Local Trade Regulations vs International Trade Agreements under Turkish Law

Introduction

For foreign entities operating in Türkiye, the interplay between domestic administrative regulations and international trade commitments is a critical area of legal risk. Türkiye operates under a "monist" legal system where international agreements are incorporated directly into domestic law upon ratification. However, in practice, businesses often face a complex layer of secondary legislation—Communiqués, Board Decisions, and Customs Circulars—that may appear to conflict with the free trade provisions established in the World Trade Organization (WTO) agreements or Türkiye's bilateral Free Trade Agreements (FTAs).

This article clarifies the legal hierarchy under Turkish law, defining how conflicts between local trade regulations and international agreements are resolved, and provides actionable guidance for ensuring compliance while leveraging international treaty protections.

Legal Framework Under Turkish Law

The relationship between international law and domestic law in Türkiye is governed by the Constitution and primary statutory codes. The hierarchy is rigid, and understanding it is the first step in dispute resolution.

1. The Constitutional Basis (Supremacy of Treaties)

The cornerstone of this legal analysis is Article 90 of the Constitution of the Republic of Türkiye.

• Article 90/5 states that international agreements duly put into effect have the force of law.
• Crucially, it stipulates that no appeal to the Constitutional Court can be made with regard to these agreements on the grounds that they are unconstitutional.
• The Conflict Rule: In cases of conflict between international agreements regarding fundamental rights and freedoms and domestic laws, the provisions of the international agreement prevail. For commercial and trade agreements, while the text does not explicitly grant "supremacy" over statutes (laws enacted by Parliament) in the same absolute terms as human rights treaties, established legal practice and statutory interpretation principles generally accord them priority over secondary legislation (regulations, communiqués).

2. Customs Law No. 4458

The Customs Law (Law No. 4458) is the primary statute governing cross-border trade.

• It is largely harmonized with the European Union Customs Code due to the Customs Union agreement.
• Article 1 of Law No. 4458 explicitly sets the scope of customs obligations, which must be interpreted in line with Türkiye's international obligations.

3. Turkish Commercial Code (Law No. 6102)

While the TCC governs private commercial relations, Article 1 and subsequent general principles require merchants to act in accordance with "good faith" and "commercial honesty," which includes adherence to the regulatory framework derived from international treaties ratified by Türkiye.

Local Trade Regulations vs International Trade Agreements

The central legal issue arises when a Ministry (e.g., Ministry of Trade) issues a Communiqué (tebliğ) or Regulation (yönetmelik) that imposes stricter technical barriers, additional tax burdens, or labeling requirements than those agreed upon in an FTA or the Customs Union Decision (1/95).

The Hierarchy of Norms (Normlar Hiyerarşisi)

Under Turkish administrative law, the hierarchy is as follows:

1. Constitution
2. International Agreements (duly ratified) & Codes/Statutes (Kanun)
3. Presidential Decrees (Cumhurbaşkanlığı Kararnamesi)
4. Regulations (Yönetmelik)
5. Communiqués (Tebliğ) & Circulars (Genelge)

Resolution of Conflict

If a local Communiqué restricts trade in a manner inconsistent with a ratified International Treaty:

• Legal Supremacy: The International Treaty prevails over the Communiqué. A lower-level norm (Communiqué) cannot contradict a higher-level norm (Treaty/Law).
• Implementation: In practice, customs officers strictly follow the electronic customs system (Bilge System) and active Communiqués. They rarely have the discretion to "disregard" a Communiqué based on a treaty argument at the border.
• Remedy: The remedy lies in administrative litigation (filing a lawsuit for the annulment of the administrative act) or seeking a correction assessment after payment under protest (ihtirazi kayıt).

Key Legal Obligations and Risks

Foreign businesses must navigate these specific risks where local practice often diverges from international treaty text:

• Surveillance Measures (Gözetim Uygulaması): The Ministry of Trade frequently imposes surveillance on imports based on unit prices (referencing Communiqués on Surveillance in Imports). While this creates a de facto minimum import price, which arguably conflicts with WTO Valuation Agreement rules, it is a prevalent local practice.
• Additional Customs Duties (Ilave Gümrük Vergisi - IGV): Türkiye imposes additional duties on non-EU/FTA origin goods. Compliance requires precise Certificates of Origin. A failure to prove preferential origin results in the application of the full statutory tax rate, regardless of the commercial contract terms.
• Technical Barriers to Trade (TBT): Products must meet Turkish Standards (TSE) or CE marking requirements. Law No. 7223 on Product Safety and Technical Regulations places strict liability on importers to ensure products meet these technical regulations, which are legally treated as equivalent to domestic law.

Relevant Turkish Court Decisions

Disputes regarding the supremacy of international agreements over domestic administrative acts are adjudicated by the Administrative Courts and the Council of State (Danıştay).

Council of State (Danıştay) Jurisprudence on Hierarchy:

There is established case law of the Council of State confirming that administrative acts (such as Regulations or Communiqués) cannot introduce restrictions that contravene the clear provisions of a ratified international agreement. The Council of State consistently applies the principle that the administration is bound by the hierarchy of norms.

Note: While specific recent E./K. numbers for pending commercial cases are often confidential or not publicly indexed in real-time, the 10th Chamber of the Council of State has historically ruled that administrative discretion cannot override specific treaty obligations.

Court of Cassation (Yargıtay) on Private Commercial Disputes:

In disputes between private parties (e.g., a distributor claiming damages for non-compliance with local regulations), the Court of Cassation (e.g., 11th Civil Chamber) generally holds that merchants are expected to know and comply with mandatory domestic provisions (Emredici Hükümler) of Turkish law, even if an international contract attempts to waive them.

Practitioner's Note: Do not assume a "treaty defense" will automatically work as a shield in lower courts without expert procedural handling. Turkish courts require specific pleading of Article 90 and a clear demonstration of the conflict.

Practical Compliance Recommendations

To mitigate risks arising from the conflict between local regulations and international agreements:

1. Payment Under Protest (İhtirazi Kayıt):

If a customs authority demands duties or imposes penalties based on a secondary regulation you believe violates an FTA or the Customs Union rules, you should formally declare the goods and pay the duties "under protest" (ihtirazi kayıtla). This preserves your right to file a lawsuit in Tax Court within 30 days. Without this reservation, you lose the right to litigation.

2. Certificate of Origin Management:

Strictly adhere to the specific "Rules of Origin" protocol of the relevant FTA. A generic "Made in [Country]" statement on an invoice is insufficient for Turkish Customs. You must strictly use EUR.1, A.TR, or invoice declarations as authorized by the specific treaty.

3. Contractual Allocations of Risk:

In your Distribution or Sale & Purchase Agreements, explicitly allocate the risk of "Changes in Law" and "Trade Defense Measures" (e.g., anti-dumping duties, safeguard measures). Under the Turkish Code of Obligations (Law No. 6098), unexpected regulatory changes can sometimes trigger "hardship" (Art. 138), but well-drafted contracts should preempt this uncertainty.

4. Monitor "Official Gazette" (Resmi Gazete):

Trade regulations in Türkiye change rapidly. Surveillance communiqués and import bans are published in the Official Gazette and enter into force immediately or within days. Relying on annual summaries is insufficient.

Conclusion

While Article 90 of the Turkish Constitution theoretically guarantees the supremacy of international trade agreements, the operational reality involves a dense web of domestic regulations that often take precedence at the border. For foreign investors and traders, the key to success is not merely relying on the "superiority" of international law, but rather ensuring meticulous compliance with local administrative requirements while preserving legal rights to challenge discrepancies through the correct procedural channels.

FAQs

1. Does a Free Trade Agreement (FTA) automatically override a Turkish Customs Communiqué?

Legally, yes, under the hierarchy of norms. However, operationally, customs officers apply the Communiqué active in their system. You may need to pay the disputed amount under protest and claim a refund through litigation to enforce the FTA.

2. Can I sue the Turkish government if a new regulation blocks my imports contrary to WTO rules?

You can file an annulment action in the Council of State (Danıştay) or a Tax Court case against the specific transaction. However, direct "damages" for legislative acts are difficult to claim. The primary remedy is usually the annulment of the administrative act.

3. What is "Payment Under Protest" (İhtirazi Kayıt) in Türkiye?

It is a critical procedural declaration made during the customs declaration phase. It signifies that you pay the demanded tax/duty to release your goods but reserve the right to challenge its legality in court. If you fail to make this reservation, the payment is deemed voluntary and final.