New regulations in Turkish International Trade Law came into effect on 10.01.2013 in order to simplify customs procedures for international traders. With the new regulation, economic operators can apply for an Authorized Economic Operator (AEO) status, which is given permanently with no expiry, either to have easier access to customs simplifications or to be in a more favourable position to comply with the new security requirements.
In the context of new regulations, economic operators (natural person/entity) who managed to fulfil the conditions stated on the regulation for obtaining AEO status and perform trade in Turkish customs territory, including free trade zones, will be entitled to obtain the privileges coming with it. Conditions for exporting companies to apply for an AEO certificate are mainly focused on four categories:
- high level security (facility, personnel, cargo security)
- easy and efficient monitoring of the goods traded by the firm (establishing computerised customs clearance systems)
- financial capability (honoured its commitments for the last three years)
- reliability/trustworthiness of economic operator (no conviction for economic operator)
- company should hold ISO 9001 and ISO 27001 certificates
At one point, the significant importance of the regulation come with the reliability part which indicates that economic operators, who fulfil the conditions for obtaining the status of AEO, distinguishing themselves positively from other economic operators and this should be considered as reliable partners in the supply chain. Therefore, AEOs can be able to benefit from not only simplifications provided for under the new customs regulations but also, from facilitations with regard to customs controls, where they fulfil some certain safety and security conditions.
As the AEO certificate is mainly a security measure, it is necessary to establish common conditions and criteria in all other states for granting authorised economic operators’ certificates as well as rules on the application for and issuing of authorised economic operators’ certificates. Providing that, customs authorities should continuously monitor the compliance of authorised economic operators with the relevant requirements, such as pre-arrival and pre-departure information to the customs authorities for all goods brought into or out of the customs territory of the Community by taking into account different means of transport as well as different types of goods or economic operators. Thus, the risk-based controls can be performed accordingly.
Customs Clearance On-Premise
Customs clearance for traded goods can be done on premises of the exporting company, which holds AEO certificate, without any submission of goods to customs office and transport those goods directly cross-border by using authorised carrier.
In order to gain the permit for customs clearance on premise,
- Firms should be entitled to have an Authorised Economic Operation licence
- For the last one year before the application, an actual export for the amount of 5 million USD should be accomplished
With the new provisions regarding customs clearance permits, previously can only be granted for export companies is now available for import companies/foreign direct investors which has its production base in Turkey.
In order to use customs clearance on-premises, traded goods generally take to a secure place on companies premises which shall be approved by the Directorate and inform customs office, by using the computerised system, that the goods are ready for export. If the goods are deemed as safe, customs office allows continuing to transport. If not, goods shall be subject to customs control for risk analyses and then goods shall be ready to transport.
Transportation can be performed by an authorised carrier which requires having a certificate other than AEO certificate and different conditions and provisions. In order to gain that certificate, authorised carrier should have AEO certificate in addition to International Carrier Certificate and should hold 500 transit declaration form.
If the AEO desires to transport its goods via regular carrier, the premises for customs clearance can be AEOs own premises and the sealing of the goods can also be done by AEO. However, if the authorised carrier is in charge, then customs clearance can be finished in either AEOs premises or authorised carriers own premises. In that case, the sealing is done by authorised carrier. It is important to clarify that authorised carrier can only be in charge for the goods coded “1000” “3141” and “3151”.
Impacts in Global Trade
AEO is a new application of Turkish international trade which enables exporters to perform their business in a convenient and swift way. In the event that this new regulation become success, it is not too far to consider international trade in Turkey whose exporters will be able to manage their customs transactions in their own facilities and transport goods directly cross-border, transportation of the goods will be shortened, carriers will no longer wait for long queues to get customs clearance, and deliveries can be finished quickly. Furthermore, Authorised Economic Operators licence, in addition to privileges provided with the certificate, shall be the key factor for the firm which obtained that its operation is legitimate, trustworthy and reliable and puts the firm forward among its competitors.
When this advantages are provided logistic costs will be reduced to a large extent as 90%. The costs in Turkey for customs clearance is now around 954 TL per shipment and when it decreases to the level of 90%, firms will be saved around 861 TL per shipment.
With all the simplifications and privileges provided with this new regulation, traders can get the opportunity to build a trust to more legitimate trade, recognition around the world and easy access to the global markets which essentially increases global competitiveness. It will sure be very preferable to foreign direct investors by reducing uncertainty. On the sides of consumers reliability shall be built and it will be easy to fulfil commitments for traders.