),

Procedures for listing, delisting and unfreezing, access to frozen funds and way of appeal against asset freezing decisions (Articles 4, 5 and 12 to 16),

Communication with financial institutions and DNFBPs and work flows for implementing asset freezing decisions (Article 14),

Duties and powers of Assessment Commission (Article 10),

Duties and powers of MASAK (Article 16),

Control mechanism for frozen assets, implementation of sanctions for failure to implement asset freezing decisions (Articles 18 to 22),

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With the mentioned Regulation, MASAK is the main actor of the asset freezing mechanism. According to Article 16 of the Regulation, MASAK is responsible for;

a) implementing asset freezing decisions,

b) conducting financial research and requesting information from any public institution and natural or legal person with regard to detection of terrorist assets,

c) receiving appeals of delisting and submitting them to the relevant authorities,

d) approving requests of unfreezing and implementing it by notifying institutions and organizations, and natural and legal persons

e) sending injunctions to financial institutions and DNFBPs or other relevant natural and legal persons or public institutions who hold asset records, to implement the freezing action,

f) listing persons, institutions and organizations about whom decision on freezing of assets has been made on MASAK website and de-listing them,

g) giving permissions for access to frozen funds,

h) controlling whether the obliged parties including financial institutions and DNFBPs who hold asset records comply with the freezing decision and whether the frozen asset is managed in conformity with the provisions of the law, and drawing up guidance in this regard,

i) publishing guidance and implementation manuals, organizing trainings, workshops, panels and seminars in order to ensure that obliged parties who hold asset records implement asset freezing decisions effectively and thoroughly,

j) performing the Secretariat services of the Assessment Commission

According to the Regulation, for the purpose of implementing asset freezing decisions timely and efficiently, MASAK may set up secure electronic systems for notifying relevant persons, institutions and organizations, and receive feedback from them (Article 14(10)). In this framework, MASAK notifies the decisions to the relevant obliged parties, including financial institutions and DNFBPs, who hold assets immediately through means of communication such as fax, e-mail and other electronic web services.

On the operational side, it should be noted that MASAK has sufficient technical infrastructure for detecting and monitoring terrorist assets and for informing electronically and without delay financial institutions and DNFBPs.

According to the Regulation on TF, MASAK has the authority to give permission to access frozen funds. But it is clearly stipulated in the Regulation and the Communique No:12 that MASAK, when granting permission, takes into consideration the permission and notification procedures arranged in UNSC Resolutions 1267 (1999), 1988 (2011) and 1989 (2011) and their successor Resolutions including UNSCR 1452.

MASAK also controls whether persons or institutions within which frozen assets are held, act in compliance with the decision of freezing and whether those concerned manage the frozen asset in compliance with Law by conducting, research and examinations on relevant books, documents and records.

Moreover, MASAK General Communique No.12 brings more clear explanations on the implementation of decisions on freezing of asset by liable parties (financial institutions and DNFBPs) in accordance with the Law and Regulation and on the management of frozen assets within the scope of the permission granted by MASAK.

With the Communique,

It has been clearly mentioned that while granting permission to access the frozen assets under UNSC Resolutions No. 1267 and 1373, MASAK shall pursue the procedures proposed in the UNSC Resolution No. 1452(2002) and its successor Resolutions.

Purpose and scope of access to frozen assets has been redefined in accordance with the UNSC Resolution No. 1452(2002)

Communication with liable parties via the Registered Electronic Mail System has been clearly set up.

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Blocking Non-Face-to-Face Systems for designated persons has been introduced

Freezing of jointly owned assets has been explained.

Guidance for potential matches with sanction lists while carrying out financial transactions has been provided

All obligatory payments which can be made without permission according to TF Law, to be made to public institutions or quasi-public organizations as taxes, levies, duties, rents, social security premiums, has been included within the scope of the actions to be taken with the permission of MASAK.

All permitted actions of legal entities to be conducted within the scope of the permission document required to be conducted over bank accounts.

Permitted legal entities whose assets are frozen may not accept cash while purchasing or selling goods and services or collecting their receivables in order to continue their activities. All collections to be made by them shall be made by using point-of-sale devices or through bank accounts.

Every kind of exercise of power of disposition on frozen assets stated in the Law and the Regulation have been clarified and ruled out in order to avoid undermining freezing decisions.

Pregunta 2 4. POLÍTICAS COMERCIALES, POR SECTORES 4.3 Servicios 4.3.1 Servicios financieros 4.3.1.2 Seguros Parrafo 4.98.- La Ley de Seguros Nº 5684, de 2007, regula la supervisión de las compañías de seguros y reaseguros. Todas las compañías de seguros y reaseguros, sean turcas o extranjeras, están sometidas a la misma legislación. No existe ninguna restricción a los capitales extranjeros. En Turquía solo pueden establecerse compañías de seguros o reaseguros bajo la forma de sociedades anónimas o compañías mutuas (cooperativas). Las compañías extranjeras de seguros y reaseguros también pueden operar en Turquía mediante la apertura de sucursales, siempre que no tengan prohibida tal cosa en sus países de origen. Las compañías de seguros y reaseguros deben obtener licencia de la Subsecretaría del Tesoro. Cada sucursal debe disponer de una licencia distinta. Las licencias están registradas en el Registro Mercantil de Turquía y se publican en la Gaceta del Registro Mercantil de Turquía. (El subrayado es nuestro) Pregunta.- El Peru desea conocer los requisitos y procedimientos para la obtencion de la licencia. Turkey’s Answer: Requirements for license applications are specified in articles 11-15 of the Regulation on Establishment and Working Principles of Insurance Companies and Reinsurance Companies which can be reached at http://www.tsb.org.tr/regulations.aspx?pageID=987 Pregunta 3 4. POLÍTICAS COMERCIALES, POR SECTORES 4.3 Servicios 4.3.1 Servicios financieros 4.3.1.3 Valores Parrafo 4.109.- El objetivo a largo plazo es preparar Borsa Istanbul para su privatización. Interlocutores comerciales internacionales han manifestado desde hace mucho tiempo su interés por adquirir una parte del capital de la empresa. El Gobierno tiene una participación del 49% en el capital total de Borsa Istanbul y ha manifestado el propósito de vender su participación mediante una IPO prevista para 2016.

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Pregunta.- El Peru desea conocer si esta venta estara abierta para inversionistas extranleros. Turkey’s Answer:(BIST) Currently, 73.6% of Borsa Istanbul’s shares belong to Turkish Treasury. Treasury shares can be subject to an IPO until 31/12/2016 and up to 42.75% of Borsa Istanbul can be offered to public. Borsa Istanbul’s IPO process started with an announcement on international and local media. (http://www.borsaistanbul.com/docs/default-source/yatirimci-iliskileri/halka-arz-financial-times-ilani.pdf?sfvrsn=2) New progress can be followed through Borsa Istanbul’s website at http://www.borsaistanbul.com/en/investors/initial-public-offering-ipo. Borsa Istanbul’s contemplated IPO will be open to foreign and domestic investors. As per the regulation, 70% of the issue can be sold to foreign investors. Pregunta 4 4. POLÍTICAS COMERCIALES, POR SECTORES 4.3 Servicios 4.3.2 Sanidad 4.3.2.4 Politica Sanitaria Parrafo 4.131.- Durante el período objeto de examen, la política sanitaria de Turquía se definió a través de los planes estratégicos del Ministerio de Sanidad, uno para el período 2010-2014 y otro para el período 2013-2017; sin embargo, su objetivo básico se mantiene: "proteger y mejorar de forma equitativa la salud de nuestra población". Pregunta.- El Peru desea conocer los objectivos de la politica sanitaria para el periodo 2013-2017. Turkey’s Answer: The main goal of the mentioned policy is “to protect and improve the health of our people in an equitable manner”. Strategic Goal 1: To protect the individual and the community from health risks and foster healthy life styles Objective 1.1.To develop healthy dietary habits, increase the level of physical activity, and reduce obesity

Objective 1.2.To sustain the fight against tobacco and to reduce the exposure to tobacco and the use of addictive substances

Objective 1.3.To develop health literacy to increase individuals' responsibility for their health

Objective 1.4.To raise awareness of reproductive health and encourage healthy behaviours.

Objective 1.5.To reduce the negative impact on health of public health emergencies and disasters

Objective 1.6.To protect and promote the health and well-being of employees by improving occupational health

Objective 1.7.To mitigate the negative impact on health of environmental hazards

Objective 1.8.To carry out effective actions on social determinants of health by mainstreaming health in all policies

Objective 1.9.To combat and monitor communicable diseases and risk factors

Objective 1.10.To reduce and monitor the incidence of non-communicable diseases and risk factors

Strategic Goal 2: To provide accessible, appropriate, effective, and efficient health services to individuals and the community

Objective 2.1.To improve the quality and safety of health services

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Objective 2.2.To protect and improve maternal, child, and adolescent health

Objective 2.3.To ensure the effective utilisation of preventive and essential health services

Objective 2.4.To sustain appropriate and timely access to emergency care services

Objective 2.5.To improve the integration and continuity of care by strengthening the role of primary healthcare

Objective 2.6.To control and reduce the complications of non-communicable diseases

Objective 2.7.To strengthen the regulations of traditional, complementary and alternative medical practices to ensure the effectiveness and safety

Objective 2.8.To continue to improve the distribution, competences and motivation of human resources for health, and to ensure the sustainability of human resources for health

Objective 2.9.To improve the capacity, quality and distribution of the health infrastructure and technologies and to ensure their sustainability

Objective 2.10.To ensure accessibility, safety, efficacy and rational use of drugs, biological products and medical devices, and the safety of cosmetic products

Objective 2.11.To enhance the health information systems for monitoring and evaluation of, and evidence-based decision-making for, the health service delivery system

Strategic Goal 3: To respond to the health needs and expectations of individuals based on a human-centred and holistic approach

Objective 3.1. To strengthen the role of individuals in order to ensure their active participation in decisions regarding their healthcare Objective 3.2. To better meet the needs of individuals with special needs due to their physical, mental, social or economic conditions by ensuring easier access to appropriate health services Objective 3.3. To contribute to ensuring equity in the financing of health services and protection of individuals from financial risks Objective 3.4. To increase the satisfaction of individuals with their health services and that of health workers with their working conditions Strategic Goal 4: To continue to develop the health system as a means to contributing to the economic and social development of Turkey and to global health Objective 4.1.To maintain the financial sustainability of health care system without compromising service quality through implementation of evidence-based policies Objective 4.2.To monitor health system performance and to document its contribution to health and the national economy Objective 4.3.To promote research, development, and innovation in priority fields of the health sector Objective 4.4.To promote the contribution of the health sector to the economy Objective 4.5.To strengthen health tourism in Turkey Objective 4.6.To be among the leaders in the development and implementation of global and regional health policies Objective 4.7.To contribute to global health through cooperation and development aid

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Pregunta 5 4. POLÍTICAS COMERCIALES, POR SECTORES 4.3 Servicios 4.3.3 Telecomunicaciones Parrafo 4.182.- La Visión 2023 de Turquía, que comenzó a aplicarse en 2003, comprende cuatro subproyectos centrados principalmente en la tecnología y los sistemas de información. En el caso de las TIC (incluido el sector de las telecomunicaciones), el objetivo de la Visión es alcanzar una cifra de 30 millones de abonados a los servicios de banda ancha; suministrar conexión a Internet a 14 millones de hogares, a una velocidad de 1.000 Mbps; aumentar la contribución de las TIC al PIB hasta el 8%; lograr una tasa de alfabetización informática del 80%; convertir Turquía en uno de los 10 países líderes en el ámbito de la transformación electrónica; elevar el número de empresas a 5.500 y el número de empleados a 65.000; y aumentar de año en año el tamaño del sector y el crecimiento del mercado. En 2013 se actualizó la Visión en lo relativo a las TIC (incluido el sector de las telecomunicaciones). El objetivo de la Visión revisada es alcanzar una cifra de 60 millones de abonados a los servicios de banda ancha; aumentar la contribución de las TIC al PIB hasta el 10%; lograr una tasa de uso de los servicios de Internet de banda ancha del 80%; y suministrar a todos los hogares y empresas acceso a servicios de banda ancha mediante redes de próxima generación. El número de abonados a los servicios de banda ancha ya ha alcanzado los 41,2 millones. En 2014, la contribución de las TIC al PIB fue casi del 4%. En abril de 2015 el porcentaje de población que utilizaba Internet era del 55,9%. Pregunta.- El Peru desea saber cuales son los objetivos especificos de estos subproyectos. Turkey’s Answer: Vision 2023 Project is composed of the following sub-projects:

Technology Foresight Project National Technology Competence Inventory Project Researcher Information System Project TÜBİTAK National Research Infrastructure Information System Project

The task of implementation of the Technology Foresight Project in coordination with the related institutions and establishments, pursuant to the decision of the Supreme Council for Science and Technology, constitutes the main axis of the Vision 2023 Project, which has been assigned to TÜBİTAK. The foresight panels, formed in 12 socio-economic areas commenced their activities in July 2002. Strategy document, covering the science and technology policies for the next 20 years of Turkey, has been elaborated with the assessment of namely the outputs of the foresight project, synthesis report, Delphi findings and the outputs of the strategic technology workgroups. A comprehensive survey was applied to approximately 2500 firms in February-March 2003 in order to determine the technological competence level of Turkey within the scope of the National Technology Competence Inventory Project. The analysis of the survey was completed in September 2004 and the report provided objective data to the technology Foresight Project. Turkish National Researcher Information System (ARBİS) has been designed as a system for the research personnel in universities, public and private sector establishments in Turkey and the Turkish researchers serving abroad. TÜBİTAK National Research Infrastructure Information System (TARABİS) is a web-based application designed and developed by TÜBİTAK. It aims to create the database for machine/system/device stock related to research, experimental development, test/analysis, diagnosis activities and R&D project accumulation. More information can be accessed from TÜBİTAK’s (The Scientific and Technological Research Council of Turkey) website: http://www.tubitak.gov.tr/en/about-us/policies/content-vision-2023

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UNITED STATES

Question 1 WT/TPR/S/331, page 28, paragraph 2.9: Does Turkey have any plans to phase out its local content requirements, especially in the renewable energy sector? Turkey’s Answer: Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy was enacted in 2005. The aim of the law is to increase the share of renewable energy sources in total electricity production. The Law was amended in December 2010 and the article regarding the “use of domestic products” was incorporated in the Law. With this amendment, incentives for the use of domestic products are provided for a limited period of time. As a matter of fact, the EU Climate and Energy Package sets a major objective as “Raising the share of EU energy consumption produced from renewable resources to 20% up to 2020”. Similarly, Turkey aims to raise renewable energy resource share in electricity production to 30% at least, by 2023 according to Electricity Energy Market and Supply Security Strategy Document. In order to reach this target and to prevent increase in the current account deficit, Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy provides the legislative base to supply an additional tariff for the renewable energy produced by using domestic equipment. For developing countries, the best solution to reduce the dependence on imported energy is introducing renewable energy which is environmentally friendly and sustainable. However, importing this technology from other countries for those which do not have the manufacturing technology of renewable energy, leads to another dependency. This application does not require an obligatory use of domestically produced equipment to benefit from the existing FIT program. It brings an additional FIT amount for local products which will help to support the recently starting renewable industry development in the country. Also, it will important job creation to produce this equipment locally, either by domestic or foreign companies. Another important point to mention is that this application is temporary. Only the production facilities in the renewable energy sector, which are commissioned before December 2020, can benefit from the application. This additional tariff is provided for a term of five years from the commissioning of the production facility. Additionally, it is optional to benefit both from the 10 years feed in tariff guarantee application and the 5 years additional price guarantee of the government. The producer can choose to sell the energy produced by renewable resources to the market in any suitable way instead of enjoying these incentives. Considering the effect of the usage of renewable energy resources on global clean environment creation and protection, reducing the greenhouse gas emission in developing countries, and that reduction of energy dependency would only be possible by improving country's own technological and industrial opportunities in the area. Question 2 WT/TPR/S/331, page 33, paragraph 2.30: Please describe the commitments with respect to copyright in the free trade agreement that Turkey recently concluded with the Republic of Korea. Turkey’s Answer: The FTA between Turkey and the Republic of Korea regulates copyright issues under Chapter 2 on Intellectual Property Rights. The Parties undertake to comply with international standards. The undertakings of the Parties comprise Articles 1 through 22 of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961); Articles 1 through 18 of the Berne Convention for the Protection of Literary and Artistic Works (1971); Articles 1 through 14 of the World Intellectual Property Organization Copyright Treaty (1996) and Articles 1 through 23 of the WIPO Performances and Phonograms Treaty as elaborated under subparagraph 1 of Article 2.2. Besides, the Parties undertake to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures and to provide adequate legal

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protection for rights management information in accordance with the conditions laid down in the Agreement. Additionally, the Parties undertake to establish provisions for the enforcement of intellectual property rights in their domestic law in accordance with the TRIPS Agreement, in particular Articles 41 through 61. Furthermore, the Parties undertake to provide measures to curtail repeated copyright and related rights infringement on the internet. The text of the FTA between Turkey and the Republic of Korea can be reached at http://www.ekonomi.gov.tr/portal/content/conn/UCM/path/Contribution%20Folders/web_en/Trade%20Agreements/Free%20Trade%20Agreements/Republic%20of%20Korea/Turkey-Republic_of_Korea_Free_Trade_Agreement.html Question 3 WT/TPR/S/331, page 39, paragraph 2.55: We understand that the goal of the Coordination Council for the Improvement of the Investment Environment is to improve Turkey's competitiveness in attracting FDI. In the Council's most recent action plan, please describe whether further amendments to Turkey's copyright law, which would be consistent with the goal of attracting FDI, were listed as a priority. Turkey’s Answer: Turkey is aware of the significance of intellectual and industrial property rights in attracting more FDI. Accordingly, the Coordination Council for the Improvement of Investment Environment (YOIKK) has ten technical committees, one of which is on Intellectual Property Rights (IPR) and R&D. The Committee’s work includes the removal of administrative barriers regarding IPR and improving the implementation of the associated rights. In terms of the annual action plans of YOIKK, one of the items of YOIKK’s 2015-2016 Action Plan is “Making the necessary legal amendments in order to make disposal of Intellectual Property infringing goods applicable in Turkey”. A draft article about simplified procedure of disposal of such items is prepared by the Technical Committee and added to the Draft Law on Industrial Property which is planned to be submitted to the Parliament in the upcoming period. The Draft Law aims to unite all the statutory decrees related with industrial property rights in order to contribute to Turkey’s technological development, eliminate implementation problems and provide harmonization with the international norms. Regarding copyright regulations, one another action item contains enabling the share of data via a protocol between the Ministry of Customs and Trade and the Ministry of Interior with regard to the contact information of rightful owners/representatives who have valid applications into the Intellectual Property Rights Program. Question 4 WT/TPR/S/331, page 69, paragraph 3.60: As stated in the Secretariat’s Report, the United States has in the past raised concerns with Turkey’s investigation on imports of cotton from the United States. Throughout this investigation, Turkey has denied the United States’ requests for supporting information and evidence that Turkey used as a basis for self-initiation of the investigation and a finding of injury. In February 2016, Turkey released its disclosure of essential facts and the requested supporting information continues to be withheld. Please indicate when Turkey will release this information to the parties, so that a determination can be made as to whether Turkey has abided by its WTO obligations and there is, in fact, sufficient positive evidence to support a finding of injury. Turkey’s Answer: Anti-dumping investigation on imports of cotton originating in U.S is still ongoing; the general and firm specific final disclosures have been released. The public and firm specific hearings were held. Turkey has been conducting investigations according to its national anti-dumping legislation that is in line with WTO Anti-Dumping Agreement (ADA) respecting the transparency and due process rights of the parties. Thus the information requests of the parties are met considering Article 6 of ADA. The comments of the interested parties are still being evaluated by the investigating authority and the results of the investigation will be released/published in accordance with the legislation.

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Question 5 WT/TPR/S/331, Page 75, Paragraph 3.96: The Secretariat’s report notes that Turkey has been focusing on harmonizing its SPS legislation with that of the EU during the review period. What is the rationale for adopting EU SPS standards? How will Turkey ensure that their legislation is science-based and is implemented according to their WTO obligations under the SPS Agreement? Turkey’s Answer: As known, Turkey is candidate for the EU membership since the start of the Customs Union in 1995 and at the final stage of full membership. For this objective, Turkey has continued to take certain steps in many areas to harmonize its national regulations with the EU Acquis, including related to SPS standards. It should be noted that as a member of the WTO, Turkey is aware of its rights and obligations arising from the WTO SPS Agreement. In other words, while aligning itself with the EU Acquis, Turkey also takes into consideration WTO SPS Agreement which inherently necessitates to consider the recommendations and standards of the international sister organizations mentioned in the SPS Agreement in the process of developing SPS standards. In doing so, scientific literature is closely followed during the preparation of all regulations. Notifications related to measures falling under the scope SPS Agreement are submitted to the WTO on a regular basis. In order to reduce risks, science based risk assessments are being carried out so as to ensure compliance with the WTO SPS Agreement. Question 6 WT/TPR/S/331, page 77, paragraph 3.103: The Secretariat’s report states that SPS-related measures are developed in accordance with the standards, recommendations and guidelines determined by standard setting organizations which are recognized by the WTO. According to the Organization for Animal Health (OIE), countries are recommended to resume trade three months after stamping out of an outbreak, and the subsequent cleaning and disinfection and continued surveillance of affected establishments. Can Turkey please discuss how their process for removing avian influenza bans is consistent with OIE guidelines? Turkey’s Answer: In accordance with Article 4 of Law on Veterinary Services, Plant Health, Food and Feed Law No:5996, the whole country or only one region of the country where an outbreak of a disease is observed may be restricted or prohibited totally or partially. Scope of the prohibition may be narrowed or expanded depending on the course of the disease. Removal of the bans regarding “Avian Influenza” is fully compatible with the OIE rules and OIE Terrestrial Animal Health Code has been based on for the removal of the ban. Poultry products that are processed in appropriate temperature and periods in accordance with trade related recommendations of OIE Terrestrial Animal Health Code are not subject to restrictions. Question 7 WT/TPR/S/331, page 79, paragraph 3.109: The Secretariat report states that Turkey conducts all plant health activities in line with IPPC standards. The United States requests that Turkey clarify why they are not allowing any mitigation mechanisms for white tip nematode (Aphelenchoides besseyi) in unmilled rice; which is considered by Turkey to be a quarantine pest despite the fact that this nematode is widespread in Turkey. Turkey’s Answer: “A.besseyi” nematode is one of the harmful organisms included in the Annex-1 B of the Regulation on Plant Quarantine. Plants, plant products and other substances that are intended to be introduced into the country are not permitted to enter into the country if they are contaminated by harmful organisms that are subject to quarantine listed in Annex-1 and Annex-2, according to the Article 13 of the above mentioned Regulation. While it is true that “A. besseyi” nematode can also be seen in Turkey, it is not widespread and can be seen within a very limited area where domestic quarantine measures are also being applied.

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Question 8 WT/TPR/S/331, Page 79, paragraph 3.111: Secretariat report mentions the 2010 biosafety law. This law includes an onerous liability clause which has hindered developers from submitting applications for products derived from biotechnology. Does Turkey intend to remove or otherwise modify this liability clause? Turkey’s Answer: According to Article 3 of the Biosafety Law, on “Application, Evaluation and Decision Making”, gene owners or importes are required to apply to the MFAL for the first importation of each GMO and products thereof. The same requirement also applies to domestically developed GMO’s and products thereof, by natural and legal persons. There is no onerous liability that hinders the application. Question 9 WT/TPR/S/331, page 79, paragraph 3.111: The Secretariat states that the Biosafety Board makes decisions on a scientific basis reflected in the scientific risk assessment and socio-economic evaluation. Unlike the European Food Safety Authority, Turkey’s Biosafety Board and its committees are not transparent in their decision making, and no scientific justification has been provided for approvals or rejections. How does Turkey intend to increase the transparency of their decision-making process to demonstrate that decisions are made on a scientific basis? Turkey’s Answer: In decision making process, the Biosafety Board which also includes scientists, evaluates reports by Scientific Committees and takes public opinion into consideration. Reports prepared by Scientific Committees -with the exception of simplified process- are shared with the public for public consultations. Reports are uploaded and shared publicly through the web site of Turkish Biosafety Information Exchange Mechanism (www.tbbdm.gov.tr.) Board provides scientific reports for the rejections and approvals made by explanatory scientific based reports. While carrying out evaluations, Scientific Committees consider several documents including those submitted by importers and number of international institutions such as EFSA, WHO, FAO, FDA as well as the results of scientific researches. Against this background, Turkey does not consider that the decision making process of the Biosafety Board is non-transparent and non-science based. Question 10 WT/TPR/S/331, page 96, paragraphs 3.159 – 3.160: According to the Secretariat Report, since 2004, Turkey has maintained a “national branding programme” called TURQUALITY®, which acts as an incubator for selected Turkish brands, under which “the state pays 50% of company expenses for TURQUALITY® support services for branding and entering international markets.” The Secretariat Report notes that at the end of 2013, the program was supporting 105 brands involving 50 companies.

Could Turkey provide information as to what manufacturing sectors are being supported under this program?

Turkey’s Answer: Every type of manufacturing sector is being supported under this program. The eligibility of the program is not limited, by law, to any enterprise or group of enterprises, or to any industry or group of industries.

Could Turkey explain whether this program has previously been notified pursuant to the

notification requirements under Article 25 of the SCM Agreement? If not, will Turkey submit the requisite notification or explain why this program may not be subject to the notification requirements?

Turkey’s Answer: This program is not specific within the meaning of Article 2 of the SCM Agreement since the eligibility of the program is not limited to any enterprise or group of enterprises, or to any industry or group of industries.

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Given that the program supports a company’s entrance into international markets, could Turkey explain whether export performance would be one condition in determining eligibility for continuing support?

Turkey’s Answer: The program is not contingent upon export performance in determining eligibility for the continuation of support. Question 11 WT/TPR/S/331, page 101, paragraph 3.178: The Secretariat’s report states that, “[a]ccording to the 2015 Annual General Investment and Financing Programme, SOEs have to establish an internal control system by the end of 2016. In addition, SOEs were subject to independent external audit starting from 2015 . . . “ Please identify which SOEs have already established an internal control system. Also, please identify which SOEs have already been subject to independent external audits and whether the audit reports are publicly available. If publicly available, please identify where such reports can be found. Turkey’s Answer: All SOEs already have internal control systems. However, with Annual General Investment and Financing Programmes, SOEs are expected to improve their internal control systems in a professional way in line with good practices by the end of 2016. Regarding independent external audit, all SOEs are subject to independent external audit starting from 2015, as a result first audit reports are expected to be publicly available on SOEs’ web sites by the second quarter of 2016. Question 12 WT/TPR/S/331, page 112, paragraph 3.203: Please describe improvements/amendments to copyright protection and enforcement, if any, in the National Intellectual and Industrial Property Strategy paper for 2015-18. We would be especially interested in learning more about Turkey's plans, if any, to enhance cooperation between Internet Service Providers and copyright owners and to improve protection against the circumvention of technological protection measures and trafficking in circumvention technologies, software, devices, components, and services. Turkey’s Answer : Turkey has set a number of strategies on IP policy. The National Intellectual and Industrial Property Strategy paper is a crucial development for Turkey and this paper provides an overall strategy for the intellectual property related sectors for the term 2015-18. As it can be also seen from the Secretariat Report (WT/TPR/S/331) the strategy paper has four main goals and 51 commitments related to strengthening legislation and enforcement, IPR sector, administrative capacity and rising of public awareness for the period of 2015-2018. These main four goals are; 1-) legislation and practice in-line with Turkey's need for improving intellectual property rights with effective implementation; 2-) ensuring adequate human and institutional capacity for the judicial, customs and law enforcement services actively involved in protecting intellectual property rights; 3-) to improve the effectiveness of the mechanisms for commercialization, market perception, and infrastructure in developing intellectual property rights; 4-) increase public awareness about the intellectual property rights system, with the target of becoming an information and knowledge-based society. Latest amendments/improvements made within the context of this strategy paper can be stated as follows:

In order for Provincial Inspection Commissions to perform inspections rapidly and effectively by penetrating into the roots of piracy, 45 QR code readers detecting the authenticity of intellectual and artistic works through the brand new banderoles and enabling to access to the rights management information of these works were distributed to the Provincial Inspection Commissions between 2012 and 2015 with a view to consolidate the technical infrastructure of combat against piracy. In the meantime, banderol security was tightened with the renewed “Encrypted Laser Code System” piloted for the first time in 2015 through new banderoles and 200 Laser Code Reader Devices were distributed to 81 provinces of Turkey to render inspections swifter.

Within these four main goals, all documents of registration system records, located at Directorate General for Copyright and Istanbul Directorate for Copyright and Cinema constitute a significant portion of Turkey’s cultural heritage. Those documents also facilitate the proof of authorships at IPR related lawsuits. Thus, with a view to protect these works and within the scope of modern archive concept, the project on digitization of registration records of cinematographic and musical works between the years 1933-2013,

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their banderoles and all other related documents (6.5 million items in total) was accomplished in May 2014. With the aforesaid project, it will be possible to provide credible and swift information as well as documents provided by the courts.

A Ministry of Culture and Tourism (DG for Copyright) IPA project entitled “Strengthening the Turkish Copyright System with a Focus on Fostering Creative and Copyright Based Industries” was accepted by the EU Commission.

In an effort to reinforce the administrative capacity of Directorate General for Copyright, a cooperation strategy has been commenced with World Intellectual Property Organization (WIPO) for the establishment of an IP Academy in Turkey.

Collecting societies named MESAM and MSG (operating in the field of musical right holders), MÜ-YAP (operating in the field of phonogram producers) and MÜYORBİR (operating in the field of performers) signed a Protocol on Joint Licensing, on 29 May 2014 in order to centralize licensing activities. Consequtively, the mentioned collecting societies signed a protocol with TUROFED (Turkish Hoteliers Federation) on 2 March 2015, which amends the protocol dated 2008 to apply a special tariff for the hotels’ uses.

Ministry of Culture and Tourism (DG for Copyright) initiated to carry out a research project titled “National Study on Assessing the Economic Contribution of Copyright-Based Industries to the National Economy of Turkey” in co-operation with the World Intellectual Property Organization (WIPO) in order to measure the economic contribution of copyright industries in Turkey.

Some provisions of the current copyright law are given below;

Preparation Actions Which Aim at Circumventing Protective Programs Art. 72. (Amendment: 23.01.2008-5728/139) “Any person who produces, puts up for sale, sells or possesses for non- private use programs and technical equipment which aim to circumvent additional programs developed to prevent illegal reproduction of a computer program shall be sentenced to imprisonment from six months to two years.” This Article is also going to be amended in compliance with the EU Directive. Finally; please kindly note that there is an effective punitive measure for Internet Service Providers and content providers.

“Additional Art 4: In case where rights of authors and related rights holders granted by this Law have been violated by providers of service and content through the transmission of signs, sounds, and/or images including digital transmission, the works which are subject of the violation shall, upon the application of the rightholders, be removed from the content. Natural or legal persons whose rights have been violated shall to this end initially contact with the content provider and request that the violation be ceased within three days. Should the violation continue, a request shall next be made to the public prosecutor requiring that the service being provided to the content provider persisting in the violation be suspended within three days by the relevant service provider. The service being provided to the content provider shall be restored, if the violation is ceased.” Additional Article 4 of the Law No. 5846, provides a two-stage approach. Initially, the law requires the hosting companies, content providers, or service providers to take down the infringing material from their servers upon ‘notice’ given to them by the right holders. The providers need to take action within three days. If the allegedly infringing content is not taken down or there is no response from the providers, the right holders can ask the Public Prosecutor to provide for a blocking order, and the blocking order is executed within three days. This legal remedy is therefore predominantly issued with regards to websites related to piracy and copyright infringements.

The latest development in the digital area; in 2014, to ensure the implementation of the blocking access decisions, “Internet Service Providers' Union” was founded with the amendment made in Law No. 5651 on Regulating Broadcasting in the Internet and Fighting Against Crimes Committed through Internet Broadcasting.

The Union is formed by the participation of operators providing internet access services and ensures coordination between all of its members. The blocking access decisions given by judicial authorities regarding digital copyright infringements are sent to the Union to fulfil swiftly.

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In addition, to develop an applicable system in order to reduce the digital piracy particularly the personal file sharing peer to peer methods without prejudice to sensitive issues of the rights such as freedom of communication and privacy of personal data, Ministry of Culture and Tourism is planning to bring together the representatives of service providers (ISP’s) operating in the country, collecting societies and the right holders, representatives of the Union of ISP’s and the Ministry in order to discuss all aspects and solution proposals.

Question 13 WT/TPR/S/331, page 112-113, Table 3.43: The Secretariat Report provides a table of IP statistics which includes, inter alia, statistics on the number of patent and trademark applications and grants from 2011 through 2014. If possible, please provide correlating statistics for copyright applications.

Turkey’s Answer : A registration system is available in pursuant to Article 13 of Law No. 5846. In this context, the total number of applications of copyright on phonograms, films and computer games, which are produced in or imported to Turkey between the years 2010 and 2015, are as follows: 20,192 for phonograms, 7,676 for films and 1,215 computer games.

Question 14 WT/TPR/S/331, page 113, paragraph 3.210:

We have taken note that Turkey recently amended Article 47 of the Law on the Intellectual and Artistic Works (No. 5846) to permit the Government of Turkey to expropriate works that are deemed important for the culture after the death of the author but before the expiration of the term of protection. Please discuss how this limitation complies with the TRIPs three-step process.

We also understand that the Turkish Constitutional Court struck down the amendment to

Article 47 on May 13, 2015 but delayed the entry into force of its judgment for twelve months. Please confirm our understanding of the status of Article 47, including the anticipated date of the repeal of the amendment.

Lastly, it is our understanding that amended Article 47 is applicable not only to works

authored by Turkish citizens but also to all works authored in Turkey. Please describe works authored by foreign nationals in Turkey, if any, that were expropriated to date under amended Article 47.

Turkey’s Answer: Article 47 of the “Law on Intellectual and Artistic Works” of 5.12.1951, no. 5846 was amended by Article 87 of the “Law Amending the Labour Act and some Laws and Decree Laws and Restructuring Some Public Receivables”. With the amendment, the conditions for expropriating the works created in Turkey or by Turkish citizens outside Turkey which are considered to have importance for the country’s culture were re-regulated. case was filed to the Turkish Constitutional Court by 120 deputies of The National Assembly for the annulment of the first sentence of the first paragraph of Article 47 of the Law on Intellectual and Artistic Works, no.5846 along with some Articles of the Law no.6552. As a consequence of the adjudication, the Turkish Constitutional Court, by its decision E.2014/177, Judgement No. 2015/49 and dated 14.5.2015, ruled on the unconstitutionality and annulment of the first sentence of the first paragraph of Article 47 of the Law on Intellectual and Artistic Works, no.5846. The Court also determined the date for entry into force of the annulment provision as after a year starting from the publication of the decision on the Official Journal, pursuant to Article 66(3) of the Law no.6216 (Law on the Establishment and Procedure of the Constitutional Court) and the third paragraph of Article 153 of Constitution. The decision was published on the Official Journal of 11.6.2015, no. 29383. Thus, the annulment provision will enter into force on 11.6.2016. Before the struck/abolishment decision of the Turkish Constitutional Court Article 47 was not interpreted to be applied to foreign works in any case. For this reason any foreign work has not been expropriated up to the present time.

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Question 15 WT/TPR/S/331, page 114, paragraph 3.211: The Secretariat Report notes that copyright law in Turkey is currently under review with planned amendments including “strengthening of the mechanism to fight digital piracy and changes to make collecting societies function more effectively.” Are there currently any specific amendments before the legislature? If so, what are the proposed amendments? Turkey’s Answer: “The Turkish Copyright Law”, the Law on Intellectual and Artistic Works (No. 5846) is undergoing a further review by the Ministry of Culture and Tourism in order to take into account developments at national and international levels and to fully harmonize it with international conventions and the EU acquis.

Strengthening of the mechanism to fight digital piracy and changes to make collecting societies function more effectively are among the main goals of this Law amendment. Currently, a review of the draft Law is carried out by the Ministry of Culture and Tourism. Following the completion of the draft, it will be presented to the relevant sectors and institutions.

Following the entry into force of the amended Law, a secondary legislation will strengthen the mechanisms to fight against digital piracy and make collecting societies more functional. It is also envisaged that legislations aiming to implement feasible licensing mechanisms and regarding efficient mediation board will come into force.

Question 16 WT/TPR/S/331, page 114, table 3.44: The box for duration of patent protection indicates there is a “non-examined patent” with a term of 7 years. Is this considered to be compliant with TRIPS Article 33 which obligates WTO Members to have a patent term of 20 years from filing? If yes, how? Turkey’s Answer: Non examined patent may simply be defined as “delayed examination”. The applicant may decide to delay the examination for 7 years from the date of application after receiving the search report. Also, third parties may request for examination within the 7 years mentioned after the publication of the search report. If the examination report is favorable, the duration of the patent shall be extended to 20 years. However, the relevant provisions concerning non-examined patent have been removed in the new draft law. Question 17 WT/TPR/S/331, page 115, table 3.44: Under the heading for “Protection of Undisclosed Information,” legislation covering human drug products is mentioned but not agricultural chemical products. How does the Government of Turkey provide the protection required by TRIPs Article 39.3 for agricultural chemical products? Turkey’s Answer: Documents given by licence holders regarding plant protection products are not made publicly available if the documents are classified as confidential by the licence holders. These records are kept as “confidential” by the Ministry of Food, Agriculture and Livestock (MFAL). This confidentiality is not valid for the following;

Physico-chemical data regarding active agents or plant-protection products, Every kind of method that renders the active agent or the plant protection product

harmless, Results of the tests conducted to determine that efficiency of the active agent or plant

protection product and these agents or products that are not harmful to animals, plants or the environment,

Methods and measures recommended for the reduction of risks related to usage, storage, transport and fire etc.,

Methods of analysis, Methods regarding the destruction of plant protection products or their packages, Procedures to be followed for cleaning in case of accidental spillage or leakage.

Applicants are required to notify the Ministry when they disclose previously confidential information. The protection period in the EU is ten years, while the protection period in Turkey is seven years for agricultural chemical products.

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Question 18 WT/TPR/S/331, page 116, paragraph 3.214: This paragraph discusses the various grounds for a compulsory license (CL). Does the mentioned Decree-Law establish a system by which all of the TRIPS Article 31(a)-(l) requirements are respected for every type of CL? Turkey’s Answer: Provisions regarding Compulsory License is regulated under Part Seven between articles 99 to 120. According to article 99 of Decree-Law No:551, compulsory license is (to be) granted where no offer for licensing offer has been made and where any one of the following situations/conditions materializes: 1. Failure to put to use/work the patented invention in accordance with Article 96; 2. Dependency of subject matter of patents as mentioned in Article 79. 3. On grounds of public interest as mentioned in Article 103. Article 102, 108, 110, 114, 117 and 118 of the Decree Law contains the correspondent provisions of the TRIPS Article 31(a)-(l). Therefore, Decree-Law No:551 establishes a system by which all of the TRIPS Article 31(a)-(l) requirements are respected for every type of CL. Question 19 WT/TPR/S/331, page 117, paragraph 3.220: The Secretariat report states that Turkey is in the process of ratifying the WIPO Marrakesh Treaty. What is the anticipated timeframe for ratification? Turkey’s Answer: WIPO Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled was signed on November 1st, 2013 by Turkey. The ratification process is currently ongoing. The ratification process includes various stages respectively. Ministry of Foreign Affairs prepares the Draft Approval Law for the International Treaty and transmits to the Council of Ministers, then the related sub commission of Turkish Grand National Assembly examines the draft law and the treaty. Then the General Assembly negotiates the treaty and either accepts or rejects the treaty as a whole. Following the publication of this approval Law in the Official Gazette, Ministry of Foreign Affairs prepares the Council of Ministers Decree on the approval of treaty based on the Approval Law. Finally the international treaty enters into force following the Council of Ministers Decree and the treaty as its attachment is published in the Official Gazette. In this context the timeframe for the adoption of the treaty could not be envisaged due to other institutions involvements in the ratification process.

Question 20 WT/TPR/S/331, page 118, paragraph 3.225: What mechanisms does the GOT plan to use to reduce the use of unlicensed software in its own offices? How does the GOT plan to address the current weak enforcement of its IP laws (e.g., strengthening the role of the judiciary)? How does the GOT protect pharmaceutical product test and other data from unfair commercial use and unauthorized disclosure? Turkey’s Answer: Turkey approved and adopted the “The Prime Minister's Circular No:2008/17”, regarding “Use of Licensed Software in Public Institutions”. (Official Gazette Date:16 July 2008) Circular regulates the principles and procedures of software purchasing, management and control in public sector. In the circular, it is stated that computer programmes commonly used in the performance of public services are protected as scientific and literary works under the “Law on Intellectual and Artistic Works”, no. 5846 and that the use of unlicensed copies of computer programmes as is the case in other types of works in parallel with copyright system of many countries, reproduction, modification and distribution of them without the permission of the right holder are foreseen to be legally and criminally sanctioned by the Law on Intellectual and Artistic Works no.5846. Therefore, acquisition, usage, management of computer programmes in public institutions and organisations, budgeting, specification and delivery procedures for the identification of the principles for the measures to be taken were described in the relevant circular.

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As computer programmes are protected as work, in case of violation of the rights of the author of a computer programme having the characteristics of work, the civil and criminal actions in the following articles of the Law no.5846 may be filed: Law Nᴼ 5846 on Intellectual and Artistic Works: A. Civil Actions I. Action for Cessation of Infringement (1) General Art. 66. Any person whose moral and economic rights have been infringed may bring an action against the infringer to cease the infringement. If the infringement has been committed by agents or employees of an enterprise in the execution of their duties, legal action may also be brought against the owner of such enterprise. It is not required that the infringer or the persons referred to in the second paragraph be at fault. The court shall order appropriate measures as required by the force of circumstances for the cessation of the infringement, by assessing the moral and economic rights of the author, the extent of the infringement, whether there is fault and if there is, degree of fault, and the damages likely to be suffered by the infringer in case of the cessation of infringement. Addition: 7.6.1995-4110/19) The author may bring an action for cessation and prevention of infringement in place of his residence as well. (2) In Case of Infringement of Moral Rights Art. 67. Where a work which has not yet been made public is divulged to the public without the consent of the author or against his wishes, action for cessation of infringement may only be brought, if the reproduced copies have been divulged to the public by way of publication. This provision shall also apply in cases where the author's name is shown on the work against his wishes. If the author's name has not been shown on the work or has been shown in a false or misleading way, and if the author has claimed the cessation of infringement in addition to the action for declaratory relief referred to in Art. 15, the infringer shall be required to show the author’s name on the original work and on the reproduced copies already in circulation. The publication of the judgment in not more than three newspapers may be requested at the expense of the infringer. The provisions of the second paragraph shall apply in the cases set out in Articles 32, 33, 34, 35, 36, 39 and 40 if the source has been wrongly or incompletely designated or no source is given. If the work has been unlawfully modified, the rightholder may claim the following: 1. The author may claim that reproduction, publication, performance and broadcasting by radio of the modified work be prohibited and that the modifications in the reproduced copies already in circulation be corrected by the infringer or restored to their original form. If the modification is made by publication in a newspaper or journal or by radio broadcasting, the author may claim the administrations of such newspapers, journals or broadcasting organizations that have published the modified work to correct the modification at the expense of the infringer. 2. (Amendment: 7.6.1995- 4110/ 20) In the case of works of fine art the author may claim an announcement be made declaring that the modification in the original work has not been made by him, or may claim that his name be removed or changed on the original. If it is possible to restore the work to its original form and if removal of the modification does not significantly prejudice the interests of the owner or of the public, the author may restore the work to its original form. (3) In Case of Infringement of Economic Rights Art. 68. (Amendment: 21.2.2001-4630/25) If a work has been translated without permission of the author, has been published outside the scope of the contract or in excess of the number stipulated in the contract, or has been adapted in an other way or broadcast by means like radio or television or performed, the author whose permission was not obtained, may claim the

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payment of compensation of up to three times of the amount that would have been determined, had the right been granted by contract or of the damages suffered on the base of imputed or current value. In determination of this amount the opinions of the related collecting societies shall be given prior consideration. If a work is being exploited by reproduction without permission and the reproduced copies have not been put up for sale, the author may claim that the reproduced copies and films, moulds and similar devices serving the reproduction be destroyed or be surrendered to him in return for equitable remuneration not exceeding their cost price or may claim the payment of three times the amount he would have demanded if a contract had been concluded. These claims shall not remove the legal liability of the person who has undertaken the reproduction without permission. If copies of a work reproduced without permission have been put up for sale or if the sale constitutes an unlawful infringement, the author may as regards copies in the possession of the infringer, choose one of the alternatives mentioned in the second paragraph. The person who claims remuneration may assert all rights and authorities he would have enjoyed had he concluded a contract. II. Action for Prevention of Infringement Art. 69. An author whose moral or economic rights are in threat of being infringed may bring an action to prevent the probable infringement. The same provision shall apply in cases where the infringement is likely to continue or recur. The provisions of the second, third and fourth paragraphs of Article 66 shall also apply in such case. III. Action for Damages Art. 70. (Amendment: 07.06.1995-4110/ 22) Any person whose moral rights have been infringed may bring an action for moral damages for the moral injury he has suffered. In place of or in addition to such pecuniary compensation the court may order another sort of compensation for moral damages. Any person whose economic rights have been infringed may claim compensation under the provisions governing torts, if the infringer is at fault. In the cases set out in the first and second paragraphs, the infringed person may, apart from the damages, also claim the profits gained by the infringing party. In such case, any sum demanded in accordance with Article 68 shall be deducted from this amount. B. Criminal Actions I- Offenses (1) Infringement of Moral Rights Art. 71. (Amendment: 1.11.1983- 2939/11) Any person, who in contravention of the provisions of this law, intentionally; 1. publishes a work or divulges it to the public, irrespective of whether it has been made public, without the written consent of the author or his successor; 2. gives a title to a work or to the reproduced copies of the work without the written consent of the author or his successor; 3. gives the appearance that the work of another person is his own or his own work is that of another person or who acts contrary to the provision of second paragraph of Article 15, 4. fails to cite the source in the cases covered by Articles 32, 33, 34, 35, 36, 37, 39 and 40, or cites the source in a false, incomplete or misleading way, 5. (Addition: 21.2.2001- 4630/ 26) modifies a work without written permission of the author, (Amendment: 3.3.2004- 5101/ 17) shall be sentenced to imprisonment from two years to four years, or judicial fine between fifty billion TL. and one hundred and fifty billion TL, or

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both considering the severity of the damages. (2) Infringement of Economic Rights

Art. 72. (Amendment: 03.03.2004-5101/18) Any person, who in contravention of this Law, intentionally;

1. sells or distributes the copies of a work or adaptations of such work that have been reproduced by him in contrary to the provisions of an existing contract with the right holder shall be sentenced to imprisonment from three months to two years or a judicial fine between ten billion TL. and fifty billion TL. or both considering the severity of the damages;

2. sells a work and its reproduced copies in places indicated in the seventh paragraph of Article 81 of this Law without permission of the right holder shall be sentenced to imprisonment from three months to two years or a judicial fine between five billion TL. and fifty billion TL. or both considering the severity of the damages;

3. without permission of the right holder, a) adapts a work in any manner,

b) reproduces a work in any manner,

c) distributes a work in any manner,

d) lets the copies of a work enter into the country through legal or illegal ways and puts them into commercial use in any manner,

e) displays or performs a work in places open to the public, organizes such display or disseminates it by devices serving the transmission of all kinds of signs, sounds, and/or images including digital transmission or acts as intermediary for such dissemination,

shall be sentenced to imprisonment from two years to four years or judicial fine between fifty billion TL. and one hundred and fifty billion TL. or both considering the severity of the damages.

(3) Other Offenses

Art. 73.( Amendment: 3.3.2004-5101/19) The following provisions shall apply to the offenses other than those set out in Articles 71, 72, 80 and 81 of this Law. Any person, who intentionally;

k) possesses for commercial purposes copies of a work, in the knowledge or with reasonable grounds to know that they have been reproduced in contrary to the provisions of this Law,

l) transfers or grants an economic right or a license or creates a pledge on, or disposes in any way of such right or license, in the knowledge or with reasonable grounds to know that such right or license does not exist or that he is not entitled to dispose of such right or license,

m) possesses for commercial purposes or distributes a technical instrument whose sole purpose is to facilitate the neutralization or unpermitted removal of any technical device used to protect a computer program,

shall be sentenced to imprisonment from two years to four years or a judicial fine between fifty billion TL. and one hundred and fifty billion TL. or both considering the severity of the damages. 2- Any person, who intentionally reproduces the copies of works, productions and phonograms, that have been reproduced and distributed in accordance with the provisions of this Law, by way of identical printing and production along with the distinctive title, trademark and identifying information of the right holders of reproduction and distribution, by means of signs, writing, sound, devices or methods serving repetition of the data or images which are moving or motionless or distributes the copies reproduced by such way shall be sentenced to imprisonment from three years to six years or judicial fine between twenty billion TL. and two hundred billion TL. or both considering the severity of the damages.

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Additionally, within the “National Employment Strategy Action Plan of 2014-2016, a commitment related to software industry and fighting informal economy with effective protection of copyright was envisaged. According to the strategy; public awareness activities will be organised regarding legal protection of software. Besides, protection of confidential data expressed in article 83/3 of the Turkish Patent Law is issued with Article 28 of “Implementing Regulation on the Registration of Medicinal Products for Human Use.” Confidentiality Article 28 “The information presented to the Ministry by the applicant for obtaining the registration of a product, shall be confidential. This confidentiality shall be protected by the Ministry.” Turkey decided to implement data protection from the beginning of the application to the end of whole life cycle of a dossier. Question 21 WT/TPR/S/331, page 118, paragraph 3.227: Would it be possible for the Government of Turkey to provide any statistics showing the actual number of detentions and seizures of infringing imported goods? The report notes an increase in applications as well as a breakdown on categories of detained articles but, no information is provided on what action, if any, followed these detentions or how the applications concluded. Turkey’s Answer: Number of IPR infringement cases in 2014 was 196. Total number of cases rose to 312 in 2015, with an increase of almost 60% compared to 2014. Cases did not only include importation but also other customs approved treatment or use. According to Article 57 of the Customs Code, goods which have been suspended or detained by the customs offices, shall be destroyed or disposed of, through the alteration of their essential characters in accordance with the decision of the duly empowered court. On the other hand, our statistics of seizures are based on smuggled goods and are not detailed as detentions and seizures of infringing goods, per se. In case, a suspicion arises about confiscated goods, officers in charge inform the related department and convey the issue for the follow up. Question 22 WT/TPR/S/331, page 119, paragraph 3.229: The report notes that the average length of conclusion of cases in the specialized civil IP courts was reduced. We welcome that news. Would it be possible for the Government of Turkey to provide any statistics showing the actual number of cases filed and concluded? Additionally, does the Government of Turkey have any statistics, or other information, showing how the cases were resolved and the average award for damages? Turkey’s Answer: Statistics relating to the number of cases opened at Civil Courts of Intellectual and Industrial Rights and concluded by these courts between 2004-2014 are given below. Statistics for 2015 is not yet published. Additionally, although statistics and information were requested regarding the average amount of compensation, statistics on average compensation amount ruled by Civil Courts of Intellectual and Industrial Courts are not kept in Turkish system. Moreover, since the ruled amount of compensation changes based on the nature of the case, it is not possible to provide such kind of statistics as well.

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Case Numbers of Civil Courts of IPR (2004-2014) INCOME OUTCOME

YEA

RS

Tran

sfer

ed C

ases

Fro

m

Pre

viou

s Y

ear

Rec

eive

d C

ases

in T

he

Cu

rren

t Y

ear

Du

e to

Rev

ersa

l

TOTA

L

Dis

mis

sal

of C

ase

Acc

epta

nce

of

Cas

e

Oth

er

TOTA

L

Tran

sfer

Cas

es t

o N

ext

Yea

r

Rat

io o

f F

inal

ized

Cas

es t

o R

ecei

ved

Cas

es (

%)

Ave

rag

e of

Ju

dg

emen

t P

roce

ss (

Dat

es)

2004 4 190 4 190 554 585 322 1 461 2 729 34,9 174 2005 2 729 2 117 122 4 968 497 523 388 1 408 3 560 28,3 621 2006 3 560 4 193 162 7 915 2 848 691 354 3 893 4 022 49,2 331 2007 4 022 2 596 165 6 783 761 982 486 2 229 4 554 32,9 619 2008 4 554 2 787 167 7 508 896 1 122 557 2 575 4 933 34,3 618 2009 4 933 2 586 204 7 723 1 047 1 377 558 2 982 4 741 38,6 603 2010 4 741 2 579 234 7 554 1 090 1 493 620 3 203 4 351 42,4 544 2011 4 350 3 094 209 7 653 1 083 1 430 835 3 348 4 305 43,7 468 2012 4 304 2 544 320 7 168 965 1 421 611 2 997 4 171 41,8 521 2013 4 171 2 976 443 7 590 1 052 1 621 871 3 544 4 046 46,7 425 2014 4 045 3 979 509 8 533 3 850 4 683 45,1 377 The Filed and Resulted Case Numbers in the Civil Courts of IPR (2014) DECISION TYPE

DISMISSIAL OF THE CASE ACCEPTANCE OF THE

CASE

CIT

IES

Nu

mb

er o

f Fi

led

Cas

e

Sta

tute

of

Li

mit

atio

ns

and

La

pse

of

tim

e

Non

-Com

pet

ence

Non

-Ju

risd

icti

on

Not

be

Pro

ved

Wai

ver

Lack

of

the

Req

uir

emen

t of

ca

se

Tota

l

Full

Acc

epta

nce

Par

tial

A

ccep

tan

ce

or

Dis

mis

sal

Tota

l

Con

cilia

tion

Oth

er

Tran

sfer

to

An

oth

er C

ourt

s

The

Nu

mb

er

of

Fin

aliz

ed

Cas

es

Ankara 2439

4 14 14 613

61 26 732

401 336 737 7 173 1649

İstanbul

2561

2 47 69 425

182 47 772

596 851 1447

84 357 26 2686

İzmir 237

2 5 2 44 10 63 36 77 113 4 14 194

Total 5237

8 66 85 1082

253 73 1567

1033 1264 2297

95 544 26 4529

Question 23 WT/TPR/S/331, page 119, paragraph 3.231: The report notes that “IP crimes and penalties are pursuant to the various IP laws, and are both civil and criminal in nature. Criminal penalties apply to copyright and trademark infringements and range from fines to imprisonment of up to seven years (Table A3.6).” Would it be possible for the Government of Turkey to provide any statistics showing the actual number of criminal cases investigated, prosecuted and concluded?

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Turkey’s Answer: The table indicating the statistics relating to the number of cases opened to Civil Courts of Intellectual and Industrial Rights and concluded by these courts in 2014 and investigation statistics for 2012-2014 is presented below. Statistics for 2015 have not yet been published.

Distribution of Decisions' Type of Criminal Courts of First Instance on IPR (2014)

Leg

isla

tion

TYPE OF DECİSİON

Nu

mb

er o

f L

aw

Sen

ten

ce

%

Acq

uit

tan

ce

%

Non

-com

pet

ence

, N

on-j

uri

sdic

tion

, C

onso

lidat

ion

%

Def

erm

ent

of T

he

An

nou

nce

men

t of

Th

e V

erd

ict

%

No

Gro

un

d t

o ad

jud

icat

e

%

Oth

er D

ecis

ion

s

%

Tota

l

%

Law on Intellectual and Artistic Works

5846

3770

69% 1834

63,61%

836

60,45%

2712

42,22%

30 76,92%

2726 72% 11908 59,60%

Decree Law Concerning The Protection of Trademarks

556

1694

31% 1049

36,39%

547

39,55%

3712

57,78%

9 23,08%

1060 28% 8071 40,40%

Total 5464

100%

2883

100% 1383

100% 6424

100% 39

100% 3786 100%

19979

100%

Crime Numbers in Finalized Cases on IPR (2014) Legislation Crime Numbers at Finalized Cases in 2014 according to Years of Filing

Legis-lation

2010 and before

% 2011 % 2012 % 2013 % 2014 % Total %

Law on Intellectual and Artistic Works

5846 175 81,02%

228 64,23

%

925 62,80

%

4762 63,75

%

4242 53,72%

10332 59,35%

Decree Law Concerning The Protection of Trademarks

556 41 18,98%

127 35,77

%

548 37,20

%

2708 36,25

%

3654 46,28%

7078 40,65%

Total Amount 216 100%

355 100

%

1473 100

%

7470 100

%

7896 100%

17410 100%

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Crime Distribution of Cases on IPR According to Age and Gender (2014)

NUMBER OF SUSPECTS

NATURAL PERSON Legal Person

Total

TURKİSH CİTİZEN

Aged

12-15

Aged

15-18

Aged 18

and Older

Undefined (*)

Foreign

National

Legislation La

w No

Number of Crimes in Cases

% M F M F M F M F

Law on Intellectual and Artistic Works

5846

8715 55,14%

77 115

7525

645 2 11 3 337 8715

Decree Law Concerning The Protection of Trademarks

556

7090 44,86%

1 8 1 6305

642 2 35 4 92 7090

Total 15805 100,00%

78 123

1 13830

1287

4 46 7 429 15805

Note: The crime numbers in cases contain offenses in the brought cases and due to reversal in the current year .

(*) Undefined suspects consist of people who cannot be classified in the UYAP system due to the lack of age and gender data.

Numbers of Investigation on Infringement of IPR TYPE OF THE IMPUTED CRİME

LAW NO

YEAR NON-PROSECUTION

% PUBLIC LAWSUIT

% OTHER DECISIONS

% TOTAL %

Law on Intellectual and Artistic Works

5846

2012 6814 34,8

8323 42,5

4461 22,8 19598 4,9

2013 8983 37,8

9975 42,0

4809 20,2 23767 6,2

2014 7128 41,1

7481 43,1

2730 15,7 17339 4,1

Decree Law Concerning The Protection of Trademarks

556 2012 3468 30,6

5491 48,4

2386 21,0 11345 2,9

2013 3461 31,7

5750 52,6

1712 15,7 10923 2,9

2014 4840 36,6

6741 51,0

1634 12,4 13215 3,2

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Question 24 WT/TPR/S/331, page 119, paragraph 3.232: The Secretariat Report notes that the Turkish National Police has increased copyright infringement enforcement. When were the discussed changes made? If possible, please provide statistics on copyright enforcement including criminal and civil cases brought since the changes in enforcement began. Turkey’s Answer: Due to the changing structure of methods of IPR crimes, the Turkish National Police has been improving capacity to fight against crimes. Turkish National Police adopted "Zero Tolerance to Imitated and Counterfeit Products” and its fight against piracy and counterfeiting will continue with the same determination. Statistics on copyright enforcement including criminal and civil cases brought have already been shared in our Special 301 Review Submission in February 2016.

Numbers of Offences and Offenders on IPR Cases Between 2012-2014 TYPE OF THE IMPUTED CRIME

LAW NO

YEARS NUMBER OF CRIMES ON THE OPENED CASES

NUMBER OF THE ACCUSED

Law on Intellectual and Artistic Works

5846 2012 9886 9886

2013 10924 10924

2014 8 715 8 715

Decree Law Concerning The Protection of Trademarks

556 2012 5866 5866

2013 5899 5899

2014 7090 7090

Question 25 WT/TPR/S/331, page 126, paragraph 4.16: The Secretariat reports states that Turkey has not notified its domestic support programs to the WTO during the review period. In fact, the United States notes that Turkey’s last notification covered only up through the year 2001. The Secretariat’s report also notes that due to this lack of notification, the Secretariat had to rely on other sources of information to compile its report, such as the OECD. Based on OECD figures for Turkey’s domestic support, Turkey’s support increased during the review period. OECD figures also indicate a majority of Turkey’s producer support estimate (PSE) is support based on outputs, which is much higher than the average level among OECD countries as noted in Paragraph 4.18 on page 128. What was the basis for the increased level of support during the review period? Please describe when Turkey plans to bring its domestic support notifications up to date.

THE STATISTICS ON INTELLECTUAL PROPERTY RIGHTS INFRINGEMENTS (COPYRIGHT)

YEARS 2012 2013 2014 2015

Number of operations 3.294 4.045 2.244 1.914

Number of suspects 3.673 4.358 2.456 2.060

TOTAL MATERIALS 8.172.426 5.928.335 5.328.838 5.760.528

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Turkey’s Answer: Turkey’s Producer Support Estimate (PSE) is calculated by the OECD. It should however be noted that as an indicator of the annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers, PSE modelling is different from that of the WTO AoA and provides an indication rather than an actual use of any support. Turkey has started a work program to notify its agricultural sector support programs gradually. In due course, we are looking for understanding of all members to complete this work as soon as possible. Question 26 WT/TPR/S/331, page 126, table 4.7: The Secretariat report indicates the Agricultural basin model provides marginal payments for 17 products in 30 basins in Turkey. Please describe what products are covered and how payments to producers are determined. What was the level of support for this program in 2014? Turkey’s Answer: Turkey provides domestic support for the following agricultural products: Seed cotton, sunflower oil, soybeans, canola, safflower, corn grain, olive oil, wheat, barley, rye, oats, triticale, beans, chickpeas, lentils, rice and tea. As noted in response to the previous question, Turkey has started a work program to notify its agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. Question 27 WT/TPR/S/331, page 126, table 4.7: The Secretariat Report indicates it is not yet possible to collect data on payments for the certified seed and seedling program. When will this information be available? Turkey’s Answer: Not yet available. The data is being collected. Question 28 WT/TPR/S/331, page 126, table 4.7: The Secretariat report indicates Turkey provided TL 101.8 million for soil analysis and fertilizer and payments are made to farms with 5 hectares or more. Please clarify how payments are determined. Please provide the payment rate on a per unit (e.g., hectare) basis. Turkey’s Answer: Conduct of a soil analysis in a laboratory authorized by the MFAL is a prerequisite to receive the fertilizer support for parcels of 5 ha and above. The payment is made on an area basis. In 2014, 101.8 million Turkish Liras (TL) in total was paid for soil analysis. In 2015, total payment was 94 million TL. Question 29 WT/TPR/S/331, page 128, paragraph 4.18: The Secretariat report indicates Turkey eliminated its decoupled payments in 2009 while simultaneously increasing output-based payments. What was the basis for Turkey eliminating the decoupled payment program? Turkey’s Answer: Direct income support (DGD) in Turkey was started with ARIP, a World Bank Project. However, because of certain challenges metin the implementation phase, Turkey ended the programme in 2009. Although, not being used at present, DGD can still be a tool for agricultural supports, according to the Agriculture Law no 5488. Question 30 WT/TPR/S/331, page 128, Table 4.8: The Secretariat Report indicates that Turkey provided market price support for at least 15 products between 2011 and 2014. Please provide the applied administered price for each product for the time period covered in this table. If Turkey does not

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announce an applied administered price for any of these programs, please indicate how Turkey implements the market price support measure indicated. Turkey’s Answer: From 2011-2104, Turkey did not provide administered price but premium supports, for agricultural products. For further details of domestic support instruments, please see page 127, chart 4.7 on the Secretariat Report. Question 31 WT/TPR/S/331, page 128, Table 4.8: The Secretariat report indicates that Turkey provides a number of deficiency payments. Please detail how premium payments are implemented and indicate any payment rates. What inputs are covered by “input subsidies” and how is the program operated differently than other input subsidy programs listed, such as the hybrid seed subsidy, pesticide subsidy, and electricity subsidy? Turkey’s Answer: Diesel and fertilizer supports are provided as input subsidies, on an area basis. Question 32 WT/TPR/S/331, page 129, paragraph 4.19-4.20: The Secretariat Report states a new Strategic Plan was implemented for 2013-17. The report also notes that Turkey’s PSE is increasing and higher in both 2013 and 2014 than in previous years. Does Turkey expect this trend to continue throughout the implementation period of the Strategic Plan? Turkey’s Answer: In table 4.8 most of Turkey’s agricultural support is seen as Market Price Support (Approximately 25,6 Million TL – Almost 76% of PSE for the year 2014). Market Price Support in OECD terms is calculated by using “the gap between domestic market prices and border prices of a specific agricultural commodity, measured at the farm gate level”. This gap may derive from some government policies that are not considered as domestic support according to the Agreement on Agriculture (Ex: border protection measures). In other cases, some measures can be seen as blue box in AoA and it might still be calculated as Market Price Support by OECD. (Ex: Potato alternative product payment. Payments based on area to encourage cultivation of alternative products at the areas where potato wart disease is seen). Thus an increase in MPS by OECD calculation does not mean an increase in trade distorting support according to AoA. Question 33 WT/TPR/S/331, page 131, paragraph 4.24: The Secretariat notes that Turkey's WTO Schedule contains 44 commitments limiting subsidization of exports and Turkey has not notified the export subsidies to the WTO Committee on Agriculture during the review period and has not notified for a number of years. In light of recent Nairobi decisions on export subsidies and renewed commitments on these issues, as well as greater transparency, can Turkey please clarify when they plan update their export subsidy notification? Turkey’s Answer: Turkey will comply with its notification requirements by the next meeting of the Committee on Agriculture, which will be held on 7-8 June, 2016. Question 34 WT/TPR/S/331, page 131, paragraph 4.24: The Secretariat Report states that Turkish officials have not notified the Committee on Agriculture because the content for that notification is different from the Committee on Subsidies and Countervailing Measures. Please provide total annual outlays for export subsidies provided for each product listed in Table 4.10. Please explain how the share of exports eligible for subsidies is determined. Turkey’s Answer: Turkey will comply with its notification requirements by the next meeting of the Committee on Agriculture, which will be held on 7-8 June, 2016. Export subsidies are provided in line with Turkey’s WTO commitments and within the budgetary constraints. Question 35 WT/TPR/S/331, page 131, paragraph 4.24: In light of the outcomes in Nairobi and the commitment by all Members to eliminate export subsidies and the extensive use of export subsidies still in Turkey based on notifications to the Committee on Subsidies and Countervailing Measures, what steps is Turkey taking to end its export subsidy programs?

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Turkey’s Answer: Turkey believes that the Ministerial Decision on Export Competition (WT/MIN(15)/45) adopted at the Tenth Ministerial Conference of the WTO in Nairobi, constitutes a significant step towards reforming world agricultural trade. Paragraph 7 of the Nairobi Decision states that Developing Country Members shall eliminate their remaining export subsidy entitlements by the end of 2018. Qualifying this obligation, footnote 5 to Paragraph 7 further states that “…a developing country Member shall eliminate its export subsidy entitlements by the end of 2022 for products or groups of products for which it has notified export subsidies in one of its three latest export subsidy notifications examined by the Committee on Agriculture before the date of adoption of this Decision.” In compliance with the foregoing, Turkey is ready to eliminate its export subsidy entitlements within the time frame as set out in the Nairobi Ministerial Decision on Export Competition. It should further be noted that Turkey deems it appropriate to have a common understanding on the legal status of the commitments made in decisions taken by the Ministerial Conferences. While already a good level of compliance with Ministerial Decisions is being witnessed, there is a need to have a common practice and interpretation in terms of how to transfer commitments made through Ministerial Decisions to members’ legally binding commitments under the respective WTO Agreements. Question 36 WT/TPR/S/331, page 135, table 4.14: The Secretariat report indicates a number of support programs for livestock and that these subsidies are significant and increasing, both in total and in comparison to other agricultural support. Please provide the total outlays for each program identified in table 4.14 for the period covered by this Report. Turkey’s Answer: The data collection has not been completed yet. Question 37 WT/TPR/S/331, page 136, paragraph 4.37: The Secretariat report describes the Turkish Grain Board as a limited-liability and autonomous state economic enterprise. Can Turkey please clarify if any Members of the Turkish Grain Board (TMO) Board of Directors are appointed by or employed by the Government of Turkey? What, if any, special rights or privileges does TMO maintain pursuant to government regulations, laws or other legal measures? Turkey’s Answer: Turkish Grain Board (TMO) is a fully autonomous entity and operates on the grounds of profitability. The same applies to the responsibility of TMO’s board of Directors in its management activities. In carrying out its activities, TMO does not enjoy any special privileges and/or exclusive rights. Question 38 WT/TPR/S/331, page 136, paragraph 4.39: Turkish Grain Board: The Secretariat notes that TMO intervenes in the market to stabilize prices. Can Turkey clarify if TMO sell domestic wheat to Turkey flour millers that export flour and hold inward processing certificates, and if so, what prices was wheat purchased and sold at during the reference period of the TPR? Can Turkey provide data and other information for the last three years listing the quality of wheat imported and the quality of wheat flour exported under Turkey's inward processing system? Turkey’s Answer: TMO sells domestic wheat to Turkish flour millers that hold inward processing certificate. Statistics are collected and compiled on the basis of HS codes. No particular statistical data is available for the quality.

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INDONESIA

SECRETARIAT REPORT SUMMARY Page 10 Para 4 “Turkey's trade policy in terms of preferential trade continues to be influenced by the EU and the provisions of its customs union with the EU, as Turkey negotiates and concludes FTAs in parallel with the EU. It is noted that many of Turkey's FTA partners are relatively small trade partners of Turkey. New FTAs concluded and entered into force during the review period were with Chile, Jordan, the Republic of Korea, Malaysia, and Mauritius. To date, Turkey's FTAs notified to the WTO only cover trade in goods, and not services or investment. However, the FTA with the Republic of Korea is broader in scope, as it includes commitments on investment and services, and Turkey has started to include deeper commitments and disciplines on TBT, SPS, intellectual property, competition, dispute settlement, and trade remedies as part of its FTA negotiations. Turkey has aligned its unilateral preference regime with that of the EU as well, and with few exceptions, offers GSP, GSP+, and Everything-But-Arms (EBA) arrangements to certain developing and least developed countries.” Question: 1. Could Turkey please elaborate the types of flexibilities it gives that are influenced by the Turkey-EU Customs Union Agreement? Turkey’s Answer: Customs Union between Turkey and the EU constitutes an advanced form of integration with its far-reaching perspective and comprehensive context covering a wide range of policies. The Customs Union Decision (CUD) covers Turkey's adoption of a wide range of EU legislation including all aspects of trade, technical standards, state aid, competition, taxation, intellectual, industrial and commercial property rights. As a result, Turkey has achieved substantial alignment with the EU acquis in the fields directly related to the functioning of the Customs Union. With the completion of the Customs Union between Turkey and the EU, custom duties, quantitative restrictions and measures having equivalent effect have been eliminated in trade of industrial goods between the parties to ensure the free movement of goods; while the Common Commercial Policy, including the Common Customs Tariffs, have been implemented towards third countries. In this respect Turkey started negotiating FTAs in parallel to the FTA policy of the EU. During these negotiations, Turkey follows the approach of the EU in terms of industrial products by providing full elimination of customs duties either at the entry into force of the Agreement or after a transitional period depending on the sensitivity of the sector. Still, Turkey has some flexibility to negotiate the transitional periods, as long as the duties are eliminated at the end of the specified periods, in line with EUs commitments vis-à-vis third country. Additionally, Turkey has to adopt identical rules of origin in its FTAs with that of the EU, both as a result of its Customs Union obligations and for the very practical reason to avoid trade diversion. However for the goods not covered by Customs Union, e.i. agricultural products and coal and steel products, Turkey enjoys complete autonomy, with regard to both coverage and liberalisation schedules. Moreover, with the enhanced scope of new generation agreements, Turkey’s scope of autonomy has also been enlarged to include trade in services, investment, public procurement, and WTO+ provisions on SPS, TBT, IPR, competition, trade remedies, or dispute settlement procedures. Also, as part of commitments pursuant to the Customs Union with the EU, Turkey, has agreed to align itself with the autonomous customs regime of the EU. Therefore Turkey has been offering unilateral preferences under these programmes since 2001 but only on industrial products and on industrial components of the processed agricultural products. Coal and steel products pursuant to European Coal and Steel Community and agricultural products are not covered under GSP regime of Turkey since these products do not fall within the scope of the Customs Union.

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SUMMARY Page 10 Para 5 “Turkey continues to recognize the importance of attracting foreign direct investment through its many programmes of incentives, schemes, and free zones. The main framework law for investment, the 2003 Foreign Direct Investment Law, continues to provide the main elements for investment such as national treatment, transfer of proceeds, etc., and has not undergone significant revision. However, there have not been any major changes to investment restrictions either and Turkey continues to impose restrictions in the broadcasting, aviation, maritime transport, port services, fishing, accounting, financial, mining, real-estate, electricity, and education sectors. Although the legal framework has not changed, investment schemes have been extended, deepened, and broadened over the period in order to encourage and target certain types of FDI in Turkey. They offer nine different types of incentive instruments, often depending on the amount of the investment and the investment region. In addition, Turkey's investment zones (Technology Development Zones, Organized Industrial Zones, and Free Zones) are designed to provide investor-friendly environments with attractive infrastructures for businesses.” Question: 2. Please elaborate the reasons why Turkey continues to impose restrictions in the broadcasting, aviation, maritime transport, port services, fishing, accounting, financial, mining, real-estate, electricity, and education sectors? Turkey’s Answer: As overall assessment of the Turkish Investment Regime indicates, Turkey has a fairly open investment regime based on equal treatment of domestic and foreign investors. However there are certain national legislations relevant to licensing processes and regulations in some sectors, as summarized in the Secretariat Report (See S331, page 195, Table A2.3). The abovementioned sectors, especially maritime transportation and aviation sectors are sensitive areas regarding national interest. Restrictions on these sectors exist in regulations of many countries including developed countries. Each country has its own sensitivities regarding its public order which can be seen in their domestic legislation. 3. What kind of restrictions are applied to those sectors mentioned above? Turkey’s Answer: Restrictions and requirements are listed in the Secretariat Report (See S331, page 195, Table A2.3). 4. Could Turkey please explain the impact of those restrictions on the efforts to attract more foreign direct investment in Turkey? Turkey’s Answer: The limitation for foreign equity participation is applied for aviation, maritime transportation and broadcasting investments. Other requirements and restrictions such as licenses and permissions are applied both for domestic and foreign investors. According to OECD FDI Regulatory Restrictiveness Index 2014, Turkey is ranked the 28th most liberal country among 58 countries, including all OECD and G20 countries with index value of 0,059 where OECD average is 0,068. (Index value= 0 (open)- 1 (closed)). Turkey is quite liberal compared to the similar countries in terms of FDI restrictions. Even the FDI inflow in 2015 has reached 16.6 billion USD with a 32,4 % increase compared to 2014. SECRETARIAT REPORT 2 TRADE AND INVESTMENT REGIME 2.2 Trade Policy Objectives Page 29 Para 2.12 “The GITES 2013-15 Action Plan establishes 37 goals and 91 concrete actions. Some examples of the goals include: reducing import dependence by encouraging investment in high-technology intermediate goods, promoting the use of domestic inputs, developing strategic approaches in

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public procurement, providing greater access to global supply chains for intermediate goods, and developing a recycling industry.” Question: 5. Will the GITES program be continued? 6. Could Turkey further elaborate the concrete action of the GITES program which are providing greater access to global supply chains for intermediate goods, and developing a recycling industry? Turkey’s Answers: 5. GITES Action Plan for the period 2013-2015 has been completed. Currently, the performance and the developments of the period are being assessed. The evaluations of the responsible bodies for the actions have been collected. In addition, selected firms from different industries are contacted to update the industrial agenda. After the assessments and consultations with related parties, it is aimed to revise the Action Plan to address the current challenges of economy with an input supply perspective. On the other hand, it is noteworthy that most of the actions included in GITES Action Plan (2013-2015) have also become a part of the 10th Development Plan (2014-2018) Priority Transformation Programmes. 6. The actions related with the target of greater access to global supply chains for intermediate goods were effective in the establishment of selected R&D programmes considering the needs of Turkish industry. Also, analytic capabilities related to the concept of global value chains have been expanded, which has been an important item on G20 agenda as well. In order to bring forth awareness to economic value of recycled materials, GİTES suggested a National Recycling Strategy which will emphasize not only environmental aspects but also economic aspects of recycling. In 2015, National Recycling Strategy was put into action and has been carried out by The Ministry of Environment and Urbanization. With the help of National Recycling Strategy, input supply from domestic recycled sources will increase gradually. 2 TRADE AND INVESTMENT REGIME 2.3 Trade Agreements and Arrangements Page 30 Para 2.16 “Turkey's imports face a variety of preferential tariff treatment based on its trade agreements and arrangements. The most important trade regime in terms of the amount of trade is its customs union with the EU which accounted for 36% of 2014 imports. Further, 50% of import trade took place under WTO MFN, with 32.9% MFN duty-free. A relatively small amount enters pursuant to Turkey's other free trade agreements, 5.5%, and a slightly larger amount, 8.3%, pursuant to unilateral preferences (i.e. GSP, GSP+, and EBA) (Chart 2.1).” Question: 7. Chart 2.1 Imports by type of import regime, 2014 (page 30) showed that import mostly came from EU (36.3%), while other trade agreements only accounted for 5.5%. Please elaborate whether Turkey attempts to enhance the value of trade with other partner countries and how? Turkey’s Answer: In line with “Turkey’s Export Strategy 2023”, it is Turkey’s priority to enhance its trade relations with other countries. To this end, Turkey has been pursuing an active policy both at the multilateral arena within the WTO and at plurilateral and bilateral levels towards further liberalization of trade. 2 TRADE AND INVESTMENT REGIME 2.3 Trade Agreements and Arrangements 2.3.3 Other Agreement and Arrangements Page 37 Question: 8. What is Turkey’s national policy, in terms of its membership in Developing-8 (D-8) and Organization of Islamic Cooperation (OIC), to make them more economically meaningful?

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Turkey’s Answer: Turkey believes that the key to making D-8 and OIC more economically meaningful mainly rests upon, first the effectuation of TPS-OIC and D-8 PTA and then the expansion of the coverage of these agreements. In this regard, Turkey has already completed necessary procedures to operationalize these 2 agreements and continues to encourage other member states to do so. 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.1 Customs procedures and requirements Page 45 Para. 3.2 “As reported in Turkey's previous review, the format of the Turkish customs declaration is aligned with the single administrative document (SAD) used for customs procedures in the EU. BILGE (a computer software package) carries out real-time customs formalities. The use of the BİLGE system is obligatory and it covers all aspects of customs formalities. In addition, the cooperation between the Ministry of Customs and Trade and other institutions is to be developed through the BİLGE system. For example, the Single Window Project, which enables traders to submit regulatory documents at a single location and/or single entity, has been ongoing since 2014. The documents required by customs administrations are receivable electronically through BİLGE. Currently, 13 institutions are interconnected through the Single Window Project.” Question: 9. Which aspects of customs formalities are included under the BILGE system? 10. Could Turkey please explain how the 13 institutions are interconnected through the Single Window Project? Turkey’s Answer: 9. BİLGE system covers all aspects of customs formalities such as; entry summary declaration, notification of arrival and departure, temporary storage procedures, customs regimes declarations, transit procedures included NCTS and TIR, express cargo declarations, risk analysis implementations, temporary admission formalities of passenger vehicles. 10. Single Window System is the system that provides obtaining the desired documents (e-document) for customs procedures from one place and completing the customs operations with applying to one place (e-application). Including “Single Window System in the Customs Services” featured in the Prime Ministry Circular No. 2012/6, published in the Official Gazette dated 03/20/2012 and no. 28239 and the coordination of the duties to deliver with the other public institutions, the duty and authority of all the realizations of the operations are delegated to the Ministry of Customs and Trade. The system consists of two steps, which are e-document and e-application. E-document step provides transferring of permission, approval and documents in the electronic environment and using and following these directly without delivering hard copies of these. E-application step provides informing the related institution by making permission, approval and documents related applications to the Ministry of Customs and Trade directly and getting the application result in the electronic environment. Effective usage of resources is aimed by applying for permissions in the electronic environment and providing the delivery of permission document, increasing the efficiency and effectiveness of controls, the simplification and acceleration of customs procedures, decreasing the time and financial cost of the merchant, increasing accounting by increasing follow up of the customs procedures. Currently, 14 institutions are interconnected through the Single Window Project E-document interface.

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Page 46 Para. 3.10 “As set out in the Customs Law, economic operators may request advance assessments – Binding Tariff Information (BTI) – for the determination of import and export taxes, the calculation of duty drawback and import-export payments within the context of Turkey's agricultural policy, or for the use of certificates providing tariff or origin information submitted for the purpose of customs clearance. The assessments are issued by the Ministry of Customs and Trade as well as authorized customs directorates and may be valid for six years, provided the information submitted by the applicant is accurate and complete, and the declared goods correspond exactly to the BTI. Assessments may cease to be valid in the event of nomenclature changes. In this event, the holder of the BTI is notified.” Question: 11. Could Turkey please elaborate the eligibility criteria to request advance assessments for the determination of import and export taxes? 12. Could Turkey please give the contact information of the responsible authority for the “Binding Tariff Information”? Turkey’s Answer: 11. As set out in the Customs Law, economic operators may request advance assessments – Binding Tariff Information (BTI) – for the determination of import and export taxes. However, economic operators shall not be allowed to request advance assessment for the goods;

- for which a customs declaration has been lodged, - which has not a distinctive commercial name, trademark, serial number, etc., - which is unfinished, - for which is not subject to an intended importation/exportation.

Moreover, customs authorities competent shall not issue BTIs for the goods which falls within the Annex 23 of Implementing Provisions of Customs Law and requires analysis in order to be classified in the tariff nomenclature. 12. Responsible Authority for the BTI is the Directorate General of Customs, (Department of Tariff and Laboratories) at the Ministry of Customs and Trade. All international correspondences are carried out by the Directorate General for EU and External Relations of the same Ministry. Page 47 Para. 3.15 “Certain goods may only be imported through specialized customs offices. The purpose of these customs practices are to make the customs offices more disciplined; improve customs procedures for certain goods and channel these goods to specialized customs offices; ensure that standards are met; and make effective controls on tariffs, valuation, and origin matters. For example, motor vehicles, tractors, motorcycles and their spare parts and accessories must be cleared at the Yesilkoy, Gebze, Izmit, Izmir, Mersin, Derince or Giresun customs directorates; for producers of motor vehicles, Mudanya, Gemlik, Esenboğa or Adana customs directorates are also authorized; textile products must pass through customs directorates at Aksaray, Ankara, AHL Kargo, Europe Free Zone, Denizli, G.Antep, G.Antep Airport, Gemlik, Giresun, Halkalı, Iskenderun, Izmir, Kayseri, Mersin, or Trakya; fertilizers must be imported through customs administrations at Antalya, Bandırma, Gemlik, Kapıkule, Tekirdağ, Iskenderun, Ambarlı, Haydarpaşa, Aliağa, Dikili, Izmir, Derince, Mersin, Samsun, Ünye, Ankara, Mardin, or Yumurtalık Ser. Böl; and some solvents and petrochemical products must be cleared at the Ankara, Mersin, Adana, Eregli Region of Karadeniz, Erenköy, Beylikdüzü Akaryakıt, Izmir, Aliağa, Tekirdağ, Bursa, Gemlik, or G.Antep customs directorates. Goods for the food sector must be cleared at Ankara, Aliağa, Izmir, Adana, Bursa, Gemlik, G.Antep, Tekirdağ, or Körfez Petrochemistry Directorate.” Question: 13. Could Turkey please explain the reasoning behind the different operational procedures or requirements needed to import those goods?

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14. Does the determination of entry points for textile products, which are in different area from the central production, have created a burden for the exporters? Turkey’s Answer: 13. The reasons that Turkey applies specialized customs practice for specific goods are to make the customs offices more disciplined, to specialize in customs procedures for certain goods and to canalize these goods to specialized customs offices with appropriate equipment and personnel, in order to protect the obligatory standards expected to be met for the imported goods and finally to make effective customs controls on tariff, customs value, origin matters. Thus, application of specialized customs does not imply imposing or maintaining prohibitions or restrictions on the importation of those products. Besides, not all the goods but only some specific goods such as metal waste, petroleum products, motor vehicles and their spare parts which requires special customs control procedures and/or hardware (for instance radiation detection etc.) are subject to specialized customs application. 14. Turkey applies specialized customs practice, for specific goods, in only import regime. Thus, exporters of textile products are not affected by the mentioned application. 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.2 Trade Facilitation Page 48 Para. 3.22 “Turkey launched an Authorized Economic Operator (AEO) programme in January 2013. The programme's aim is to facilitate the foreign trade operations of its traders by reducing required lead times and costs as well as enhancing security by encouraging best practices throughout the supply chain. In order to obtain an AEO certificate, companies must, inter alia, prove that they have traceable documentation, are financially solvent, practice the necessary safety and security measures, and are established in Turkey and have been in operation for at least three years. Other benefits extended to AEO certificate holders are: the use of lump-sum or partial guarantees; the right to self-issue A.TR movement certificates and EUR.MED invoice declarations; the ability to submit incomplete declarations and documentation; reduced data requirements for summary declarations; green line facilitation; and fewer documentary and physical controls as well as control priority.” Question: 15. Could Turkey please provide information concerning the registration of foreign trade operations who wish to join or apply for the AEO Program? 16. Does Turkey have a mutually recognized AEO certificate scheme with any of its trading partners? Turkey’s Answer: 15. Companies that are reliable, have adequate traceable documentation, have financial solvency, practice the necessary safety and security measures, and are established in Turkey can apply for the AEO Certificate. It is also mandatory for companies to present up-to-date ISO 9001 and ISO 27001 certificates. 16. Turkey has signed a mutual recognition agreement with the Republic of Korea on June 9th, 2014.

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3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.5 Tariffs 3.1.5.1 Applied MFN Duties Page 51 Table 3.1 Table.2 Structure of MFN tariffs in Turkey, 2011-15 MFN applied Final bounda

2011 2015 1. Bound tariff lines (% of all tariff lines) n.a. n.a. 50.4 2. Simple average tariff rate 12.2 12.8 37.5 Agricultural products (WTO definition) 47.9 49.0 72.1 Non-agricultural products (WTO definition) 5.0 5.5 17.6 Agriculture, hunting, forestry and fishing (ISIC 1) 26.0 27.1 46.2 Mining and quarrying (ISIC 2) 0.2 0.2 9.3 Manufacturing (ISIC 3) 11.6 12.1 36.8 3. Duty-free tariff lines (% of all tariff lines) 23.2 23.5 2.8 4. Simple average rate of dutiable lines only 15.9 16.8 39.8 5. Tariff quotas (% of all tariff lines) .. .. 0.0 6. Non-ad valorem tariffs (% of all tariff lines) 1.7 1.7 0.2 7. Non-ad valorem tariffs with no AVEs (% of all tariff lines) 0.3 0.2 0.2 8. Domestic tariff peaks (% of all tariff lines)b 9.1 9.0 3.7 9. International tariff peaks (% of all tariff lines)c 14.6 16.1 32.7 10. Overall standard deviation of applied rates 27.1 27.6 44.7 11. Nuisance applied rates (% of all tariff lines)d 6.7 5.5 0.04

Question: 17. Could Turkey please explain the specific consideration for the increase of its simple average tariff line from 12.2% in 2011 to 12.8% on 2015? Turkey’s Answer: After 2008 global crisis, there has been a difficulty in entering foreign markets worldwide. Turkey has always drawn the attention of other countries to this reality, G20 being one of these platforms as well. Turkey’s applied rate for non-agricultural products has been 5.5%, whereas 49.0% for agricultural products in 2015. There are slight increases in some products, which also affected the general average. We do believe that to reduce the commitment levels is a matter of WTO rounds.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.6 Other charges affecting imports 3.1.6.3 Special Consumption Tax 3.1.6.3.4 SCT on tobacco products Page 64 Para. 3.50 “Revenue from the SCT (Special Consumption Tax) levied on tobacco products is channelled into the Tobacco Fund. Since 2011, SCT ad valorem rates have risen either by 4.5% or 25% depending on the item. The duty is calculated on an ad valorem basis with a specific tax floor; the ad valorem tax is then compared with minimum specific tax amount, and the higher one is applied by adding the specific tax amount (Table 3.13).” Question: 18. Could Turkey please explain the rationale behind the increase in the SCT levied on tobacco products? Turkey’s Answer: Reasons behind the increase of SCT on tobacco products are as follows:

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-Budget necessities: It is right and obligation of every country to determine tax rates or to amend tax amount on every item. Turkey is no exception. According to the budgetary needs, SCT on tobacco or other products may be adjusted by the Ministry of Finance.

-Increase in price levels: The SCT Law gives the right to the administration to assess tax amounts on tobacco products in every six months depending on the increase in general price level in Turkey.

-WHO (World Health Organization) Framework Convention on Tobacco Control: Turkey is one of the parties to mentioned Convention and with the intention of minimizing harmful effects of tobacco products, Turkey recognizes that price and tax measures are effective and important means of reducing tobacco consumption by various segments of the population, in particular young persons within the scope of Article 6 of the Convention. 19. Could Turkey please provide information whether it has any intentions of lowering the SCT for tobacco products? Turkey’s Answer: Currently, Turkey has no intention to reduce tax on tobacco products. 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.7 Import prohibitions, restrictions, and licensing 3.1.7.2 Import restrictions and licensing Page 66 Para. 3.55 “Since Turkey's previous review, the EU has been exempt from import licensing requirements applied to certain fertilizers. Additionally, import licensing requirements have been removed on a wide range of household machines, telecommunications, television, photographic and broadcasting apparatus; motor vehicles, bicycles, carriages for babies and disabled persons; medical apparatus; hydro shower systems and exercising apparatus which were in place to ensure adequate after-sale services and to ensure imports conform with the national telecommunications network.” Question: 20. Could Turkey please explain the rationale behind giving the EU an exemption from import licensing requirements of certain fertilizers? Turkey’s Answer: According to the Turkey-EU Customs Union, a product that is lawfully manufactured and/or marketed within the EU and certificated accordingly, should not be subject to further controls or documentation requests at the importation stage. Such controls are performed only on risk basis. So, for the fertilizers which are in free circulation within the EU, it is sufficient for the importer to submit “the analysis report based on EC fertilizer criteria” to the related rural public institution in 15 working days following the completion of the customs formalities partially or completely. In fact, such a treatment should be valid for products exported from Turkey to the EU where the respective product legislation is harmonized by Turkey. In case there is no EU-level product legislation, then the principle of mutual recognition in the non-harmonized should be applied. Fertilizers legislation is among the EU’s product legislations with which Turkey has substantially aligned. 21. Could Turkey explain whether the other goods which are exempted from import licensing requirements, such as household machines, telecommunications, and others, are only exempted to EU members or other countries as well? Turkey’s Answer: According to the Turkey-EU Customs Union, a product that is lawfully manufactured and/or marketed within the EU and certificated accordingly, should not be subject to further controls or documentation requests at the importation stage. For the products mentioned in question, import controls related to product safety are carried out through the “Risk-Based Trade Control System (TAREKS)”. Within TAREKS, import controls are performed electronically and on risk basis, in other words only risky products would be subject to

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safety and conformity checks. In this regard, the products originating in the EU or in third countries, which are accompanied by A.TR free movement certificate, undergo safety and conformity checks only in case they are considered risky according to risk assessment criteria used by TAREKS. 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.8 Contigency measures 3.1.8.1 Anti-dumping and countervailing measures Page 68 Para. 3.59 “Turkey remains a significant user of the anti-dumping instrument. Over the period 1995 to 2014, it was ranked in 10th place among WTO Members in terms of the number of anti-dumping investigations initiated and in 7th place in terms of the number of anti-dumping measures imposed. Most of these measures affected tariff lines in HS Sections VII (plastics and rubber and articles thereof), XI (textiles and textile articles), and XV (base metals and articles thereof). As of September 2015, Turkey had anti-dumping measures in force against 23 WTO Members. China was subject to the most numerous measures, followed by Indonesia, Chinese Taipei, India, Malaysia, Thailand, and Viet Nam. Over the review period, several existing anti-dumping measures have been extended (Table A3.2). Various measures in place include anti-circumvention measures.” Question: 22. In 2014, Indonesia has faced anti dumping charges on 11 cases that covers 22 commodities and 2 cases of Safeguard. In this regard, could Turkey elaborate the anti-dumping investigation process? Was there sufficient evidence to the existence of dumping practices of those Indonesian products? Turkey’s Answer: Turkey has been conducting antidumping investigations according to its national antidumping legislation that is in line with WTO Anti-Dumping Agreement. Thus the conditions and requirements regarding the initiation and investigation processes as well as the imposition and review of anti-dumping duties are fully governed by the aforesaid legislation. In addition, Turkey is respecting the transparency and due process rights of the parties during the investigations and responds to requests regarding the reviews after the imposition of the duties that are made within the limits of its legislation. 23. Indonesian textile products (HS 55) are currently subject to anti-dumping levies, which are mainly due the increased value of Indonesian textile exports. Meanwhile, Turkey's export of Apparel products (HS61), which are inter-related with Indonesia's textile products, to the EU has increased during that same period. Indonesia thus wishes Turkey to review the measure and eliminate the anti-dumping levies to Indonesia's textile products. Turkey’s Answer: All the interested parties can request the Authority to review the need for the continued imposition of the duty, provided that the Party requesting the review submits positive information substantiating the need for a review. In this regard, Indonesian Authorities are welcome to submit an application for the review of the measures if they believe that there is sufficient ground for the review. 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 Measures Affecting Production and Trade 3.3.2 Incentives, State Aid, and Subsidies 3.3.2.1 Turquality Page 96 Para. 3.159 “Turkey's TURQUALITY® is its national branding programme designed to facilitate and support Turkish brands in international markets. It has been in operation since 2004 at the initiative of the Ministry of Economy, TIM, and the Istanbul Textile and Apparel Exporters Association (ITKIB). There have been no changes to the laws or regulations for TURQUALITY® during the review period. Its main objectives are to support companies in their brand-building efforts, undertake public relations activities abroad, create awareness on internationally accepted values like quality, help companies with brand positioning, and act as an incubator for selected Turkish brands.

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TURQUALITY® is a state-supported branding entity in which the state pays 50% of company expenses for TURQUALITY® support services for branding and entering international markets. There are two main programmes: the branding and TURQUALITY® programmes.” Question: 24. Could Turkey please elaborate further how it implements the programme and the impact the programme has not only on Turkey’s products in domestic and foreign market but also on imported products? Turkey’s Answer: As a “national brand-building program”, TURQUALITY® has been implemented by providing highly customized strategic coaching and consulting for Turkish brands in order to facilitate their success on international arena with a vision of “quality in brand management”. Therefore, the program does not have any impact on imported products since its focus is only the success of Turkish brands on international arena. 25. Could Turkey please elaborate how the state pays for the company expenses? Turkey’s Answer: Exporters’ Associations and Turkish Exporters Assembly (TIM) are responsible for the payments of the company expenses. 4 TRADE POLICIES BY SECTOR 4.1 Agriculture 4.1.4 Support Programmes Page 128 Para 4.18 Turkey's agriculture support has undergone many changes over the last 20 years leading to the maintenance of relatively high supports, at least in comparison to other OECD countries. The use of decoupled payments ceased in 2009 while output-based payments increased. Turkey's Producer Support Estimate (PSE) as reported by the OECD has generally increased over the review period, except for a slight decline in 2012. Market-based supports comprise the largest share of the PSE, accounting for 76% in 2014, an increase from 72% in 2011. The largest market-based supports are for beef and potatoes. Question: 26. Could Turkey provide more information on how it implements agricultural support programmes for its domestic farmers? Turkey’s Answer: In accordance with Agriculture Law No. 5488, policy tools to be used for agricultural support are as follows:

Direct income support, Deficiency Payments, Compensatory payments, Livestock supports, Agricultural insurance payments, Rural development supports, Supports for protection of agricultural land for environmental purposes,

Other payments include research, development and agricultural extension supports, marketing incentives, special storage supports, quality supports, market regulation supports, organic production supports, destruction supports, product processing supports, input supports upon necessity and agricultural basin supports. 4 TRADE POLICIES BY SECTOR 4.1 Agriculture 4.1.5 Strategy and policy Page 129 Para 4.20 “The 2013-17 Strategic Plan identifies five strategic areas on which to focus, each containing, specific goals and objectives (Table 4.9). The intention of the Plan is to move Turkey towards its, 2023 Vision for Agriculture in which Turkey aims to become a country that can feed its population,

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with sufficient amounts of safe and high-quality foods; a net exporter of agricultural products; improve its competitiveness; and be influential in the field of agriculture within its region and across the world.” Question: 27. Please elaborate futher Turkey 2023 Vision for Agriculture, and how these vision are being implemented in order to achieve its goals? Turkey’s Answer: Turkey’s 2023 Vision for Agriculture with the theme of “Sustainable Development, Sustainable Agriculture, Food and Livestock” has the following objectives: 1-VISION: To assure sustainable economic use of agricultural and ecological resources; to assure access to safe food and qualified agricultural and livestock products; to improve living standards in rural areas; to develop policies for providing economic and social facilities, sound and modern housing opportunities for rural settlements; to ensure land consolidation; to become a competitive country in international arena through an agricultural, food and livestock industry with increased productivity. 2-OBJECTIVES: To assure food security and safety; to develop an organized and highly competitive agricultural structure while taking into account sustainable use of natural resources; to improve the data related with the implementation of agricultural policies and to develop information infrastructure; to develop production means and systems for agricultural, food and aquaculture products; to produce and develop seeds, seedlings, saplings and broods; to develop new genotypes for production in agriculture, forestry and livestock; to increase the capability for integrated control of agricultural diseases and pests through developing techniques for protection, control and treatment; to develop food processing methods and processes and to increase the diversity of processed products; to develop remote sensing and early warning systems and informatics system and software; to make ecological agriculture that takes into account human, environment and animal health more widespread; to make more common methods and means for the efficient use of soil and water resources; to accelerate and complete land consolidation activities for the purpose of eliminating scale related problems in the agricultural land partitioned via inheritance; to develop cooperation and organization between SMEs that are for agricultural and food products’ branding; to develop organizations for increasing the competitiveness of firms that are active in rapidly developing and growing international agriculture and food products markets and to plan production for targeted markets. Documents may be accessed via http://www.tsv2023.org/ 4 TRADE POLICIES BY SECTOR 4.1 Agriculture 4.1.8 Major agriculture sectors 4.1.8.2 Livestock Page 135 Para 4.35 “Agricultural supports to the livestock sector are significant and have increased during the period, in particular direct subsidy payments. Livestock subsidies, as a percentage of Turkey's overall agricultural subsides, have increased. The share of the livestock sector eligible for subsides was 24% in 2011, rising to 30% in 2015.19 Most subsidies for the sector are incentives for milk production, followed by cattle breeding, and feed processing (Table 4.14). Part of these agricultural subsidies is also given to the industry association relevant to the particular livestock subsector.” Question: 28. Please elaborate further on the details of the implemented livestock support programmes?

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Turkey’s Answer: As a traditional agricultural activity in Turkey, livestock sector has a great deal of importance. As can be seen from Turkey’s 2023 Vision for Agriculture, livestock sector is aimed to be further developed through use of modern technologies and effective support tools which will enable more competitive livestock industry and increased productivity. Existing support programmes details of which can be examined from the Table 4.14 in the Secretariat Report, aims to increase yield per animal through artificial insemination, along with disease control through vaccination of the new born calves with Brucellosis vaccine. With respect to brood livestock support, what is aimed is to get full benefit of reproductive yield of livestock economically. Moreover, the accuracy and up-to-dateness of the records are targeted by giving priority to the registration, and increases in the number of ovine and caprine animals and the red meat production. Healthy milk production is also one of the goals pursued. In order to achieve this, determination of milk content (milk fat, milk protein and somatic cell count) and milk quality through records of livestock breeding is being targeted, among others. For further details please see Pages 133- 135 of the Secretariat Report. 4 TRADE POLICIES BY SECTOR 4.1 Agriculture 4.1.9 Marketing boards 4.1.9.4 Tobacco and Alcohol Market Regulatory Authority Page 139 Para 4.46 “In terms of trade, TAPDK oversees laws and regulations related to the trade of raw and processed tobacco products and alcoholic beverages. For tobacco, TAPDK issues producer certificates in order to produce tobacco products. Tobacco products are generally free to export, subject to an inspection of conformity, but to import there are limitations on which companies may do so, based on their annual production capacity and/or investment. For alcoholic beverages, TAPDK has a regulatory function including oversight over production certificates, distribution licences, and imports.” Question: 29. Could Turkey please explain the rationale behind the limitation on importation of tobacco based on the annual production capacity and/or investment? Turkey’s Answer: Limitations on the importation of tobacco are simply applied on the grounds of health considerations. As one of the Parties to the WHO Framework Convention on Tobacco Control (WHO FCTC) -which was adopted by the World Health Assembly on 21 May 2003 and entered into force on 27 February 2005-, Turkey actively contributes to the goals of the Convention which foresees sound tobacco control policies by the Parties, also including great majority of WTO Members. As one of the most successfull countries in implementing the Convention, Turkey aims to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke, through different means, which also includes the limitation measure being asked. 4 TRADE POLICIES BY SECTOR 4.2 Manufacturing Page 139 Para 4.51 “Small and medium-sized enterprises (SMEs) constitute a key part of the industrial sector in Turkey. According to Turkish Treasury figures, SMEs account for 99% of all companies in Turkey, and contribute to around 78% of employment, 62% of exports and 57% of total value added. SMEs receive support from the Government through assistance with financing, training, technology development, innovation, export orientation and quality improvement.”

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Question: 30. Indonesia is currently developing its Small and Medium-sized Enterprises (SMEs) to become a key part in its industrial sector. Please elaborate further details of the support programmes given to SMEs? Turkey’s Answer: Several support programmes focusing on SMEs are implemented by different government agencies with different aims in Turkey. These programmes are composed of various instruments such as grants, reimbursement supports, tax exemptions, credits and some others aiming to facilitate credit usages. All these support programmes are categorized by related institutes and support types as shown Table 2.

Table 3 SME Support Programmes in Turkey

Support Type Support Programme Related Institute

Supports Focused on R&D And Innovation

Industrial Thesis Program Ministry of Science, Industry and Technology (MoSIT)

Techno-Initiative Capital Support Program MoSIT

Technological Products Promotion& Marketing Program

MoSIT

Technological Products Investment Program MoSIT

Enhancing International Competitiveness Program Ministry of Economy (MoE)

Energy Sector R&D Projects Support Program Ministry of Energy and Natural Resources (MoENR)

Direct Financial Supports Regional Development Agencies (RDAs)

Regulations in Law No: 5746 Concerning the Support of Research and Development Activities: - R&D Deduction - Income tax withholding incentives - Insurance premium support - Stamp duty exemption

Ministry of Finance (MoF), Social Security Institution (SGK)

Regulations Laid Down In Technology Developing Zones Law No: 4691: - Infrastructure Supports - Income tax withholding exemption - Corporate tax exemption - Income tax exemption - Stamp duty exemption - Value added tax exemption

MoSIT/MoF

Law No 193: Income Tax and Law No: 5520: Corporation Tax (R&D Deduction)

MoF

Electronic, Information and Communication, Aviation and Space Sectors R&D Projects Support Program

Ministry of Transport, Maritime Affairs and Communications (MoTMAC)

Industrial R&D Projects Grant Programme TÜBİTAK

R&D Project Brokerage Events Grant Programme TÜBİTAK

University - Industry Collaboration Grant Programme TÜBİTAK

SME Research, Development & Innovation Grant Programme

TÜBİTAK

International Industrial R&D Projects Grant Programme

TÜBİTAK

Research Technology Development and Innovation Projects in Priority Areas Grant Programme

TÜBİTAK

Entrepreneurship Multi-Phase Programme TÜBİTAK

TÜBİTAK Patent Support Programme TÜBİTAK

Capacity Building for Innovation and Entrepreneurship Grant Programme

TÜBİTAK

Industrial Property Rights Support KOSGEB

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Support Type Support Programme Related Institute

R&D and Innovation Programme KOSGEB

Industrial Application Programme KOSGEB

International Incubators and Accelerators Support Programme

KOSGEB

Technology Development Project Support Technology Development Foundation of Turkey (TTGV)

Commercialization Project Supports TTGV

Advanced Technologies Support Programme TTGV

Supports Focused on Entrepreneurship

Direct Financial Supports RDAs

Guided Project Support RDAs

Applied Entrepreneurship Trainings KOSGEB

New Entrepreneur Support KOSGEB

Business Incubators Support KOSGEB

Business Plan Award KOSGEB

Supports Focused on Strategy Development and Collaboration

Cluster Support Programme MoSIT

Direct Financial Supports RDAs

Guided Project Supports RDAs

Cooperation-Collaboration Support Programme KOSGEB

Thematic Project Support Programme KOSGEB

Supports Focused on Marketing

Overseas Trade Fair Participation Support MoE

International Domestic Fair Participation Support MoE

TURQUALITY Support Program MoE

Opening Foreign Branches and Business/Brand Promotion Support

MoE

Market Research and Market Access Support – Foreign Market Research Support

MoE

Market Research and Market Access Support – E-Commerce Website Membership Support

MoE

Design Support MoE

Export Refund for Agricultural Products Support MoE

Technical Consultancy Services Support MoE

Employment Support MoE

Currency Earning Services Sector Branding Support MoE

Direct Financial Supports RDAs

Guided Project Supports RDAs

Overseas Tourism Fair Participation and Tourism Promotion and Marketing Support

Ministry of Culture and Tourism (MoCuT)

Domestic Fairs Support KOSGEB

Foreign Business Travel Support KOSGEB

Promotion Support KOSGEB

Matching Support KOSGEB

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Support Type Support Programme Related Institute

Design Support KOSGEB

International Incubators and Accelerators Support Programme

KOSGEB

Supports Focused on Consultancy and Capacity Building

Enhancing International Competitiveness Support- Training and Consultancy Support

MoE

Market Research and Market Access Support – Market Access Report Support

MoE

Market Research and Market Access Support – Sectoral Trade Mission and Buying Mission Support

MoE

Direct Financial Supports RDAs

Guided Project Supports RDAs

Consultancy Support KOSGEB

Training Support KOSGEB

Support for Employment of Qualified Staff KOSGEB

Certification Support KOSGEB

Test, Analyse and Calibration Support KOSGEB

Independent Audit Support KOSGEB

SME Project Support Program KOSGEB

Supports Focused on Environment And Energy

Industrial Enterprises’ Productive Projects Support MoENR

Voluntary Agreement Support MoENR

Energy Support for Tourism Certificated Enterprises MoENR/ MoCuT

Energy Efficiency Support KOSGEB

Environmental Technologies Support TTGV

Energy Efficiency Support TTGV

Investment Incentives

VAT Exemption MoF

Customs Duty Exemption MoCT

Tax Reduction MoE /MoF

Social Security Premium Support (Employer’s Share) MoE

Income Tax Withholding Allowance MoF

Social Security Premium Support (Employee’s Share) MoE

Interest Rate Support MoE /MoF

Land Allocation MoE

VAT Refund MoE

Direct Financial Supports RDAs

Guided Project Supports RDAs

Exemptions for Corporate Tax, Land tax, Electricity and Gas Consumption Tax, VAT Tax, Building Construction Fee and Residential Usage Licence Fee and some other charges

MoSIT

Supports Focused on Access to Finance

Venture Capital Funding Programme TÜBİTAK

Emerging Enterprises Market SME Support Programme

KOSGEB

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Support Type Support Programme Related Institute

Loan Interest Support Programme for SMEs KOSGEB

Loan Interest Support Programme for tradesmen and craftsmen

Halk Bank

Credit Guaranty Support Credit Guaranty Fund (KGF)

Business Angels System Undersecretariat of Treasury

Interest Support, Interest Free Loan Support RDAs

In addition, Small and Medium Enterprises Development Organisation (KOSGEB) is the unique governmental organization in Turkey which is established to support just SMEs. It is an affiliated organization to the Ministry of Science, Industry and Technology. Also KOSGEB is the main body for executing the policies regulating the SMEs, the number of which amounts to 3,5 million according to Turkey’s business registers. To date, the number of SMEs registered in the KOSGEB database has exceeded 850.000. KOSGEB Supports and Services can be classified under 4 main headings:

A. Supports provided within the scope of “KOSGEB Support Programs Regulation”, B. KOSGEB Finance (Loan Interest Rate) Supports C. KOSGEB Laboratory Services D. Information and Guidance Supports

As for KOSGEB Laboratory Services, in KOSGEB’s laboratories some specific services are provided to SMEs in the areas of metal, plastics, rubber, textile and environment. One of the most important activities, in the context of Information and Guidance Supports are to announce SMEs the calls for projects within the scope of EU Funds and services of national organizations which are related to SMEs and to provide guidance to SMEs for benefiting from the other institution’s supports. Lastly to explain, the most common and the most important supports submitted to SMEs by KOSGEB are the ones which are implemented as part of KOSGEB Support Programs Regulation. And in the context of this study, the following KOSGEB support programs will be analysed;

Cooperation-Collaboration Support Programme Entrepreneurship Support Programme General Support Programme SME Project Support Programme Thematic Project Support Programme R&D, Innovation and Industrial Application Support Programme Emerging Enterprises Market SME Support Programme International Incubators and Accelerators Support Programme

KOSGEB is ready to share all its experience with the Government Indonesia in terms of SME Development. 4 TRADE POLICIES BY SECTOR 4.3 Services 4.3.1 Financial services 4.3.1.2 Insurance Page 149 Para 4.96 “Turkey's insurance sector has a low penetration rate, around 1.49% of GDP (2014). At the end of 2014, the annual premium production in insurance was TL 25.9 billion (almost US$11.8 billion). The share of non-life insurance premiums in total is 87.4%, while life insurance represents a share of 12.6% at the end of 2014. Motor vehicle accident insurance accounts for the largest share of non-life premiums, at around 50%. The average premium per person is around US$152.”

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31. Could Turkey please explain why Turkey's insurance sector has a low penetration rate? Turkey’s Answer: Lack of insurance awareness among the general public is an important factor in explaining the low penetration rate in the insurance sector in Turkey. Improvements in financial education and inclusion are expected to increase the traditionally low penetration rates. 32. Does the low penetration in the insurance sector affect foreign insurance investments? Turkey’s Answer: The low penetration in the insurance sector does not affect foreign insurance investments negatively. On the contrary, low insurance penetration rates promise great potential for growth in the insurance sector of Turkey. 4 TRADE POLICIES BY SECTOR 4.3 Services 4.3.2 Health 4.3.2.2 Trade Page 156 Para 4.124 “The OECD reports trade in health services as a percentage of health expenditures. For Turkey, imports of health services were estimated at approximately 0.5% of health expenditures in 2012, and exports (defined as domestic provision of health services to non-residents) approximately 1%. Exports were however growing strongly, at a 12% annual growth rate during 2007-12, which was the 6th highest rate of growth among reporting European countries. Exports of health-related travel or other services were 1.1% of total health expenditure but, at €219.5 million in 2012, were higher than for any EU member State for which there are data.” Question: 33. Could Turkey please explain the main factors that lead to the increase in export of health services in 2007-2012? Turkey’s Answer: In addition to the development of any kind of cooperation between countries; improvement of freedom and opportunities of travel, facilitation of transport, increase of medical services’ quality worldwide and both individual and budget-based challenges in financing of health services have gradually raised the importance of the health tourism in the world. Almost any and all kinds of health services are being demanded in the area of health tourism. However such fields as dental treatment, eye, plastic surgery, cardiovascular and joint prosthesis, infertility treatment, in-vitro fertilization and surgical interventions have the leading role. Previously, advanced technology, modern infrastructure, high quality standards of healthcare services and ease of transport were the common characteristics of the leading countries in the field of health tourism while qualitative characteristics of the health facilities and healthcare professionals predominate currently. Facts of the health tourism can be named as follows even though they may differentiate on country basis: belonging (blood relation), long waiting periods for treatment, high cost of the health services, insufficient level of the health services, excess of old population and preference of thermal health tourism facilities. The investments in the field of health over the past decade and the health transformation program have increased international competitive capacity of many health institutions in Turkey. Turkey has caught or gone beyond the western standards in health services. Turkey has a noteworthy potential to be a leader in the field of health tourism not only with its geographical position or health institutions with developed infrastructure but also with the experienced and trained manpower, technically advanced health infrastructure, the most important geothermal sources of the region, historical and natural attractions, rich cultural heritage and low costs. Health tourism is a chain of complex activities, which requires integration and coordination of such main sectors as boarding services, transport, communication, environment, architecture, insurance, intermediary agencies, advertisement and marketing companies.

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According to the WHO data, health services are more cost-effective in Turkey in comparison with many developed and developing countries. Turkey is among the first countries to be considered for health services worldwide in terms of both prices and waiting periods. Challenges of out-of-pocket payment systems in developed countries or problems of domestic health service provisions in developing countries have increased the demands of health services in Turkey as in many other countries. Turkey holds the regional power in the field of health tourism. In particular for medical tourism, Turkey is prominently preferred as the main destination. Moreover, the number of thermal health facilities, rehabilitation clinics, healthy life facilities and elderly care/treatment centers, etc. is rising as alternative practices of health tourism. Pursuant to the health transformation program, Turkey has achieved a great progress in the field of health service provision, which is also welcomed by WHO. Those who would like to receive qualified and cost-effective health services are coming to Turkey with ever increasing rates. Located on an important geothermal zone, Turkey is among the first seven countries in terms of rich sources and potential for thermal tourism. 34. Could Turkey also explain which mode of supply was the largest, in terms of health services export in 2007-2012? Turkey’s Answer: The referred paragraph of the Secretariat report citing OECD statistics specifies that exports were “defined as domestic provision of health services to non-residents”, which falls under services supply through Mode 2. The recent activities in the field of health and health tourism have contributed to improvement of the sector in Turkey. The number of incoming foreign patients is increasing year by year, especially the increases after 2010 are remarkable. While the number of foreign patients coming to Turkey was around 110.000 in 2010, this number reached 300.000 in 2013. Records indicate that foreign patients apply to all branches for treatment in Turkey. The patients traveling to Turkey for health tourism receive specialized services in the fields of radiotherapy, laser eye surgery, plastic surgery, dental treatment, assisted reproductive techniques and cardiovascular diseases in addition to such main clinics as internal medicine or gynecology and Turkey has a comparative superiority in these fields. Patients mostly prefer the private sector to receive services in the fields above. The records of health tourism in Turkey have been kept more meticulously in recent years, according to which about 500.000 foreign patients have received health services in Turkey as of the end of 2014. The following Table shows the number of international patients, including health tourism and tourist health groups, by years until 2012. Years Number of Patients

2008 74.093

2009 91.961

2010 109.678

2011 156.176

2012 270.000

In Turkey, 952 hospitals provided services for international patients. Foreign patients were treated at 335 State Hospitals, 502 Private Hospitals, 64 Training and Research Hospitals and 31 University Hospitals. Even though private hospitals come to the fore with the highest number of foreign patients, “Training and Research Hospitals” stand out in terms of the number of patients

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per hospital. In 2012, the number of international patients per hospital was around 291 persons. International patients mostly apply to the Emergency Medicine clinic. When both tourist health and health tourism patients are evaluated together, the Emergency Medicine is respectively followed by Internal Medicine, Orthopedic and Traumatology, Ophthalmology, Pediatrics, Gynecology and Obstetrics, Otorhinolaryngology, General Surgery, Cardiology and Dermatology. 4 TRADE POLICIES BY SECTOR 4.3 Services 4.3.2 Health 4.3.2.6 Licensing, accreditation, and regulatory aspects Page 160 Para 4.145 “Previously, doctors working in Turkey were required to be Turkish citizens and have a diploma from a Turkish medical school until a law was adopted in 2007 removing this requirement, but subsequently overturned. However in 2011, a statutory decree permitted foreign doctors to practise in private health institutions if they passed a language test, obtained work and residence permits, obtained liability insurance, and if their medical diplomas were awarded a certificate of equivalence to Turkish University standards. The same provisions are provided to all health workers except dentists, pharmacists, nurses, and midwives.” Question: 35. Please explain why foreign dentists, pharmacists, nurses, and midwives are not permitted to practice in Turkey? Turkey’s Answer: Turkey approaches this issue within the context of its GATS commitments. According to Turkish Law number 1219, doctors, dentists or midwives; number 6283, nurses; number 6197, pharmacists requires to hold Turkish citizenship to practice in Turkey. In 2011, with Statutory Decree No. 663, Article 58 gives permission to foreign physicians and nurses to practice in Turkey. In 2014, with the Law No. 6514, Article 22 the requirement of Turkish citizenship to work as midwife in Turkey was removed. However, dentists and pharmacists are required to hold Turkish citizenship to practice in Turkey. 4 TRADE POLICIES BY SECTOR 4.3 Services 4.3.5 Distribution 4.3.5.2 Market structure Page 178 Para 4.229 “E-commerce has been growing in Turkey as a result of rising internet penetration rates and credit-card use. In the first half of 2015, domestic e-commerce transactions reached TL 25.8 billion, a 30% increase from the same period in 2014. In 2014, the value of online purchases was equivalent to 1.6% of total retail sales according to the Turkish Informatics Industry Association. Foreign investment in the online retail sector in Turkey has also witnessed strong growth in recent years.” Question: 36. Could Turkey please provide the total amount of e-commerce trading in Turkey for the last 5 years? Turkey’s Answer: According to the “E-Commerce in Turkey Market Definition and Sizing 2014” report prepared by TUBİSAD (Informatics Industry Association), e-commerce market size was around 10 billion TL in 2014 which was 7 billion in 2013. 37. Are there any incentives given for foreign e-commerce providers in Turkey? Turkey’s Answer: The incentives for e-commerce, which are granted by Ministry of Economy of Turkey, are indicated in “The Market Research and Market Access Incentive Notification” (Article 13 -14).

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The membership fees to the e-commerce websites which are not for final consumers are supported up to 70% and annually maximum amount of $10,000. E-commerce websites are given support up to $2,000. Companies can benefit from the support specified in the Article 13, for a maximum of 5 e-commerce websites. Each e-commerce website can benefit from this support up to a maximum of three years. Any company which would like to benefit from this incentive, aforementioned in Article 13, must have a website related to its commercial activities at least in one of the foreign languages. OTHERS: 38. Could Turkey explain the difference in the applied tariff of Crude Palm Oil (CPO) from Indonesia at 31.2% vis-à-vis 11% for CPO from Malaysia? Would Turkey consider lowering the tariff of CPO from Indonesia to equal that from Malaysia? Turkey’s Answer: For imports of crude palm oil, the MFN customs duty is 31,2%. However within the scope of Malaysia and Turkey FTA, the customs duty of crude palm oil originating in Malaysia is 21,8%. 39. Would Turkey consider providing greater market access facilities for other products, such as cacao, pepper, nutmeg, coconut and derivatives, leather (shoes), organic rice, glutinous rice, seed, mangosteen, bark, and dragon fruit? Turkey’s Answer: Like other countries, tariff rates are determined according to domestic needs, production capabilities and international commitments of Turkey. When it is deemed necessary, the tariff rates can be arranged by taking into consideration those conditions. The tariff rates of agricultural products can be reached at Decree on Import Regime, published Official Gazette dated December 31, 2015. 40. Could Turkey provide information on how it implements the halal certification? Does the Turkish authority have an authorization agreement with the Standards and Metrology Institute for the Islamic Countries (SMIIC)? Turkey’s Answer: Turkish Standards Institute (TSI) is a member of SMIIC since its establishment in 2010. On 14 June 2011, OIC/SMIIC standards (see below) have been adopted as national (TS) standards by TSE Technical Board. SMIIC invites all OIC member countries to be a member of SMIIC and adopt OIC/SMIIC Standards as national standards. It should be noted that, there have not been made any changes on the standards at the stage of adoption. Currently, TSE is implementing halal certification activities according to TS OIC/SMIIC 1: 2011, “General Guidelines on Halal Food”. One of the important tasks is to activate the mutual recognition system of halal certificates under the umbrella of SMIIC in OIC. Accordingly, SMIIC Accreditation Committee has recently completed the major work based on this document for activating the mutual recognition system in OIC based on OIC/SMIIC Standards. 41. Indonesia seeks detailed clarification concerning the imposition of anti-dumping and safeguard measures implemented by Turkish authorities for Polyester Synthetic Fibers (Anti-Dumping), Polyester Textured Yarn and Yarn Man of Man Made Staple Fibers (Anti Dumping), and Glass Lids (Sunset Review Anti-Dumping). Turkey’s Answer: According to Article 6.9 of the Anti-Dumping Agreement, the authorities shall timely inform all interested parties of the essential facts before a final decision made. In accordance with this article, all the necessary information regarding the essential facts of all the dumping investigations are disclosed to the interested parties, including the government of the exporting countries, via final disclosure reports during the investigation. All the necessary clarifications related to the anti-dumping measures concerned can be found in their final disclosure reports. Additionally, if an anti-dumping duty is imposed, a public communique regarding the measure is published in the Official Gazette of Republic of Turkey. Additional details regarding the measures concerned can also be found in the related communiques as follows:

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a) Polyester Synthetic Fibers (Anti-Dumping) – Communique No: 2012/11 published in the Official Gazette dated May 16, 2012 and numbered 28294. b) Polyester Textured Yarn and Yarn Man of Man Made Staple Fibers (Anti-Dumping) - Communique No: 2015/8 published in the Official Gazette dated April 17, 2015 and numbered 29329. c) Glass Lids (Sunset Review Anti-Dumping) - Communique No: 2010/12 published in the Official Gazette dated May 23, 2010 and numbered 27589.

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RUSSIAN FEDERATION

QUESTIONS REGARDING THE SECRETARIAT REPORT (WT/TPR/S/331) 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1.7 Import prohibitions, restrictions, and licensing Table 3.15 Import prohibitions, 2015 p.66 Question: According to the abovementioned table the Soil, leaf, stem, straw, and natural manure used for agricultural purposes (excluding turf and perlites cultivated in culture environment) are prohibited for import. Please clarify the grounds for the said prohibition? Turkey’s Answer: Soil and Natural manure are listed in Regulation on Plant Quarantine (Annex 3 Plants, Plant Products and Growing Medium.) Therefore, their entry is prohibited. Apart from that, straw and hay import started in 2013. The importation of those products is prohibited since the high probability of the existence of harmful agent. That is in conformity with 2000/29 directive of European Community. Table 3.16 Imports requiring a licence, 2015 p.68 Questions: According to the abovementioned table the import of fertilizers requires a license. Please provide more information concerning the goods that are considered as fertilizers (including organic fertilizers)? Please also provide more information about the licensing production procedure and the way in which the control of use of fertilizers is regulated within the territory of Turkey. Turkey’s Answer: In this respect, fertilizers are subject to import controls within the comminique of 2016/5 which is about the import controls of certain agricultural goods from the point of human, animal and plant health and existence. Within this concept, required information and documents should be given to the Ministry of Food, Agriculture and Livestock (MFAL) prior to controlling operations controling procedures are run by the aforementioned Ministry. Within this framework, there is no exemption for imports from EU countries. 3.1.8 Contingency measures 3.1.8.1 Anti-dumping and countervailing measures Paragraphs 3.57 – 3.60 p. 68-69 Questions: The Report by the Secretariat (document No. WT/TPR/S/331, paragraphs 3.57 – 3.60) provides a description of the national legislation, the responsible authorities, the current anti-dumping investigations and the measures in force. At the same time, it does not describe certain practices of the Turkish investigating authorities that may be worth mentioning.

Considering the recently disclosed results of the ongoing anti-dumping investigation on imports of hot-rolled steel products originating in, inter alia, the Russian Federation, the practices of normal value calculation and product scope determination used by the Turkish authorities is of special interest for the Russian Federation.

1. Concerning the adjustment of costs actually incurred by the producers of the exporting country when the authorities come to a conclusion that the records of the exporting producers do not reasonably reflect the costs associated with production and sales of the product under consideration, please clarify the following:

a. What provisions of Turkish national legislation authorize such adjustment? Please provide a list of the relevant legal acts with reference to such provisions.

b. What provisions of Turkish national legislation enable the investigating authorities to replace the input costs incurred by the exporting producers with the data related to the costs of such inputs outside the country of origin and exportation of the product under consideration for the purposes of normal value calculation? Please describe the methodology applied in such cases in order to choose the country where the input costs are considered appropriate to calculate the normal value.

c. What is the exact number of anti-dumping investigations where Turkish investigating authorities resorted to such adjustment of exporters’ costs? For these investigations, please indicate the exporting countries.

d. Does Turkey consider in all investigations that costs associated with raw materials “are not reasonably reflected” in the exporter’s records if some of the suppliers of raw

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materials are related with the exporter and/or such raw materials are purchased at “highly distorted prices”? How does Turkey establish the facts of “relation” and “distortion”?

2. It seems that Turkey applies provisional anti-dumping measures on investigated imports, except for imports of hot-rolled flat steel especially designated as a raw material for the use in production of pipes for construction of the Trans Anatolian Natural Gas Pipeline (TANAP) project (hereinafter – TANAP-aimed products). In this respect, please clarify:

a. How does Turkey determine whether the imported products are exactly TANAP-aimed products in order to exempt them from anti-dumping duties?

b. Have the Turkish investigating authorities taken into consideration the data on imports of TANAP-aimed products for the purposes of dumping determination?

c. Have the Turkish investigating authorities taken into consideration the data on imports of TANAP-aimed products for the determination of injury?

d. Does Turkey consider that its obligations before the Government of the Republic of Azerbaijan under the Intergovernmental Treaty for TANAP System prevail over or constitute an exemption from its obligations vis-à-vis the WTO Members under the Agreement on Implementation of Article VI of the GATT 1994? In case of a positive answer, please explain the reasons for it. If the answer is negative, please explain the legal grounds under the WTO Agreements for making exceptions for TANAP-aimed products from the imposition of the provisional and/or definitive anti-dumping duties.

Turkey’s Answer: Anti-dumping investigation on imports of hot-rolled steel products originating in, inter alia, the Russian Federation is still ongoing; the general and company specific final disclosures have been released. The public and company specific hearings were held. Turkey has been conducting investigations according to its national anti-dumping legislation that is in line with WTO Anti-Dumping Agreement respecting the transparency and due process rights of the parties. Thus, the findings regarding the scope, dumping calculations, injury were shared with interested parties considering the confidentiality requirements. The comments and objections of the interested parties are still being evaluated by the investigating authority and the results of the investigation will be released/published in accordance with the legislation. 3.1.9 Standards and other technical requirements 3.1.9.3 Alignment with the EU 3.75. p.72 At the horizontal level, Turkey has maintained legislation since 2002 to align itself with EU legislation. Pursuant to changes by the EU in 2008, Turkey revised its regulations in 2012 to conform in the areas of CE marking, conformity assessment bodies, and notified bodies. Questions: Could Turkey please specify what measures does the alignment with the EU involve? Could Turkey give a more detailed information on the sectors in which this alignment is carried out, in which sectors the alignment with EU legislation will take place in the nearest future? Please provide a plan, if any, of the alignment of Turkish technical regulations with the sector-specific EU directives. Turkey’s Answer: The Ministry of Economy is responsible for harmonizing the horizontal technical legislation of the EU, in particular, the ones in the areas on product safety. In this respect, a Framework Law No. 4703 and its four implementing Regulations which were drafted by the Ministry regarding product safety, CE marking, market surveillance, notified bodies and notification procedures were put into force in 2002. Due to the changes in the EU horizontal legislation in 2008, the implementing regulations (Regulation on CE Marking” and “Regulation on Conformity Assessment Bodies and Notified Bodies) were adopted and published in February 2012. The new legislation repealed previous implementing Regulations, which were adopted in 2002. Also, in order to ensure the free movement of goods between Turkey and the EU in the non-harmonised area, Regulation on Mutual Recognition on the Non-harmonized Area was adopted and published in the Official Journal in June 2012. The Ministry of Economy also coordinates the legislative alignment with the EU’s vertical legislation that is carried out by the relevant public authorities. In fact, Turkey has already aligned with the EU’s sectoral/vertical legislation that is listed in Association Council Decision No. 2/97 to a great extent. This alignment concerns around 250 pieces of EU legislation in areas like radio and

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telecommunication terminal equipment, batteries and accumulators, toys, personal protective equipment, construction products, medical devices, gas appliances, civil explosives, and lifts. Nonetheles, due to the evolving nature of the EU legislation, alignment with the EU legislation is a continous process. Presently, processes of harmonization and exchange of view with the EU legislation is underway with respect to following sectors/products: Measuring Instruments, Non-Automatic Weighing Instruments, Electrical Equipment Designed for Use Within Certain Voltage Limits, Pyrotechnic Articles, Electromagnetic Compatibility, lifts and safety components for lifts, equipment and protective systems intended for use in potentially explosive atmospheres, simple pressure vessels and transportable pressure equipment. 3.76. p.72 Further, the relevant Turkish authorities have aligned the sector-specific EU into Turkish laws and regulations, including around 250 technical regulations. Also, other EU directives were adopted pursuant to Decision No. 2/97 of 1997, covering products such as radio and telecommunication terminal equipment, batteries and accumulators, toys, personal protective equipment, construction products, medical devices, gas appliances, civil explosives, and lifts. Questions: Could you please clarify whether the EU directives on technical regulations were adopted in its integrity or partially? Are they adopted simultaneously with the EU ones? Could Turkey please provide more detailed information describing the implementation procedure, if there are any, for the adoption of the EU directives in the sphere of technical regulation? Could Turkey please provide a source with a list of technical regulations aligned with the sector-specific EU directives? Please also provide the exact number of such documents. Turkey’s Answer: EU Directives on technical regulations are adopted in its integrity. Most of the time, the EU legislation is put into effect simultaneously with the EU Member States. If the simultaneous adaption is not possible, Turkey mostly harmonizes the EU legislation within 1-2 years after it was put into effect in EU Member States. The list of the already harmonized legislations can be accessed through the following link. http://www.ekonomi.gov.tr/portal/faces/home/urun-guvenligi/ab-teknik-mevzuat-uyumu/yararlikaynaklar?_afrLoop=249873482779461&_afrWindowMode=0&_afrWindowId=83phal8sy_575#!%40%40%3F_afrWindowId%3D83phal8sy_575%26_afrLoop%3D249873482779461%26_afrWindowMode%3D0%26_adf.ctrl-state%3D83phal8sy_629 3.1.10.1 Overview and alignment with the EU 3.81 p.73 In 2011, Turkey started pilot implementation of a risk-based trade control system, TAREKS, to carry out safety checks on imported and exported goods on the basis of risk. Consequently, since January 2012, conformity assessment of certain imported goods (toys, medical devices, telecommunication products, personal protective equipment, batteries and accumulators, construction products, and shoes) and as of August 2012, transactions related to cotton controls have been taken under the scope of TAREKS. Finally, since 15 February 2013 conformity assessment of certain imported goods such as machinery, lifts, pressure vessels, electrical equipment, gas appliances and also some industrial raw materials have been incorporated in TAREKS. Question: Please specify whether it is planned to use TAREKS for safety control of goods subject to the State Veterinary Service? What risk analysis mechanisms are used within the mentioned system? How is it integrated with the third countries’ systems, including the EU one? Turkey’s Answer: Today, import controls related to products safety are carried out through the “Risk-Based Trade Control System (TAREKS). Within TAREKS, import controls related to product safety are performed electronically and on risk basis, in other words only risky products are subjected to safety and conformity checks. Before the establishment of the electronic control system, all export and import consignments used to be subjected to inspection. As a matter of fact, TAREKS introduced a new understanding of risk assessment based on objective criteria. On this manner, TAREKS uses risk analysis by sorting out goods from high risk to low risk and document checks of each product at each arrival at customs does not continue anymore and the system focuses on the control of only risky products. TAREKS is not integrated with the other countries’ systems. Given the information that for safety control of goods subject to the State

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Veterinary Service is not foreseen to be included in TAREKS for safety control of goods for the near future. 3.1.10 Sanitary and phytosanitary requirements 3.96. p. 75 Similar to the changes that have occurred for TBT, Turkey has been focusing on harmonizing its SPS legislation with that of the EU during the review period. The Turkish legislation is partially aligned with the acquis under this chapter. In order to achieve full and efficient implementation of the acquis, Turkey continues with further legislative alignment. Turkey's Strategy for Transposition and Implementation of the Acquis Communautaire in Chapter 12 – Food Safety, Veterinary and Phytosanitary Policy into National Legislation, in particular its Annex I, contains detailed legislative measures to be taken. 3.99. p. 75 Within the scope of harmonization of SPS matters with the EU, the legislation aligned by the MFAL is as follows:

‐ Regulation on the Control of Foot-and-Mouth Disease, in accordance with Council Directive No. 2003/85/EEC;

‐ Regulation on Notifiable Animal Diseases and Notification of Them, in accordance with laying down the codes for the notification of animal diseases pursuant to Council

‐ Directive 82/894/EEC and with EU Commission Decision No. 2005/176/EC; Question: Please specify to what extent the Turkish SPS measures are recognized as an equivalent to the European ones? Turkey’s Answer: Turkey has continued to take certain steps in many areas to harmonize its national regulations with that of the EU Acquis, including those related to SPS standards. Until now harmonization to a certain extent has been achieved. It should be noted that as a member of the WTO, Turkey is aware of its rights and obligations rising from the WTO SPS Agreement. In other words, while aligning itself with the EU Acquis, Turkey also takes into consideration WTO SPS Agreement which inherently necessitates to consider the recommendations and standards of the international sister organizations mentioned in the WTO SPS Agreement in the process of developing SPS standards. Turkey will continue its efforts for further legislative alignment. 3.101. p. 76 The Law on Veterinary Services, Plant Health, Food and Feed is a comprehensive law setting out provisions on food and feed; plant health; and animal health, welfare, and zootechnics. The main elements of the law provide for the control of contagious diseases, identification and registration of animals, animal welfare, veterinary health product approval, control of harmful organisms, food and feed safety, food codex, labelling and traceability, hygiene for food establishments, official controls, and penal provisions. Questions: It is mentioned that Law No. 5996 sets out provisions on food and feed, plant health, animal health, welfare and zootechnics. Please specify whether there is a relevant law on human life and health protection as provided by the WTO SPS Agreement? Is the export procedure regulated by the mentioned Law? Turkey’s Answer: Law No 5996 sets out among others provisions on protection of human life and health. It has a number of implementing regulations such as those on “Official Controls of Food and Feed, Special Hygiene Rules for Food of Animal Origin”, “Setting Special Rules for Official Controls of Food of Animal Origin”, “Registration and Approval Procedures for Food Establishments” “Turkish Food Codex Microbiological Criteria”, “Turkish Food Codex Food Additives”, “Turkish Food Codex Labelling”, “Turkish Food Codex Flavorants”, “Turkish Food Codex Maximum Residue Limits of Pesticides”, “Turkish Food Codex Classification and Maximum Residue Limit of Pharmacologically Active Substances in Foodstuffs of Animal Origin”, “Turkish Food Codex Contaminants”, “Turkish Food Codex”, “Articles and Materials in contact with Food”.

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These Regulations also contain provisions on export provisions in general sense. Yet in exports destination countries’ requirements are taken into account. 3.103. p.77 If there is no EU equivalent legislation, SPS-related measures are developed in accordance with the standards, recommendations and guidelines determined by standard setting organizations which are recognized by the WTO. Question 1: Could Turkey please specify whether there is a scientific risk assessment for each measure different from the international standards, i.e. Codex Alimentarius, OIE and IPPC? Where could we get acquainted with such risk assessment? Question 2: If the same EU legislation acts (regulations) are not developed in accordance with the relevant international standards (e.g. standards for several pesticides, antibiotics), what steps would be undertaken by Turkey? Question 3: Please clarify what particular issues are not regulated by the EU equivalent legislation? Turkey’s Answer for Questions 1, 2 and 3: Turkey either applies existing international standards as defined by the WTO Agreement on SPS Measures or adopt higher standards on the basis of her own scientific risk assessments. In the same vein, if there is no EU legislation that is in line with an international standard, Turkey may opt out either to develop her own standards or adopt existing relevant international standards. For example, for certain traditional products (like tahini, tahini halva and grape molasses) for which the EU does not apply any international standards Turkey, in cooperation with all stakeholders can develop a national legislation taking national scientific literature into account. In any case, TBT and SPS notifications of draft regulations are submitted through WTO NSS system. In addition, Department of Risk Assessment was established in order to carry out risk assessment studies in the MFAL, under General Directorate of the Food and Control. 3.105. p.78 The duties of the Directorate include providing safe food and feed, determining traceability at each stage of the process, registering producers of food and making controls, determining audit principles for feed and feed additives, identifying animals and controlling their movement, determining health conditions for foreign trade, taking measures to protect consumers and public health, and determining the principles for the certification of laboratories. The Directorate also performs risk assessment for all SPS matters. Question: Please provide a source of information (a web-link) where we could get acquainted with the risk assessment for Turkish SPS matters? Please clarify the methods for risk assessment? Turkey’s Answer: Information on animal and plant health in Turkey is notified to the OIE and the IPPC by semi-annual, annual and emergency reports. More detailed information can be obtained from official websites of these organizations. For further reading, “www.gkgm.gov.tr “can also be visited. Table 4.14 Livestock support programmes, 2015 p.135 Question: According to the abovementioned table the support measures are applied inter alia to the following programmes: Breeding female cattle and water buffalo support, Breeding female sheep/goat support, On-site protection and development of livestock genetic resources. Could you please specify which support measures are applied within the livestock support programmes? Could you please also clarify whether the purchase of imported breeding stock and breeding materials is supported? Turkey’s Answer: Please refer to Table 4.14 for the support programs that Turkey applies for livestock sector.

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Purchase of imported livestock and breeding materials is not supported. 4.1.5 Strategy and policy 4.20. p.129 The 2013-17 Strategic Plan identifies five strategic areas on which to focus, each containing specific goals and objectives. The intention of the Plan is to move Turkey towards its 2023 Vision for Agriculture in which Turkey aims to become a country that can feed its population with sufficient amounts of safe and high-quality foods; a net exporter of agricultural products; improve its competitiveness; and be influential in the field of agriculture within its region and across the world. Table 4.9: - to increase plant production through environmentally conscious and effective phytosanitary practices that also ensure the preservation of quality; -to improve and spread integrated and biological control practices in plant health services; - to improve control and inspection services for plant protection products and application equipment. To improve internal and external quarantine services in plant production. Question: Could you please elaborate on the implementation progress of the 2013-17 Strategic Plan? In your response could you please focus on the Phytosanitary control system improvements and the quality of the quarantine products? Turkey’s Answer: Since the adoption of Turkey’s 2013-17 Strategic Plan there have been many improvements. The strategy, which is being implemented by the MFAL, among others enabled spread of integrated and biological control practices in plant health services. Achievement recorded in the last years led 5 fold increase on a country scale in biological control practices without using pesticides. Accordingly, this led to remarkable improvements in control and eradication pesticides and hazardous agents in plant production. As known, Turkey is candidate country to the EU since the start of the Customs Union in 1995 and at the final stage of full membership. On the way to become full member of the EU, Turkey has continued to take certain steps in many areas to harmonize its national regulations with that of the EU Acquis, including those related to SPS standards. It should be noted that as a member of the WTO, Turkey is aware of its rights and obligations rising from the WTO SPS Agreement. In other words, while aligning itself with the EU Acquis, Turkey also takes into consideration WTO SPS Agreement which inherently necessitates considering the recommendations and standards of the international sister organizations mentioned in the SPS Agreement in the process of developing SPS standards. In doing so, scientific literature is closely followed during the preparation of all regulations. Notifications related to measures falling under the scope SPS Agreement are submitted to the WTO on a regular basis. In order to reduce risks, science based risk assessments are being carried out so as to ensure compliance with the WTO SPS Agreement. 4.1.3 Trade 4.1.3.1 Overview 4.10. p.124 The main source of imports also depends on the product: in 2014, the United States was the main supplier of cotton (HS 5201); the Russian Federation for wheat (HS 1001), sunflower seed oil (HS 1512), and maize (HS 1005); Paraguay and Brazil for soya beans (HS 1201); Indonesia for palm oil (HS 1511); the EU for other food preparations (HS 2106), and sunflower seeds (HS 1206); Brazil for unmanufactured tobacco (HS 2401); and Canada for dried leguminous vegetables (HS 0713). Question: Could you please provide information on the applicable import duty rate in respect of the sunflower oil as well as the information about the application of fixed indicative minimum prices while calculating the import duty rates? In addition, please clarify whether the indicative prices are applicable when calculating the import duty rates for other products, if such exist. How

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does it correlate with the commitments under Article VII of the GATT 1994 and the Agreement on the implementation of Article VII of the GATT 1994? Turkey’s Answer: The tariff rate for sunflower oil was determined as %36 according to the Decree No: 2015/8306 published in the Official Journal No: 29579 dated 31 December 2015. On the other hand, a surveillance system has been introduced for the importation of sunflower oil imported below a treshold price. The aforementioned surveillance system does not have any relevance with the Article VII of GATT 1994, namely the valuation for customs purposes. The only purpose of the surveillance system is to collect specific data and closely monitor the importation of products imported below treshold price. 4.1.4 Support programmes 4.16. p.127 Turkey has not notified its domestic support programmes to the WTO during the review period, thus the discussion on supports relies heavily on information from outside sources, in particular the OECD. According to the Ministry of Food, Agriculture and Livestock, Turkey paid TL 9.1 billion in 2014 for direct support payments; by comparison, in 2011, TL 7.84 billion had been paid in direct support payments. Over the period 2003-14, a cumulative TL 70 billion had been paid and allocated as support payments. Question: When is Turkey going to provide information on the new domestic support programmes, and, specifically, on the trade-distorting domestic support measures in accordance with Article XVIII of Agreement on Agriculture? Turkey’s Answer: Turkey has started a work program to notify its pending agricultural sector support programs, on a gradual basis. In due course, we are looking for understanding of all members to complete this work. 3.3.4 State trading, state-owned enterprises, and privatization 3.3.4.1 State Trading Enterprises 3.177 p. 100-101 Turkey continues to notify the Turkish Red Crescent (TRCS) as the only state-trading entity pursuant to the provisions of Article XXVII:4(a) and the Understanding on the Implementation of Article XVII. The last full notification was made in 2012 and enumerates 7 HS 12-digit tariff lines pertaining to chemicals or medicines used to fight against malaria and syphilis. Pursuant to the exclusive rights granted to this non-profit aid organization, TRCS is the sole importer of these products. During the period covered by the notification, 2010-11, only potassium iodide was imported, amounting to 18,000 and 20,000 kg in 2010 and 2011, respectively. Question: What is the reason that Turkey has not notified its marketing boards as state trading enterprises within the meaning of Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII, if autonomous TRQs are mainly allocated to such marketing boards (paragraph 4.13 of the Secretariat Report) and they have been given “an exclusive rights to import” under tariff quotas (paragraph 4.44 of the Secretariat Report)? Turkey’s Answer: Turkey has been notifying, the imports of Turkish Red Crescent within the context of the WTO Agreement on Imports Licencing. TRC is the only state and commercial entity which has the exclusive right to import specific chemicals and medicines used in vaccines. The said notification has been made only to the Committee on Import Licensing in order to avoid any double notification. In Turkey, the alcohol and tobacco products sector operates under free market conditions and Tobacco and Alcohol Market Regulatory Authority (TAPDK) which regulates and supervises the tobacco and alcohol markets, takes a regulatory role to ensure the operability of these conditions. Also, there is no State Trading Enterprise (STE) in alcohol and tobacco products manufacturing sector in Turkey. General Directory of Meat And Milk Board (ESK) was founded under the title of “Meat and Fish Authority”, as a State Economic Enterprise under the directorship of Ministry of Trade on 01/10/1952 upon the Coordination Board Decision No: K/871 which was approved by the Decree

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No: 3/15597 dated 28/08/1952 of the Cabinet pursuant to Article 6 of the National Protection Law No: 3780. Foundation of ESK coincides with a period when the private sector, capital accumulation and industry and trade were underdeveloped and qualified personnel were scarce. The foundation objectives are to ensure development in livestock and meat sector as well as in other sectors, to increase employment and to promote economic life. But after Turkey had adopted export oriented policies and privitize most of its state economic entreprises ESK also changed its role. In this context, ESK solely makes purchases and marketing through its outlets and does not make intervention in private sector. In addition, ESK follows the below-mentioned policies since its foundation: - To promote the national livestock industry to contribute to its stable development, - To contribute to the formation of the price stability in the market by forming balance between the producer and consumer. - To play a regulatory and supportive role in the sector by performing the production and marketing activities so as to contribute to the development of the livestock sector. - To offer service in line with the principles of profitability and productivity by meeting the competition requirements in the sector pursuant to the rules of the market economy. 4 Trade policies by sector 4.1 Agriculture 4.1.3 Trade 4.1.3.2 TRQs 4.12 p. 124 The procedures and principles related to the administration and allocation tariff quotas are determined in the related Decrees and Communiqués on Tariff Rate Quotas for Importation of Certain Agricultural and Processed Agricultural Products for the related country. In general, the importer applies for a licence for the quota from the Ministry of the Economy which in turns issues the licences on a first-come, first-served basis to importers or producers using them or consuming them in downstream production. Quotas are continually issued until the amount is exhausted. Questions: How are the autonomous TRQs allocated among the supplying countries? To what countries does Turkey allocate the autonomous TRQs? Turkey’s Answer: Country specific TRQs mentioned above are the ones that have been opened in line with Turkey’s Free Trade Agreements concluded with a number of countries. On the other hand, autonomous TRQs are not country specific and the products within the context of those TRQs can be imported from any country. 4.13 p. 124 Regarding autonomous quotas, during the period 2011-15, the Council of Ministers approved a number of tariff-rate quotas for agricultural products (Table 4.5). These mainly concerned commodity crops, in particular wheat and rice. These quotas are issued in response to market conditions and to meet shortfalls in the domestic market. They are mainly issued to marketing boards (see section 4.1.9). Question: Could Turkey explain the reasons why autonomous TRQs are mainly issued to marketing boards? Turkey’s Answer: As stated in the Secretariat Report, autonomous TRQs, which mainly concern commodity products, are generally allocated to the marketing boards in charge of regulating market conditions with the purpose of meeting the shortfalls in the domestic market as well as preventing further increases in prices. 4.14 p. 124 According to the authorities, these quotas are implemented in line with non-discrimination and transparency principles; quotas are provided to all importers and their requests are evaluated based on their previous performances; and quotas are aimed to be provided in quantities that represent economic value.

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Question: Could Turkey please clarify which TRQs are allocated on a first-come, first-served basis and on a previous performance basis? Turkey’s Answer: Turkey’s quota allocation methods have been set in its Tariff Quota Legislation. Individual quotas and tariff quotas have been administered according to the specific market conditions, consumer behavior, density of producers and the special economic interests of consumers and users of quota. Thus, every single quota allocation method chosen from available quota allocation methods is announced to public beforehand and the administration pays utmost importance to transparency and predictability of the system. Table 4.6 p.125-126 Questions: Does the last column of the Table 4.6 mean that TRQs are opened only for certain countries? Except for the case of FTA’s TRQs, why are the other WTO Members excluded from the TRQ allocation? Turkey’s Answer: The TRQs listed in the table 4.6 are TRQs that are opened in line with the preferential trade agreements . For the case of those TRQs, the products can be only imported from the countries or country groups that Turkey has concluded free trade agreements. 4.1.6 Export subsidies 4.25. p.131 Turkey's export subsidies are provided to develop Turkey's export potential in processed agricultural products. They have been provided through various decrees during the review period to producer/exporters or exporters. The subsidies take the form of a deduction of debts to public corporations (taxes, social insurance premium costs, energy costs, telecommunication costs) from the subsidy entitlement. Goods eligible are those of Turkish origin and products may be exported to all markets. 4.26. p.131 Pursuant to its subsidy notifications to the Committee on Subsides and Countervailing Measures, Turkey's export subsidies vary significantly depending upon the product. During the review period there have been no changes in the percentage share of the products eligible to receive the subsidy during 2013-15. Since 2013, the export subsidy rate notified has been changed from U.S. dollars to Turkish Lira. The maximum payment rate has declined slightly in a number of cases (Table 4.10). According to the authorities, Turkey's WTO commitments and its budgetary constraints determine the percentage share eligible to receive the subsidy and its variations. Question 1: Does Turkey consider notified export subsidies as export subsidies within the meaning of Articles IX and X of the Agreement on Agriculture? Turkey’s Answer: Turkey considers that notified subsidies are provided within the meaning of Articles IX and X of the Agreement on Agriculture. Question 2: Is Turkey going to eliminate these export subsidies according to the Ministerial Decision on Export Competition of the Nairobi Ministerial Conference? Turkey’s Answer: Turkey, as a developing country, will comply with the agreed provisions of the Nairobi Ministerial Decision. Table 4.10 p. 131-132 Question 1: Does Turkey provide any export subsidies for cereals and cereal flour? Turkey’s Answer: Although cereals and cereal flour is included in the Export subsidy commitment Schedule of Turkey, currently no export subsidy is provided for cereal and cereal flour. Question 2: It is impossible to compare the data in table 4.10 with Turkey’s WTO export subsidy reduction commitments due to the lack of information on the quantity of subsidized exports. Is Turkey going to provide the relevant notifications ES:1 during the review period?

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Turkey’s Answer: Turkey will comply with its notification requirements by the next meeting of the Committee on Agriculture which will be held on 7-8 June, 2016. 4.36. p. 136 Turkey maintains four marketing boards for agricultural products: the Turkish Grain Board, the Meat and Milk Board, Sugar Authority, and Tobacco and Alcohol Market Regulatory Authority. These are all state-owned and operated entities. Question: Please explain whether the four marketing boards are state trading enterprises? If so, is Turkey in a position to provide the necessary information as provisioned in the Ministerial Decision on Export Competition of the Nairobi Ministerial Conference (Agricultural Exporting State Trading Enterprises)? Turkey’s Answer: It would not be correct to say that the Marketing Boards mentioned in the Report by the Secretariat enjoy exclusive rights and/or special privileges within the meaning of Article XVII of the GATT 1994. When the level of overall economic actvity is considered, one can see the limited role they play in Turkish economy. There is no intention either to expand their role in any sectors. As one of the listed Marketing Boards, Tobacco and Alcohol Market Regulatory Authority (TAPDK) supervises the tobacco and alcohol markets, takes a regulatory role to ensure the operability of these conditions while the alcohol and tobacco products sector totaly operates under free market conditions. Turkish Grain Board (TMO) which operates on the grounds of profitibality regulates grain markets and prevents extreme price volatility without intervening the functioning of grain markets. Meat and Milk Board (ESK) maintains market stability and prevents unfair and speculative actions, while contributing to economic and social development. Sugar Authority has only a regulatory and supervisory role in the sector. Policies and strategies developed aim at the operation of the sector in balance. Neither of the listed entities above has a role in terms of pricing. Prices are determined under free market conditions without any government intervention. Turkish Sugar Authority is not a state trading enterprise; it determines the procedures, principles and conditions related to sugar production and marketing. It has regulatory aspects, such as granting permission for the operation of new facilities or expanding them, conducting inspections, and R&D activities. The Sugar Authority oversees the sugar quota system, audits the sugar factories and sugar containing food producers but the Authority does not participate in any sugar trade activity. 4.39 p. 136 Under certain circumstances, the Cabinet of Ministers allocates TRQs for TMO imports, and these are not permanent. Under the provisions of the TRQ, customs duties are often lowered to 0% for TMO imports. According to the authorities, both TMO and private companies can have customs duties lowered to 0% on imports. TMO can resell imported grains either domestically or for export, often when there are surpluses. Question: Please describe the mechanism to determine the imported products resale prices by the marketing board. Turkey’s Answer: TMO operates according to market conditions. Sales prices are also determined by the market dynamics. In other words, there is no specific mechanism to determine the imported products resale prices by the TMO. QUESTIONS REGARDING THE GOVERNMENT REPORT (WT/TPR/G/331) 3.3.1.2 Modernization of Existing Free Trade Agreements EFTA Free Trade Agreement 3.49. p. 11 The Turkey-EFTA FTA, which entered into force on 1 April 1992, establishes a preferential trade regime between Turkey and EFTA States regarding industrial goods, fisheries and processed

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agricultural products. Currently, Turkey and EFTA States initiated negotiations in order to revise and enhance the scope of the FTA. 3.50. p. 11 In revision process, parties are aiming at revision of the existing chapters of the FTA, namely trade in goods and related areas (such as technical barriers to trade, sanitary and phytosanitary measures, trade remedies), intellectual property rights, competition and horizontal and legal provisions, as well as to enhance the scope of the FTA by including new chapters, concerning trade in services, trade facilitation and trade and sustainable development therein. Question: Could Turkey please clarify what particular changes concerning the SPS measures will be made while reviewing the Turkey-EFTA FTA? Turkey’s Answer: The Turkey-EFTA FTA, which entered into force in 1992, lays down the SPS measures with a general provision under the “Trade in Agricultural Products” heading. Article 11.3 of the FTA reads that “The States Parties to this Agreement shall apply their regulations in veterinary, plant health and health matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade”. Accordingly, in the revision process, which is currently ongoing, Turkey has the intention to have an SPS chapter in the revised FTA, which reaffirms both sides’ rights and obligations stemming from the WTO SPS Agreement.

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ECUADOR Preguntas del Ecuador Informe Secretaría de la OMC.- 1. De conformidad con la página 13, párrafo 15: “Turquía mantiene empresas públicas o juntas de comercialización para los cereales, el azúcar, la carne y las bebidas alcohólicas y los productos del tabaco que, en función del producto y de la junta de comercialización de que se trate, desempeñan un papel en el comercio, la producción o la fijación de precios de esos productos”. Podría explicarnos Turquía cómo las actividades de las mencionadas juntas de comercialización se ajustan a las disposiciones contenidas en el artículo XVII, y su nota complementaria al párrafo 1, del GATT de 1994. Además, respecto al rol de fijación de los precios de los productos abarcados por la junta, podría informarnos Turquía qué medidas ha tomado para que esa función, que se podría considerar como un privilegio especial, se lleve adelante en virtud de las consideraciones de carácter comercial cuando se trate de actividades de compra y venta de los productos en cuestión? Turkey’s Answer: It would not be correct to say that the Marketing Boards mentioned in the Report by the Secretariat enjoy exclusive rights and/or special privileges within the meaning of Article XVII of the GATT 1994. When the level of overall economic actvity is considered, one can see the limited role they play in Turkish economy. There is no intention either to expand their role in any sectors. As one of the listed Marketing Boards, Tobacco and Alcohol Market Regulatory Authority (TAPDK) supervises the tobacco and alcohol markets, takes a regulatory role to ensure the operability of these conditions while the alcohol and tobacco products sector totaly operates under free market conditions. Turkish Grain Board (TMO) which operates on the grounds of profitability regulates grain markets and prevents extreme price volatility without intervening the functioning of grain markets. Meat and Milk Board (ESK) maintains market stability and prevents unfair and speculative actions, while contributing to economic and social development. Sugar Authority has only a regulatory and supervisory role in the sector. Policies and strategies developed aim at operation of the sector in balance. Neither of the listed entities above has a role in terms of pricing. Prices are determined under free market conditions without any government intervention 2. De conformidad con las páginas 52 y 53, párrafo 3.14: “desde 2009 se exige un registro especial en el caso de los importadores de productos textiles y ropa, a efectos de vigilancia. A fin de obtener la certificación necesaria para importar estos productos, hay que facilitar los datos de contacto de la empresa exportadora, así como información sobre su tamaño, ventas (incluidas las exportaciones a otros destinos) y certificados de calidad internacionales”. Según lo expuesto, parecería que ese registro especial se trataría de un requisito previo a la importación. Al respecto, en virtud de la normativa multilateral de la OMC, podría indicarnos Turquía bajo qué disposición se aplica este procedimiento y el objetivo de la prescripción de este requisito? Turkey’s Answer: Registration under Communiqué No. 2010/1 on imports of textile, apparel products and footwear is in force since January 1, 2010. The Communiqué was published in the Turkish Official Gazette dated 31/12/2009 No.27449 (bis. 2). Trade diversions, circumventions and other unfair trade practices have often been observed especially in textile, apparel and footwear sectors. Also, there have been anti-dumping measures in force including these sectors. In order to prevent possible attempt of trade diversion, these

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sectors need to be monitored in an updated database closely. Export registration requirement is serving that purpose without creating unnecessary burden and paperwork for traders. The exporter registry form should be submitted once in a year, and then renewals and updates can be made on the Internet. Information requested with export registry form are legal titles, address and other communication details, number of employees, total sales, international quality certificates and other export countries. Parts of the exporter registry form that are regarded as addressing commercial secrets, could be waived as “Firm’s commercial secret”. 3. De conformidad al párrafo 53, párrafo 3.15: “Algunas mercancías solo se pueden importar a través de oficinas de aduanas especializadas. La finalidad de estas prácticas aduaneras es lograr que las oficinas de aduanas sean más disciplinadas; mejorar los procedimientos aduaneros para determinadas mercancías y canalizar esas mercancías hacia las oficinas de aduanas especializadas; velar por el cumplimiento de las normas; y controlar efectivamente las cuestiones relacionadas con los aranceles, la valoración y el origen. Por ejemplo, el despacho de los vehículos automóviles, tractores, motocicletas y sus recambios y accesorios debe efectuarse en las oficinas de Yesilkoy, Gebze, Izmit, Esmirna, ersin, Derince o Giresun; Las importaciones de mercancías para el sector de la alimentación deben despacharse en las oficinas de Ankara, AliaÄa, Esmirna, Adana, Bursa, Gemlik, Gaziantep, TekirdaÄ o el complejo petroquímico de Körfez. Podría comentarnos Turquía cómo esta medida sobre importación de mercancías a través de oficinas de aduanas especializadas cumple con la prescripción contenida en el párrafo 1, artículo XI del GATT de 1994, que establece que ninguna parte contratante impondrá o mantendrá, aparte de los derechos de aduana, impuestos y otras cargas, prohibiciones ni restricciones a la importación de un producto del territorio de otra parte contratante? Turkey’s Answer: The reasons that Turkey applies specialized customs practice for specific goods are to make the customs offices more disciplined, to specialize in customs procedures for certain goods and canalize these goods to specialized customs offices with appropriate equipment and personnel, to protect the obligatory standards expected to be met for the imported goods and finally to make effective customs controls on tariff, customs value, origin matters. Thus, application of specialized customs does not imply imposing or maintaining prohibitions or restrictions on the importation of those products. Besides, not all the goods but only some specific goods such as metal waste, petroleum products, motor vehicles and their spare parts which requires special customs control procedures and/or hardware (for instance radiation detection etc.) are subject to specialized customs application. Within the explanations above, Turkey emphasizes once again that application of specialized customs cannot be considered as a trade policy and it is not incompatible with paragraph 1, article XI of the GATT 1994. 4. De conformidad con las páginas 66 y 67, párrafo 3.45: “El precio del precinto es el mismo para las mercancías importadas y las producidas en Turquía, salvo la cerveza; en ese caso la diferencia de precio se debe al costo del papel timbrado. Según lo expuesto, la diferencia de precio se debe al costo del papel timbrado”. Para el caso de las mercancías importadas, la etiqueta codificada puede colocarse: (i) en el lugar de producción en el extranjero antes de enviar el producto a Turquía; ii) en las zonas aduaneras destinadas a las bebidas alcohólicas y los productos del tabaco en Turquía; o iii) en instalaciones gestionadas por una empresa autorizada en las provincias de Estambul, Esmirna o Mersin. Sobre la base de lo expuesto, podría informarnos Turquía en dónde se origina esta diferencia de precio? Qué acciones ha emprendido desde su último Examen de Políticas Comerciales en dónde se indicó que “las autoridades turcas están examinando varias opciones para eliminar la diferencia de precio”. Cómo se justifica, conforme las disposiciones multilaterales de no discriminación, el aparente trato menos favorable que se estaría otorgando a la cerveza importada, en el caso que el precio del precinto sea mayor para el producto importado en relación a la cerveza nacional.

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Turkey’s Answer: Turkey has been implementing a strip-stamp (banderole) requirement for alcoholic beverages and tobacco products since 2007. Exemptions to this requirement apply to alcoholic beverages of 5cl or less and wine during the aging process. The stamp contains a code to be applied on each product. It has been provided for equalization of code/coded label/tax stamp/ prices for domestic and imported tobacco and alcoholic beverages products and thus eliminated price discriminatory of unit prices for tobacco and alcoholic beverages products as of 10th June 2015. Additionally, with the new tender it has been abolished completely bandrol/coded label application in the authorized company’s facilities in İstanbul, İzmir and Mersin. On the other hand, it can be applied tax stamps (banderole) or coded labels in production sides abroad before products are shipped to Turkey and also in free zones and bonded warehouses. 5. De conformidad a la página 90, párrafo 3.119, respecto de los impuestos aplicados a las exportaciones de pieles en bruto, avellanas sin cáscara y avellanas con cáscara. “Los ingresos procedentes de esos impuestos se canalizan hacia el Fondo de Sostenimiento y Estabilización de los Precios”. Podría Turquía informarnos sobre el funcionamiento y objetivo del Fondo de Sostenimiento y Estabilización de los Precios, qué productos y actores de la cadena productiva se benefician del mismo (productores, comercializadores o exportadores), y su relación con los precios de venta para la producción o exportación? Turkey’s Answer: Price Stabilization and Support Fund functions as an instrument to support activities aiming to realize social and economic goals set out in the development plans and annual programs without prejudice to our international commitments. All trading and manufacturing enterprises and all sectors can benefit from this fund. This fund has no effect on the sales prices. 6. De conformidad con las páginas 105 y 106, párrafo 3.159, respecto de TURQUALITY, programa nacional de marcas de Turquía. Según el párrafo mencionado supra, es el Estado quien paga el 50% de los gastos de la empresa en concepto de servicios de apoyo TURQUALITY® para la creación de marcas y la entrada en mercados internacionales. Asimismo, se señala que TURQUALITY se trata de una iniciativa del Ministerio de Economía, la Asamblea Turca de Exportadores (TIM), y la Asociación de Exportadores de Textiles y Prendas de Vestir de Estambul. Por tratarse de desembolsos que cubren el 50% de los gastos de las empresas que exportan (creación de marcas y la entrada en mercados internacionales), podría indicarnos Turquía si existe algún requisito del tipo de producto y volumen de exportación que se pueden beneficiar de esta medida, el requisito que deben cumplir las empresas para beneficiarse de este programa y qué actividades productivas se ven favorecidas por esta medida? Turkey’s Answer: There is not any requirement of product type and export volume for the companies to be admitted into the program. The requirement that the companies must meet in order to benefit from this program is the level of their institutional capacity. As a “national brand-building program”, TURQUALITY®’s goal is to facilitate the success of Turkish brands on international arena with a vision of “quality in brand management” by providing highly customized strategic coaching and consulting. 7. De conformidad con la página 106, párrafo 3.161, respecto de las notificaciones que Turquía presentó al Comité de Subvenciones y Medidas Compensatorias de conformidad con el párrafo 1 del artículo XVI del GATT de 1994 y el artículo 25 del Acuerdo sobre Subvenciones y Medidas Compensatorias (Documentos G/SCM/N/220/TUR,G/SCM/N/253/TUR/Suppl.1y G/SCM/N/253/TUR /Suppl.2). Como se especifica en el mencionado párrafo, las notificaciones abarcan efectivamente programas de subvenciones a la exportación de productos agrícolas. No obstante, en el documento G/SCM/N/253/TUR, Programa de Subvenciones a la Exportación de Productos Agropecuarios 2012, se especifica que las subvenciones “se otorgan a los productores/exportadores o a los

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exportadores deduciendo de la subvención a que tienen derecho las deudas que hayan contraído con entidades públicas”. Según lo expuesto, este programa también estaría subvencionando a la producción nacional de los bienes referidos en el punto 7 de dicho documento. Podría indicarnos Turquía cómo este programa se ajusta a las disposiciones multilaterales, especialmente, respecto de sus compromisos en materia de medidas de ayuda interna? Por qué motivo no se ha notificado este programa conforme las prescripciones del Acuerdo sobre la Agricultura de la OMC, tanto para el caso de las subvenciones a las exportaciones como las medidas de ayuda interna? Turkey’s Answer: Turkey’s export subsidy program is in line with its WTO commitments and is not structurally related to any local support mechanism. The term “Producer/Exporters” indicates companies which engage in not only export activities but also in manufacturing activities. 8. De conformidad con la página 136, párrafo 4.13, referente a los contingentes arancelarios para productos agropecuarios y que la mayoría de los contingentes se asignan a las juntas de comercialización. Podría indicarnos cuál es el objetivo de asignar la mayoría de licencias de importación a las juntas de comercialización. Este privilegio tiene alguna relación con el papel de fijación de precios especificada en la la página 13, párrafo 15 del Informe de la Secretaría de la OMC? Turkey’s Answer: In the agricultural sector, Turkey maintains a number of TRQs. Some of those are autonomous TRQs which are not country specific. Those TRQs mainly concern commodity products such as cereals and are generally issued in response to market conditions with the purpose of meeting the shortfalls in the domestic market. In some cases, they are allocated to the marketing boards. On the other hand, some of the TRQs are opened in line with the preferential trade agreements. These TRQs are generally allocated to the applicants in line with the Comminiques published in the Official Journal. 9. De conformidad a la página 138, párrafo 4.17, Cuadro 4.7 “Programas de ayuda al sector agropecuario de Turquía, 2015”, en relación al Modelo de producción y ayudas para las cuencas agrícolas. En el Cuadro 4.7 se especifica que este modelo se trata de pagos marginales para 17 productos en 30 cuencas de Turquía. Se revisaron las notificaciones de Turquía sobre medidas de ayuda interna y su última notificación corresponde al año 2001. Podría explicarnos Turquía, con mayor detalle, sobre el funcionamiento del Modelo de producción y ayudas para las cuencas agrícolas, cuáles serían los productos que abarca la medida y la justificación normativa de este programa de ayuda interna al sector agropecuario, conforme las disposiciones del Acuerdo sobre Agricultura de la OMC? Turkey’s Answer: Sustainability of its agricultural sector is a matter of priority for Turkey. In the same vein, for the generations to come, protection of natural resources is approached as an issue that is highly important. Turkey believes that among others, agricultural support policies have a role to play in that regard. In compliance with the commitments under the WTO Agreement on Agriculture, agricultural support payments are provided for the strategically important products for which there is a supply deficit, -namely, sunflower oil, cotton unseed, soybean, corn, rapeseed, safflower, wheat, barley, rye, oat, triticale, paddy rice, dry beans, chickpeas, lentils, tea and olive oil. Through the use of agricultural statistics and satellite imaging, agricultural basins are determined on the basis of certain criteria, including ecological conditions of the regions. While the overall

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objective of the Agriculture Basins Model is to increase productivity, with crops being produced on its own ecology, it is also aimed to contribute sustainable use of natural resources. 10. De conformidad a las páginas 139 y 140, párrafo 4.18, Cuadro 4.8 Principales medidas de ayuda a la agricultura, 2011-2014, en relación a las medidas adoptadas por Turquía. “Aunque el empleo de pagos desconectados se interrumpió en 2009, los pagos basados en la producción han aumentado. Durante el período objeto de examen, la Estimación de la Ayuda a los Productores (EAP) de Turquía (según la OCDE) ha tendido a aumentar (salvo en 2012, en que registró una ligera disminución). La mayor parte de la EAP consiste en pagos en concepto de sostenimiento de los precios de mercado, que entre 2011 y 2014 aumentaron del 72% al 76%”. Podría informarnos Turquía a qué se refiere con “otras medidas de sostenimiento de los precios de mercado (cuadro 4.18)”, los productos cubiertos por esa medida, y bajo qué disposiciones del Acuerdo sobre la Agricultura de la OMC se justifican estas medidas catalogadas como pagos en concepto de sostenimientos de los precios de mercado. Turkey’s Answer: As the Report by the Secretariat mentions, Turkey’s Producer Support Estimate (PSE) is calculated by the OECD. Referred Table 4.8 in the Report brings together main measures of agricultural support during 2011-2014, based on OECD data. As an indicator of the annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers, PSE modelling is different from that of the WTO AoA and provides an indication rather than an actual use of any support. Turkey does not provide Market Price Support within the meaning of WTO Agreement on Agriculture.

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ADDITIONAL QUESTIONS RECEIVED FROM ECUADOR

Preguntas adicionales de Ecuador Informe de Secretaría: 1.De conformidad con la página 31, párrafo 2.9, el Gobierno de Turquía, en el Décimo Plan de Desarrollo 2014-2018, ha establecido 25 programas prioritarios en los que centrará su labor, vinculadas a la política comercial, siendo uno de ellos, el Programa para la Reducción de la Dependencia de las Importaciones. Al respecto, podría indicarnos Turquía ¿Qué tipo de medidas comerciales se contemplan en el mencionado Plan? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session. 2. De conformidad con la página 62, párrafo 3.8, en relación a los certificados de circulación de mercancías EUR.1 o EUR-MED (para las importaciones procedentes de países no pertenecientes a la UE con los que Turquía tiene acuerdos de libre comercio), podría Turquía informarnos ¿Cuáles son los requisitos para obtener el certificado EUR.1 o EUR.MED, y si este tipo de certificados se realiza por cada importación o tiene duración por un periodo determinado? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session 3. De conformidad con la página 83, párrafo 3.88, en Turquía, todos los productos, ya sean importados o de producción nacional, están sujetos a actividades de vigilancia del mercado a cargo de 10 autoridades públicas. En este sentido, podría Turquía indicarnos ¿Cuáles son las 10 autoridades públicas, encargadas de la vigilancia del mercado? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session 4. De conformidad con la página 96, párrafo 3.135, las diversas cámaras de comercio y uniones de cámaras de Turquía también participan intensamente en actividades de promoción de las exportaciones. En este contexto, podría Turquía informarnos ¿Dónde se puede obtener información sobre las Cámaras de Comercio y Uniones de Cámaras que existen en Turquía? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session 5. De conformidad con la página 101, párrafo 3.152, El KOSGEB tiene varios programas de ayuda para las PYMEs que se rigen por su reglamentación en la materia, podría Turquía explicarnos ¿Cómo clasifica a sus PYMEs y cuáles serían los incentivos que se otorgan de acuerdo a dicha clasificación? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session 6. De conformidad con la página 114, párrafo 3.178, Conforme al Programa General Anual de Inversión y Financiación 2015, las empresas estatales tienen que establecer un sistema de control interno para finales de 2016. Al respecto, podría Turquía indicarnos ¿Cómo funciona el sistema de control interno que se refiere dicho Programa?

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Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session 7. De conformidad con la página 121, párrafo 3.198, hay dos tipos diferentes de preferencias nacionales permitidas actualmente por la PPL. En primer lugar, si el valor del contrato es inferior al valor de umbral la entidad contratante puede limitar la participación en el procedimiento de contratación a los proveedores o contratistas nacionales únicamente. En segundo lugar, independientemente del valor del contrato, ya sea inferior o superior al valor de umbral, en la contratación de servicios y obras se puede otorgar una ventaja de precios de hasta el 15% a todos los licitadores nacionales y en la contratación de mercancías se puede otorgar una ventaja de precios de hasta el 15% a los licitadores que ofrezcan productos nacionales determinados por el Ministerio de Ciencia, Industria y Tecnología y otras instituciones competentes. En este sentido, podría Turquía explicarnos ¿Dónde se puede encontrar el listado de productos nacionales determinados por el Ministerio de Ciencia, Industrias y Tecnología y otras instituciones, de los productos que pueden acceder a la ventaja de precios de hasta el 15%? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session 8. De conformidad con la página 121, párrafo 3.107, en el ámbito fitosanitario, durante el período objeto de examen, Turquía ha venido aplicando un programa nacional de sanidad vegetal y mejorando las actividades de cuarentena fitosanitaria y pasaporte fitosanitario, dicho programa nacional de sanidad vegetal incluye la vigilancia de plagas y enfermedades en todo el país mediante estudios basados en los riesgos y se centra en promover la gestión integral de plagas. Las actividades de gestión de plagas se realizan de conformidad con los principios de la gestión integral de plagas, que incluyen sistemas de alerta temprana y el control biológico. Otros componentes importantes del programa nacional de sanidad vegetal son el establecimiento de zonas libres de plagas, las actividades de erradicación, la formación de agricultores y la emisión de certificados fitosanitarios. En este contexto, podría Turquía indicarnos ¿Para qué plagas se han realizado estudios sobre áreas libres? y ¿Dentro de vigilancia fitosanitaria, existe un programa específico que realice control en especies de moscas de la fruta? Turkey’s Answer: Turkey will be answering this late coming question in the aftermath of the review session.

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COSTA RICA

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT Page 19 (footnote 10) According to the authorities, in order to reduce the current account deficit permanently, in particular by lessening the dependency of energy imports, priority transformation programmes have been prepared under the Tenth Development Plan such as "Reducing Dependence on Imports" and "Energy Generation Based on Local Resources”. Questions: 1. Could the government of Turkey elaborate further on its energy policy, particularly in

respect to renewable energies? Turkey’s Answer: Turkey has a prominent advantage on renewable energy resources due to its geological structure and location. Turkey’s energy strategies are designed on the basis of utilizing the renewable capacity at maximum, assuring the energy supply security and creating new employment areas. Turkey pursues a strategy for efficient energy production and utilization in order to eliminate the supply side risks and to create a market oriented environment based on competition. The Ministry of Energy and Natural Resources generates the strategies focusing on supply security; alternative energy resources, resource variety, domestic and renewable resource management, sustainability, open energy market and energy efficiency. These policies are conducted in accordance with the realities of Turkey and the global dynamics, by using the advantages of geopolitical location. In this regard, the main strategies and policies are based on the aim of increasing the share of renewable energy resources and increasing energy efficiency. With the Electricity Supply Strategy Paper which is established in 2009, Turkish Government set out the targets to achieve a share of 30% for renewable energy resources in electricity generation by 2023. In order to decrease import dependency and increase diversification to secure our supply, it is aimed;

- to increase the share of renewables - to introduce nuclear energy - to increase share of domestic coal based power plants - to decrease share of natural gas in electricity generation - to increase number and capacity of gas storage facilities - to increase number and capacity of LNG facilities

In 2011, Turkey amended the Law on the Utilization of Renewable Energy Resources for the Purpose of Generating Electricity, to apply differentiated feed-in tariffs for renewable energy. The new Electricity Market Law which is accepted in 2013 and the 10th Development Plan (2014-2018) lay further foundations for the legal framework for promoting energy production from renewables. The installed power of renewable energy resources increased by 2.5 times in 2015 according to 2002 while the electricity generation from renewables increased by 142% in 2015 according to 2002. In 2014, 45% of the 5,512 Mw increase of installed power capacity came from the renewable resource increase, while almost the whole increase came from the renewables in 2015. 2. Has the government of Turkey included any process of reform of its fossil fuel policy

–including subsidies - on its transformation programmes; such as “Reducing Dependence on Imports" and "Energy Generation Based on Local Resources”?

Turkey’s Answer: The main purpose of “Reducing Dependence on Imports" is to decrease import dependence by shifting transformation of production structure in favour of high value added products and promoting production and usage of domestic inputs. Energy imports, an important element in foreign trade deficit, have been excluded within the scope of this programme, since there are other relevant programmes focusing on the energy sector. Therefore, this program does not foresee any reforms regarding fossil fuels. However, within the scope of the program, the production of renewable energy sources is supported.

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Page 50 (paragraph 3.30) As reported in Turkey's previous review, Law No. 474 on the Customs Tariff Schedule allows the Government to increase the applied MFN rates when these are deemed insufficient to provide "adequate" protection to domestic industries. The Law sets the so-called statutory tariff, which is different from the applied MFN tariff adopted annually by the Council of Ministers. Under the Law, the Government may replace applied MFN rates by 150% of the corresponding rates of the statutory tariff to ensure higher protection to local industries. However, according to the authorities, the statutory tariff is only applied for tariff lines that are unbound in the WTO framework or fall outside of the scope of the Customs Union Decision (see Section 2). For bound tariff lines or lines covered by the Customs Union, any increases in the applied MFN rate are capped by Turkey's commitment levels. Questions: 3. How does the Government assess that an applied MFN tariff rate is insufficient to

provide “adequate” protection to domestic industries? Are specific guidelines followed or is it a highly political process?

4. What is the yearly average of MFN tariff lines increased during the last four years following Law No. 474?

Turkey’s Answer to Questions 3 and 4: Law Nr. 474 is only an authorizing law, which does not directly set tariff rates but sets limits to the government for maximum and minimum tariff without referring to Turkish Grand National Assembly’s consent. Turkey sets its tariff rates in compliance with its WTO commitments, Customs Union and other FTA obligations. Page 55 (paragraph 3.36) As a result of the Uruguay Round, Turkey bound 50.4% of its tariff lines; the final bound schedule is based on the HS02 nomenclature and contains bindings for 100% of agricultural tariff lines and 33.5% of tariff lines for industrial products. The simple average bound tariff rate on agricultural products (WTO definition) is 72.1%, while on non-agricultural products it is 17.6% (Table 3.1). As noted in Turkey's previous review, significant differences between bound and applied rates leave Turkey some flexibility to increase its MFN duties on a number of agricultural goods. The gap between bound and applied duties on industrial products, combined with a relatively low incidence of tariff bindings, provides significant scope for Turkey to increase its duties on non-agricultural products within the WTO framework. Question: 5. Only 33.5% of the tariff lines for industrial products are WTO bound. Does Turkey

have plans to bound the remaining 66.5% of industrial tariff lines? Turkey’s Answer: Turkey has been actively involved in the Non-Agricultural Market Access Negotiations within the context of Doha Development Agenda and is still committed and will bind its remaining tariff lines according to the agreed final outcome. Page 56 (paragraph 3.40) Turkey continues to apply a Mass Housing Fund (MHF) levy on imported fish and fish products falling within HS Chapters 2, 3, 15, 16, and 23. The levy is differentiated according to the source of imports (the EU, EFTA member States and other countries). It ranges from zero to 35% ad valorem. Turkey has not bound its tariffs for fish, but imports from EFTA member States enter free from import duty and the MHF levy under the Turkey-EFTA Free Trade Agreement. Question: 6. With respect to the Mass Housing Fund levy applied to imported fish and fish

products, which is differentiated according to the source of import (the EU, EFTA member States and other countries), could Turkey please explain how this complies with Article I of GATT (the MFN principle).

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Turkey’s Answer: Turkey has concluded a Free Trade Agreement (FTA) with EFTA countries. In this regard, in line with the provisions of the EFTA FTA Agreement, Turkey has differentiated its tariff rates on fish and fisheries products originating from EFTA countries, which is fully in compliance with Turkey’s WTO commitments. (GATT Art. 24) PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT Page 5 (paragraph 2.29) Services account for 22% of Turkey’s gross exports but for over 40% in value added terms. This indicates that Turkey’s exports of goods rely intensively on services inputs. As of 2014, Turkey stands as the 27th largest commercial service exporter in the world with an export value of US$50 billion. For 2023, Turkey targets to reach US$150 billion in services exports. Question: 7. Could the Government of Turkey elaborate further on the measures it intends to

implement to strengthen the participation of the service sector in total exports and how it expects to achieve the target of US$150 billion in services exports by 2023?

Turkey’s Answer : In order to reach this target, Turkey, by several policy tools, aims to both strengthen the domestic capacity and promote trade in services.

Domestic policies with regard to services sectors can be found in the Tenth Development Plan published in the website of the Ministry of Development. (http://www.mod.gov.tr/Pages/DevelopmentPlans.aspx) Turkey also follows a tripartite policy in order to specifically promote the exports and imports of services. The first pillar includes the policies such as elimination of red tape and facilitation of administrative requirements in order to attract more FDI (import of services through Mode 3). One of the results of this policy is the highly increasing number of procedures that can be applied online through e-government facilities. All available online applications can be submitted through the single platform www.turkiye.gov.tr. The second pillar is to support service exporters in sectors, which are underdeveloped, compared to OECD levels. The examples to these sectors are software development, audiovisual services, education services and healthcare services. The supporting mechanism mainly includes the encouragement of service providers to do market research, attend sectoral fairs and marketing of the services provided. The third pillar is about levelling the playing field through regional and bilateral trade agreements. With regard to Turkey’s FTA services policy, one of the most targeted sectors are transport services and the movement of natural persons. We believe that the elimination of barriers together with disciplining and streamlining the procedures with respect to those areas will have positive effects to promote trade in services. Page 6 (paragraphs 2.34 and 2.35) A new Investment Incentive Program for investment projects incorporating sectoral and regional development priorities was introduced with the Decree No. 2012/3305 on State Incentives for Investments dated 19 June 2012. The Investment Incentive Program aims to steer savings into high value added investments, to boost production and employment, to encourage large scale and strategic investments with high R&D content for increased international competitiveness, to increase foreign direct investments, to reduce regional development disparities and to promote investments for clustering and environment protection for the production and export-oriented growth strategy in line with the projected targets in Development Plans and Annual Programs as well as international agreements

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Question: 8. Could the government of Turkey describe these incentives? Are they linked or

conditioned in any way to export results?

Turkey’s Answer: The Investment Incentive Program is summarized in the Secreteriat Report. (See paragraph 2.60, 2.61, 2.62 and Table 2.5, pages 40-41).

There is no link between the support measures and the export results in the program. The eligibility criteria to benefit from the program is not contingent upon export performance.

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PARAGUAY

Preguntas de la delegación del Paraguay 15 y 17 de marzo de 2016 Preguntas en relación con el informe de la Secretaría (WT/TPR/S/331) Turquía es calificada como la séptima mayor productora agrícola del mundo, en el cual el comercio representa un papel importante, verificado por el aumento del 43% de las exportaciones e importaciones en el periodo 2010-2014 (para 4.1) A su vez, en la descripción de las estrategias y las políticas, se resalta que el plan Estratégico 2013-2017 se propone mejorar la competitividad y convertirse en un actor influyente en su región y el mundo en el área de agricultura (Apartado 4.1.5). Pregunta 1 ¿En ese sentido, contempla dicha estrategia una mayor consolidación arancelaria de productos no agrícolas y una reducción de los aranceles de importación de productos agrícolas? Turkey’s Answer: When deemed necessary, applied tariffs for the importation of agricultural products may be reduced as was the case for feedstuffs in previous years. While there is no doubt that further tariff consolidation can improve predictability and transparency for agricultural trade, Turkey considers tariff consolidation as an issue that can be pursued within multilateral trade negotiations. Unlike non-agricultural products, Uruguay Round succeeded in tariff binding for agricultural products. However there is a room for furthering liberalization in agricultural market access once WTO members get back to DDA negotiations. Pregunta 2 ¿Siguiendo su objetivo de ser un actor influyente en la economía mundial, pretende Turquía promover al comercio internacional para impulsar al sector agrícola, y a través de que herramientas? Turkey’s Answer: Turkey, as a net exporter country, will continue to benefit from its rights emanating from the related provisions of the Agreement on Agriculture to support its agricultural production and to promote exports. These tools can be summarised as domestic support and export subsidies. Agricultural sector is one of the key areas of economic activities in Turkey. Although the use of technologies and know-how have increased in recent years, structural problems including those related to limited average farm sizes hinder Turkey to realize real potential in the sector. Despite all difficulties, Turkey is one of the biggest agricultural producers and aims to play much bigger role in world agricultural markets. As can be seen from Turkey’s Agriculture Vision 2023, Turkey is taking steps to become more competitive in international trade through an agricultural, food and livestock industry with increased productivity.

Turkey is determined to make use of contemporary, scientific and technological advances to transform its agricultural sector and improve standard of living and welfare in the countryside with a number of policies.

Turkey’s Agricultural Vision 2023 foresees, making more common methods and means for the efficient use of soil and water resources; accelerating and completing land consolidation activities for the purpose of eliminating scale related problems in the agricultural land partitioned via inheritance; developing cooperation and organization between SMEs that are for agricultural and food products’ branding; developing organizations for increasing the competitiveness of firms that are active in rapidly developing and growing international agricultural and food product markets and planning production for targeted markets, among others.

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Pregunta 3 El mismo plan estratégico contiene un pilar importante para mejorar las estadísticas nacionales de Turquía; ¿podremos los miembros de la OMC beneficiarnos de este sistema mediante la actualización de las notificaciones en materia de apoyo interno, las cuales no estuvieron disponibles para el presente examen? Turkey’s Answer: In the Strategic Plan, in order to establish a basis for sound agricultural policies, improvement of the statistical infrastructure of MFAL is aimed through data collection and preparation of statistics. The objective is, in the general sense, to protect agricultural and ecologic resources and diversity of genetic resources and, to provide sustainability in agricultural production. The system has not been exclusively created for the preparation of WTO notifications but is expected to serve as an instrument to complete them as well. Pregunta 4 Como se explica en el párrafo 2.19 Turquía participa activamente como tercera parte en los procedimientos de solución de diferencias de la OMC. ¿Podría Turquía explicar con más detalle las razones de esa participación, y de ser posible, presentar las principales conclusiones de dicha participación?; ¿Puede Turquía ilustrar la estructura institucional que ha adoptado para hacer frente a las controversias en el sistema de la OMC, así como en los TLC? Turkey’s Answer: As Turkey attaches utmost importance to its WTO rights and obligations, following the WTO dispute settlement mechanism closely becomes an inevitable task, particularly taking into account systemic concerns of Turkey in different cases. It is important for Turkey to follow and contribute as appropriate to the WTO jurisprudence. Regarding the institutional structure on WTO dispute settlement, there is a department consisting of experienced trade lawyers in the Ministry of Economy. The Ministry conducts Turkey’s contributions to the dispute settlement mechanism and ensures coordination between all stakeholders. An ad-hoc team consisting of experts is established for important cases within the Ministry. There are various ways and mechanisms to resolve disputes under Turkey’s FTAs. The structure of each dispute settlement mechanism under those FTAs differs with respect to rules and procedures. Generally, the main institutional body of an FTA -Joint Committee- is a primary forum for discussion and resolution of disputes. Additionally, consultation, arbitration, good offices, mediation and conciliation are also regulated respectively as ways and mechanisms depending on the relevant FTA. Pregunta 5 ¿Ha buscado Turquía la colaboración de la OMPI en el diseño y la implementación de las estrategias y objetivos de propiedad intelectual? Turkey’s Answer: Turkey has instituted a number of strategies during the review period that had an impact on IP policy. The National Intellectual and Industrial Property Strategy paper provides an overall strategy for the IP related sectors for the term 2015-18. While designing and implementing intellectual property strategies and objectives, Turkey did not seek a special collaboration of WIPO. But considering the regulative role of WIPO in international intellectual property system and being one of the leading actors in this field; Turkey has taken notice of WIPO’s principles, priorities and international treaties as a natural consequence. In recent years, since the importance of "cultural industries based on copyright" is emphasized by WIPO, the role of copyright is appreciated by all countries as well as Turkey on the formation and strengthening of these cultural industries. While designing its national strategy paper, Turkey gave priority to the actions in this concept. The EU as an international actor within WIPO and developed countries are intensely trying to produce preventive and punitive systems concerning the digital copyright infringements. In terms

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of trends in international area and national requirements, Turkey follows these processes to make progress towards making the necessary arrangements in a legal sense within the aim of accomplishing the actions specified in strategy paper in the digital area. Implementation of the actions specified in the National Intellectual and Industrial Property Strategy Paper is planned to be accomplished by Turkey through conducting joint projects with international stakeholders including the European Union, the World Trade Organization, the World Bank and WIPO in particular and similar programs will be carried out in close cooperation with regional stakeholders. Pregunta 6 ¿Puede Turquía brindar más detalles sobre el proceso de ratificación del Tratado de Marrakech para facilitar el acceso a las obras publicadas a las personas ciegas, con discapacidad visual o con otras dificultades para acceder al texto impreso? Turkey’s Answer: WIPO Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled was signed on November 1st, 2013 by Turkey. The ratification process is currently ongoing. The ratification process includes various stages respectively. Ministry of Foreign Affairs prepares the Draft Approval Law for the International Treaty and transmits it to the Council of Ministers, then the related sub commission of Turkish Grand National Assembly examines the draft law and the treaty. The General Assembly reviews the treaty and accepts or rejects the treaty as a whole. Following the publication of this approval Law in the Official Gazette, Ministry of Foreign Affairs prepares the Council of Ministers Decree on the approval of the treaty based on the Approval Law. Finally the international treaty enters into force following the Council of Ministers Decree and the treaty as its attachment is published in the Official Gazette. In this context the timeframe for the adoption of the treaty could not be envisaged due to other institutions’ involvement into the ratification process. Preguntas con relación al informe del Gobierno (WT/TPR/G/331) En el Párrafo 3.9 se expresa: “Durante los preparativos de la Décima Conferencia Ministerial de la OMC, celebrada en Nairobi, Turquía sostuvo que la credibilidad de la OMC y, en particular, el futuro de su función de negociación depende del logro de resultados equitativos y significativos que beneficien a todos. Pregunta 7 ¿Cómo Turquía llevará adelante la implementación de los Acuerdos alcanzados en Nairobi, especialmente sobre Competencia de las Exportaciones? Turkey’s Answer: Turkey notified to the Council for Trade in Services, on 3 September 2015 (S/C/N/824), the preferential treatment which Turkey made available to services and services suppliers of least-developed countries in accordance with the decision by Ministers at the WTO’s Eighth Ministerial Conference on Preferential Treatment to Services and Service Suppliers of Least-Developed Countries (WT/L/847), and the decision by Ministers at the WTO’s Ninth Ministerial Conference on Operationalization of the Waiver Concerning Preferential Treatment to Services and Services Suppliers of Least-Developed Countries (WT/L/918). The preferential treatment is made in sectors and modes of supply that are of particular export interest to least-developed countries, as set out in The Collective Request Pursuant to the Bali Decision on the Operationalization of the LDC Services Waiver Concerning Preferential Treatment to Services and Service Suppliers of Least Developed Countries (S/C/W/356). The preferential treatment took effect on 25 August 2015, and is intended to be maintained for the period of the Waiver. Turkey, as a developing country, will continue to benefit from the export subsidies within the time limits and conditions as set out in the Nairobi Ministerial Decision.

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Pregunta 8 El Párrafo 3.10 menciona que el proceso de ratificación del Acuerdo sobre Facilitación del Comercio está en marcha y concluirá muy pronto. ¿Podría Turquía indicar una fecha aproximada en la cual se espera su ratificación? Turkey’s Answer: The ratification process of the Agreement on Trade Facilitation has already been finalized through a Council of Ministers Decree published on 5th March, 2016. The instrument of acceptance will be conveyed to the WTO this week.

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CHINA

Part I. Questions based on Report by the Secretariat (WT/TPR/S/331) Page 2, Para 5 Although the legal framework has not changed, investment schemes have been extended, deepened, and broadened over the period in order to encourage and target certain types of FDI in Turkey. They offer nine different types of incentive instruments, often depending on the amount of the investment and the investment region. Question 1 Please introduce the main contents of the nine different types of incentive instruments. Turkey’s Answer: Support measures for each incentive scheme are summarized in the Secretariat Report (See: S331, page 41, Table 2.5). The support measures are summarized below;

Exemption from Customs Duties: Imports of the machinery and equipment to be used in the production process shall be subject to Customs Duty exemption.

Value Added Tax Exemption: Imports and domestic purchases of machinery and equipment within the scope of the investment are exempted from the Value Added Tax.

Tax Deduction: Reduced income or corporate tax rates will be imposed. Interest Support: A specific portion of the interest/profit share of the investment loans is

covered. Social Security Premium Support (Employer’s Share): For any additional employment

created by an investment, the amount corresponding to the employer’s share of the social security premium on legal minimum wage is covered.

Land allocation: Government land is allocated for rent for investments in accordance with the rules and principles defined by the Ministry of Finance, depending on the availability of such land in the provinces where investments are made.

VAT Refund: VAT paid for building & construction expenses made for Strategic Investments will be rebated, provided that the fixed investment amount is over 500 million TL.

Social security premium support -Employee’s share (Only for Region 6): The employee’s share of the social security premium paid by the investor to the Social Security Institution in the amount corresponding to the legal minimum wage, for additional personnel recruited for the investments in Region 6 is covered for 10 years.

Income Tax Withholding Support (Only for Region 6): The withholding tax imposed on the income tax of employees will not be levied for new staff employed for the investments made in Region 6 for 10 years.

Question 2 Please introduce the effect of the above incentive instruments on attracting FDI. Turkey’s Answer: Foreign companies in Turkey can enjoy equal terms and rights with domestic companies in terms of Investment Incentive Program. Many foreign companies have benefited from Investment Incentive Program for their new, capacity expansion and modernization investments in Turkey. In the last 5 years, 1,139 incentive certificates were issued for foreign investors with a total investment amount of 76 billion TL. In addition to investment incentives, impressive growth rates, increasing foreign trade volume and favorable business climate have been crucially important for attracting FDI to Turkey. Page 11, Para 6 6.In terms of tariff protection, Turkey's overall applied tariff average increased slightly during the period to 12.8% due to tariff increases in response to requests by domestic producers. Furthermore, Turkey has the scope to increase tariffs further because 50% of its tariff schedule is unbound (tariffs are bound for 100% of agricultural tariff lines and 34% of industrial tariff lines), and in many cases there is a significant gap between bound and applied rates.

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Question 3 the significant gap between Turkey’s official bound tariff and market applied tariff always exist? Does the tariff difference significantly affect actual import and export? Are there any authoritative channels to obtain data for applied tariff rates? Turkey’s Answer: Turkey has been implementing European Union’s common customs tariff since 1996. This has been a transparent, predictable implementation of the import policy. Turkish importers and foreign exporters are well aware of the fact that Turkish import regime for industrial products is no significantly different than that of the EU. Also, Turkey’s applied tariff rates for agricultural and non-agricultural products are published in the Official Gazzette annually. Any difference between the bound and applied rates can be seen as in the case of other countries. We believe that via multilateral negotiations under the umbrella of the WTO, those differences could be diminished. Page 11, Para 9 9.Turkey continues to apply a number of taxes or other charges on imported and domestic products that affect consumption. These taxes include VAT, a strip-stamp tax, and a special consumption tax (SCT). Tobacco products and alcoholic beverages are particularly affected, being subject to both the strip-stamp tax and special consumption taxes; with raw tobacco also being subject to the Tobacco Fund levy. Other products impacted by the special consumption tax include petroleum products, motor vehicles, aircraft, vessels, and durable consumer goods. Together, VAT and SCT provide over half of government revenue. Question 4 Turkey continues to levy different kinds of consumption-affecting tax on lots of import products. Please introduce the degree of impact of special consumption tax on oil, motor vehicles, aircrafts, vessels and durable goods, especially vessels and the policy trend in the future. Turkey’s Answer: There are mainly four product groups that are subject to special consumption tax (SCT) at different tax amounts or rates.

-List (I) is related to petroleum products, natural gas, lubricating oil, solvents and derivatives of solvents.

-List (II) is related to land, air and sea vehicles (cars and other vehicles, motorcycles, planes, helicopters, yachts etc.)

-List (III) is related to alcoholic beverages and cola soda pops, cigarettes and other tobacco products,

-List (IV) is related to other consumption goods (caviar, furs, mobile phones, white goods and other electrical household machines etc.) Delivery of goods in List No (I) by the importers, or their delivery by the producers including refineries and their sale via auctions are subject to SCT for one time. SCT is not a discriminatory tax since it is applied both on imported and domestically produced goods. SCT was introduced for fiscal purposes as an aggregate tax to substitute different types of funds, levies etc. It has been to the benefit of entrepreneurs and consumers in Turkey since it has eased the procedures. Therefore the Government has no intention to change implementation of SCT. Question 5 Is Turkey’s special consumption tax on import goods completely borne by consumers? Will it be partially transferred to Turkey’s export enterprises? Turkey’s Answer: The liability of Special Consumption Tax is mainly on producers or importers with the exception of List (II) which includes vehicles subject to registration. The SCT could be reflected via pricing of the goods unless those goods are exported.

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Page 11, Para 11 11. Both imports and exports are subject to a number of border measures in Turkey, including outright prohibitions, licensing, controls, and restrictions. Eleven categories of goods are subject to import licences and 26 require export licences. Question 6 Are there any requirements or restrictions on the import of vessels? Turkey’s Answer: There are no restrictions on the imports of vessels. Page 11, Para 12 12. State-owned enterprises (SOEs) continue to be involved in a number of important sectors of the Turkish economy including manufacturing, mining, oil and gas, agriculture, transport, and banking...” Page 12, Para 16 16. Turkey's key industrial export sectors are automotives, textiles and clothing, chemicals, machinery, iron and steel, electronics, and jewellery. Small and medium-sized enterprises (SMEs) constitute a key part of the industrial sector in Turkey. Under the Tenth Development Plan, the Input Supply Strategy, and Turkey Vision 2023 the Government has set out multiple objectives for manufacturing, including increasing production of intermediate and finished goods in order to, inter alia, reduce the trade deficit...” Question 7 Can one rest assured about the payment ability of Turkey's state-owned enterprises? Do state-owned enterprises have obvious advantages over SMEs in cross industries? What support and subsidy policies does Turkey apply to the import of raw materials and intermediate goods for major export sectors? Turkey’s Answer: SOEs in Turkey are subject to Decree Law Nr.233 which is the establishment Law for SOEs. SOEs are also subject to Turkish Commercial Code as private companies are subject to. They encounter the same results if they do not pay their debts. So, they do not have any privilege regarding their debts. Within this regard, their payment ability is very good so far. SOEs do not have any advantages over SMEs. No support or subsidy is in place for importation of raw materials or intermediate goods used specifically for the manufacturing of the exported goods. Page 12, Para 18 18. In 2012, a new Capital Markets Law entered into force which transformed the legal and institutional framework of Turkey's capital markets. Question 8 Does the new Capital Market Law and institutional framework have any influence on trade financing and buyers' credit? Turkey’s Answer: Capital Market Law does not directly regulate trade financing or empower Capital Markets Board on trade financing and buyers' credit issues. The scope and purpose of the Capital Market Law is stated as follows. Purpose ARTICLE 1 – (1) The purpose of this Law is to regulate and supervise capital markets to ensure the functioning and development of capital markets in a secure, transparent, efficient, stable, fair and competitive environment and to protect the rights and interests of investors. Scope ARTICLE 2 – (1) Capital market instruments, the issue of these instruments, issuers, those who public offerors, capital market acitivities, capital market institutions, exchanges and other organised markets where capital market instruments are traded, market operators, Capital Markets Association of Turkey, Appraisal Experts Association of Turkey, central clearing

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institutions, central securities depositories, the Central Registry Agency and the Capital Markets Board are subject to the provisions of this Law. Private sales of shares of non-public joint stock corporations are outside the scope of this Law. (2) General provisions shall apply to matters where no applicable provision exists in this Law and in the secondary legislation promulgated on the basis of this Law and where it is stated in other laws that this Law shall not be applied. In relation to securities transaction financing, margin trading is designated as an ancillary service within the context of Capital Market Law Art 39 as follows. Obligation to take permission for activities ARTICLE 39 – (1) The performance of investment services and activities as a regular occupation, business or a professional activity requires permission from the Board. Investment services and activities can only be performed by investment firms. Provisions regarding investment companies, portfolio management companies and exchanges shall be reserved. The Board is authorised to make regulations that allow the performance of each investment service and activity by separate institutions on the basis of capital market instruments or investment services and activities. (2) Ancillary services shall be performed by investment firms and portfolio management companies according to principles determined by the Board, without being subject to a separate license. (3) The Board may also grant permission for one or more than one types of investment services and activities on the basis of the capital market instrument. The Board may classify investment firms according to types of their investment services and activities and capital structure. (4) The Board shall decide on applications for taking permission for activity within a maximum period of six months starting from the full submission of necessary documents to the Board and the state of affairs shall be notified to the interested person. (5) Persons and institutions that do not meet the conditions mentioned in this Law and that are not permitted by the Board may not carry out investment services and activities, even in cases where they have been authorized according to their special laws. (6) The Board may require professional liability insurance for the conduct of investment services and activities as well as ancillary services. (7) The Board is authorised to determine principles and procedures regarding borrowing and lending transactions of capital market instruments as well as short selling transactions and to make regulations concerning margin trading of capital market instruments upon taking the opinion of the Undersecretariat for Treasury and the Central Bank of the Republic of Turkey. (8) Principles and procedures regarding the conduct of investment services and activities as well as ancillary services shall be established by the Board. (9) Investment services and activities enumerated in sub-paragraphs (a), (b), (c), (ğ) and (h) of Article 37 of this Law may also be carried out by banks. Investment and development banks may also carry out the services enumerated in sub-paragraphs (ç), (d), (e) and (f) of the same Article. The principles and procedures regarding investment services and activities to be carried out by banks in the context of the same Article shall be determined by the Board. With regard to these services and activities the Board may determine different principles and procedures according to the nature of capital market instruments and upon taking the opinion of the Banking Regulation and Supervision Agency according to characteristics of banks. Page 12, Para 20 20. Distribution services are important to the Turkish economy with wholesale and retail trade contributing 12% to GDP in 2014. Retail sales volume growth was highest in 2011 at 8.3% but slowed in subsequent years, reaching 1.3% in 2014; nevertheless total retail sales recorded US$282 billion the same year. Turkey is considered the 7th largest retail market in Europe. Turkey has not undertaken any GATS commitments in distribution services. Foreign distributors are

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present but the supermarket segment is largely dominated by local shops, or bakkals (small shops of less than 50 m2). Question 9 How long is Turkish distributors’ usual operating period? Are there any sudden emergences and successive collapses in the industry?, What is the share of entrepot trade in terms of scale vs. local sales and how does the risk preference compare? Turkey’s Answer: There are not sudden emergencies and successive collapses in the sector. Data on the operating periods of distributors in Turkey is not available. However, according to data collected by Turkish Statistical Institute, retail and wholesale sector grew by % 8.8 in 2012, %11.6 in 2013, %11.1 in 2014 and %7.1 in in the first 9 months of 2015, which represents a steady growth of the sector. Page 68, Para 3.57 3.57. There have been no changes to Turkey's laws and implementing regulations on anti dumping and countervailing measures over the review period. These are: Law No. 4412/1999 on the Prevention of Unfair Competition in Imports; Decree No. 13482/1999 on the Prevention of Unfair Competition in Imports, amended by Decree No. 9840/2005; and the Regulation on the Prevention of Unfair Competition in Imports, amended in 2002 and 2006. Question 10 China understands that Turkey supports applying lesser duty principle in dumping and injury margins. But we have noticed that in Turkey’s motor hoe and other cases, some respondent enterprises’ injury margins are lower than the dumping margins, but the lesser duty principle was not applied. Do the Turkish investigating authorities have the right to select applying lesser duty principle or not? What are the specific standards for the application of this principle? Turkey’s Answer: According to the Law on Prevention of Unfair Competition in Imports (Official Gazette 1.7.1989/20212) Article 7 states that “if a lesser duty would be adequate to remove injury, it shall be imposed”. Thus, Turkey considers the factors in individual investigations and if the facts and conditions of the investigation are adequate for applying a duty less than the dumping margin to remove injury, it will be determined by the Board and approved by the Ministry. Page 68, Para 3.59 3.59 China was subject to the most numerous measures, followed by Indonesia, Chinese Taipei, India, Malaysia, Thailand, and Viet Nam. Question 11 China is not the largest trading partner of Turkey, as described by section 1.3 of page 21 and chart 1.5 of page 24, Please explain why China was among the top victims of trade remedies by Turkey? Turkey’s Answer: The Turkish anti-dumping legislation is not applied considering the trade volumes between the trading partners. According to Turkey’s Legislation, as a result of an investigation that is initiated by an application that has the evidence on the existence of dumping, injury and causal link, an anti-dumping duty may be imposed. Page 69, Para 3.61 3.61. Turkey continues to impose countervailing duties on PET films originating in India (originally imposed on 22 March 2009). These duties range from 4.25% to 21.61%. Recently, a countervailing investigation has been initiated on 15 May 2015 regarding seamless tubes, pipes and hollow profiles of iron (other than cast iron) or steel (HS 7304) products originating from China. Question 12 In May 2015, Turkey initiated anti-dumping and countervailing investigations on China’s seamless steel tube. This is the first time Turkey launched cuntervailing investigations on Chinese products,

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Chinese government pays great attention to it. We noted that Turkey has made an initial award on dumping for this case recently, what is the latest progress of the investigations? In this anti-dumping and countervailing case, how will Turkey solve the "double remedy" problem? Turkey’s Answer: Turkey has been conducting anti-dumping and countervailing duty investigations according to its national legislation that is in line with WTO Anti- Dumping and WTO Subsidy and Countervailing Measures Agreement. According to the relevant WTO Legislation, anti-dumping and countervailing duty investigations can be carried out simultaneously and this practice has been used by many WTO members. Conditions and requirements regarding the initiation and investigation processes are fully governed by this legislation. In addition, Turkey is respecting the transparency and due process rights of the parties during investigations and the information requirements of the interested parties for ongoing investigations are met within the boundaries of this legislation. The investigations are still ongoing and the issues regarding the remedies will be handled and shared with interested parties as required by the legislation in due course of time. Page 69, Para 3.64 3.64. Turkey has been the third biggest user of safeguard measures since the WTO's inception, initiating 21 safeguard investigations over the period 1 January 1995 to 30 April 2015 and taking 14 safeguard actions over the same period. Question 13 Turkey is one of the WTO members that relatively frequently use safeguard measures. In the safeguards investigations, how do investigation authorities identify “increase of import” in Article 2.1 of Agreements on Safeguards? Are there any specific standards to follow? How does Turkey consider "unforeseen development" stipulated in Article 19 of GATT 1994? Turkey’s Answer: In Turkish national legislation on trade remedies, the conditions necessary to initiate investigations for safeguard measures are clearly stated and if domestic producers make proper applications, the investigating authority has to take them into consideration. Turkey is well aware of the fact that safeguard measures are designed for addressing exceptional trade circumstances and Turkey also acknowledges the importance of transparency and predictability in achieving growth in international trade and for creating a favorable business environment for foreign producers and investors. However, it should be noted that all the safeguard measure taken by Turkey are in full conformity with the related WTO Agreements and principles. It should also be noted that for the last 7 years Turkey has taken only 3 safeguard measures which by no means can be regarded as frequent. The Agreement on Safeguards sets forth the rules for application of safeguard measures pursuant to Article XIX of GATT 1994. Safeguard measures are defined as “emergency” actions with respect to increased imports of particular products, where such imports have caused or threaten to cause serious injury to the importing Member's domestic industry. Article 2 of the Agreement on Safeguards introduces the conditions of a Safeguard Measure. According to the Article 2 of the Agreement on Safeguards: “A Member may apply a safeguard measure to a product only if that Member has determined, pursuant to the provisions set out below, that such product is being imported into its territory in such increased quantities, absolute or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces like or directly competitive products.” An increase in imports can be a real increase in imports (an absolute increase); or it can be an increase in the imports’ share of a shrinking market, even if the import quantity has not increased (relative increase). So the Turkish Administration analyze both absolute and relative increase in imports. In order to take a safeguard measure, increase in imports has to qualify certain conditions and circumstances. The first condition is set out in Article XIX:1 of GATT 1994, providing that the increase in imports must result from “unforeseen developments”.

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This clause is not further defined or illustrated by examples either in Article XIX of the GATT 1994 or in the Agreement of Safeguards. Its broad language is presumably meant to cover a wide range of unexpected circumstances, which by definition is difficult to anticipate. Turkish Administration’s interpretation of unforeseen development” is in line with the Appellate Body interpretation, and holds the view that “the ordinary meaning of the phrase “as a result of unforeseen developments” requires that the developments which led to a product being imported in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic producers must have been “unexpected”. Turkish Administration also believes that an in-depth evaluation of the “unforeseen development” has to be made by the competent authority. Page 88, Para 3.139 3.139 The Bank does not discriminate between sectors of business operation, but does give special consideration to companies located in Turkey's priority investment regions (see Section 2.4.4.1). These companies are provided with privileges for credit applications, they benefit from the Preshipment Export Credit Programme for Priority Development Areas with lowest interest rates, and intermediary banks are required to extend at least 5% of their credit limit to companies in these areas. Question 14 Please further introduce the available concrete incentives for priority areas of development, such as the specific interest rates level of the Import and Export Bank of Turkey. Turkey’s Answer: Türk Eximbank provides finance to exporters either directly or through intermediary commercial banks so as to reach companies having business in different areas of the country. Under Pre-Shipment Priority Investment Areas Export Credit Program, a sub-program having an indirect lending structure, the Bank provides finance to companies located in the priority areas of investment through intermediary banks with favorable lending terms determined according to the market conditions. Intermediary banks are required to extend at least 5% of their credit limit to companies in these regions. Page 88, Para 3.140 3.140 This programme covers export transactions based on cash against documents and irrevocable letters of credit. Export receivables with a maturity of up to 240 days discounted by the Central Bank of Turkey and up to 360 days are discounted from Turk Eximbank's own sources on LIBOR+spread, where the spread is determined by Turk Eximbank. Export and foreign exchange earning services' rediscount credits are provided to companies through intermediary banks in Turkish Lira based on export or foreign exchange earning services' receivable documents converted from the foreign currency. Re-payments are then made to the Central Bank in foreign currency which helps increase the Central Bank's foreign currency reserves and decrease the current account deficit. In view of the significant demand for this type of product, the Central Bank raised the rediscount limit to the Eximbank to US$14 billion in October 2014, and again to US$15 billion in January 2015. Furthermore, provisions were made to the programme so that companies operating in free zones and making sales outside Turkey could benefit. The programme was also extended to tourism, health, consulting, software, shipping, and engineering services. Question 15 For the refinancing of export accounts receivable, how do the Central Bank and Eximbank of Turkey determine discount rates and what level are the discount rates? Turkey’s Answer: The maturity of rediscount credits of the Central Bank of the Republic of Turkey (CBRT) that are extended through Türk Eximbank and commercial banks to exporters and foreign exchange earning firms could be up to 240 days. Applied discount rate for these rediscount credits with a maturity up to 120 days is 1 month LIBOR/EURIBOR, discount rate for credits with a maturity of 121-240 days is 6-month LIBOR/EURIBOR. In addition to these rates Türk Eximbank applies an additional margin determined according to the market conditions and varying in parallel with the maturity of export receivables.

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Question 16 Please introduce the specific policies in the shipping field. Turkey’s Answer: Türk Eximbank has a specific program providing direct loans and/or Letters of Guarantees to Turkish companies involved in shipbuilding and/or exporting of ships to meet their working capital requirements in the pre-shipment stage with a maturity up to 2 years. The interest rates/commissions charged by the Bank are determined according to each project specifically depending upon the construction period, market conditions, repayment term and risk and past performance of the shipbuilders and buyers. Page 88, Para 3.142 3.142. One of Turk Eximbank's main areas of activity since 1989 has been export credit insurance programmes under which export receivables are insured against commercial and political risks…The most commonly used programme is the Short-Term Export Credit Insurance Programme, and within the scope of this programme, all shipments to be made by an exporter during the one-year policy period, and with payments deferred up to 360 days, are insured. Turk Eximbank has been extending cover to companies in 238 countries since April 2012. Question 17 Turk Eximbank’s current main business is short-term export credit insurance, while mid-and-long term export credit insurance started relatively late and remained a smaller scale. Does Turkey have a specific plan to further promote the development of mid-and-long term business? If so, please introduce the complete set of plans, expected timetable and corresponding support policies. Turkey’s Answer: Since Turk Eximbank is the official export credit agency of Turkey, its mission is to provide credit insurance facility in line with its exporters’ demand. On the other hand, Turk Eximbank steers exporters to establish reasonable market shares in the competitive export areas by providing medium/long tenors. Actually, Turkey has a strategic plan named “Export Strategy for 2023” for further promotion of mid-and-long term business. The strategy has a goal as transforming low-tech manufacturing into a high value-added creating industry. As part of the strategy, Turk Eximbank will increase medium-and-long term credit insurance exposure to 50 million USD till the end of 2016 and it will increase it gradually. Also, Turk Eximbank will expand its product range by adding new insurance policies such as Pre-shipment Export Credit Policy, Political Risk Insurance for Overseas Contractors, Insurance Program for Unfair Calling of Bonds, Investment Insurance Policy, Buyer’s Credit Insurance, L/C Confirmation Insurance. All policy types will be realized till the end of 2016, except for L/C Confirmation Insurance. It will be put into practice in the upcoming years. For further information: http://www.tim.org.tr/files/downloads/2023/2023_english.pdf Page 111, Para 3.201 3.201 Turkey has been participating as an observer in the WTO Committee on Government Procurement since June 1996. Question 18 What are the obstacles to Turkey’s signing of GPA? Turkey’s Answer: Turkey’s membership to the GPA is an issue that will be discussed in the medium and long-term in coordination with relevant public institutions. On the other hand, Turkey is a candidate country for the EU. When Turkey becomes a full member of the EU, it will automatically be part of GPA.

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Part II. Questions based on Policy Statement by Turkey (WT/TPR/G/331) Page 10, Para 3.32 3.32 So far, Turkey has signed FTAs with 33 countries Question 19 How does Turkey deal with the FTA, PTA (Preferential Trade Agreements) and DDA (Doha Development Agenda)? Turkey’s Answer: Turkey believes WTO and the multilateral trading system it represents continue to be a unique platform for wider economic cooperation. There is much to expect from multilateral trade liberalization in a way contributing to a strong, sustainable and balanced growth. On the other hand, RTAs have become a hugely prominent part of the global trading system. In face of this reality, it is essential that global trading system works efficiently with strong coherence across all its elements, including bilateral, regional, plurilateral and multilateral agreements. Although Turkey has signed its first FTA with EFTA back in 1991, Turkey has been pursuing an active FTA policy since 1995 as a result of both its obligations stemming from the Customs Union with the EU and as a natural outcome of its resolve to remain as an integral part of liberal world trade system. In line with the global trends, Turkey weighs further liberalization of trade through signing more free trade agreements as an important policy action to improve trade volume both in terms of goods and services, attract FDI, create solid networks of economic cooperation and lay ground for further collaboration among FTA partners. Based on the objective of elimination of tariffs and non-tariff barriers, identifying and improving market conditions for services, as well as ensuring transparency and harmonization of trade-related rules, free trade agreements create a convenient and liberal environment that support increased trade volume. Moreover, free trade agreements are crucial in the sense that they constitute a strong legal framework on various disciplines of trade. Therefore, a predictable and sustainable business environment, which also serves as an attraction for FDI, is created. In this regard, Turkey has been adapting its FTA policy in line with the demands of the new global trade environment, increasingly being shaped by bilateral, regional or mega-regional trade agreements. New generation FTAs not only cover issues of tariff elimination; but also regulate a variety of areas such as sustainable development, intellectual property rights and technical standards. Accordingly, Turkey has adjusted itself to this new trend and now negotiates and concludes deep and comprehensive FTAs covering not only services and investment but also chapters on SPS, TBT, IPR, competition, trade remedies, or dispute settlement introducing WTO+ provisions. In this respect, “Agreement on Trade in Services” and “Agreement on Investment” signed with South Korea on 26 February 2015within the context of Turkey-South Korea FTA is the first and most recent example of Turkey’s new policy towards covering services and investment in its FTAs in a comprehensive and detailed manner. Moreover, FTAs whose negotiations are actively going on for the time being with Ukraine, Peru, Japan, and Mexico covers services and investment as well. This is the case for FTA with Singapore which was signed on 14th November 2015. In addition to the currently negotiated ones, Turkey would like to cover these two areas in its FTAs that are already in force as well. Page 13, Para 4.2 4.2. Among others, achieving Vision 2023 requires Turkey to transform its export composition from low-tech to high-tech products, diversify its target markets and sectors for exports, and pursue a pro-active policy both in goods and services exports.

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Question 20 Please elaborate on the specific policies and measures to promote the development of trade in services. Turkey’s Answer: Services account for almost 63% of Turkey’s GDP and contribute to 55% of the total employment with tourism and construction taking a particularly important role. Therefore Turkey attaches special importance to the growth of services sectors domestically which also indirectly promotes the development of trade in services. The domestic policies with regard to services sectors can be found in the Tenth Development Plan published in the website of the Ministry of Development. (http://www.mod.gov.tr/Pages/DevelopmentPlans.aspx) Apart from the efforts to strengthen domestic service supply capacity, Turkey follows a tripartite policy in order to specifically promote the exports and imports of services. The first pillar includes the policies such as elimination of red tape and facilitation of administrative requirements in order to attract more FDI (import of services through Mode 3). One of the results of this policy is the highly increasing number of procedures that can be applied online through e-government facilities. All available online applications can be submitted through the single platform www.turkiye.gov.tr. The second pillar is to support service exporters in sectors which are underdeveloped compared to OECD levels. The examples to these sectors are software development, audiovisual services, education services and healthcare services. The supporting mechanism mainly includes the encouragement of service providers to do market research, attend sectoral fairs and marketing of the services provided. The third pillar is about leveling the playing field through regional and bilateral trade agreements. With regard to Turkey’s services FTA policy, one of the most restricted sectors are transport services and the movement of natural persons. We believe that the elimination of barriers to these areas and disciplining and streamlining the procedures with respect to those areas will have positive effects to promote trade in services. Part III. Other Questions Question 21 Under Turkey’s customs regulation, in the case of not getting the rejection declaration of the consignees, the goods shall not be shipped back and customs will auction them if the goods are retained for more than 45 days, the consignees have the preemptive right. For this regulation, are there any relevant measures to avoid such circumstances where buyers intentionally rejecting goods, waiting for the customs auction at a low price, thus incurring rejection risks? Turkey’s Answer: The preemptive right mentioned in the question is not about the auction process. Before the date on which the announcement of the auction is published or the decision to sell by retail is taken, the goods may be requested to be placed under a customs procedure or re-exported out of the Customs territory by lodging an application to the relevant Customs authorities. However, the acceptance of the requests depends on the payment of the fines related with the goods if any, warehousing and handling costs and other expenses and the amount at the rate of 1 per cent of the CIF value of the goods on foreign currency. After the acceptance of request, customs procedures must be carried out or the goods must be re-exported. In other words, consignees must fulfill the customs’ obligations. On the other hand, in auction process, consignees do not have the preemptive right. All bidders are treated equally. Question 22 Under Turkey’s customs regulation, the longer the period for some imports’ credit, the greater the tax incentives will be. This has led to more applications for long payment underwritings. Please provide details of the relevant policies, and whether they are strictly implemented in accordance with government regulations in practice.

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Turkey’s Answer : Unless proof of payment completion for the full amount of the imported goods is shown to the customs authority upon import of goods into Turkey, the Resource Utilization and Support Fund (RUSF) charge of 6% is imposed at customs.

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MALAYSIA

SECRETARIAT REPORT 1. Para 4.1.4 - Support Programmes 4.16. Turkey has not notified its domestic support programmes to the WTO during the review period, thus the discussion on supports relies heavily on information from outside sources, in particular the OECD. According to the Ministry of Food, Agriculture and Livestock, Turkey paid TL 9.1 billion in 2014 for direct support payments; by comparison, in 2011, TL 7.84 billion had been paid in direct support payments. Over the period 2003-14, a cumulative TL 70 billion had been paid and allocated as support payments.

QUESTION

Could Turkey explain measures that it has taken to ensure compliance to its notification obligation for domestic support under the Agreement on Agriculture (AOA)?

Is there any specific timeframe to submit the required notification?

Turkey’s Answer: Turkey has started a work program to notify its agricultural domestic support programs gradually. In due course, we are looking for understanding of all members to complete this work as soon as possible. 2. Para 4.2 - Manufacturing 4.51. Small and medium-sized enterprises (SMEs) constitute a key part of the industrial sector in Turkey. According to Turkish Treasury figures, SMEs account for 99% of all companies in Turkey, and contribute to around 78% of employment, 62% of exports and 57% of total value added. SMEs receive support from the Government through assistance with financing, training, technology development, innovation, export orientation and quality improvement.

QUESTION

Malaysia notes that one of main trade agendas of Turkey’s G-20 Presidency in 2015 was to enhancing the participation of SMEs.

Given the importance of SMEs to Turkey’s economy, what are Turkey’s views on WTO’s role in enhancing the participation of SMEs in global trade? Turkey’s Answer: In the aftermath of the Nairobi Conference, Turkey is ready to evaluate the introduction of new issues in the WTO. However, before proceeding any further on these new issues like the participation of SMEs in global trade, deep and comprehensive technical work should be done so that each WTO member could be convinced that the WTO is the appropriate venue to handle it and that possible outcomes will be to the interest of all.

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KENYA 1. We note from the Secretariat Report that Turkey has had a mixed compliance with its WTO notification obligation. Notifications in some areas, in particular, agriculture sector are still pending. Kenya would like to know the challenges that Turkey is facing in fulfilling its notification obligations. How are these challenges being addressed in order to ensure full compliance with notification obligations? Turkey’s Answer: Turkey will comply with its export subsidy notification requirements by the next meeting of the Committee on Agriculture, which will be held on 7-8 June, 2016. Turkey also has started a work program to notify its agricultural domestic support programs gradually. In due course, we are looking for understanding of all members to complete this work as soon as possible. 2. We commend Turkey for putting in place a number of schemes and initiatives as well as a framework for encouraging Foreign Direct Investments (FDI). However, we note that investment restrictions remain in a number of sectors. What national objectives are aimed at in maintaining investment restrictions in some sectors? Is there a timeframe for removing these restrictions which continue to impact negatively on FDI? Turkey’s Answer: As overall assessment of the Turkish Foreign Investment Regime indicates, Turkey has a fairly open FDI regime based on equal treatment of domestic and foreign investors. However, there are certain national legislations and regulations relevant to licensing processes and regulations in some sector, as summarized in Secretariat Report (S331, page 195, Table A2.3). Turkey became a crucial participant of global FDI flows with its outstanding performance in the last 13 years and managed to host USD 12.7 billion of FDI in this period annually. Although global FDI fell sharply in 2014, Turkey demonstrated a positive performance and the amount of FDI was realized as USD 12.5 billion. In 2015, upward trend in FDI inflows have pursued with a 32.4% increase and inflows reached up to USD 16.6 billion despite domestic election period and persistent regional tensions. Turkey does not of the view that investment restrictions have negative impact on FDI and currently, there is no work carried out regarding further liberalization in these sectors.

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RESPONSES TO QUESTIONS RECEIVED AFTER THE 2 WEEK DEADLINE, ADDITIONAL QUESTIONS AND FOLLOW UP QUESTIONS.

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P. R. CHINA

Part I. Questions based on Report by the Secretariat (WT/TPR/S/331) Page 112, Para 3.206 3.206. WIPO and TPI statistics indicate growth in the use of most forms of IP protection during the initial phase of the review period, but many have levelled off or even slightly declined at a later stage of the review period. There were increases in most types of IP applications in 2011, followed by modest growth or decline during 2012-14. There was a steady increase in the filing of patents over the period, which can be attributed to the patent incentive systems (see paragraph below). Question 1： Please introduce the main contents of the patent incentive systems. What specific measures have been taken to increase the filing of patents? Turkey’s Answer: The Scientific and Technological Research Council of Turkey (TUBİTAK) Patent Support Programme aims to increase the number of national and international patent applications of Turkey, to encourage patent application and to contribute to awareness-raising among public for the registry of intellectual and industrial property rights. The program provides support to all patent applications made to the Turkish Patent Office, European Patent Office (EPO), WIPO, Japanese Patent Office (JPO) and USPTO. The program also provides "patent awards" for granted patents. Page 113, Para 3.207 3.207. The Patent Application Incentive and Support Programme and the more recent Patent Support Programme of TUBITAK were created to increase awareness for intellectual and industrial property rights and stimulate the filing of patents in Turkey. In particular, they provide grants to Turkish registered companies and individuals to offset the costs of the patent. In particular, they provide grants to Turkish registered companies and individuals to offset the costs of the patent. For national and international/regional applicants, grants of up to TL 3,000 are available, and for international/regional applicants, a support credit of up to TL 100,000 is also available. The Patent Application Incentive and Support Programme operated from 2006 to 2013, when it was replaced by the Patent Support Programme as of 1 January 2014. During 2014, the Patent Support Programme has received 2,398 requests for incentives. Question 2： Please introduce the main contents of the Patent Support Programme of TUBITAK. To what kinds of patent are grants provided and how much is the amount? Turkey’s Answer: The Patent Support Programme of TUBITAK aims to increase the number of national and international patent application of Turkey and to encourage local companies and inventors to capitalize their intellectual work through patent registration. In particular, TUBİTAK provides grants to Turkish registered companies and individuals to offset the costs of patents. Patent Support Programme has funding schemes targeting patent applicants and patent attorneys for their national and international applications. Awards provided to national patents are 3.000 TL and 10.000 TL for granted international patents. In addition, “national phase” of the Patent Cooperation Treaty procedure is also supported by TUBITAK with an amount of 5.000 TL-10.000 TL, which differs for EPO, USPTO, JPO and other national patent offices. Furthermore, patent attorneys are also supported to enhance the patent ecosystem in Turkey. Awards are provided to patent attorneys for each of their patent applications and granted patents. Question 3: Can international applicants apply for the grants in line with the stipulation of Patent Support Programme of TUBITAK? If so, what are the requirements and procedures for application? Turkey’s Answer: Only Turkish citizens or Turkish registered companies/universities/institutions are eligible to apply for the Patent Support Programme of TUBITAK. Page 114-116, Table3.44 Table 3.44 listed the main legislations, duration, exclusions and limitations of Turkey's protection of intellectual property rights. The table shows the duration is20 years from date of filing for fully

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protected patent following examination process,7 years for non-examined patents,10 years for utility models. The duration of Integrated Circuit Topographies is 10 years from the date of first commercial exploitation by rights holder anywhere in the world. Question 4： What is the difference between patent and patent without (substantive) examination? What is the difference between patent without (substantive) examination and utility models? Turkey’s Answer: The procedures of obtaining a patent with a substantive examination and without a substantive examination differ in some aspects that it is shown in the table below. After the search report is published, in accordance with the Article 60 of the Decree Law No: 551, applicants may opt for a patent without a substantive examination. The term of protection is 7 years for a non-examined (without a substantive examination) patent from the filing date, while it is 20 years for patents with substantive examination. According to Article 72 of the Decree Law No: 551, if a request for a substantive examination is filed for a non-examined patent in 7 years (starting from the filing date) and if the examination report prepared confirms its patentability, the term of protection is extended to 20 years for the non-examined patent in question. As for the difference between patent without (substantive) examination and utility model, it is the term of protection (7 years for without substantive examination, 10 years for utility model) and not having a search report in the procedures of obtaining a utility model.

Question 5： In table 3.44, the duration of Industrial Designs Decree (No. 554) is 5 years from filing date, renewable for 5- year periods to a maximum of 25 years. But the annotation of table 3.44 is “industrial designs may be covered by both the Copyright and the Industrial Design Law. The term is 70 years under the former and 20 years under the latter.” Please explain the inconformity between these 2 durations. Turkey’s Answer: In Turkey, design right and copyright are accepted as two separate Intellectual Property Rights and there are two different laws, namely, Turkish Copyright Law No: 5846 on Intellectual and Artistic Works and the Decree-Law No.554 Pertaining to the Protection of Industrial Design Law. The rights conferred by the Decree-Law No.554 are different from the rights conferred by the Copyright Law. A design which is protected by a registered design right may also be eligible for

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protection under the Copyright Law as long as it meets the requirements of the Law and vice versa. Question 6: Does Integrated Circuit Layout-Design need application or registration before getting authorization? Turkey’s Answer: The protection conferred by the Integrated Circuit’s Topographies starts with the application date, however, if the applicant (or the third part with the permission of the right holder) markets the integrated circuit into the domestic market or foreign market for the first time and files an application within 2 years from the marketing date, the protection conferred for the integrated circuit topography starts from the date of the first marketing of the integrated circuit in the domestic or foreign market where the first marketing occurred. Page 116, Para 3.217 3.217. At end 2015, the only CL to have been granted was in 1998. In one other case, the TPI was requested to initiate a mediation procedure with regards to a CL. Question 7： Please elaborate on the specific scenario of compulsory licenses (CLs) granted in 1998, including the reasons, procedures for the granting and patents that were covered, etc. Turkey’s Answer: There had been only one case regarding CLs so far. The claimant for the CL had requested the mediation service of the TPI claiming that the patent in question had not been used in 3 years following the grant of the said patent. Accordingly, the claimant had been requested to provide the “claim for a licence” in line with Articles 95, 104, 105, 106 and 107 of the Decree Law No: 551 and the claimant had been informed that the relevant fee would be determined in due course. However, the claimant had not responded to the notification of the TPI, and upon the final decision rendered by the Court, the said patent had been registered with a note of CL on 27/11/1998. Question 8： According to Turkish laws, the decision on CL is made by courts. What kind of process is the mediation procedure initiated by the TPI? What disputes are mainly solved? Is it a mediation procedure before the issuance of a CL, or is for the mediation of royalties after the issuance of a CL? Turkey’s Answer: A person desirous to apply for a CL may in the first instance apply to the TPI asking for its mediation with a view to obtaining a contractual license for the same patent. TPI approves the mediation application taking into consideration whether a situation exists for a CL to be required, the financial strength of the claimant of the CL and whether required tools for the use of the invention, which is the subject of the CL, by the claimant exist. The mediation by the TPI may be concluded with affirmative or non-affirmative results. In case of an affirmative result, 1 year period is given to the licensee to use the invention and the license is an exclusive license. In case the invention is not utilised in 1 year, a security is provided. The process of the mediation by the TPI is request-based and not an obligatory situation that has to be completed before going to the Court. In case of non-affirmative conclusion of the process, the Court procedures to be initiated are available. The mediation process by the TPI should not be taken as a form of mediation to determine the remuneration after the compulsory license has been published by the Court. It is a process that takes place from the very establishment of the license agreement to the determination of licensing fees. Part II. Other Questions Question 9： What is the average period for TPL to complete the substantial examination of a patent? Turkey’s Answer: The average time lapsed for a patent to be granted with substantive examination is 3 years from the date of filing.

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Question 10： Article 18 of Turkey's Decree-Law 551 regulates that, employees have the obligation of reporting their on-duty invention to the employers. Please provide details about Turkey's on-duty invention report system. Do employees only have the reporting obligations of the on-duty invention they deem, or all the on-duty ones during their employment? What is the legal consequence of violating inventions reporting obligations? When on-duty inventions are authorized, do employees have the right to get rewards or remuneration? Turkey’s Answer: According to Decree Law No: 551 Article 18, an employee having made a service invention shall be under the duty to report, without delay, the invention to his employer, in writing. In the report, the employee is under the obligation to disclose the technical problem, its solution and how the service invention was realized. For the better understanding of the invention, the employee shall provide the employer with the drawing(s) of the invention, if any. The employee shall furthermore specify the experience and activities/work of the enterprise from which he/she has benefited; if any, the contributions of other employees, the nature/form of such contributions, the instructions he/she received in respect of his/her work and with regard to said contributions and the contributions which he/she considers to be his/her own. Employees are under the obligation to report the inventions which they realize only during the course of their work relation with the employer. In case of non-reporting of the invention by the employee, Turkish Labor Law is applied and the contract of the employee may be cancelled by the employer. Also, the employer may claim compensation of damages caused by non-reporting by employee. According to Article 22 of the Decree Law No: 551, where the employer claims ownership in whole on the service invention, the employee shall have the right to a reasonable remuneration as against the employer. In assessing remuneration, due consideration shall in particular be given to the economical/commercial applicability of the service invention, the duties of the employee in the enterprise and the enterprise's contribution to the invention. Question 11： According to Article 171 of Turkey's Decree-Law No. 551, patent applicants whose residence is abroad can only be represented by patent agents. Are the patent agents dedicated institutions approved or registered by TPL? Where to access the list of patent agents? Turkey’s Answer: The patent attorneys have to pass the patent attorney examination which is held by the Turkish Patent Institute. The patent attorneys who pass the exam are registered to the relevant TPI’s registry. Attorney registrations have to be renewed every year. The contact information of the current patent attorneys can be reached from the following address: http://www.tpe.gov.tr/TurkPatentEnstitusu/attorneysearchAll/

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CHINESE TAIPEI PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/331) 3. TRADE POLICIES AND PRACTICES BY MEASURE 3.1.8 Contingency measures 3.1.8.2 Safeguard measures Footnote 47: Regulation on Safeguard Measures for Imports published in the Official Gazette No. 254486 on 8 June 2004, revised by the Regulation on Amendment of the Regulation on Safeguard Measures for Imports (Official Gazette No. 27961 of 11 June 2011 and Official Gazette No. 28836 of 29 November 2013). As reported in Turkey's previous review, the 2011 amendment extends the scope of safeguard measures to imports of parts of components of a product subject to a safeguard measure, or parts or components incorporating the value added to be safeguarded by the imposed measure. Question 11 According to the Regulation on Amendment of the Regulation on Safeguard Measures for Imports (Official Gazette No. 27961 of 11 June 2011) mentioned in footnote 47, the scope of safeguard measures can be extended to imports of parts of components of a product subject to a safeguard measure, or parts or components incorporating the value added to be safeguarded by the imposed measure. Please explain when it is decided in a case to extend the scope of products in safeguard measures. If a decision is not made until safeguard measures are about to be applied, please explain the justification for such practice. Turkey’s Answer: The mentioned amendment regarding the inclusion of components of a product subject to a safeguard measure was made through adding a new paragraph to the end of Article 6 of Decree No. 2004/7305 of the Council of Ministers on Safeguard Measures for Imports, dated 10 May 2007. The rationale is to prevent the circumvention of a safeguard measure through basic assembly of the product subject to safeguard measure after importation. Question 11 To follow Turkey’s answer, please explain whether those imports of parts or components of a subject product, or parts or components incorporating the value added to a subject product, are within the scope of the subject product under investigation? If not, please explain how the concerned amendment and such practice comply with the obligation under Article 3.1 of the Safeguard Agreement. Turkey’s Answer: Imports of parts or components incorporating the value added to a subject product are within the scope of the subject product under investigation. The investigating authority has to make an explicit determination on the subject product as well as the value added that is aimed to be safeguarded.

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EUROPEAN UNION

WT/TPR/S 331 EU initial question N°7: Page 49, paragraph 3.23, Customs valuation The Secretariat notes that "there have been no changes during the review period in Turkey's basic provisions on customs valuation and that the primary basis for customs value is the transaction value". Also, the report indicates that "the primary basis for customs value is the transaction value. The transaction values used by Turkish customs are c.i.f. values". In some cases, it seems that the set value for surveillance are much higher than the selling price. Could Turkey provide information on how value-based surveillance is implemented at the customs for imports which are below the customs value set for the surveillance but lack a surveillance license? Doesn't this give rise to declarations of a "fictional" customs value which is above the actual transaction value by the importers who fail to obtain a non-automatic license to be able to import below the set value? Is it normal that this practice does not create difficulties as to customs value determination and does not circumvent the use of the transaction value as the primary basis for customs value which is defined as price actually paid or payable for the imported goods in Agreement on Implementation of Article VII of the GATT, in compliance with Turkey's obligations? Turkey’s Answer: Purpose of the import surveillance system is to closely monitor and to collect specific data regarding the imported products. In many cases, the surveillance is only implemented to products below a certain c.i.f. value in order to make the least effect on other trade. But, there are surveillance practices with no set price criteria thus monitoring all trade. This determination is based on the characteristics of the product itself or the target of the surveillance application. On the other hand, in order to avoid administrative procedures, importers usually submit a customs declaration voluntarily in which the customs value of the imported goods is declared above the price threshold set in the surveillance Communiqué. In principle, the primary basis for customs value is the transaction value which is c.i.f. value. Customs declaration above the transaction value is an exceptional case and this declaration is made voluntarily by the importers. In the customs value declaration these cases are negligible and can be ignored. On the other hand, importers’ specific problems relating to the issuance of surveillance licenses have always been welcome by the Turkish authorities. EU Follow up question to initial EU question N°7: In its reply, Turkey states that the purpose is to closely monitor imports and collect specific data regarding the imported products. In many cases, the surveillance is only implemented to products below a certain c.i.f. value in order to have the least effect on overall trade. Turkey also replies that on the other hand, in order to avoid administrative procedures, importers usually submit voluntarily a customs declaration in which the customs value of the imported goods is declared above the price threshold set in the surveillance Communiqué. In fact, any data regarding imports that need to be surveyed for statistical purposes can be recorded by the customs authority without putting additional documentary burden on importers. However, as indirectly acknowledged in the answer by Turkey, surveillance, if implemented in a way that Turkey does, has an impact on trade. Could Turkey explain the reason why it requires a surveillance license instead of monitoring imports by recording them as well as the rationale for implementing a value based surveillance system given the acknowledged effect on trade? Could Turkey provide more details on the administrative procedures which incentivise importers to declare a higher customs value? Could Turkey provide information on the ratio of cases where the importers "voluntarily" declare higher customs values in relation to the total number of declarations only regarding the imports which are subject to surveillance? Turkey’s Answer: Regarding the surveillance system, some documents (information about the exporter and importer, proforma invoice, information about economic indicators of the company, and information about the cost of the product) are required and these procedures cannot be

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performed by customs authorities. On the other hand, a value based surveillance system is only used for low-priced imports. In order to refrain from the administrative procedures, some companies declare higher customs value. These procedures include providing certain documents to the Ministry of Economy of Turkey and these documents are listed in the related Communiqués. Regarding the ratio of cases where the importers "voluntarily" declare higher customs values in relation to the total number of declarations; Turkish authorities do not have that statistical information. EU Question N°8: It seems that in certain cases, the set values for the surveillance are artificial and much higher than the market values and consequently, taxes collected at customs are higher than what is normally payable. In particular for VAT, the importer would structurally remain in the position in which it should be reimbursed VAT from the Turkish Administration. It is understood that the importer can carry forward that VAT amount to the next fiscal period, however, if the situation is structural, the importer will continue to carry forward increasing amounts of VAT and will never be reimbursed by the Turkish Administration. So, eventually, that VAT amount will be a loss for the importer. In contrast, for domestic producers, VAT is computed on transaction value. Could Turkey confirm that such a situation can happen? If yes, how does Turkey justify this with its obligations under Article III of the GATT? Turkey’s Answer: Purpose of the import surveillance system is to closely monitor and to collect specific data regarding the imported products. In many cases the surveillance is only implemented to products below a certain c.i.f value in order to make the least effect on other trade. But, there are surveillance practices with no set price criteria thus monitoring all trade. This determination is based on the characteristics of the product itself or the target of the surveillance application. On the other hand, in order to avoid administrative procedures, importers usually submit a customs declaration voluntarily in which the customs value of the imported goods is declared above the price threshold set in the surveillance Communiqué. In this case, customs duties and the value added tax (VAT) are collected over the value that is normally payable. This is the preference of importers as the importers carry forward the VAT amount to the next fiscal period. VAT paid by the importers is offset with their receivable other VAT accounts which then lessens the financial burden of the system. It should be noted here that the surveillance system does not create any structural problems and thus does not contradict with Article III of GATT. EU follow-up question to initial question 8: Turkey's answer confirms that taxes collected at customs are higher than what is normally payable whereas for domestic producers, VAT is computed on transaction value. If so, could Turkey elaborate how this situation is compatible with Article III of GATT also considering that in certain cases the set values for surveillance purposes can be artificial and as such much higher than actual market values? Turkey’s Answer: In principle the primary basis for customs value is the transaction value. VAT is computed on transaction value both for domestic producers and importers. So there is no incompliance with Article III of GATT. On the other hand, as explained in the original answer, for the products subject to surveillance system, in order to refrain from the administrative procedures, some importer companies voluntarily declare higher customs value. These companies may choose to provide the documents listed in the Communiqué. As importers can carry forward VAT amount to the next fiscal period and later offset it with VAT receivables, they may choose to refrain from the administrative procedures. As stated above, from Turkey’s point of view, this is no violation of Article III of GATT. EU initial Question N°11: Page 60 paragraph 3.46 notes that "SCT on imports is primarily collected when goods are cleared through customs, and for domestically produced goods upon delivery to the customer". The EU would like to stress that, unlike domestic producers, importers of spirits but also of cigarettes, of motor vehicles and of cosmetics (inter alia) do not benefit from a duty deferment period. While local producers can delay payment of excise by several weeks, importers have to pay

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duty before their products can be released onto the market. This puts importers at a competitive disadvantage. Does Turkey plan to harmonise SCT payment conditions for imported and domestic products? If the answer is positive, when would this harmonisation take place and would it cover all products? If not, what is the rationale? Turkey’s Answer: According to Special Consumption Tax Law (Law No: 4760), when determining the subject of the tax or taxable event, there is no difference between domestic producer or importer. Both the domestic producers and importers of spirits but also of cigarettes, of motor vehicles and of cosmetics (inter alia) are taxed under the same status and conditions, in the course of production, delivery and importation. The below lists indicate products where SCT are charged;

-List (I) is related to petroleum products, natural gas, lubricating oil, solvents and derivatives of solvents.

-List (II) is related to land, air and sea vehicles (cars and other vehicles, motorcycles, planes, helicopters, yachts etc.)

-List (III) is related to alcoholic beverages and cola soda pops, cigarettes and other tobacco products,

-List (IV) is related to other consumption goods (caviar, furs, mobile phones, white goods and other electrical household machines etc.) According to Article 3 of above-mentioned Law, taxable event for goods laid down in List (I) occurs on delivery of the goods or conditions regarded as delivery, not on importation. For List (II) products, there is no SCT liability on the importation of vehicles subject to recording and registration while taxation of their initial acquisition phase. As regards vehicles not subject to recording and registration, SCT liability arises during the phase of importation or during the delivery phase for the domestically produced vehicles. Thus SCT is charged only once during the phase of free movement or supply to the market, without any discrimination between the imported and domestically manufactured vehicles. For List (III) and (IV) products, like cigarettes, spirits and cosmetics, the application of SCT is similar to vehicles not subject to recording or registration. Therefore, since SCT does not discriminate between domestically produced and imported products, we do not see any need for an alteration in the legislation at the moment. EU follow up question to initial question N°11: Domestic spirits producers can store spirits in their warehouses - tax unpaid – and have up to 45 days in which to pay the excise tax due when they move them to retail and other sales channels while importers do not have access to "tax unpaid warehouses" in Turkey and must pay all excise taxes due immediately when their goods enter the country. In its reply, Turkey states that SCT is only paid once without any discrimination but does not address the issue of the alleged discrimination with regard to when the tax is payable. Could Turkey address the issue of the discrimination aspect that rests in the timing for requesting the tax to be paid? Turkey’s Answer: According to the Special Consumption Tax (SCT) Law No. 4760, the tax is collected at the stage of importation of goods that are set out in the annexed list No (II) that are not subject to recording and registration, alcoholic beverages and tobacco products indicated in the annexed list No (III) and durable consumer goods and other goods stated in the annexed list No (IV). This implementation arises from current legal regulations and is based on the structure of indirect taxation system in Turkey. Thus, during implementation of VAT which is another indirect tax, taxation is done in the phases of import and domestic delivery. Besides, according to the above mentioned Law, SCT taxation is made during the period of importation simultaneously with the import taxes or, for situations not subject to customs duty on the register date of the declaration that has been accepted pursuant to the customs legislation or the register date of other documents accordingly. Therefore, for the imported goods which are subject to customs duty, SCT taxation is made in the same framework of customs duty.

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There is no SCT legislation in Turkey similar to that of EU legislations on tax warehouses or tax suspension for free movement of goods within the EU, which enables suspension of SCT until release for consumption of goods (except goods that are set out in the annexed list No (II) that are not subject to recording and registration). This situation does not lead to a pave the way for a discrimination between goods that are imported and domestically produced. All tax payers, regardless of whether they deliver the goods for consumption or not, have to declare and pay their duties within the time laid down by the Law. Original EU question 13 EU Question N°13: Page 66, Import restrictions and licensing and page 72 section 3.1.9.3 on standards and alignment to the EU para 3.76 on medical devices The EU would like to add to the description of the WTO Secretariat the following information. Turkish Ministry of Health in 2009 issued requirements that in order for a pharmaceutical product to be imported to Turkey the manufacturer must submit a certificate of Good Manufacturing Practice (GMP) issued by the Turkish Ministry of Health or an authority of another country with which Turkey has reciprocal certification agreement. Therefore, since 1 March 2010, Turkey does not accept the EU GMP certificates as it was the case since many years. Instead, the manufacturers need to apply and wait to be inspected by the Turkish official inspectors for receiving this certificate for the registration of new medicine or variations of existing products. The introduction of this measure and Turkey’s limited capacity to implement these requirements and deliver the GMP certificate within a reasonable period of time, has led to significant delays in the registration of new pharmaceutical products in Turkey. These requirements coupled with the limited enforcement capacity of the Turkish authorities are de facto banning imports of new pharmaceutical products to Turkey and have created a huge backlog of de facto unprocessed requests. What measures does Turkey intend to take to remedy the above described situation? Turkey’s Answer: Pharmaceuticals and Medical Devices Institution under the Ministry of Health of Turkey has the competence to inspect just like the other competent authorities in other countries. This right has been mentioned for the first time in the GMP Regulation dated 1984 and mentioned again in the Article 13 of the ‘’Regulation on Manufacturing Plants of Medicinal Products for Human Use’’, which is currently in force. This Regulation was prepared in accordance with Directive 2001/83/EC of EU through harmonization. In addition, during the inspections, scientific guidelines that are accepted on an international level are used (PIC/S, FDA, ICH guidelines etc.). The GMP certification process is conducted whether the manufacturer is foreign or domestic. During this process, following amendments were made in order to facilitate and accelerate GMP certification process: On 06.03.2015, the period of validity of the GMP inspections of the foreign manufacturing plants conducted by the Ministry of Health/the Agency and/or the GMP certificates that were regulated in accordance with the conducted inspections that exceeded the 3-year-validity-period were prolonged starting from 31.12.2009 until 30.06.2016. Thus, prolongation of the validity period of certificates available without the need to inspect has been provided in the foreign manufacturing facilities that meet the relevant criteria (published and announced as a guideline). Furthermore, the number of GMP inspectors and the corporate capability of GMP department in the agency have been reinforced. Another important progress that has been made is the fact that the agency has formally applied for full membership in the PIC/S (Pharmaceutical Inspection Cooperation Scheme). As the Country/Agency that has applied for full membership, all committee meetings of the PIC/S are attended regularly. Currently, the document based inspections are finalized and “visit and on-site inspection” is being awaited. Draft Regulation on Manufacturing Plants of Medicinal Products for Human Use has been re-evaluated according to views of stakeholders. And it is planned to be finalized during the first half of 2016 and to be sent to European Commission.

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Follow-up question to EU question 13: In its response, Turkey refers to the reinforcement of the agency to conduct inspections and to its application to the PIC/s. This should improve the situation for the future. However, there is still the issue of a backlog of hundreds of applications that have been filed over the past years that remain un-cleared despite the obligation to conduct the inspection within 90 days of the submission of the application and to deliver the market authorization within 210 days of the submission of the application. This situation has created de facto a very important obstacle to trade. Could Turkey mention how it will address this issue of the backlog and deliver the belated market authorization? Can Turkey now confirm that it will conduct future inspections within 90 days of the submission of the application and deliver the market authorization within 210 days of the submission of the application? Turkey’s Answer: Inspections are planned by taking into account the centrality and critical importance of products for public health. Additionally, conducting planned inspections are not only under the initiative of the Agency as relevant manufacturing sites’ and local authorities’ consent is also required. Besides, after the inspections, correction of the defined inspection findings process is the liability of manufacturing sites. All these, may have implications over the certification procedure. Explanation regarding waiting application dossiers can be found in our original answer. Original EU question 19 Page 96, Paragraph 3.162 "The Ministry of Health uses a reference price system to determine prices of pharmaceuticals using the lowest wholesale prices in some EU member States as the reference. Currently, the reference prices are converted into Turkish Lira at a fixed rate of TL 2.0787 to the euro". The EU notes that the exchange rate for determining drug prices has not been updated to reflect currency changes. This, combined with mandated high discounts, has resulted in significant losses for foreign pharmaceutical companies. Does Turkey intend to rectify this situation by amending the pricing methodology for pharmaceuticals so that it reflects the currency exchange rates? Turkey’s Answer: Provision regarding “The rate of 1 (one) Euro in the form of Turkish Lira used in the pricing of medicinal products for human use shall be determined by multiplying the yearly average Euro rate that will be calculated based on the indicative daily Euro selling rate of exchange of Central Bank of Republic of Turkey which have been published in the Official Gazette of the previous year with the adjustment coefficient which is 70%. Price Assessment Committee shall annually meet on the first 5 (five) workdays of January and shall announce the rate of 1 (one) Euro that will be used in the pricing of medicinal products for human use in accordance with the procedures mentioned above.” is laid down in Paragraph 2 of Article 2 of the Decision published in Official Gazette dated 10.07.2015 No. 7752. Thus, Price Assessment Committee (PAC) decided at its meeting on 08.01.2016 to update the rate of 1 (one) Euro from 2.0787 TL to 2.1166 TL. In accordance with the provision regarding “The changes in the rate of Euro used in the pricing of medicines shall be implemented 45 days after the Committee’s announcement” in Paragraph 3 of Article 7 of the Decision, the date of validity of the rate of Euro that has been raised to 2.1166 TL starts from 45 (forty-five) days after PAC’s decision. Currently, exchange rate used in the pricing of medicines is 2.1166 TL for both locally produced and imported pharmaceutical products. EU follow up question to EU original question 19. In its response, Turkey refers to the decision of the Price Assessment Committee (PAC) of 8.1.2016 to update the exchange rate of 1 euro from 2.0787 TL to 2.1166TL. However, Turkey did not respond to the question. As published in specialized press, on 8.1.2016, the actual exchange rate was 1 euro: 3.29 TL. The new exchange rate fixed by the PAC is thus far away from real market value, and operators are unduly penalized by the use of artificial exchange rates by the PAC. How will Turkey ensure that the pricing methodology and the exchange rates used for pharmaceuticals reflect the actual currency exchange rates?

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Turkey’s Answer: As was indicated in the original answer, Price Assessment Committee (PAC) decided at its meeting on 08.01.2016 to update the rate of 1 (one) Euro from 2.0787 TL to 2.1166 TL based on the Decision on the Pricing of Medicinal Products for Human Use to be effective as of 22.02.2016. However, even if 70% of the yearly average Euro rate is determined, there are tools through which PAC ensures the availability of pharmaceuticals in the Turkish market and are some available options in the pricing regulation for pharmaceuticals based on actual currency exchange rate. PAC may designate differentiating prices and/or profit rates for medicines to be subjected for the purchases made upon the utilization of alternative reimbursement models in accordance with Article 73 of Law No. 5510 on Social Insurances and Universal Health Insurance. PAC is also entitled with - granting price above the designated price for products holding a critical importance in terms of public health by taking into account the general principles of the Notification; - evaluating increases in prices of products of which market availability is mandatory due to public health and products which provide savings in terms of public finance upon ensuring their market availability, - pricing pharmaceuticals like albumins and IVIg’s based on the actual currency exchange rate due to its market availability. EU NEW QUESTIONS (in total 5 new questions) 3.1.1 Customs procedures and requirements, page 47, para 3.15 Certain goods may only be imported through specialized customs offices. As a result, all goods subject to this type of custom procedure must physically be transported to these locations. The specialty customs (for instance for non-EU furniture, rugs and hinges and lighting fixtures) are situated far from the ports. Consequently, this contributes to increasing costs and clearance lead times as well as having a negative impact on the environment. EU new Question 1: In its last TPR, in 2012, Turkey explained that specialized customs offices are not designed as an obstacle or a restriction to trade but that they are equipped with relevant techniques and expertise and that their aim is to ease and speed up the formalities. However, the Secretariat report states that "the purpose is also to make effective controls on tariffs, valuation, and origin matters". Could Turkey elaborate why the designation of specialized customs offices is chosen to make controls on tariffs, valuation, and origin instead of risk analysis? And how does Turkey ensure that trade is not hindered given the transportation and other administrative costs incurred by operators due to this practice? Turkey’s Answer: The mentioned purpose of “making effective controls on tariffs, valuation, and origin matters” can be seen as a “by-product” or “side benefit” of specialized customs application’s results. Turkey uses first-hand advanced risk analyses systems, pre-summary declaration systems and other common control mechanisms to conduct tariff, valuation, and origin controls. Besides, as mentioned before, in Turkey, not all goods but only some specific goods such as metal waste, petroleum products which require special customs control procedures and/or hardware (for instance radiation detection etc.) are subject to specialized customs application. For such specific goods, besides those first-hand control tools, special customs offices, frequently dealing with processes of these goods, have an automatic advantage of getting experienced on tariff, valuation, and origin documentation for that type of goods which enable them making such controls faster and more effective. 3.1.5 Tariffs 3.1.5.7 Fees and charges for services rendered, page 58 Certain non-tariff and technical barriers create costly, time consuming and complicated compliance processes in the custom clearance. One problem for example is when local physical inspection takes place before custom clearance (for example Food Contact Articles (700 SKUs - even though the products are tested in accredited laboratories), Lighting Articles (320 SKUs), Toys and

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Batteries (140 SKUs)). Another concern is when products are sent to the customs laboratory for tariff code analysis even though tariff codes are in order. In addition, it remains often unclear whether the physical inspections are carried out by the customs authority or by other authorities. As regards laboratory testings, at the beginning of last year there was a surge in the goods that were directed to customs laboratory testing. The Customs implementing regulation was modified in the sense that analyses may be performed in accredited laboratories other than the customs laboratories (OG of 13 March 2015). In addition in page 45, the Secretariat report states that over the review period the Customs Law and its regulations have been amended several times. These amendments include, inter alia, changes to laboratory analysis sampling procedures. In the section 3.1.1 Customs procedures and requirements, paragraph 3.8 page 46, the Secretariat states that pursuant to risk assessment, goods may be subject to physical inspection. It also reports that data on the percentage of goods physically inspected was not available. EU new Question 2: Could Turkey provide information on the level of physical inspections on imports and exports and explain the relation between the level of physical inspections and risk assessment? Could Turkey give the percentage of traded goods subject to physical inspection? Turkey’s Answer: Turkish Customs Administration has been actively improving the system for electronic Risk Analysis (based on high, medium and low risk scores which recognize traders compliance history e.g. AEO status) in order to target the increasing number of declarations in all customs procedures and to deal with the requirements of the Risk Analysis processes for fiscal, safety and security purposes based on the risk areas such as nature of goods, origin country, mode of transportation and compliance history of the traders, etc. In addition to the risk-based controls that are applied deliberately, “random” controls are also conducted at both central and local levels. Turkish Customs works within the framework of a modern legislation to reduce the cost of trade by making procedures more transparent, easier and faster with the help of an effective risk analysis system. In this regard, the risk assessment activities are the major determinants of physical inspection rates at customs. Physical inspection rate is approximately 15% for imports, while for exports it is around 5%. With the aim of improving the selectivity in customs controls and enhancing efficiency of anti-smuggling activities, the physical inspection rates are regularly monitored and evaluated. 3.1.9.4 Controls at the border, page 73, para 3.81 It is reported that in 2011, Turkey started a pilot implementation of a risk-based trade control system, TAREKS, to carry out safety checks on imported and exported goods on the basis of risk. The EU has noted that almost half of footwear articles are subject to inspection in Turkey with costly and lengthy delays as a result. The requirements regarding phthalates seem to match those of the EU chemicals regulation, REACH. However, Turkey does not accept test results of EU accredited laboratories, only tests by Turkish laboratories. Turkish footwear does not seem to be subject to the same level of testing. Could Turkey provide information on the modification relating to the laboratory analysis and level of laboratory analysis carried out for tariff classification purpose in 2015? Turkey’s Answer: Modification in the Customs Implementing Regulation (CIR) in terms of laboratory analysis arose from problems regarding toys. Toys, which are basically classified in position 95.03, do not fall within the scope of products that are subject to Annex 23 of the CIR. For the purpose of determining tariff classification, it is not an obligation to analyse imports in accordance with Article 196 of the CIR. Some products (toys, shoes, etc.) are directed to the red line examination and sent for laboratory analysis. In those cases, to decrease the analysis time of the products and to relieve declarants, some accredited laboratories, apart from customs laboratories, are also authorised to carry out analyses. In 2015, 150.066 samples of over 72.024 customs declarations were examined by Turkish customs laboratories.

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EU new Question 3: Could Turkey explain how such extensive testing to which the EU imports are subject could be considered risk-based, despite the fact that those products have already been cleared by EU Member States Customs and are in free circulation? Given that Turkish footwear is allegedly not subject to the same level of testing, could Turkey provide its assessment of the possible conflict with the non-discrimination requirement of the WTO? Turkey’s Answer: Import controls of shoes regarding their “phthalate” content are carried out through “Risk-Based Trade Control System (TAREKS)” within the framework of the Communiqué of Product Safety and Inspection No. 2016/18 (Official Gazette, dated 31/12/2015 and no. 29579). The Communiqué requires shoes to be checked at customs stage. TAREKS based import controls are carried out electronically and on risk basis. In other words, only risky products are subjected to safety and conformity checks. In this regard, samples are taken from product models and checked at accredited laboratories for their “phthalate” content. In this respect, no origin certificates are asked during import controls performed under the Communiqué No. 2016/18. Within the framework of the Communiqué, products originating in the EU or third countries accompanied with an A.TR document are principally not subjected to safety and conformity checks. They undergo these checks only if they are considered risky according to the risk assessment criteria. Shoes regarding their “phthalate” content are also subjected to conformity controls as market surveillance activity by the Ministry of Customs and Trade (MCT) according to the related market surveillance Communiqué (Official Gazette, dated 14/1/2015 and no. 29236). Risk-based controls that require laboratory tests were tightened in 2015 as a result of detection of azoic dye at footwear. Besides, as domestic products are also checked at the market stage, Turkey’s implementation is in line with the non-discrimination requirement of the WTO. 3.1.6 Other charges affecting imports, page 59 In the Secretariat report a number of duties and charges are mentioned. However, a duty that is not reported is a special surcharge, ‘KKDF’, of 6.5% is imposed on payment against invoice address. International companies produce goods in other countries. Production from country A but invoicing from country B are taxed with 6 % if the invoice address does not match the country of production. Example: An international company has production in China, but invoices from France and sales in Turkey. If the payment does not go to China, the tax of 6 % will be raised in Turkey. EU new question 4: Could Turkey explain the rationale for this special surcharge? Moreover, could Turkey provide its assessment of the possible conflict with WTO rules on National Treatment on International Taxation and Regulation (non-discrimination)? Turkey’s Answer: The Resource Utilization Support Fund (the RUSF) is not a charge or a fee, but a fund levied on only credit based importation. Thus, not all importation is subject to the RUSF. The RUSF is collected on credit based importation or credit based transaction where any credit is used. If the price of the good is transferred before the customs liability has started, according to customs regulation, RUSF is not collected. However, if the price is transferred after this date, then, this credit based transaction is subject to RUSF because of the fact that importer is credited. There is no distinction for collection of the RUSF depending on any criteria such as the type of imported good or country of origin. RUSF is a policy tool which is applied to goods imported using credit and consumer loans and also loans obtained abroad. RUSF by nature does not represent an indirect protection to domestic products vs imported ones a taxation of imports. 3.1.10 Sanitary and phytosanitary requirements 3.1.10.1 Overview and alignment with the EU, page 75 It happens that EU companies are facing frequent problems with inconsistent import rules and certificate requirements for export of food products to Turkey. The demands are forwarded

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through brokers/importers in Turkey and seem to be a condition for filing for an import license. It is very difficult to get in direct contact with the Turkish competent authorities. It is stated that Turkey has been focusing on harmonizing its SPS legislation with that of the EU during the review period. However, EU exporters and EU authorities are experiencing that SPS import procedures are non-transparent and inconsistent, in particular regarding certificate requirements for export of food products to Turkey. Moreover, it is very difficult to get in direct contact with the Turkish competent authorities not only for exporters, but also for EU authorities. EU new Question 5: How does Turkey look upon this issue? Does Turkey have any plans to increase transparency in its SPS procedures and increase Turkish competent authorities’ availability? Turkey’s Answer: In accordance with the WTO Agreement on Sanitary and Phytosanitary Measures, WTO member states have the right to adopt or enforce measures to protect human, animal or plant health, and/or food safety, as long as those measures are applied in a manner which would not create any unjustified discrimination between memberws or disguised restriction on international trade. The said Agreement also stipulates that these measures be implemented on the basis of scientific data. As a WTO Member, Turkey is also bound with the provisions of the Agreement on Sanitary and Phytosanitary Measures and respects fully that SPS measures are implemented in accordance with above mentioned principles. In live animal and animal products trade, notifiable diseases which are notified by OIE member states are taken into consideration while taking measures. Notified diseases are tracked and import ban regarding animal and animal products can only be imposed in certain regions or when necaessary, for all parts of the country, in order to avoid spread of disease in the counry in which the disease is erupted. Veterinary health certificates are determined in accordance with relevant EU Directives, and recommendations of the OIE, which are also reflected in national legislations. If there is no designated model health certificate issued by the Ministry, submitted model veterinary health certificate shall contain exporters country/region of the product, central competent authority, consignor, consignee, place of origin, animal species the products obtained, description of commodity, quantity, information on means of transport and for products intended for human consumption, it shall contain declaration of fit for human consumption. For products not intended for human consumption, the purpose of use must be stated (For example; for feeding purposes, soap industry etc.) It must contain public and animal health attestation according to the type of the product. Aforementioned certificates are available at “http://www.tarim.gov.tr/Konular/Veteriner-Hizmetleri/Ihracat-Ithalat/Ithalat?Ziyaretci=Ihracat-Ithalat” web page and relevant units (persons contact information) are available at “http://www.tarim.gov.tr/GKGM/Menu/6/Personel-Telefon-Rehberi”. For imports of non-animal origin food and feed products, there is no designated model certificate. Documents meeting requirements of certificates which are given in “Regulation on Official Control of Plant Origin Food and Feed Import” and issued by the exporting or producing country competent authorities are accepted. Competent authorities that are authorised to issue certificates by the relevant countries and model certificates have to be submitted to Turkey. During the negotiations for the Update of the Customs Union between Turkey and the EU, “establishing stronger SPS provisions” will be one of the topics to be negotiated.

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JAPAN Report by the Secretariat (WT/TPR/S/331) 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.6 Other charges affecting imports 3.1.6.4 Other taxes and charges (Question : Page65, Paragraph 3.52) According to the answer by Turkey, the RUSF is levied on importation in some case, RUSF revenues are transferred to the general state budget, and RUSF is not the tax, fee nor charge. Then, is RUSF a type of customs duties imposed on importation? (Question) How does Turkey maintain RUSF in conformity with GATT VIII? Turkey’s Answer: RUSF has no relation with any type of fee or charge that are mentioned in GATT Article VIII but rather a policy tool which is applied to goods imported using credit and consumer loans and also loans obtained abroad. In addition RUSF by nature does not represent an indirect protection to domestic products or a taxation of imports. Turkey’s Answer: As it is stated in our previous answer, RUSF is not a type of tax, fee or duty imposed on importation. But, it is a policy tool which is levied on credit-based transactions with consumer loans obtained from domestic banks and loans obtained from abroad by the taxpayers who are residents in Turkey or any other credit based importation regardless of whether the user is a real person or a legal entity.

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ECUADOR

Preguntas adicionales de Ecuador Informe de Secretaría: 1. De conformidad con la página 31, párrafo 2.9, el Gobierno de Turquía, en el Décimo Plan de Desarrollo 2014-2018, ha establecido 25 programas prioritarios en los que centrará su labor, vinculadas a la política comercial, siendo uno de ellos, el Programa para la Reducción de la Dependencia de las Importaciones. Al respecto, podría indicarnos Turquía ¿Qué tipo de medidas comerciales se contemplan en el mencionado Plan? Turkey’s Answer: The main purpose of the Programme for Reducing Import Dependency is to decrease import dependency by shifting transformation of production structure in favour of high value added products and promoting production and usage of domestic inputs. In this context, measures should be taken for improving technological capacity, standards and quality of domestic products; encouraging effective utilization of domestic natural resources, waste recycling for a circular economy and decreasing production costs such as energy, transportation and labour. The Programme does not include specific trade measures and no trade policies have been used, in this regard. 2. De conformidad con la página 62, párrafo 3.8, en relación a los certificados de circulación de mercancías EUR.1 o EUR-MED (para las importaciones procedentes de países no pertenecientes a la UE con los que Turquía tiene acuerdos de libre comercio), podría Turquía informarnos ¿Cuáles son los requisitos para obtener el certificado EUR.1 o EUR.MED, y si este tipo de certificados se realiza por cada importación o tiene duración por un periodo determinado? Turkey’s Answer: In order to benefit from preferential customs duties during customs clearance, EUR.1 or EUR.MED movement certificates are required for imports from non-EU countries with which Turkey has free-trade agreements, and from EU member states for imports of agricultural goods, and coal and steel products. EUR.1/EUR-MED Movement Certificate is used to demonstrate that the goods are originated pursuant to the relevant agreement (i.e. Free Trade Agreement) rules and benefit from the tariff reduction while trading with a contracting country. These documents can be accepted for goods which are subject to one single consignment between FTA partners and cannot be re-used for another importation even if the goods, exporter or importer are the same as in the previous importation(s). In general, these certificates are admissible by customs offices only in 10 month period after exporting country’s customs endorsement. In Turkey, these certificates are issued by Exporter Unions, Chambers of Commerce and/or Industry and Chambers of Tradesmen and Craftsmen. The exporter should verify to the related Chamber/Union whether the goods are of exporter country’s origin via written evidence (likewise invoices, production capacity reports etc.). 3. De conformidad con la página 83, párrafo 3.88, en Turquía, todos los productos, ya sean importados o de producción nacional, están sujetos a actividades de vigilancia del mercado a cargo de 10 autoridades públicas. En este sentido, podría Turquía indicarnos ¿Cuáles son las 10 autoridades públicas, encargadas de la vigilancia del mercado? Turkey’s Answer: The names of the public authorities that are responsible for market surveillance are as follows:

1. Ministry of Science, Industry and Technology 2. Ministry of Customs and Trade 3. Ministry of Health 4. Ministry of Food, Agriculture and Livestock 5. Ministry of Environment and Urbanization

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6. Ministry of Labour and Social Security 7. Ministry of Transport, Maritime Affairs and Communications 8. Information and Communication Technologies Authority 9. Tobacco and Alcohol Market Regulatory Authority 10. Energy Market Regulatory Authority

4. De conformidad con la página 96, párrafo 3.135, las diversas cámaras de comercio y uniones de cámaras de Turquía también participan intensamente en actividades de promoción de las exportaciones. En este contexto, podría Turquía informarnos ¿Dónde se puede obtener información sobre las Cámaras de Comercio y Uniones de Cámaras que existen en Turquía? Turkey’s Answer: Information on the Chambers of Commerce and Unions of Chambers of Turkey can be received from http://www.tobb.org.tr/Sayfalar/Eng/TicaretOdalari.php 5. De conformidad con la página 101, párrafo 3.152, El KOSGEB tiene varios programas de ayuda para las PYMEs que se rigen por su reglamentación en la materia, podría Turquía explicarnos ¿Cómo clasifica a sus PYMEs y cuáles serían los incentivos que se otorgan de acuerdo a dicha clasificación? Turkey’s Answer: KOSGEB supports and services can be classified under 4 main headings: A. Supports provided within the scope of “KOSGEB Support Programmes Regulation”, B. KOSGEB Finance (Loan Interest Rate) Supports C. KOSGEB Laboratory Services D. Information and Guidance Supports The most common and the most important supports submitted to SMEs by KOSGEB are the ones which are implemented as part of KOSGEB Support Programmes Regulation. In this context, 9 support programmes are listed below: 1. Cooperation-Collaboration Support Programme 2. Entrepreneurship Support Programme 3. General Support Programme 4. SME Project Support Programme 5. Thematic Project Support Programme 6. R&D, Innovation and Industrial Application Support Programme 7. Emerging Enterprises Market SME Support Programme 8. International Incubation Center and Accelerator Support Programme 9. SME Development Support Programme SME definition distinguishes between micro, small and medium-sized enterprises on the basis of balance sheet, employment and turnover. This single SME definition is used by all governmental bodies in Turkey. The characteristics of micro, small and medium sized enterprises are illustrated in the Table below: Size Employees Annual Turnover Annual Balance Sheet Micro < 10 ≤ 1 Million TL ≤ 1 Million TL Small < 50 ≤ 8 Million TL ≤ 8 Million TL Medium-sized < 250 ≤ 40 Million TL ≤ 40 Million TL

In KOSGEB Database, SMEs are classified in the direction of NACE Rev.2 (Statistical Classification of Economic Activities in the European Community). NACE consists of a hierarchical structure; a first level consisting of headings identified by an alphabetical code, a second level consisting of headings identified by a two-digit numerical code, a third level consisting of headings identified by a three-digit numerical code, a fourth level consisting of headings identified by a four-digit numerical code and a fifth level consisting of headings identified by a six-digit numerical code.

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Several support programmes focusing on SMEs are implemented by different government agencies with different aims in Turkey. These programmes are composed of various instruments such as grants, reimbursement supports, tax exemptions, credits as well as facilitating credit usage. All supporting agencies have their own priorities and target audience. For instance, Scientific and Technological Research Council of Turkey (TÜBİTAK) supports R&D and innovation activities of SMEs. As for KOSGEB, sectoral and regional priorities of services and supports are determined by the Council of Ministers. Currently, 13 sectors constitute the target audience of KOSGEB. For 8 out of 9 support programmes of KOSGEB, there is not a sector or scale based discrimination. The last launched support programme of KOSGEB, SME Development Support Programme, has a call based structure. In the context of this program, it is possible to prioritize different SME groups in terms of sectors and scales. 6. De conformidad con la página 114, párrafo 3.178, Conforme al Programa General Anual de Inversión y Financiación 2015, las empresas estatales tienen que establecer un sistema de control interno para finales de 2016. Al respecto, podría Turquía indicarnos ¿Cómo funciona el sistema de control interno que se refiere dicho Programa? Turkey’s Answer: According to the 2015 Annual General Investment and Financing Programme, state-owned enterprises (SOEs) have to establish an internal control system by the end of 2016. Internal control is a management system that contains organization, methods, processes and internal audit established by SOEs to:

provide effective, efficient and economic implementation of SOEs’ operations in accordance with the objectives, related policies and regulatory framework,

ensure the protection of assets and resources, keep accurate and complete accounting records, produce timely and reliable financial and management information.

This definition is referred to and also based on the internationally accepted descriptions of an internal control system. More information can be found about internal control in http://www.coso.org/ or other internationally accepted organizations’ websites. 7. De conformidad con la página 121, párrafo 3.198, hay dos tipos diferentes de preferencias nacionales permitidas actualmente por la PPL. En primer lugar, si el valor del contrato es inferior al valor de umbral la entidad contratante puede limitar la participación en el procedimiento de contratación a los proveedores o contratistas nacionales únicamente. En segundo lugar, independientemente del valor del contrato, ya sea inferior o superior al valor de umbral, en la contratación de servicios y obras se puede otorgar una ventaja de precios de hasta el 15% a todos los licitadores nacionales y en la contratación de mercancías se puede otorgar una ventaja de precios de hasta el 15% a los licitadores que ofrezcan productos nacionales determinados por el Ministerio de Ciencia, Industria y Tecnología y otras instituciones competentes. En este sentido, podría Turquía explicarnos ¿Dónde se puede encontrar el listado de productos nacionales determinados por el Ministerio de Ciencia, Industrias y Tecnología y otras instituciones, de los productos que pueden acceder a la ventaja de precios de hasta el 15%? Turkey’s Answer: According to the Public Procurement Law, all SMEs and large scaled enterprises that obtained “Certificate of Domestic Product” have up to 15% price advantage in public procurement. The price advantage is applied to SMEs or large-scaled enterprises via providing evidence that they produce medium/high tech industrial products and that at least 50% of their production is domestic. The list of medium/high tech industrial products is announced by the Ministry of Science, Industry and Technology. The list can be accessed via the following link: http://www2.ihale.gov.tr/duyurular2012/Orta_ve_Yuksek_Teknolojili_Sanayi_Urunleri_Listesi.pdf 8. De conformidad con la página 121, párrafo 3.107, en el ámbito fitosanitario, durante el período objeto de examen, Turquía ha venido aplicando un programa nacional de sanidad vegetal y

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mejorando las actividades de cuarentena fitosanitaria y pasaporte fitosanitario, dicho programa nacional de sanidad vegetal incluye la vigilancia de plagas y enfermedades en todo el país mediante estudios basados en los riesgos y se centra en promover la gestión integral de plagas. Las actividades de gestión de plagas se realizan de conformidad con los principios de la gestión integral de plagas, que incluyen sistemas de alerta temprana y el control biológico. Otros componentes importantes del programa nacional de sanidad vegetal son el establecimiento de zonas libres de plagas, las actividades de erradicación, la formación de agricultores y la emisión de certificados fitosanitarios. En este contexto, podría Turquía indicarnos ¿Para qué plagas se han realizado estudios sobre áreas libres? y ¿Dentro de vigilancia fitosanitaria, existe un programa específico que realice control en especies de moscas de la fruta? Turkey’s Answer: In Turkey, surveys on harmful organisms that have not so far been observed are carried out in all the 81 provinces. Additionally, surveys on 17 harmful organisms, presence of which is unknown, are also being continued in provinces with such hosts. Since 2014, work on disease free areas from 11 harmful organisms has also been carried out, including Mediterranean fruit fly. There is an ongoing Project of disease free areas in Bursa province regarding black fig production sites. Also in 2015, a pilot project was executed in the Mediterranean coastal region for an effectived Mediterranean fruit fly control.

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MALAYSIA

SECRETARIAT REPORT 1. Para 4.136 In 2013, Turkey passed new legislation on Healthcare Public-Private Partnerships (PPP), replacing earlier legislation, in which improvements were made in bringing legal certainty and reducing burdens and risks to the private firms.

The PPP involves the collaboration of the public and private sectors to provide public services usually provided by the State, and in this case for the healthcare sector. Under the PPP build-lease-transfer model, 34 health campuses or city hospitals are due to be built with the investment of the private sector and then subsequently leased by the Ministry of Health. As of 2015, there were 20 projects being developed. The PPP legislation encourages investment and requires that at least 20% of the medical equipment used in PPP healthcare facilities be locally produced. QUESTION Malaysia would like to understand how the local content requirements stipulated under the PPP Legislation are in line with various WTO Agreements specifically with the TRIMs Agreement. Turkey’s Answer: Healthcare Public-Private Partnerships (PPPs) are essential to renovate health infrastructure and to provide high quality and affordable health services to all citizens in Turkey. Moreover, such PPPs intend to supply health services which are under the responsibility of the state. Therefore, PPPs actually constitute procurement by the Turkish government to supply health services to its people. In this context, as Turkey is not a party to the WTO GPA, the PPP legislation does not violate any of the WTO obligations of Turkey. 2. Para 4.172 In February 2014 the law was amended to broaden the scope of illegal internet content and regulate the protection of national security and public order, thus considered an exception within Article 10 of European Convention on Human Rights and Article 22 of Turkish Constitution relating to freedom of communication. Pursuant to the law, internet content considered breaching people's private life is deemed illegal and internet providers are required to block such sites within four hours of notification. The access-blocking and/or content-removing decisions shall be realized by a judge or Telecommunications Presidency upon order of the Prime Ministry or relevant Ministries where delay is prejudicial. Prejudicial decisions shall be submitted to penal courts with judge's approval within 24 hours. QUESTION Appreciate if Turkey could provide further clarification on major changes undertaken under the amendment.

Turkey’s Answer: With the new amendments, violations of personal rights via internet (especially right to privacy) are regulated. Furthermore, with the aim of protecting national security and public order, right to life and protection of life and property, protection of public health, prevention of committing crime, access blockage and/or content removing shall be realized by Courts or Telecommunications Presidency upon the order of the Prime Ministry or relevant Ministries where delay is prejudicial. Internet service providers shall realize the order of access blockage at the latest in 4 hours. Access blockage and/or content removing decisions given by Presidency upon the request of the Prime Ministry or relevant Ministries shall be submitted to penal courts for a peace judge’s approval. Judge shall profess its decision within 48 hours. The amendments can be summarized as follows: 1. Conviction for a crime by a prison sentence turned into fine (penalty). 2. The decision of blocking access can be given for a certain period instead of an unlimited period.

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3. Violations of personal rights via internet (especially for violation of private life) are resolved within a very short period via moderate measures. 4. As a priority, the decision of access blockage provide a URL-based blocking in which the violation occurred instead of the blockage of the whole website. 5. Studies on ensuring a safe and conscious use of internet are determined. 3. Para 4.220 and 4.224 Turkey's wholesale and retail sectors are regulated by several laws, mainly the new Law on Regulation of Retail Trade 129, the E-Commerce Law 130, the Commercial Code (Section 3.3.1.1) and the Law on the Protection of Competition 131 which applies to the wholesale and retail sector in the same way as it does to other sectors (Section 3.3.3.2).

The Law on Regulating Electronic Commerce and its implementing regulations 136 provide regulations on general information liability for a commercial activity; commercial communication and basic regulations such as prior consent and the right of refusal (unsubscribe mechanism) related to commercial electronic messages; the rules that will be applied on the contracts made by means of electronic devices; information that needs to be provided before the contract or during the order; and other issues about the intermediary service providers providing the platform for electronic commerce. QUESTION Malaysia would like to request for more information on the effects of the new laws on foreign participation in distribution services sector. Turkey’s Answer: The Turkish Commercial Code makes no distinction between local and foreign natural/legal persons, in terms of company establishing or participation in a company. Besides, the Law on Regulation of Retail Trade and the Law on Regulating Electronic Commerce do not require any additional obligation for foreign investors different from domestic ones in distribution services sector. 4. Para 4.221 In January 2015, the Government enacted the Law on Regulation of Retail Trade (Retail Trade Law), which applies to large shops, chain stores, retail dealers, franchises, as well as tradesmen and craftsmen. These retailers provide a broad range of household goods and services. The law also applies to their suppliers and producers, retail outlets, including shopping malls. Implementing regulations are yet to be published and enforced. According to the authorities, since September 2015, a draft regulation for shopping malls has been under review by the public. QUESTION Appreciate if Turkey could share the main elements of the new law as well as when it is expected to be approved and implemented? Turkey’s Answer: - Main goals of the Law on Regulation of Retail Trade which came into force as of 14 January 2015 are facilitating opening and start-up processes of retailers, ensuring a business environment which is based on efficient and sustainable competition conditions, protection of consumers, ensuring balanced growth and development of the retail business and regulating activities of retailers and their relations between manufacturers, suppliers and consumers. As a secondary legislation of the Law, Regulation on Shopping Centres came into force as of 26 February 2016 and it aims to regulate qualifications and start-up processes of shopping centres, rules regarding allocated areas to craftsmen and artisans and common use areas created in shopping centres. Regulation on Rules and Principles on Retail Trade and Regulation on Council of Retailers have been under review by the public since February 2016 and are expected to be implemented by the end of 2016.

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5. Para 2.70 There have been no major changes to the FZ regime in Turkey during the review period. During 2011-14, the annual trade volume of FZs remained relatively flat, with US$22.6 billion in trade volume in 2011, climbing to US$23.2 billion in 2013, then falling slightly to US$22.4 billion in 201448 (Table 2.8). Thus, trade through FZs was approximately 10% of Turkey's 2014 imports. Trade inflows into the FZs are mainly from the EU, with 35% of total 2014 inflows, and outflows are mainly to the Turkish market, 37% of 2014 outflows, thus the zones have a significant import processing component. QUESTION

i. Is there any limitation for FZ companies/industries to sell to Turkish market or duties/taxes to be paid when entering Turkish market (whether it is finished/semi-finished products)?

Turkey’s Answer: There is no legal limitation for FZ companies regarding sales to the Turkish market. However, as FZs are considered to be outside of the customs territory, import tax is applied when entering the domestic market. Also, since one of the purposes of the establishment of FZs is to encourage international trade, goods that are sold from FZs to Turkey are subject to a fee equivalent to 0.9 percent of the FOB value of goods. This fee is deposited in advance to a special account under the government budget.

ii. Are there any tax exemptions granted to FZ companies/industries selling within Turkish market?

Turkey’s Answer: Until the end of the taxation year, including the date Turkey becomes a full member of the European Union, earnings of FZ manufacturers generated through the sales of the goods they produced in FZs are exempted from income or corporate taxes. This exemption is regardless of where the products are sold. Therefore, there is no exclusive tax exemption for companies that sell to the domestic market.

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MEXICO Preguntas de México para el sexto examen de las Políticas Comerciales de Turquía a llevarse a cabo del martes 15 de marzo al jueves 17 de marzo de 2016. Informe de la República de Turquía (WT/TPR/G/331) Preguntas 21 a 23. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.1 Política comercial multilateral; 3.1.1 Programa de Doha para el Desarrollo: Página 8, párrafo 3.9. Durante los preparativos de la Décima Conferencia Ministerial de la OMC, celebrada en Nairobi, Turquía sostuvo que la credibilidad de la OMC y, en particular, el futuro de su función de negociación dependen del logro de resultados equitativos y significativos que beneficien a todos. En ese entendimiento, Turquía reafirmó su compromiso de continuar las negociaciones sobre las cuestiones pendientes en el marco de las anteriores Decisiones y Declaraciones Ministeriales, así como de las Decisiones del Consejo General. México pregunta 21: Según la decisión Ministerial de Nairobi, los países Miembros en desarrollo (PED) deberán eliminar las subvenciones a la exportación consignadas en sus listas de compromisos para fines del año 2018. México quisiera saber si Turquía va a eliminar en su totalidad los subvenciones a las exportaciones de bienes agroalimentarios. Turkey’s Answer: Turkey has acted within the sipirit of Bali Decision and will be following the same path with regards to Nairobi Package. In the mean time as a devoloping country, Turkey will continue to benefit from export subsidies within the time limits and conditions set out in the Nairobi Ministerial Deceision. México pregunta 22: México quisiera conocer la visión de Turquía sobre los mecanismos de ayuda interna (subvenciones, financiamiento, créditos y su reembolso, tipos de productos beneficiarios y su destino) con respecto a las exportaciones del sector agrícola. Turkey’s Answer: The agricultural sector in Turkey historically has been the largest employer and one of the major contributors to the country’s GDP. Although agriculture’share in employment and its contribution to GDP have declined in recent years, and that Turkey’s agricultural sector, along with the support policies, has undergone many changes over the last two decades, the principal objectives have changed little over time. As defined in the 10th Development Plan (2014-2018), the strategic objectives of agricultural policies in Turkey include developing a globally competitive and environmentally friendly agricultural sector and providing suffcient and balanced nutrition to population. In order to be more responsive to the objectives set by the 10th Development Plan, as well as to achieve strategic goals as enshrined by the 2013-2017 Strategic Plan in which five strategic areas are defined, including agricultural infrastructure and rural development, Turkey has a number of tools to support its agricultural sector. Policy tools of agricultural support in Turkey include deficiency payments, compensatory payments, livestock support (for fodder crops, artificial, insemination, milk premiums, risk-free livestock regions, bee-keeping and fisheries), support for crop insurance, rural development support and environmental set-aside. Turkey also has the right to implement export subsisidies to a number of agricultural commodities, in line with her WTO commitments. México pregunta 23: México quisiera conocer también la visión de Turquía respecto del Proyecto de modalidades para la Agricultura (TN/AG/W/4/Rev.4) que contiene fórmulas para reducir los aranceles y las subvenciones causantes de distorsión del comercio. Turkey’s Answer: We would like to thank Mexico for the question which extends Turkey an opportunity to once more explain her positioning towards the approach reflected in the Draft Agricultural Modalities Text (TN/AG/W/4/Rev.4). As a developing country in which agriculture has always been one of the dominant sectors in the overall economic structure, Turkey has long been arguing that a cautious market opening for

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agricultural products is needed to balance trade interests with non-trade ones. On the grounds of the fact that the results of the WTO Agricultural Negotiations would be highly critical for all developing countries, not only economically but also socially, Turkey strived for an extension of additional flexibilities in the WTO Agricultural Negotiations for developing and the least developed countries so as to sustain agricultural production without possible negative impacts of liberalization in the years to come. Speciafically, as regards to market access, as tariffs are the only instruments to sustain agricultural production in Turkey, a gradual liberalization process and some complementary instruments to minimize the possible negative impacts of liberalization have been sought. In that sense, an utmost importance has been attached to the flexibilities to be extended to developing countries, including Special Products (SP) and Special Safeguard Mechanism (SSM). Additionally, on domestic supports, what Turkey strongly voiced out in the run up to Rev4 Text and onwards, was the elimination of trade distorting supports that lead unfair competition in the world agricultural markets within a structure wherein complemantary S&D Treatment be defined for developing and the least developed countries. In that sense, as expressed on many occasions, Turkey was in principle supportive of the Rev4 text, on the basis of the above mentioned considerations with rather limited concerns on particular provisions. Pregunta 24. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.3 Relaciones Turquía-EU:

Página 10, párrafo 3.24. En noviembre de 2015, se habían comenzado a negociar 14 capítulos, uno de los cuales se ha suspendido provisionalmente. Para Turquía, la adhesión a la UE es un objetivo estratégico. Turquía está resuelta a concluir el proceso de adhesión a la UE, así como el programa de reforma que conlleva. A este respecto, el 18 de septiembre de 2014 adoptó la nueva "Estrategia para la UE" con el fin de acelerar el proceso de adhesión. México pregunta 24: De ser posible, Turquía podría proporcionar información más detallada respecto a su a “Estrategia para la UE”. ¿Qué tipo de medidas o acciones se contemplan en esta estrategia? Turkey’s Answer: The new “EU Strategy” mainly aims at achieving the EU standards in all areas through an accelerated reform process, determining the priority issues related to the negotiation chapters, and implementing a powerful communication plan that features the significance and potential of the Turkey-EU cooperation. In this regard, the EU Strategy consists of three different parts. Firstly, “Political Reform Process” pillar is based on advancing the reforms of the last thirteen years in rule of law, democratization, human rights, civilization, freedom and security, as well as consolidating related gains. Secondly, “Socio-economic Transformation in the Accession Process” pillar of the strategy addresses Turkey's priorities in continuing and enhancing socio-economic change and identifies the legislation to be harmonized in addition to the areas of action required to improve administrative structures during proper implementation. Turkey's EU Strategy will be based on a socio-economic transformation, which is the “sine qua non” of a powerful democracy. Lastly, EU Communication Strategy pillar is prepared to ensure an accurate picture of Turkey and to increase domestic and external support for Turkey's EU accession process. The EU Communication Strategy has two main components; Strategy for Turkey and Strategy for the EU. The Communication Strategy for Turkey aims to increase public support to reforms by strengthening their conviction that the EU accession process is a modernization and democratization project which will promote living standards in all areas. On the other side, the Communication Strategy for the EU aims to provide facts on Turkey to help shape a more accurate perception in the EU public opinion.

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Preguntas 25 y 26. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3. 3 Relaciones Turquía-EU: Página 10, párrafo 3.28. Sin embargo, se ha hecho necesario revisar y actualizar la Unión Aduanera. Esta Unión se había concebido como un paso preliminar previo al ingreso de Turquía en la UE como miembro de pleno derecho; sin embargo, al prolongarse el proceso de adhesión, la estructura asimétrica de la Unión Aduanera ha comenzado a causar graves problemas a Turquía. México pregunta 25: ¿Podría Turquía puntualizar si actualmente se encuentra en un proceso de renegociación de la Unión Aduanera con la Unión Europea? Turkey’s Answer: Turkey and EU started a dialogue in January 2014 with a view to improving the structure of the Customs Union. The parties have compromised negotiating the establishment of an effective consultation and decision-making mechanism, simultaneously concluding FTAs and extending the scope of the Customs Union to new areas, including agriculture, services and public procurement. It is expected that the negotiations will be initiated in the last quarter of 2016. México pregunta 26: ¿Será posible que Turquía pudiera ejemplificar qué tipo de problemas le ha causado la estructura asimétrica de la Unión Aduanera, si ha tenido impacto en sectores específicos y cuáles? Turkey’s Answer: The asymmetric structure that has been mentioned in the Government Report does not refer to an asymmetry in the sectors or the product groups. It is rather an asymmetry in the decision making processes of EU that has an implication on the functioning of the Turkey-EU Customs Union. While Turkey has committed to comply with the EU legislation with respect to Customs Union, it cannot take part in the legislation making process in this area. The procedures regarding the consultation and decision-making mechanisms envisaged within the Customs Union by the Association Council Decision are not being implemented effectively. Preguntas 27 y 28. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.3 Relaciones Turquía-EU: 3.3.1 Acuerdos de Libre Comercio y Preferenciales: Página 11, párrafo 3.31. La Unión Aduanera entre Turquía y la UE constituye el fundamento jurídico de los acuerdos de libre comercio (ALC) y los regímenes preferenciales autónomos de Turquía. En virtud de la Unión Aduanera, Turquía armonizará su política comercial con la política comercial común de la UE. El régimen de comercio preferencial, junto con el arancel aduanero común, constituye la parte más importante de la política comercial de Turquía aplicada a terceros países. México pregunta 27: ¿Podría Turquía aclarar si el fundamento jurídico al que se refiere el párrafo anterior también se extiende aún para aquellos productos que no se encuentren contemplados dentro de su Unión Aduanera con la UE y, en su caso, la manera en que estos productos son acordados o contemplados dentro de los ALC negociados por Turquía? Turkey’s Answer: Turkey-EU Customs Union (CU) covers industrial and processed agricultural products. Although Ankara Agreement foresaw the gradual establishment of a Customs Union including both agricultural and industrial products, the Parties have agreed on a separate preferential arrangement for agricultural products. Also, the iron and steel products that are covered by the Turkey-ECSC Free Trade Agreement are not within the scope of Turkey-EU CU. So, the industrial products are included within the scope of the FTAs with different timetables for the elimination of the customs duties depending on the sensitivity of that specific industry. For the agricultural products, Turkey does not have any obligation with respect to the Customs Union Decision. In Turkey’s FTAs, the agricultural products are classified under different categories like tariff rate quota, full elimination, reduced duty or exclusion reflecting the sensitivity of the Turkey’s agricultural sector which is a similar approach followed in many of the FTAs by other countries. México pregunta 28: ¿Podría Turquía explicar si dentro de los ALC puede negociar / acordar algún esquema de flexibilidad o excepciones específicas a su Unión Aduanera con la UE, considerando sectores sensibles de Turquía frente a terceros países socios?

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Turkey’s Answer: Turkey negotiates mutually advantageous FTAs in line with its Customs Union (CU) commitments. In terms of industrial products, Turkey follows the approach of the EU in its FTAs by providing full elimination of customs duties either at the entry into force of the Agreement or after a transitional period depending on the sensitivity of the sector. It is important to note that concerning industrial goods, which are covered by the CU, Turkey’s average applied MFN rates are already at a low level of 5.4%. So, industrial goods are relatively less sensitive for Turkey when compared with agricultural products. Agricultural products do not fall within the scope of the Customs Union. In agricultural goods, Turkey’s average applied MFN rates are 42.2%. Thus, for the agricultural products, Turkey is not bound with the concessions provided by the EU for a certain FTA partner and negotiates agreements on the basis of its own sensitivities. Pregunta 29. WT/TPR/G/331 • Turquía; Informe de la República de Turquía; 3 POLÍTICA COMERCIAL; 3.3 Relaciones Turquía-EU; 3.3.1 Acuerdos de Libre Comercio y Preferenciales; 3.3.1.3 Acuerdos de Libre Comercio en Negociación:

Página 13, párrafo 3.53. Turquía ha emprendido iniciativas para entablar negociaciones con 11 países/bloques de países: los Estados Unidos de América, el Canadá, Tailandia, la India, Indonesia, Viet Nam, países de América Central, otros países del ACP, Argelia, Sudáfrica y el Pakistán. México pregunta 29: México quisiera conocer las razones por las cuales se omitió esta negociación. Turkey’s Answer: This list covers only the countries, with which Turkey has launched initiatives to start FTA negotiations but not the official negotiations. Turkey lists Mexico, among the countries that it has officially started FTA negotiations. Along with Mexico, the other ongoing negotiations of Turkey are with Japan, Peru, Ecuador, Colombia, Ukraine, Cameroon, Democratic Republic of the Congo, Gulf Cooperation Council, Libya, Mercosur, and Seychelles. Informe de la Secretaría de la OMC (WT/TPR/S/331) Pregunta 30. WT/TPR/S/331 • Turquía; Informe de la Secretaría; RESUMEN: Página 12, párrafo 8. Las medidas comerciales correctivas siguen siendo una herramienta de política importante para Turquía, ya que ese país sigue recurriendo con frecuencia a las medidas de salvaguardia y las medidas antidumping de la OMC. Desde 2012, Turquía ha iniciado cuatro investigaciones en materia de salvaguardias y ha prorrogado medidas de salvaguardia en ocho ocasiones. En lo que se refiere a las medidas antidumping, Turquía está entre los 10 Miembros de la OMC que más recurren a esas medidas, y desde 2012 ha habido mucha actividad, ya que se han iniciado 25 investigaciones y se han impuesto 14 medidas. Durante el período examinado la legislación turca en materia de salvaguardias ha sido objeto de algunas modificaciones relativas al período de investigación. México pregunta 30: México quisiera saber si Turquía considera introducir próximamente mejoras de transparencia en materia de procedimientos y normatividades internas para agilizar el desahogo de estos temas. Turkey’s Answer: Turkey is of the view that the rules to ensure transparency during the proceedings in dumping and countervailing measures investigations are fundamental to guarantee the indispensable right of defending interest. Turkey would like to highlight that its internal legislation is in full conformity with the provisions of the WTO AD Agreement and the SCM Agreement that focus on transparency and due process. Furthermore, Turkey attaches great importance to follow coherent administrative patterns to ensure that transparency requirements are met and that all interested parties enjoy their right of voicing their interests during the proceedings. Turkey is aware of the fact that safeguard measures are designed for addressing exceptional trade circumstances. Turkey also acknowledges the importance of transparency in procedures. But it should also be noted that Turkey is not a frequent user of safeguard measures. Since 2012, Turkey has initiated 4 safeguard investigations but has imposed only 2 measures. Turkey currently has 3 safeguard measures in force.

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Pregunta 31. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 2 RÉGIMEN DE COMERCIO E INVERSIÓN; 2.3 Acuerdos y arreglos comerciales; 2.3.1 Participación en la OMC: Página 33, párrafo 2.17. Turquía, como parte contratante del GATT desde 1951, es Miembro de la OMC desde 1996 y participa en muchos aspectos de la labor de la Organización. Según las autoridades, Turquía está comprometida con la labor y las negociaciones de la OMC y apoya plenamente la liberalización a nivel multilateral como parte de su política comercial. En el período objeto de examen, Turquía formuló propuestas en las negociaciones de Doha y participó en diferencias en el marco de la OMC, así como en su labor ordinaria y sus Comités. Además, Turquía es parte en el Acuerdo sobre Tecnología de la Información (ATI) y tiene la condición de observador en el Acuerdo sobre Contratación Pública y el Acuerdo sobre el Comercio de Aeronaves Civiles. México pregunta 31: México quisiera saber cuál es la posición de Turquía ante la iniciativa de la OMC para la eliminación de los obstáculos al comercio de bienes y servicios ambientales (Acuerdo sobre Bienes Ambientales) y si tiene previsto integrarse en el corto plazo al acuerdo. Turkey’s Answer: Turkey would like to quote section 3.1.2 Plurilateral Negotiations under the WTO 3.1.2.1 Environmental Goods Agreement (EGA) of the Government Report p.8. “3.16 Turkey has officially taken part in the negotiations on EGA, with the aim of eliminating tariffs on a list of products agreed as environmental goods, since the 5th Round of talks that has been held in March 2015.Turkey believes that EGA will have a positive impact that will go beyond just export and import liberalization in environmental goods. It will also facilitate the process for renewable energy investments, technology transfer and capacity building. 3.17. Besides, Turkey believes that an agreement on liberalizing trade in environmental goods will contribute to our efforts in meeting the challenges of climate change, reaching the sustainable development goals recently accepted, as well as strengthening the multilateral trading system as a whole.” Pregunta 32. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 2 RÉGIMEN DE COMERCIO E INVERSIÓN; 2.3 Acuerdos y Arreglos Comerciales; 2.3.2 Acuerdos Regionales y Preferenciales; 2.3.2.2 Acuerdos Comerciales Recíprocos: Página 36, párrafo 2.32. Turquía mantiene un programa ambicioso de ALC, con varios ya concluidos o en curso de negociación. En diciembre de 2015, había completado las negociaciones de ALC con Ghana, las Islas Feroe, Kosovo, el Líbano, la República de Moldavia y Singapur. Todos estos acuerdos estaban en curso de ratificación, excepto los de Ghana y Singapur. También se están negociando ALC con otros 12 interlocutores: el Camerún, Colombia, el Consejo de Cooperación del Golfo, el Ecuador, el Japón, Libia, el Mercosur, México, el Perú, la República Democrática del Congo, Seychelles y Ucrania. Turquía también ha dado pasos para iniciar negociaciones con otros países ACP, Argelia, el Canadá, los Estados Unidos, la India, Indonesia, países centroamericanos, Sudáfrica, Tailandia y Vietnam. México pregunta 32: México quisiera conocer las razones de la discrepancia entre ambos documentos, el documento WT/TPR/S/331 y el documento WT/TPR/G/331. Turkey’s Answer: To avoid repetition, Turkey had opted for mentioning only the initiatives to launch negotiations in the Government Report. Pregunta 33. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.1 Procedimientos y Requisitos Aduaneros. Página 50, párrafo 3.2. Como se indica en el informe anterior de Turquía, el modelo de la declaración aduanera turca se armonizó con el documento administrativo único (SAD) utilizado en la UE para los procedimientos aduaneros. BILGE, un paquete de programas informáticos, permite realizar las formalidades aduaneras en tiempo real. El uso del sistema BILGE es obligatorio y abarca todos los aspectos de las formalidades aduaneras. Además, el sistema BILGE fomenta la cooperación entre el Ministerio de Aduanas y Comercio y otras instituciones. Por ejemplo, en 2014 se puso en marcha el Proyecto de Ventanilla Única, que permite a los comerciantes presentar toda la documentación requerida en un único lugar y/o ante una única entidad. Los documentos

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exigidos por las administraciones aduaneras se pueden presentar electrónicamente a través de BILGE. En la actualidad, hay 13 instituciones interconectadas a través del Proyecto de Ventanilla Única. México pregunta 33: Se menciona que la Ventanilla Única permite presentar toda la documentación requerida en un único lugar y/o ante una única entidad. Al respecto, nos gustaría que Turquía nos aclare si el servicio que se ofrece a través de la Ventanilla Única se refiere solamente a la presentación y envío de documentos de manera electrónica, o también incluye la resolución de trámites y procedimientos responsabilidad de las 13 instituciones interconectadas. Turkey’s Answer: Single Window is designed in two phases, as the e-document and the e-application phases. In the “e-document” phase, the economic operator applies to the related institution for permission and license. Data on the permission/license etc. is transmitted to the system and the economic operator is provided with an ID number. The economic operator declares this number in its customs declaration and the data is checked automatically by the system. E-document phase is in force since 14/01/2014. Pregunta 34. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.1 Procedimientos y Requisitos Aduaneros.

Página 50, párrafo 3.3. Desde el 1º de enero de 2012 en Turquía se utiliza una nueva declaración abreviada previa a la llegada. La información sobre las mercancías y el vehículo de transporte debe presentarse electrónicamente antes de la llegada a la oficina de aduanas para que pueda realizarse, con fines de seguridad e inocuidad, un análisis de riesgo de la carga que vaya a ingresar en el territorio aduanero de Turquía. Salvo que la carga esté en tránsito, y no efectúe ninguna parada, a través de las aguas territoriales o el espacio aéreo del territorio aduanero turco, se exige una declaración abreviada de entrada para todas las mercancías importadas en el territorio aduanero turco. México pregunta 34: Nos gustaría saber si el paquete de programas BILGE también contempla realizar las declaraciones abreviadas de manera electrónica. Turkey’s Answer: BILGE system, including summary declaration, tariff, customs declaration (for all customs regimes), accounting, reference tables, Express Cargo, TIR EPD and NCTS modules are used in all customs administrations to enable an efficient and rapid control. Pregunta 35. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.1 Procedimientos y Requisitos Aduaneros. Página 52, párrafo 3.10. Como se establece en la Ley de Aduanas, los operadores económicos pueden solicitar resoluciones anticipadas (información arancelaria vinculante o IAV) para la determinación de los derechos de importación y exportación, para el cálculo de devoluciones de derechos y de pagos de importaciones y exportaciones en el contexto de la política agrícola de Turquía, o para el uso de certificados en los que figure información sobre los aranceles o el origen, presentados a efectos del despacho de aduana. Las resoluciones son expedidas por el Ministerio de Aduanas y Comercio y por las direcciones de aduanas autorizadas, y pueden ser válidas seis años, a condición de que la información presentada por el solicitante sea exacta y completa y de que las mercancías declaradas se correspondan exactamente con la IAV. Las resoluciones dejan de ser válidas cuando se introducen cambios en la nomenclatura. En ese caso, se notifica al titular de la IAV. México pregunta 35: Respecto a las resoluciones anticipadas, ¿es posible que Turquía precise cuál es el tiempo estimado que requiere la autoridad aduanera para emitir una resolución anticipada ya sea respecto de la determinación de derechos de importación y exportación o del origen de la mercancía?

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Turkey’s Answer: Although the legal basis of Advance Ruling on Origin (or Binding Origin Information) exists, no advance ruling has been issued up until now. There is not an estimated time for issuing Binding Origin Information. Preguntas 36 y 37. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.1 Procedimientos y Requisitos Aduaneros. Página 53, párrafo 3.15. Algunas mercancías sólo se pueden importar a través de oficinas de aduanas especializadas. La finalidad de estas prácticas aduaneras es lograr que las oficinas de aduanas sean más disciplinadas; mejorar los procedimientos aduaneros para determinadas mercancías y canalizar esas mercancías hacia las oficinas de aduanas especializadas; velar por el cumplimiento de las normas; y controlar efectivamente las cuestiones relacionadas con los aranceles, la valoración y el origen. Por ejemplo, el despacho de los vehículos automóviles, tractores, motocicletas y sus recambios y accesorios debe efectuarse en las oficinas de Yesilkoy, Gebze, Izmit, Esmirna, Mersin, Derince o Giresun; para los productores de vehículos automóviles, también están autorizadas las oficinas de Mudanya, Gemlik, Esenboga o Adana; los productos textiles deben pasar por las oficinas de Aksaray, Ankara, AHL Kargo, la zona franca Europa, Denizli, G.Antep, Aeropuerto de G.Antep, Gemlik, Giresun, Halkalı, Iskenderun, Esmirna, Kayseri, Mersin o Trakya; los abonos deben importarse a través de las oficinas de Antalya, Bandırma, Gemlik, Kapıkule, Tekirdag, Iskenderun, Ambarlı, Haydarpas a, Aliaga, Dikili, Esmirna, Derince, Mersin, Samsun, Ünye, Ankara, Mardin o Yumurtalık Ser. Böl; y las importaciones de algunos disolventes y productos petroquímicos deben despacharse en las oficinas de Ankara, Mersin, Adana, Eregli (región de Karadeniz), Erenköy, Beylikdüzü Akaryakıt, Esmirna, Aliaga, Tekirdag, Bursa, Gemlik o Gaziantep. Las importaciones de mercancías para el sector de la alimentación deben despacharse en las oficinas de Ankara, Aliaga, Esmirna, Adana, Bursa, Gemlik, Gaziantep, Tekirdag o el complejo petroquímico de Körfez. México pregunta 36: ¿Podría Turquía explicar cuáles son los criterios que se utilizan para designar las oficinas de aduanas especializadas correspondientes para importar determinados tipos de mercancías? Turkey’s Answer: The goods which will be subject to specialized customs application on import are determined on the basis of specific criteria including the followings;

- Specific features of goods and technical capacity of customs offices (for instance; goods subject to radiation controls which require specific equipment and/or personnel)

- Location and allocation of customs offices, - Smuggling risks, - International commitments (such as controls for Ozone Depleting Substances).

México pregunta 37: Nos gustaría conocer el grado de especialización y tecnificación con las que cuentan estas oficinas aduaneras especializadas a fin de que tengan la capacidad necesaria para desaduanar las mercancías que se les designen. De no ser así, ¿podría explicar con mayor profundidad en qué consiste la especialización o disciplina de estas oficinas aduaneras? Turkey’s Answer: Goods such as metal waste, petroleum products, motor vehicles and their spare parts which require special customs control procedures and/or hardware (for instance radiation detection etc.) are subject to specialized customs application. Such offices are especially designed with appropriate equipment and/or personnel in order to conduct the control process of such goods. Preguntas 38 a 40. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.2 Facilitación del Comercio: Página 53, párrafo 3.19. A fin de facilitar el comercio en los puestos fronterizos terrestres de Turquía, el Ministerio de Aduanas y Comercio ha puesto en marcha un proyecto piloto de ventanilla única en el puesto terrestre de Kapikule, en la frontera entre Bulgaria y Turquía. Según las autoridades, la finalidad de este proyecto es reducir las demoras en la tramitación de la documentación aduanera gracias a la implementación coordinada y sincronizada de todos los procedimientos relativos a la prestación de servicios aduaneros a los pasajeros, vehículos y conductores que transporten carga.

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México pregunta 38: Nos gustaría saber si se tiene prevista alguna fecha en la que este programa opere de forma definitiva. Turkey’s Answer: This project is planned to be completed by 2017. México pregunta 39: ¿Podría especificar si dentro de este proyecto se están emitiendo y aceptando Certificados de Origen de manera electrónica? Turkey’s Answer: Issuing and accepting electronic certificates of origin within this Project will be considered in line with the studies regarding data exchange at international level. México pregunta 40: ¿Está contemplado que este proyecto será extensivo a otras aduanas de Turquía? Turkey’s Answer: We envisage that the Pilot Project will be extended to other crossing border points in Turkey, as well. Pregunta 41. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.4 Normas de Origen:

Página 55, párrafo 3.27. En los acuerdos preferenciales de Turquía (véase la sección 2) se establecen normas de origen preferenciales, normalmente basadas en el criterio de obtención total o transformación sustancial, con margen para la acumulación. Turquía forma parte del sistema paneuropeo de acumulación de origen desde el 1o de enero de 1999. Este acuerdo permite utilizar material originario de cualquier país de la zona (UE, AELC y Turquía) para fabricar un producto conservando el origen preferencial. Este sistema de acumulación diagonal se ha hecho extensivo a los siguientes países euromediterráneos: Albania; Argelia; Bosnia y Herzegovina; Egipto; Islas Feroe; Israel; Jordania; Kosovo; Líbano; Macedonia; Marruecos; Montenegro; Palestina; Serbia; Siria (actualmente suspendido); y Túnez. Sin embargo, para que sea posible la acumulación diagonal entre estas partes, las normas de origen deben ser idénticas, lo que se está logrando de forma gradual mediante la incorporación del protocolo euromediterráneo sobre normas de origen en los acuerdos de libre comercio (ALC) que suscriben esos países entre sí.16 El protocolo euromediterráneo sobre normas de origen ha entrado en vigor para Turquía mediante sus ALC con Egipto; Israel; Jordania; Marruecos; Siria; y Túnez. Hay que presentar prueba del origen (certificado de circulación de mercancías EUR.1 y declaración en factura) y en algunos casos el certificado de circulación de mercancías EUR-MED y/o la declaración en factura EUR-MED.17 México pregunta 41: ¿Podría Turquía explicar si existen productos que se encuentren excluidos de esta acumulación diagonal? Turkey’s Answer: There are no products that are excluded from diagonal cumulation applied within the context of the Pan-Euro-Mediterranean Origin Cumulation System. Pregunta 42. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.5 Aranceles; 3.1.5.4 Los demás derechos y cargas:

Página 63, párrafo 3.40. Turquía sigue aplicando un impuesto del Fondo Público para la Vivienda al pescado y los productos del pescado importados comprendidos en los Capítulos 2, 3, 15, 16 y 23 del SA. El gravamen es diferente según la fuente de las importaciones (la UE, los Estados miembros de la AELC u otros países) y va del 0% al 35% ad valorem. Turquía no ha consolidado sus aranceles correspondientes al pescado, pero las importaciones de los Estados miembros de la AELC entran libres de derechos de importación y del gravamen del Fondo Público para la Vivienda en virtud del Acuerdo de Libre Comercio entre Turquía y la AELC. México pregunta 42: Deseamos conocer si en opinión de Turquía este impuesto, que se aplica a los pescados y productos de pescado con tasas diferentes según la fuente de la importación, no se opone a las disposiciones del artículo I del Acuerdo General sobre Aranceles Aduaneros y Comercio (GATT), que dispone que los países Miembros no pueden normalmente establecer discriminaciones entre sus diversos interlocutores comerciales GATT, y que si conceden a un país una ventaja

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especial (por ejemplo, la reducción del tipo arancelario aplicable a uno de sus productos), tienen que hacer lo mismo con todos los demás Miembros. Turkey’s Answer: The MHF levy applied for imported fish and fish products is not differentiated according to the source of import. The preferential treatment for EFTA countries comes from Turkey-EFTA Free Trade Agreement and as well for the EU it comes from the preferential trade regime between EU and Turkey for agricultural products. Pregunta 43. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.1 Medidas que afectan directamente a las importaciones; 3.1.5 Aranceles; 3.1.5.5 Contingentes Arancelarios: Página 63, párrafo 3.41. Turquía no ha consolidado ningún contingente arancelario en su Lista de compromisos arancelarios en el marco de la OMC. Sin embargo, sí mantiene varios contingentes arancelarios, que pueden clasificarse como contingentes arancelarios autónomos, contingentes arancelarios derivados de ALC y contingentes arancelarios para países no miembros de la OMC. En 2015, se mantenían contingentes arancelarios para más de 1,800 líneas arancelarias, que afectaban principalmente a productos agropecuarios (véase la sección 4.1 para una descripción de los contingentes arancelarios aplicables a productos agropecuarios y de la administración de los contingentes arancelarios). Sin embargo, había 10 líneas arancelarias correspondientes a productos industriales de los Capítulos 29, 38, 39, 84, 85 y 94 del Sistema Armonizado para las que se habían establecido contingentes autónomos. Esos contingentes arancelarios prevén que empresas o importadores puedan beneficiarse de un tipo arancelario nulo para una cantidad limitada del producto de que se trate, y se asignan según los métodos de la capacidad de producción o de las importaciones realizadas en períodos anteriores (cuadro 3.5). México pregunta 43: Deseamos conocer si los beneficios de estos contingentes pueden ser para cualquier empresa sea nacional o extranjera que importe, si cumple con los requisitos de capacidad de producción. Turkey’s Answer: Turkey treats all companies set up and operated under Turkish law equally regardless of ownership. Quotas are allocated to companies regardless of their nationalities, only if they that meet the needed criteria. Pregunta 44. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.2 Medidas que afectan directamente las exportaciones; 3.2.5 Financiación, seguro y garantías de las exportaciones: Página 96, párrafo 3.137. El Turk Eximbank es un banco de propiedad estatal y es el único organismo oficial de crédito a la exportación de Turquía. El Banco fue establecido por ley en 1987 y en una Resolución del Consejo de Ministros de ese mismo año se precisaron sus actividades y principios. Esa Resolución se revisó en consonancia con el nuevo Código de Comercio, la legislación bancaria y la evolución de la situación financiera y económica mundial desde la creación del Banco. La nueva Resolución, que entró en vigor en 2013, incluye disposiciones adicionales sobre el alcance, las finanzas y los órganos. En particular, la Resolución dispone la creación de una nueva Asamblea General, conforme al nuevo Código de Comercio; la prestación de servicios de seguro a las filiales en el extranjero de los exportadores turcos; la prestación de apoyo financiero para el registro de marcas de fábrica o de comercio y patentes, y para la adquisición de tecnología; y la participación en actividades de reaseguro y todo tipo de transacciones financieras en los mercados de capitales y derivados. Los objetivos del Banco son aumentar las exportaciones, diversificar las mercancías y los servicios exportados, facilitar el acceso de los productos exportados a nuevos mercados, incrementar la participación de los exportadores en el comercio internacional, fomentar el espíritu emprendedor, prestar apoyo a los exportadores y los contratistas en el extranjero para aumentar su competitividad y prestar apoyo a las inversiones en el extranjero, así como a la producción y la venta de bienes de capital orientados a la exportación. México pregunta 44: Toda vez que el Banco opera principalmente en la concesión de créditos (en efectivo o no) a corto, medio y largo plazo, la concesión de préstamos y garantías internacionales para la financiación de exportaciones y en proyectos en el extranjero de empresas turcas, México quisiera saber si los créditos que concede el Turk Eximbank se podrían “confundir” con mecanismos substitutos de subvención a las exportaciones.

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Turkey’s Answer: Turk Eximbank's identification of financial sustainability as a primary objective is driven mostly by its current and future international obligations to the OECD, WTO and the EU, in which ECAs are expected to at least break-even over time and eliminate all trade subsidy programs. Management believes that it is critical to operate within sound commercial guidelines. Additionally, as Turk Eximbank borrows from international financial markets regularly and its financial soundness affects its borrowing costs, a sound financial structure gains more importance. Furthermore “OECD Arrangement on Officially Supported Export Credits” is applied for credits and export credit insurance whose maturities are more than 2 years. Pregunta 45. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS; 3.3 Marco Empresarial; 3.3.2 Incentivos, ayuda estatal y subvenciones. Página 103, párrafo 3.155. Actualmente no hay en Turquía un único ministerio que se encargue de los incentivos y las subvenciones, sino que cada ministerio tiene sus propios programas con arreglo a su mandato. Así pues, el Ministerio de Alimentación, Agricultura y Ganadería se ocupa de las subvenciones agrícolas; el Ministerio de Economía, de los incentivos a la inversión y la ayuda a la exportación; el KOSGEB, del apoyo a las pymes; y el Ministerio de Ciencia, Industria y Tecnología, de la ayuda para investigación y desarrollo. En Turquía, la política de ayuda estatal se guía por las normas de la OMC y las prescripciones de la UE de conformidad con la Unión Aduanera. México pregunta 45: Según la decisión Ministerial de Nairobi, los países Miembros en desarrollo (PED) deberán eliminar las subvenciones a la exportación consignadas en sus listas de compromisos para fines del año 2018, México quisiera saber si Turquía va a eliminar en su totalidad los subvenciones a las exportaciones de bienes agroalimentarios, sin importar qué entidad los administra. Turkey’s Answer: Turkey has acted with in the sipirit of Bali Decision and will be following the same path with regards to Nairobi Package. In the mean time, as a developing country, Turkey will continue to benefit from the export subsidies within the time limits and conditions as set out in the Nairobi Ministerial Decision. Pregunta 46. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 4 POLÍTICAS COMERCIALES, POR SECTOR; 4.1 Agricultura; 4.1.3 Comercio; 4.1.3.2 Contingentes Arancelarios: Página 135, párrafo 4.11. Turquía no tiene contingentes arancelarios consolidados en su Lista de compromisos arancelarios en el marco de la OMC. No obstante, en el sector agropecuario mantiene varios contingentes arancelarios autónomos y contingentes arancelarios en el marco de acuerdos de libre comercio (para un panorama general de todos los contingentes arancelarios de Turquía, véase la sección 3.1.5.5). México pregunta 46: Quisiéramos asegurar que los mecanismos de administración y asignación de los contingentes arancelarios no le restan transparencia al otorgamiento y utilización de los contingentes. Turkey’s Answer: The procedures and principles related to the administration, application and allocation of the TRQs are determined through the Communiqués published in the Official Journal in a transparent manner. In order to benefit from tariff quotas which are allocated once the relevant Free Trade Agreement enters into force, the applicants need to apply to the Ministry of Economy for an import license, which has to be presented to the competent customs authority at the time of the importation. For autonomous TRQs, the relevant entity needs to apply to the Ministry of Economy for an import license, which has to be presented to the competent customs authority at the time of the importation. Pregunta 47. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 4 POLÍTICAS COMERCIALES, POR SECTOR; 4.2 Manufacturas: Página 151, párrafo 4.52. Turquía es un gran exportador de productos manufacturados, y desde 2011 las exportaciones han superado los niveles anteriores a la crisis de 2008-2009. De 2011 a

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2014, las exportaciones totales de productos industriales aumentaron un 5,1% anual en términos nominales y alcanzaron los 122.000 millones de dólares EE.UU. Los principales sectores industriales exportadores son el de los automóviles, los textiles y prendas de vestir, los productos químicos, la maquinaria, el hierro y el acero, la electrónica y la joyería (gráfico 4.2). Turquía es también un importante importador, fundamentalmente de bienes intermedios, que representan el 73% de las importaciones. A este respecto destacan los productos energéticos, la chatarra, los motores y los grupos moto propulsores para vehículos de motor, los productos químicos, los componentes electrónicos y el algodón y los insumos textiles. México pregunta 47: Deseamos conocer si existen planes de apoyo en los que cualquier empresa, nacional o extranjera, que desee exportar, pueda beneficiarse de los apoyos en estas industrias. Turkey’s Answer: Regarding subsidy programs in effect, please refer to Turkey’s notifications being submitted to the WTO Committee on Subsidies and Countervailing Measures annually. Pregunta 48. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 4 POLÍTICAS COMERCIALES, POR SECTOR; 4.2 Manufacturas; 4.2.2 Textiles y prendas de vestir: Página 157, párrafo 4.71. En los tres últimos decenios, por efecto de la competencia asiática, las empresas turcas se han ido posicionando en un segmento de mayor valor añadido, al pasar de producir y exportar textiles y prendas de vestir de bajo precio y bajo valor añadido a productos fabricados de mayor valor añadido y productos de moda. México pregunta 48: Deseamos conocer si además de estas medidas para posicionarse en segmentos de mayor valor añadido, existe alguna política específica o algún instrumento legal como acuerdo de colaboración con países asiáticos, para mejorar las condiciones futuras de competencia o para evitar problemáticas en el sector textil de Turquía que pudieran desprenderse de la subvaluación de estas mercancías. Turkey’s Answer: There are no specific policies or legal instruments such as cooperation agreements with Asian countries, to improve future conditions of competition or to avoid problems in the textile sector in Turkey. However, Turkey encourages as a whole the transformation of textile, ready-to-wear and leather industries into a structure that can create design, collection and brand and improve producer’s quality on marketing and production stages. Pregunta 49. WT/TPR/S/331 • Turquía; Informe de la Secretaría; 4 POLÍTICAS COMERCIALES, POR SECTOR; 4.2 Manufacturas; 4.2.2 Textiles y prendas de vestir: Página 157, párrafo 4.72. La rama de producción de los textiles y prendas de vestir sigue siendo objeto de una protección relativamente alta, con aranceles consolidados que abarcan el 15,1% de las líneas arancelarias correspondientes a los textiles y el 2,1% de las líneas arancelarias correspondientes a las prendas de vestir. En 2015, el promedio aritmético de los aranceles NMF aplicados a los textiles fue del 6,7%; en el caso de las prendas de vestir, el promedio fue del 11,5%. La Unión Aduanera con la UE, que abarca todos los productos textiles y prendas de vestir, permite a Turquía acceder en régimen de franquicia arancelaria al mercado de la UE (y viceversa). Página 157, párrafo 4.73. El sector de los textiles y las prendas de vestir tiene derecho a beneficiarse de las ayudas del Plan de Incentivos a la Inversión General (exenciones del IVA y de los derechos de aduana de la maquinaria y el equipo importados) y del Plan de Incentivos a la Inversión Regional, que proporciona un abanico de incentivos más amplio que, como sucede en el caso del sector del automóvil, dependen de la región geográfica y de si el proyecto está ubicado o no en una ZIO. El sector de los textiles y las prendas de vestir no se beneficia de otros incentivos a la inversión. México pregunta 49: Deseamos conocer mayores detalles sobre el funcionamiento del Plan de Incentivos a la Inversión General en el sector textil. Adicionalmente, queremos saber si existen apoyos adicionales por parte del gobierno o algún monto económico que se destine al sector textil además de este Plan. Deseamos conocer si para el sector textil aplica el mecanismo de “tax rebate” y cómo funciona. Turkey’s Answer: The support schemes provided by the Investment Incentive Program can be seen in Table 2.5 of the Secretariat Report (page 41). Textile sector can benefit from Regional Scheme or General Scheme of the Program according to the subsector and the investment amount. General Scheme is the least favorable support scheme of the program.

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The investments which are not supported by other schemes of the program can benefit from General Scheme when the investment amount exceeds 1 Million TL for Region 1 and 2 and 500.000 TL for Region 3, 4, 5 and 6. The eligible companies are issued with an Investment Incentive Certificate on which the support scheme and the related support measures are enlisted. As an example, apparel investments can only benefit from General Scheme, which provides VAT Exemption and Customs Duty Exemption. The explanation of these support measures are as follows:

Value Added Tax (VAT) Exemption: Imports and domestic purchases of machinery and equipment within the scope of the investment are exempted from the Value Added Tax for the companies with Investment Incentive Certificate.

Customs Duty Exemption: Imports of the machinery and equipment to be used in the production process shall be subject to Customs Duty exemption for the companies with Investment Incentive Certificate.

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MOROCCO

Rapport du Gouvernement WT/TPR/S/331 3 Politique et pratiques commerciales – analyse par mesure ; 3.1 Mesures visant directement les importations 3.1.3 Évaluation en douane : paragraphe 3.23 page 55 Il est cité que: Durant la période à l'examen, aucune modification n'a été apportée aux dispositions de base de la Turquie relatives à l'évaluation en douane, qui sont énoncées aux articles 23 à 31 de la Loi douanière n° 4458. La valeur transactionnelle est la base première pour la détermination de la valeur en douane. Les douanes turques utilisent la valeur c.a.f. comme valeur transactionnelle. Question: La Turquie pourrait-elle expliquer l’application d’un prix de référence de 75 $US à l’importation de certains produits, notamment les électroménagers (fours électriques 8516600000 et réchauds à gaz 7321119100/7321111100/7321112100)? Turkey’s Answer: Regarding the importation of certain electrical appliances, there is not an application of reference pricing. Rather, those products are subject to surveillance system. Purpose of the import surveillance system is to closely monitor and to collect specific data regarding imported products. In many cases, the surveillance is implemented only to products below a certain c.i.f value in order to make the least effect on other trade.

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THAILAND

QUESTIONS REGARDING THE SECRETARIAT REPORT 2. TRADE AND INVESTMENT REGIME Page 40 (paragraph 2.58) Question 1: Does Turkey plan to consider new favorable support rates for foreign investors who are interested to invest after 31 December 2015? If possible, please provide an update of the new favorable support rates. Turkey’s Answer: Investment Incentive Program, which is equally available for foreign and domestic companies, had provided higher support rates and terms for the investments starting before 31 December 2015. Investments that have started after 31 December 2015 have been benefiting from support measures with usual rates and terms of the program. Page 42 (paragraph 2.63) Question 2: Under Investment Zones that Turkey maintains three types of Zones providing additional incentives or provisions to attract foreign investors, in the case foreign investors invest outside the Investment Zones, can foreign investors be provided any incentives or provisions for their investment? Turkey’s Answer: Both foreign and domestic companies can benefit from the Investment Incentive Program with equal rights all over the country. There is no regional limitation for foreign investors in Turkey. 3. TRADE POLICIES AND PRACTICES BY MEASURE Page 46 (paragraph 3.6) Question 3: What kind of efforts has Turkey undertaken to increase the efficiency of custom procedures such as minimizing the release time or numbers of documents required? Turkey’s Answer: Turkey has a vision of “Employing innovative approaches and practices with a view to turning Turkey into a prominent global trading center where customs services and commercial procedures are rendered in the easiest and safest manner”. Turkish Customs Administrations have been working with modern legislation and EU standards focused on all customs matters to reduce the costs to foreign trade by making procedures more transparent, easier and quicker. It is already fully supported by a professional and well established administration which has aligned itself to the new trends and technologies. There are several tools and measures to increase the efficiency of custom procedures, inter alia: -using risk analysis methods in customs control, -using e-documents instead of paper in customs formalities, -performing post-release controls instead of controls at the time of export/import, -working on the extension of Single Window System, -increasing the implementation of Authorized Economic Operator (AEO) status, -analyzing customs release time to increase the efficiency of customs procedures and sharing those information on the web-site of the Ministry of Customs and Trade -exchanging information with the neighbor countries’ customs. Page 46 (paragraph 3.8) Question 4: What criteria are used by the BILGE System in its risk analyses? Turkey’s Answer: Turkey has been actively improving the system for electronic Risk Analysis (based upon high, medium and low risk scores which recognizes traders’ compliance history e.g. AEO status) in order to target the increasing number of declarations in all customs procedures and to deal with the requirements of the Risk Analysis processes for fiscal, safety and security purposes based on the risk areas such as nature of goods, origin country, mode of transportation and compliance history of the traders, etc.

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As a result of risk analysis and assessment, declarations are directed to red, yellow, blue and green lines. In addition to risk-based controls that are applied deliberately, “random” controls are also conducted at both central and local levels. Page 48 (paragraph 3.18) Question 5: What is Turkey’s practice or treatment of custom clearance for perishable goods Turkey’s Answer: “International Convention on the Simplification and Harmonization of Customs Procedures (known as Revised Kyoto Convention)”, signed in 1999, emphasizes the necessity of prioritizing perishable goods during customs procedures. As a Contracting Party to this Convention, Turkey is taking the necessary measures to implement the Convention properly. According to Article 147 of the Customs Regulation, specific goods including perishable goods may be subject to implementation of simplified procedures without prerequisite of an AEO or Approved Person Status for importers. Page 50 (paragraph 3.30) Question 6: Which main products are categorized as “statutory tariff” which is unbound tariff lines in the WTO framework and placed outside the scope of the Customs Union Decision? Turkey’s Answer: The basic agricultural and processed agricultural products (PAPs) are bound in the WTO framework. The basic agricultural products are not classified within the Customs Union. The PAPs, which are defined according to European Union regulations, are classified within the Custom Union. The fish and fishery products are unbound in WTO framework with few exceptions and are classified outside the scope of the Customs Union. 492 tariff lines with 12-digits exist under this classification. Page 56 (paragraph 3.40) Question 7: Please provide information on where the Mass Housing Fund (MHF) rates applied to products or originating countries could be found, for examples Table charts of ODCs rates levied on specific products and countries. Turkey’s Answer: According to Turkey’s Import Regime, Mass Housing Fund (MHF) rates are applied to processed agricultural products (PAPs) and fish and fishery products originated in any country. The rates and the classification of the countries can be found in details at List #3 of the Import Regime for PAPs and List #4 of the Import Regime for fish and fishery products. Based on that classification, for fish and fishery products, EFTA member states are exempted from MHF rates based on the Free Trade Agreement between Turkey and EFTA states. Besides, based on the Free/Preferential Trade Agreements Turkey had signed, some countries are either exempted from MHF rates or discounted values are applied for some specific tariff lines both for PAPs and fish and fishery products. Page 57 (paragraph 3.1.5.5) According to information provided in Table 3.5, Turkey does apply TRQs to certain industrial products; Question 8: Which categories do these TRQs fall under the description in 3.41? (Autonomous TRQs? Or other TRQs?) Where can detailed information of the 1,800 TRQs applied tariff lines be found? (list of products, quantity, in-out quota rates) Turkey’s Answer: Turkey applies autonomous tariff quotas within the scope and context of the negotiations with the European Commission under Economic Tariff Questions Group (ETQG). The autonomous tariff quotas have been made available for raw material and semi-finished industrial products which are not produced either totally or sufficiently in the EU and Turkey. Due to current legal system in Turkey; respectively, a cabinet decision and a communiqué related to application methods and grounds are published in the official gazette. Question 9: Under Turkey Tariff-rate quotas system what are “Autonomous” TRQs? How are Autonomous TRQs applied? (as stated in 3.41 as it is applied to industrialists or importers based on the production capacity or past performance methods)

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Turkey’s Answer: Autonomous TRQ refers to the amount or value of imports provided for any country without distinction of origin or provenance for a specific time period for specific tariff line and/or tariff lines, with reduction or exemption in customs duty and / or other charges. The procedures and principles related to the administration, application and allocation of the TRQs are determined through the Communiqués published in the Official Journal. Currently, autonomous TRQs for wheat, maize, rice and bovine meat exist. Autonomous TRQs are generally allocated to the marketing boards in charge of domestic market regulation. Question 10: What are the procedures to import this certain type of products? Any specific approval to import in order to apply in-quota rate? Turkey’s Answer: The procedures and principles related to the administration, application and allocation of the TRQs are determined through the Communiqués published in the Official Journal in a transparent manner. In order to benefit from tariff quotas which are allocated once the relevant Free Trade Agreement enters into force, the applicants need to apply to the Ministry of Economy for an import license, which has to be presented to the competent customs authority at the time of the importation. For autonomous TRQs, the relevant entity needs to apply to the Ministry of Economy for an import license, which has to be presented to the competent customs authority at the time of the importation. Question 11: Does Turkey have intention to eliminate or decrease such TRQs application to industrial products? Turkey’s Answer: Turkey does not have any intention to change its current TRQs application for industrial products in the near future. Page 97 (paragraph 3.3.3.2) Question 12: In order to handle several hundred cases per year, Thailand would like to know the size and structure of the TCA, for example how many officers in total; how TCA divides its units and how many officers in each unit; and whether TCA has local branches and the size of those branches. Turkey’s Answer: Turkish Competition Authority (TCA) currently has 340 employees (122 are case handlers/competition experts, 23 are managers, 26 are advisers and 168 are support staff). In 2015 TCA handled 283 cases and among these cases, 89 of them were Infringements of Competition cases, 35 of them were Exemption/Negative Clearance cases and 159 of them were Merger/Acquisitions/Joint Ventures/Privatization cases. TCA is organized into 11 departments. 5 of them, which are called Supervision and Enforcement Departments (SED), are tasked with handling antitrust issues. Each of these departments is responsible for handling antitrust issues of specific sectors. In each SED, there is one department head and one professional coordinator. Their duty is to manage the case handlers working in these departments. There are approximately 20-25 case handlers in each department. TCA also has a separate Economics Department as well as a separate International Relations, Training and Advocacy Department. TCA currently does not have local branches and is located in Ankara. TCA has a support unit in Istanbul, where most of the commercial activity takes place. However, this support unit is only responsible for logistics matters. Competition Board is the main unit responsible for taking decisions. It is composed of 7 members, which are elected by the Council of Ministers from among the two candidates for each vacant membership to be nominated by the Ministry of Customs and Trade (3 members), Ministry of Development (1 member), Turkish Union of Chambers and Commodity Exchanges (1 member), Supreme Court of Appeals (1 member) and Council of State (1 member). TCA’s 7 board members serve for 6 years. Their term cannot be terminated for any reason except they are found to have lost the qualifications required for their appointment or their position is found to be contrary to article 25 of the Competition Act (i.e. disclosing trade secrets), or where their offence with regard to the duty is proven by a court decision.

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For more information please visit: http://www.rekabet.gov.tr/en-US/Mainpage or e-mail to: aarioz@rekabet.gov.tr (Head of International Relations, Training and Advocacy Department) tancatalcali@rekabet.gov.tr (Professional Coordinator of International Relations, Training and Advocacy Department) Page 100 (paragraph 3.3.4) Question 13: The directorate General of State-Owned Enterprises has a role in consolidating and monitoring the financial and non-financial data of the SOEs. What are the mechanisms to monitor the SOEs or evaluate the SOEs’ performance? Does it set the KPIs for the SOEs? Does it have incentive mechanisms such as a bonus system for the SOEs when they have good performance and achieve their goals? Turkey’s Answer: According to the Law on the Structures and Duties of the Undersecretariat of Treasury (UoT) of Turkey (Law Nr. 4059), Directorate General of State Owned Enterprises has a role in consolidating and monitoring financial and non-financial data of the SOEs. Also, a Communiqué was issued in 2009, regarding the notification, reporting and monitoring of SOEs prepared with reference to Law Nr. 4059. According to this Communiqué, UoT established an internet based monitoring system in order to collect financial and non-financial data of SOEs periodically. During the budget process, UoT prepares SOEs’ financial targets such as gross sales, profit, and primary surplus with Annual General Financing and Investment Programs which is a Cabinet Decree prepared with reference to Decree Law on State-Owned Enterprises (Decree Law Nr.233). In line with the Communiqué mentioned above, Directorate General of SOEs monitor the performance of SOEs quarterly. When SOEs achieve their targets determined by Annual General Financing and Investment Programs, an incentive mechanism such as bonus system does not exist. However, SOEs’ performances are reported in the audit of Turkish Court of Accounts which are sent to the Parliament. SOE Commission in the Parliament discusses these reports as well as performances of SOEs. Based on the reports and discussions, SOE Commission and then the Parliament have the right

to discharge the board of directors of SOEs by approving financial statements or, not to discharge the board of directors of SOEs by disapproving financial statements.

Question 13: What are the criterion and framework for the government to privatize SOEs? Turkey’s Answer: In accordance with Turkish Privatization Law No: 4046 enacted in November 24, 1994, Turkish Privatization Administration (PA) is entitled for the privatization of SOE’s and their subsidiaries. Privatization High Council (PHC) is the decision making body for privatizations which is chaired by the Prime Minister and composed of 4 Ministers, namely Deputy Prime Minister, Environment and Rural Affairs , Finance, Transport, Maritime and Communication. Taking of SOE’s into privatization portfolio and approval for their sales are decided by PHC. The SOE’s which are transferred to PA are converted to stock company and operate under Turkish Commercial Code Principles. Valuation of the SOE’s are undertaken by various independent consulting companies (independent audit, legal firms and environment firms and investment bank). Under Privatization Law, PA also establishes an in-house separate Valuation Commission composed of experts. Subsequent to completion of the valuation of the enterprise by the consultants, the valuation of the business is reviewed and approved by our Valuation Commission. Tender announcement is made and followed by negotiations of the price and other articles of the tender. Subsequent to final round, whoever bids the highest price and favourable conditions the result of the tender is sent to PHC for final approval. Finally, shares of the relevant SOE is transferred to the new owner subsequent to receipt of the tender amount. 4. TRADE POLICIES BY SECTOR Page 124 (paragraph 411) Question 14: Since Turkey does not commit any TRQs bound in the WTO schedule, please kindly elaborate on how the TRQs administration works i.e. TRQ goods, TRQ allocation, autonomous TRQs scheme, example of the FTA with TRQs.

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Turkey’s Answer: Turkey does not have MFN based TRQs but autonomous ones, determined through discussion within the negotiation of Economic Tariff Questions Group (ETQG) of the European Commission. The autonomous tariff quotas are opened for raw material and semi-finished industrial products which are not produced either totally or sufficiently in EU and Turkey. Due to the current system in Turkey; respectively, a cabinet decision and a communiqué related to application methods and grounds are published. In the allocation of TRQs, past performance criteria and production capacities of producer firms are considered. Turkey’s quota distribution system is implemented by the Ministry of Economy to domestic producers by granting import licences which are valid until the end of the relevant year. Page 126 (paragraph 4.16) Question 15: Will there be any domestic support notification to the WTO in the near future? Turkey’s Answer: Turkey has started a work programme to submit its pending domestic support notifications gradually. We are looking forward to the understanding of all Members until the process is completed. Page 128 (paragraph 4.18) Question 16: Since the agricultural support remains high and output-based payment increased, does the output-based payment and the market-based supports be in line with the domestic support commitment? Does Turkey have any plans to notify these support payments to WTO? Turkey’s Answer: Turkey has started a work programme to submit its pending domestic support notifications gradually. We are looking forward to the understanding of all Members until the process is completed. Page 129 (paragraph 4.19) Question 17: Is it possible for Turkey to share the experience of introducing the Agriculture Basins Production and subsidies Model and the reduction of credit interest rates to zero for most products? Turkey’s Answer: Agricultural Basins Base Model was targeting to implement an efficient and rational agricultural support policy while protecting the natural resources. Agricultural Basins which were identified according to climate, soil, topography, land classes and land uses, also served for the elaboration of agricultural inventory in Turkey. Out of all the agricultural basins data evaluated, some basins were identified for the cultivation of some agricultural products. The Support policies were implemented in a way encouraging agricultural producers to cultivate their crops in the most suitable basin. Since 2010, the Agricultural Bank of Turkey (Ziraat Bankası) which is the largest commercial bank in Turkey, provides interest concessions on loans through Agricultural Credit Cooperatives for farmers and agricultural facilities, which are engaged in livestock production and breeding dairy cattle, among others. As an input supply support to farmers and agricultural enterprises, concessional credits aim to improve animal breeds and farm production capacity of those lacking enough financial resources to do so. Page 131 (paragraph 4.24) Question 18: Could Turkey elaborate the reason why notified the export subsidies to the Committee on Subsides and Countervailing Measures but has not notified export subsidies to the WTO Committee on Agriculture? Turkey’s Answer: As known, formats of these notifications are different from each other. As explained in the Secretariat Report, the reason for submitting the information to the Committee on Subsidies and Countervailing Measures was because the content of the notification which Turkey faced no problem in putting together relevant data/information. Additionally, Turkey will comply with its notification requirements related to the agricultural export subsidies by the next meeting of the Committee on Agriculture which will be held on 7-8 June 2016.

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Page 131 (paragraph 4.25) Question 19: Please give more details on the export subsidies program, especially the export subsidies for processed agricultural products. Turkey’s Answer: For details of Export Subsidy Programme for Agricultural Products please refer to Turkey’s latest notification to the WTO Comitte on Subsidies and Countervailing Measures (G/SCM/N/284/TUR) dated 18 September 2015. Page 132 (paragraph 4.1.7 and Table 4.11) Question 20: Please provide further information on Turkey’s experience and execution regarding the Agricultural Credit Cooperatives and Law on Restructuring Agricultural Credit, Agricultural Credit Cooperatives and Unions, and Agricultural Insurance law. Turkey’s Answer: Uncertainties involved in farming activities, such as those that may stem from adverse weather conditions make agricultural production open to risks both in social and economic terms. Due to these risks, sustainability of agricultural production might be imperiled. Thus, it is almost compulsory to manage risks instead of crisis management in order to ensure sustainability of agricultural production. To this aim, agricultural insurance can play an important role as a tool for managing risks associated with farming. Agricultural Insurance Law numbered 5363 entered into force in 2005. With the completion of legislative and technical infrastructure, insurance policies are being implemented since 1st of June, 2006, in Turkey. Under the Turkish agricultural insurance system, it is voluntary for farmers to insure their products. As of 2016, fifty percent (50%) of insurance premiums of farmers, who insured their crop productions, greenhouses, ovine and bovine animals, poultry, fisheries and beehives that have plate and bee, have been paid by the Government. An additional premium support at 1/3 rate has been provided for only frost risk due to flowering period of fruits grown on open areas. Up until now, 2.225 trainees (Agricultural Engineer, Veterinary, Aquaculture Engineer, Fisheries Technologies Engineer, Agricultural Technician and Agricultural Techie) have been trained under agricultural insurance system for Agricultural Insurance Experts’ Pool and certified as experts. Regulations regarding agricultural credit cooperatives and their higher units were put in place during the 1970s. Various regulations were implemented through the years according to new needs. In this context, agricultural cooperatives were ensured an environment of internationally accepted cooperative rules where they can act independently and democratically. Purpose of the Law on Agricultural Credit Cooperatives is to enable producers to protect their mutual economic interests and to establish agricultural credit cooperatives with variable partnership and variable capital based on the principle of mutual assistance to address their professional livelihood needs. By means of this Law, regional and central organisation of credit cooperatives has been established. Currently there are more than 1600 agricultural credit cooperatives with more than 1 million farmers as partners. Purpose of the Law on Restructuring Agricultural Credits was to restructure interest debts of farmers that has difficulty in paying their credit loans due to compelling reasons such as global economic crisis or natural disasters, without prejudice to the main capital of their loan. This way, the aim was for the farmers to gravitate towards activities regarding rural development and environment more easily. Along with entry into force of Agricultural Insurance Law No: 5363 in 2005, necessary regulations, general provisions, technical provisions, tariffs and instructions and automation software were completed and insurance policies have been issued since 1st of June, 2006. Page 135 (paragraph 4.35) Question 21: With regard to livestock subsidies, please elaborate the subsidies for milk production as to how and in what form of the subsidies are executed. Turkey’s Answer: As reflected in the Secretariat Report, page 135, Table 4.14; MFAL provides support for identifying milk contents for quality improvement. Also, premium payments are made for milk, in accordance with Turkey’s WTO commitments.

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Page 136 (paragraph 4.1.9.1) Question 22: The Turkish Grain Board has the responsibility to purchase and hold stocks to stabilized prices for producers and the intervention on the grains price that fall below a pre-determined reference price. Can Turkey please elaborate on the numbers of the support that have been spent in the recent years? Turkey’s Answer: TMO determines its own policies autonomously, on the basis of profitability and productivity. In case, TMO announces a purchasing price, it is determined by its Board of Directors in line with TMO’s own policies. Thus, TMO’s purchasing prices do not constitute administrative prices. Question 23: Is the TMO the only organization that could purchase grains from foreign markets? If so, please provide details on the purchasing process. Turkey’s Answer: TMO is not the only entity that can purchase grains from foreign markets. Page 138 (paragraph 4.44) Question 24: Please provide the rationale to why the ESK is the only authorized enterprise to import the red meat from the EU. Is there a possibility that its scope of responsibility will be expanded to cover export from other countries? Turkey’s Answer: ESK imports red meat from the EU within the framework of Decision No 1/98 of the Association Council between Turkey and EU. ESK’s scope of responsibility may be extended to cover exports from other countries. Page 139 (paragraph 4.46) Question 25: What are the types of limitations that the Tobacco and Alcohol Market Regulatory Authority could place on the import of the tobacco? Turkey’s Answer: Limitations on the import of tobacco are listed as follows: - For leaf tobacco import: Under the Article 30/1 of the Regulation on Procedures And Principles Concerning Production, Processing, Domestic and Foreign Tradıng of Tobacco published in the Official Gazette dated 10/07/2010 no. 27637, it is stated that “even if for import after being processed, tobacco can only be imported by the producers of tobacco products with limited their needs.” - For tobacco products:

1-Pursuant to Law No. 4733 Article 6(7) “The ones manufacturing annually minimum two billion items of cigarettes under a brand in Turkey and minimum fifteen tons of other tobacco products can freely import, price and sell items under the condition that they all are of the same brand.” Preconditions of manufacturing tobacco products in Turkey are that the production capacity of the firm should not be less than billion sticks for cigarette and 15 tons for other tobacco products, and the production equipment should be new and high technology. 2-Under Article 15(3) of “Regulation on Procedures and Principles Concerning the Production and Trading of Tobacco”, the right to import tobacco products on the basis of brand is limited to the calendar year. 3-In line with Law No. 4207 Article 3(15); brand stretching and brand sharing of tobacco products which are manufactured or placed on the market in Turkey are banned. 4-Pursuant to Law No. 4207 Article 4(4); it is forbidden to import or put on sale tobacco products giving incorrect or incomplete information on properties, effects on health, hazards or emissions of tobacco products on the packages and labels. Any text, name, brand, type name, figurative speech, metaphor, figure, sign and other elements and definition, brand, type name, color, figure or marks that imply a tobacco product is less harmful and/or superior than the others or promoting or encouraging the consumption or deceiving the consumers cannot be placed on the packages and labels.

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5-Under the “Board Resolutions Concerning the Evaluation of Data Included in the Input Declaration and Toxicological Data Tables” published on the Official Gazette dated 30/05/2012 no. 28308, products which will be imported must not contain the inputs given in the “List concerning the inputs not allowed to be used in the production of tobacco products” and must not contain the inputs given in the “List concerning the inputs of limited use in the production of tobacco products” more than the allowed quantity. 6-Under Board Decision on Determination of Technical Specifications of Filters Used in Tobacco Products published on the Official Gazette dated 09/05/2014 no. 28995, the production of filters used in tobacco products which will be imported should be done according to the restrictions determined in the mentioned Board Decision. 7-Under the Cabinet Decision on the Procedure and Principles for Import, Pricing and Domestic Marketing of Cigar and Cigarillo published on the Official Gazette dated 16/04/2008 no. 26849, applications for each import lot less than 100 kilos on the basis of product range of cigars and cigarillos to be imported shall not be accepted. Page 141 - 142 (paragraph 4.62 and Table 4.16) According to Import Licensing for Automotive Products in 4.62 and Table No. 4.16 please further clarify; Question 26: Are all imported vehicles (including new vehicles) subject to approval from Ministry of Industry and Technology for various motor vehicles and trailers? Turkey’s Answer: All imported vehicles are subject to the approval of the Ministry of Industry and Technology (MoSIT). Turkish Standards Institution (TSE) performs the necessary controls at the customs and gives a "Letter of Conformity" for the imported vehicles. Mechanical parts/components of vehicles are evaluated in the scope of the "Market Surveillance and Inspection" (PGD) mechanism. Question 27: What are the procedures, approval criteria, and document to be submitted? Turkey’s Answer: For vehicles to be imported, a "Letter of Conformity" is granted following the control of the compliance of "type approval certificates". Page 147 (paragraph 4.3.1.1) Question 28: The banking sector comprises a mix of state-owned, private and foreign banks. At the end of 2014, the number of banks in Turkey reached 51 including branches. In this regard, please provide further information whether there is any activity limitation on branches in Turkey. Turkey’s Answer: Branches established in Turkey by banks headquartered abroad continue their activities under the supervision and surveillance of the Banking Regulation and Supervision Agency in line with the Banking Law Nr. 5411 and its relevant sub-regulations. As of 28.03.2016, there are no prohibitions or restrictions on the activities of the mentioned branches. QUESTION REGARDING THE REPORT BY THE GOVERNMENT 2. TRADE POLICY DEVELOPMENTS (2011-15) Page 6 (paragraph 2.35) Question 29 Does the scope of the Investment Incentive Program cover the incentive in service sector operated by foreign companies? Turkey’s Answer: Investment Incentive Program, which is equally available for foreign and domestic companies aims to support all production and service industries.

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URUGUAY 1) NOTIFICACIONES En la página 34 del Informe de la Secretaría WT/TPR/S/331 se informa: “ 2.20. Turquía tiene un historial desigual de cumplimiento de sus obligaciones de notificación a la OMC. La mayor parte de las notificaciones presentadas en el período objeto de examen se referían a medidas de salvaguardia y otras medidas comerciales correctivas (cuadro A2.2). Sin embargo, siguen pendientes las notificaciones relativas a ciertas esferas, como por ejemplo la agricultura. » In page 31 of the Report of the Secretariat WT/TPR/331 ‘ 2.20. Turkey has a mixed compliance with its WTO notification obligations. Most notifications during the review period pertained to safeguard measures and other trade remedies (Table A2.2). However, notifications in some areas are still pending, including those in the area of agriculture.’ Pregunta: mucho se agradecería recibir información respecto a las acciones previstas para ponerse al día en materia de las notificaciones pendientes para el sector de la agricultura. Al mismo tiempo, conocer si existe alguna previsión para mantener la regularidad de las notificaciones (es decir en cumplimiento de los plazos establecidos) una vez que se haya alcanzado la actualización de las notificaciones pendientes. QUESTION: We would like be informed of any projected action in relation to solve the situation related to the pending notifications for the agricultural sector. At the same time, we would like to know whether there is any provision to regularly maintain the notification process up to date, once the overdue notifications are dealt with. Turkey’s Answer: Turkey will comply with its export subsidy notification requirements by the next meeting of the Committee on Agriculture, which will be held on 7-8 June, 2016. Please further note that, Turkey also has started a work program to notify its agricultural domestic support programs gradually. In due course, we are looking for understanding of all members to complete this work as soon as possible. Similar to other notification requirements under respective WTO Agreements, it is the relevant government body to ensure compliance with the notification requirements both in terms of their preparation and timely submission, in accordance with the terms defined in each agreement. No specific structure other than the notification requirements and/or formats exists to monitor and keep up to date notifications. 2) ACUERDOS REGIONALES Y PREFERENCIALES En la página 34 del informe de la secretaría WT/TPR/S/331 se detallan los acuerdos regionales y preferenciales celebrados por Turquía. In page 33 of the Report by the Secretariat (English version) there is a extensive review ot the reciprocal trade agreements negotiated and concluded by Turkey with a number of other countries or regions. Pregunta: se consulta sobre negociaciones en curso y potenciales acuerdos con otros Miembros y /o grupos de Miembros. Interesa conocer cuáles son las prioridades y / o si se han realizado estudios de factibilidad para evaluar futuros acercamientos comerciales. QUESTION: we would like to receive more information about any current negotiation and in relation to potencial trade agreement with other Members. We are interested in knowing what are the priorities and whether any feasibiity study has already been done in order to idntify potencial future trade agreements. Turkey’s Answer: Turkey follows the FTA policy of the EU due to its obligation laid down in the Customs Union Decision 1/95 which states that Turkey has to align its trade policy with the preferential customs regime of the EU. Turkey also conducts impact assessment studies before conducting FTA negotiations with its future FTA partners to explore the legal and economic conditions.

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Turkey is currently conducting Free Trade Agreement (FTA) negotiations with Japan, Mexico, Peru, Ecuador, Ukraine, Cameroon, Colombia, Democratic Republic of the Congo, Gulf Cooperation Council, Libya, Mercosur and Seychelles. Turkey has launched initiatives to start negotiations with the USA, Canada, Thailand, India, Indonesia, Vietnam, Central American Countries, other ACP Countries, Algeria and South Africa.

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UNITED STATES REGARDING TURKEY’S TRADE POLICY REVIEW REPORT The two follow-up questions below, relate to two answers given in response to questions from Australia (under Chapter 4, Trade Policies by Sector, 4.1 Agriculture, page 7.) Question 15 Could Turkey please advise of how these subsidies are in accordance with their WTO obligations? Turkey’s Answer: At present, no export subsidy is being provided neither for the wheat nor for the wheat flour. As it is stated in the Secretariat Report, there is a domestic support for wheat. The total amount of the support can be declared after the related data are collected. Follow-up Question: Could Turkey please explain how Topraki Mahsulleri Ofisi (TMO) programs work on domestic and international markets? We are particularly interested in learning:

At what volume and prices are domestic purchases of wheat by TMO made every year? At what volume and prices are domestic sales of wheat to processors by TMO made every

year? At what volume and prices are exports of wheat by TMO made every year? What conditions, particularly related to domestic sales or exports, must domestic wheat

processors meet in order to participate in the above programs? Turkey’s Answer: As an autonomous entity in its commercial activities, TMO operates fully on the basis of profitability and productivity, while considering the needs of the economy and market conditions. Both purchasing of wheat and domestic sales of it are carried out with this understanding. Question 16 Could Turkey please provide details on how it manages any surplus production of wheat and/or wheat flour which cannot be absorbed by the domestic market? Turkey’s Answer: As it is the case in every country, excess wheat and wheat flour that have not been domestically consumed can be exported. Wheat in particular is imported as well as exported. Import and export values of wheat and wheat flour for the last three years are: 2013 wheat export 79.3 Million USD, import 1.3 Billion USD 2014 wheat export 35.4 Million USD, import 1.54 Billion USD 2015 wheat export 32.5 Million USD, import 1.1 Billion USD 2013 wheat flour export 947 Million USD, import 146 Thousand USD 2014 wheat flour export 931 Million USD, import 1.6 Million USD 2015 wheat flour export 979 Million USD, import 1.4 Million USD Source: TURKSTAT HS4 Codes 1001 and 1101. Follow-up Questions: Can Turkey please provide additional details on wheat exports, such as what entities manage wheat exports? Aside from TMO, which other entities manage wheat exports? Turkey’s Answer: In Turkey, any market player can export wheat; no authorization is needed to export wheat.

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