Biofuel Equipment and Services in Turkey: A Strategic Reference, 2007
Edited by
Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)
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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.
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Table of Contents 1
INTRODUCTION & METHODOLOGY.............................................................................1
1.1
What Does This Report Cover?
1
1.2
How to Strategically Evaluate Turkey
1
1.3
Latent Demand and Accessibility in Turkey
3
2
BIOFUEL EQUIPMENT AND SERVICES IN TURKEY .................................................4
2.1
Latent Demand and Accessibility: Background
4
2.2
Latent Demand: Market Composition
4
2.3
Latent Demand: Market Data
5
2.4
Latent Demand: Leading Segments
6
2.5
Prospective Buyers
6
2.6
Accessibility: Market Entry
6
2.7
Market Issues and Obstacles
8
2.8
Key Contacts
8
3 3.1
MACRO-ACCESSIBILITY IN TURKEY............................................................................9 Executive Summary
9
3.2 Economic Fundamentals and Dynamics 9 3.2.1 Dynamic Markets ....................................................................................................................................... 9 3.2.2 Government Intervention Risks................................................................................................................ 10 3.2.3 Balance of Payments Issues ..................................................................................................................... 10 3.2.4 Infrastructure Development...................................................................................................................... 11 3.3 Political Risks 12 3.3.1 Economic Relationship with the United States ........................................................................................ 12 3.4 Political Risks 13 3.4.1 The Political System................................................................................................................................. 13 3.5 Marketing Strategies 14 3.5.1 Distribution Channel Options................................................................................................................... 14 3.5.2 Agents and Distributors............................................................................................................................ 14 3.5.3 Franchising Activities............................................................................................................................... 14 3.5.4 Direct Marketing Options......................................................................................................................... 16 3.5.5 Joint Ventures and Licensing Options...................................................................................................... 16 3.5.6 Creating a Sales Office............................................................................................................................. 16 3.5.7 Selling Strategies...................................................................................................................................... 17 3.5.8 Advertising and Trade Promotion ............................................................................................................ 17 3.5.9 Pricing Issues............................................................................................................................................ 18 3.5.10 Selling to the Government........................................................................................................................ 18 www.icongrouponline.com
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Intellectual Property Risks ....................................................................................................................... 19 Hiring Local Counsel ............................................................................................................................... 20 Performing Due Diligence........................................................................................................................ 20
3.6 Import and Export Regulation Risks 20 3.6.1 Tariffs, Non-Tariff Barriers, and Import Taxes........................................................................................ 20 3.6.2 Valuations on Imports .............................................................................................................................. 21 3.6.3 Licenses Required for Imports ................................................................................................................. 21 3.6.4 Controls on Exports.................................................................................................................................. 21 3.6.5 Documentation Required for Trade.......................................................................................................... 21 3.6.6 Special Documentation............................................................................................................................. 22 3.6.7 Entering Temporary Imports .................................................................................................................... 22 3.6.8 Labeling Issues......................................................................................................................................... 23 3.6.9 Restrictions on Imports ............................................................................................................................ 23 3.6.10 Local Standards ........................................................................................................................................ 24 3.6.11 Additional Trade Issues............................................................................................................................ 24 3.6.12 Adherence to Free Trade Agreements ...................................................................................................... 25 3.7 Investment Climate 25 3.7.1 Openness to Foreign Investment .............................................................................................................. 25 3.7.2 Conversion and Transfer Policies............................................................................................................. 26 3.7.3 Expropriation and Compensation ............................................................................................................. 26 3.7.4 Dispute Settlement ................................................................................................................................... 27 3.7.5 Performance Requirements and Incentives .............................................................................................. 27 3.7.6 Right to Private Ownership and Establishment ........................................................................................ 28 3.7.7 Intellectual Property Risks ....................................................................................................................... 29 3.8 Transparency of the Regulatory System 29 3.8.1 Capital Market Risks ................................................................................................................................ 30 3.8.2 Political Violence ..................................................................................................................................... 31 3.8.3 Corruption ................................................................................................................................................ 31 3.8.4 Bilateral Investment Agreements ............................................................................................................. 32 3.8.5 OPIC and Other Investment Insurance..................................................................................................... 32 3.8.6 Labor ........................................................................................................................................................ 32 3.8.7 Free Trade Zones...................................................................................................................................... 33 3.8.8 Major Foreign Investments ...................................................................................................................... 33 3.9 Trade and Project Financing 33 3.9.1 The Banking System ................................................................................................................................ 33 3.9.2 Exchange Control Risks ........................................................................................................................... 34 3.9.3 General Financing Availability ................................................................................................................ 34 3.9.4 How to Finance Exports and Methods of Payment .................................................................................. 34 3.9.5 Types of Available Export Financing and Insurance ............................................................................... 35 3.9.6 Project Financing Availability.................................................................................................................. 35 3.9.7 Types of Projects Receiving Financial Support........................................................................................ 35 3.9.8 Regional Financing .................................................................................................................................. 36 3.9.9 Small Business Support............................................................................................................................ 36 3.9.10 Defense Offsets ........................................................................................................................................ 36 3.9.11 Banks with Correspondent U.S. Banking Arrangements ......................................................................... 36 3.10 Travel Risks 37 3.10.1 Local Business Practices .......................................................................................................................... 37 3.10.2 Travel Issues............................................................................................................................................. 37 3.10.3 Infrastructure for Conducting Business.................................................................................................... 38 www.icongrouponline.com
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Temporary Entry of Goods....................................................................................................................... 40 Pricing Issues............................................................................................................................................ 40 Country Data ............................................................................................................................................ 40
3.11 Key Contacts 41 3.11.1 U.S. Mission Trade-Related Personnel .................................................................................................... 41 3.11.2 United States Department of State ........................................................................................................... 42 3.11.3 Contacts in Washington D.C .................................................................................................................... 44 3.11.4 U.S.-Based Multipliers ............................................................................................................................. 45 3.11.5 Turkish Government Contacts.................................................................................................................. 45 3.11.6 Chambers of Commerce........................................................................................................................... 68 3.11.7 Market Research Firms ............................................................................................................................ 69 3.11.8 Major Commercial Banks ........................................................................................................................ 69 3.11.9 Exhibition Management Companies ........................................................................................................ 71
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DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS ...........72
4.1
Disclaimers & Safe Harbor
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4.2
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1 1.1
INTRODUCTION & METHODOLOGY WHAT DOES THIS REPORT COVER?
The primary audience for this report is managers involved with the highest levels of the strategic planning process and consultants who help their clients with this task. The user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its alternative perspective on strategic planning relating to biofuel equipment and services in Turkey. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including biofuel equipment and services, the methodology decomposes a country’s strategic potential along three key dimensions: (1) latent demand, (2) micro-accessibility, and (3) macroaccessibility. A country may have very high latent demand, yet have low accessibility, making it a less attractive market than many smaller potential countries having higher levels of accessibility. With this perspective, this report provides both a micro and a macro strategic profile of biofuel equipment and services in Turkey. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Turkey can quickly understand where Turkey fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for biofuel equipment and services in Turkey. The report then considers macro-accessibility in Turkey. Macro-accessibility is a general evaluation of investment and business conditions in Turkey.
1.2
HOW TO STRATEGICALLY EVALUATE TURKEY
Perhaps the most efficient way of evaluating Turkey is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to biofuel equipment and services are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
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Framework for Prioritizing Countries Demand/Market Potential Driven Firm
High
Highest Priority
High Priority Latent Demand
Moderate Priority Low Priority
Low
Lowest Priority Low
High Relative Accessibility
Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand
Moderate Priority Low Priority
Lowest Priority Low High
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Introduction & Methodology
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In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
1.3
LATENT DEMAND AND ACCESSIBILITY IN TURKEY
This report provides a detailed overview of factors driving latent demand and accessibility for biofuel equipment and services in Turkey. Latent demand is largely driven by economic fundamentals specific to biofuel equipment and services. This topic is discussed in Chapter 2 using work carried out in Turkey on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for biofuel equipment and services in Turkey. I use the term “micro” since the discussion is focused specifically on biofuel equipment and services. Chapter 3 deals with macro-accessibility and covers factors that go beyond biofuel equipment and services. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Turkey: •
Openness to Trade in Turkey
•
Openness to Direct Investment in Turkey
•
Local Marketing and Entry Strategy Alternatives
•
Local Human Resources
•
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in Chapter 3, which is a general overview of investment and business conditions in Turkey. Chapter 3 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Turkey. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
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2 2.1
BIOFUEL EQUIPMENT AND SERVICES IN TURKEY LATENT DEMAND AND ACCESSIBILITY: BACKGROUND
Turkey is strategically positioned at the crossroads of Europe, Asia and the Middle East. Turkey is the 16th largest economy in OECD countries with its 70 million population and over $300 billion GNP. It is estimated that over 8 million vehicles operate on Turkish roads, approximately 30% of that are commercial vehicles. Production of biodiesel in Turkey is a major growing trend as an alternative fuel. Turkey is aligning its regulations with that of EU. One of the EU directives is about encouragement of usage of biofuels. Turkey achieved a major step in production of biogas/biodiesel in Europe. While Germany has approximately 1.8 million tons of alternative fuel, Turkey increased its production capacity to somewhere between 450,000-870,000 metric tons and became the second largest producer in Europe. In Turkey, the petroleum products consumption is about 35 million tones. If 2% of this requirement is met by biodiesel, Turkey requires at least 700,000 tons of vegetable or animal oil. Ministry of Agriculture is considering providing incentives for the production of canola, which is the best resource for the production of biodiesel. In Turkey, Energy Market Regulatory Authority (EMRA) has recently enforced a new regulation that each biodiesel producer must obtain a license from EMRA. The deadline for this is February 28, 2006. Certainly, the new investors will also have to obtain such a license regardless of this deadline. According to this regulation, biodiesel producers will not be able to deliver biodiesel directly into the market. Like in the oil products, biodiesel producers will have to sell into the market through those companies, which have distributor license.
2.2
LATENT DEMAND: MARKET COMPOSITION
Turkey is a large country with 70 million populations and over $300 billion GNP. Today, the U.S. is Turkey’s fourth largest trading partner and U.S. exports to Turkey totaled $3.36 billion in 2004. From January to November 2005, the United States exported U.S. $3.85 billion in goods and imported U.S. $4.93 billion from Turkey. Turkey has over 8 million automobiles on Turkish roads, of which nearly 31% are commercial vehicles. Turkey spent over $8.5 billion for the import of crude oil in 2005. Oil prices having doubled during the last three years, alternative fuel resources are becoming extremely important. Turkish farmers and some transportation companies have started using Biodiesel in Turkey. In today’s environmental pollution caused by car exhausts, usage of biodiesel and biogas will become more and more important. Biodiesel is a clean burning alternative fuel, produced from domestically grown, renewable resources. Biodiesel contains no petroleum products, but can be blended at any concentration with diesel from fossil sources to create a biodiesel blend. It can be used in compression-ignition (diesel) engines with little or no modification. Biodiesel is simple to use, biodegradable, non-toxic, and basically free of sulphur compounds and aromatics. Diesel engines would operate on a variety of vegetable oils. Biodiesel is made in a chemical process called transesterification, where organically derived oils (vegetable oils, animal fats and recycled restaurant greases) are combined with alcohol (usually methanol) and chemically altered to form fatty esters such as methyl ester. The biomass-derived esters can be blended with conventional diesel fuel or used as a neat fuel (100% biodiesel). The process results in two products—methyl esters (the chemical name for biodiesel) and glycerin (a valuable by-product usually sold for use in the production of soap). 100% biodiesel is named as B100 or “neat biodiesel”. The most common blend is B20 (20% biodiesel and 80% petrodiesel). Biodiesel
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Biofuel Equipment and Services
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should not be confused with straight vegetable oil. Fuel-grade biodiesel is produced to strict industry specifications in order to ensure proper combustion and engine performance. With agricultural commodity prices approaching record lows, and petroleum prices reaching ever new record highs, it is clear that more can be done to guide the farmers to grow more oil rich seeds to be used in production of vegetable oil. As a result, this would be a major resource for biodiesel. Turkey is an agricultural country and some of the agricultural products that the farmers are producing are hardly meting their costs. If biodiesel is used in the tractors and other farming vehicles, this will also make agricultural production less costly. Some of the oils, which are widely used in the production of biodiesel, are soybean oil, canola oil, sunflower oil, cottonseed oil, and animal fats. Biodiesel has a higher cetane number than conventional diesel, which increases the engine’s performance. It also serves as a high-quality lubricant and can enhance the life of heavy-duty machine engines. Production of biodiesel in Turkey is a major growing trend. Turkey is aligning its regulations with that of EU. One of the EU directives is about encouragement of usage of biofuels. The EU is supporting biofuels with the aim of reducing greenhouse gas emissions, boosting the decarbonization of transport fuels, diversifying fuel supply sources, offering new income opportunities in rural areas and developing long-term replacements for fossil fuels.
2.3
LATENT DEMAND: MARKET DATA
Around the world, many other countries have now launched biodiesel programs, using a wide range of different feedstock, from cassava to used cooking oil. The United States’ National Biodiesel Board anticipates that 75 million gallons of biodiesel will be produced in 2005, or three times as much as in 2004. Production of biogas has increased significantly, but it is used mainly for combined power and heat generation. Although in Europe more than 500,000 gas-fuelled vehicles have been sold in recent years, they mainly run on fossil gas. However, biogas as a transport fuel is used in some countries and Sweden has about 50 biogas refueling stations. Average imports of bioethanol in Europe increased by 77% over 2002-2004 compared to the previous three-year period (1999-2001), when they totaled 1 447 839 hl. Currently, Petrol Ofisi is the only biogas supplier in Turkey. Turkey achieved a major step in production of biogas/biodiesel in Europe. While Germany has approximately 1.8 million tons of alternative fuel, Turkey increased its production capacity to somewhere between 450,000-870,000 metric tons and became the second largest producer in Europe. The other large producers of biofuel in Europe are France and Italy. Currently, there are 144 biodiesel producers in Turkey. Most of these are small producers while there are several major producers. Some of these producers are seeking for foreign technologies and foreign investors to expand their production. Depending on the raw materials, the production cost of the biodiesel is 70-85 cents per liter depending on the raw material. It is sold in the market for approximately one dollar per liter plus 18% VAT in the market. It is being currently used as fuel for agricultural machinery and central heating as well as construction companies using it for their construction machineries. When it starts to be sold in gasoline stations, the consumption will considerably increase. The price of gasoline is rather high in Turkey. It is approximately $1.50-$1.60 per liter because of the taxes imposed on gasoline and diesel fuels. For a 50,000-ton biodiesel capacity plant, an investment of $1-10 million depending on the technology difference is required. In Turkey, the petroleum products consumption is about 35 million tones. If 2% of this requirement is met by biodiesel, Turkey requires at least 700,000 tons of vegetable or animal oil. Ministry of Agriculture is considering providing incentives for the production of canola, which is the best resource for the production of biodiesel.
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The major provinces that biodiesel is produced are Gebze, Adana, Izmir, Bursa, Polatli, Sanliurfa, Tarsus, Kirikkale and Ankara. Turkey has approximately 350,000 tons of animal and vegetable oil waste, which is not being fully utilized for production. Only 50,000 tons of such waste oil is being collected. Turkey has over 25 sugar factories owned by the Federal Government. These factories will be privatized and can be a good resource for biofuel as they use sugar beet for sugar production.
2.4
LATENT DEMAND: LEADING SEGMENTS
Biofuel production equipment, automation systems, data lodging devices and controlling equipment are the best prospects. U.S. firms will also find excellent market potential in consulting and engineering services for the design, construction and management of biofuel production systems and installations, financial consulting services, educational programs and services for end-users. Additional opportunities for the organization, installation, inspection, operation and maintenance of biofuel installations are available for U.S. firms. Agreements for the transfer of manufacturing technology for biofuel equipment and joint venture or licensing arrangements for the local production of that equipment including assembly, accessories, and automation instrumentation also have excellent sales prospects in Turkey. A major opportunity exists to supply a technology to Bogazliyan sugar factory, which is currently under construction by Kayseri sugar factory. The investors plan to produce biofuel and are seeking for suppliers.
2.5
PROSPECTIVE BUYERS
Biodiesel producers established an Association named as ALBIYOBIR (www.albiyobir.com), which stands for Alternative Energy and Biodiesel Producers Association. This organization has approximately 150 members who are one way or the other involved in biofuel production. Their members would be the prospective buyers as they plan to expand and introduce new products into the market such as biodiesel resistant to the freezing conditions. There are many companies in Adana and Gaziantep, which would like to obtain biodiesel technology from the United States. Most of the companies already producing biodiesel are open to joint ventures with U.S. companies.
2.6
ACCESSIBILITY: MARKET ENTRY
Biodiesel imports into the EU are subject to an ad valorem duty of 6.5%. However, there is no significant external trade, since the EU is by far the world’s biggest producer. Although technical traits are reported to be less favorable than for rapeseed oil, biodiesel generated from imported soya and palm oil can be mixed in low percentages with rapeseed biodiesel without major problems. There is currently no specific customs classification for bioethanol for biofuel production. This product is traded under code 2207, which covers both denatured (CN 2207 20) and indentured alcohol (CN 2207 10). Both denatured and indentured alcohol can then be used for biofuel production. To be successful in the Turkish market, most U.S. companies opt to have a local representative or have a liaison office in entering into the market. When the business develops, companies open up subsidiary companies. Companies rely on the local experience and knowledge as to how “business is done” in this exciting market. Knowing the regulatory and business framework is almost an impossible task without the support of a local business partner.
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Marketing of most foreign products in Turkey is through foreign suppliers’ representatives or distributors. Depending on the location of consumers/end-users, most distributors have a dealer network throughout the country or in areas where the product is most used—in the case of several industrial sectors; a dealer/repair network may be required. Commission representatives/agents, on the other hand, periodically visit their customers together with their foreign principals to maintain strong personal contact, a very important marketing tool in Turkey. Unless a U.S. firm’s interests are large enough to warrant opening an office in the country, the most effective means of selling in Turkey is through a reliable and qualified local representative. Personal contact is extremely important in Turkish business in both private and public sectors. When dealing with government tenders, an agent is an absolute necessity in view of complicated bureaucratic procedures and the language barrier. An American firm should carefully investigate the reputation and possible conflicting interests of any prospective representative or agent before signing contractual agreements. Agency agreements under Turkish law are private contracts between two parties and their stipulations vary according to mutual consent. There are no fixed commission rates. It is recommended that sole manufacturer representatives/distributors be appointed, either for a particular sales territory, by product or for a particular market niche. In cases where a large volume of government business is expected, it is essential either to appoint an Ankara firm or an Istanbul firm with a branch office in the capital. Although 100% foreign ownership is permitted (except in the media), most U.S. investment in Turkey is in the form of joint venture or licensing operations. Most Turkish companies prefer to establish joint ventures with U.S. suppliers to overcome shipping costs and European competition. Especially in view of customs duties applied to U.S. products vis-à-vis zero customs charges for European-origin goods (Turkey joined the European Customs Union in 1996), many U.S. firms have chosen local production as a way to profitably penetrate the Turkish market. Especially in large urban centers, a highly sophisticated infrastructure exists (legal support, financial and consulting services) which may be required by potential foreign investors or joint venture partners. Major U.S. accounting/auditing firms, law firms and banks also have established branches in Turkey. Price, quality, financial credit terms, and length of repayment period are the most important factors in purchasing decisions. Other factors that affect sourcing decisions are the suppliers’ reputation, the reputation of the quality and reliability of their products, references, qualifications of the local partner and previous experience in dealing with particular suppliers. Especially in larger Turkish cities, international trade promotional events, such as fairs, exhibitions and seminars, are common methods of sales promotion. These fairs are also opportunities for U.S. companies to assess (and meet) existing competition, since all major foreign and local suppliers participate in such events. The catalogs of the events serve as ‘trade lists’ on specific product categories. Currently, there are about seventy international fair and exhibit organizers in Turkey. The Export-Import Bank of the United States (Eximbank) is open for business in Turkey and offers a variety of credit facilities to U.S. firms exporting to Turkey as well as providing project financing for U.S. investments. Eximbank does not have a ceiling for Turkey as long as a Treasury guarantee is provided (for the public sector). For the private sector investments, Eximbank considers the financial records of the Turkish company or the ability of a project to generate enough revenue to pay back the loan. The U.S. Trade and Development Agency (TDA) is active in financing pre-feasibility and feasibility studies and pre-design work for major government projects and private sector projects, while the Overseas Private Investment Corporation (OPIC) insures and provides investment credit financing to many U.S investments in Turkey. U.S. firms may also compete for contracts financed by the World Bank. Most major government tenders still require suppliers’ credits.
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Biofuel Equipment and Services
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MARKET ISSUES AND OBSTACLES
The European Commission is now focusing on transport, which is responsible for around 21% of the EU’s harmful greenhouse gas emissions. A wide range of actions is already being taken. Vehicle manufacturers are developing new models that are cleaner and more fuel-efficient. Efforts are being made to improve public transport and rationalize the transportation of goods. Biofuels can also make a contribution. Processed from biomass, a renewable resource, biofuels are a direct substitute for traditional petrol and diesel and can readily be integrated into fuel supply systems. Biofuels could also help prepare the way for other advanced transport fuel alternatives. In 2003, the Biofuels Directive (www.managenergy.net/products/R1247.htm) on the promotion of the use of biofuels and other renewable fuels for transport set out indicative targets for Member States. To help meet the 2010 target—a 5.75% market share for biofuels in the overall transport fuel supply—the European Commission has adopted an EU Strategy for Biofuels. In Turkey, Energy Market Regulatory Authority (EMRA) has recently enforced a new regulation that each biodiesel producer must obtain a license from EMRA. The deadline for this is February 28, 2006. Certainly, the new investors will also have to obtain such a license regardless of this deadline. According to this regulation, biodiesel producers will not be able to deliver biodiesel directly into the market. Like in the oil products, biodiesel producers will have to sell into the market through those companies, which have distributor license. To obtain a distributor license, it is required by the regulation that a distribution company must distribute at least 60,000 tons of fuel. This standard may be decreased for biodiesel distributors in the future. Turkish Standards Institute (TSE) (www.tse.gov.tr) is working on issuing the biodiesel standard in Turkey, which will probably be similar to EU standards.
2.8
KEY CONTACTS
Minister of Agriculture Contact: Mr. Fikret Akin Erdem, Adviser Tel: +90-312-418-5893, 419-1677 E-mail:
[email protected] or
[email protected] www.tarim.gov.tr ALBIYOBIR Alternative Energy and Biodiesel Producers Association 8. Cadde, No. 46/3, Asagiovecler, Ankara, Turkey Contact: Mr. Tamer Afacan, President; Mr. Fikret Eginer, Secretary General Tel: +90-312-441-9934, 472-1266 E-mail:
[email protected] www.albiyobir.com NOTE: ALBIYOBIR almost has 150 member companies. Energy Market Regulatory Authority (EMRA) Ziyabey Caddesi, No. 19, 06520 Balgat, Ankara Contact: Mr. Umit Bilek, Biofuel Specialist; Mr. Mustafa Sagir, Energy Expert Tel: +90-312-287-2560 Ext. 507, Ext. 540 Fax: +90-312-287-7800 E-mail:
[email protected],
[email protected] www.epdk.org.tr/english/default.asp
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3 3.1
MACRO-ACCESSIBILITY IN TURKEY EXECUTIVE SUMMARY
There are several advantages to exporting to Turkey including an average tariff on industrial goods of 4.65% and a strategic location for regional markets. Traditionally, Turkish corporations have satisfied most of their financing requirements through the banking industry. The U.S. Export-Import Bank, the Overseas Private Investment Corporation and the U.S. Trade and Development Agency are open for business in Turkey. Potential investors and exporters in Turkey face many of the same challenges that exist in other developing countries, such as inconsistent, sometimes contradictory policies and lack of transparency in decision-making. Turkey is a complex and challenging market requiring adaptability and persistence. Careful planning and patience are the prerequisites for success in Turkey. U.S. firms that are willing to invest time to develop market presence should expect to be rewarded.
3.2
ECONOMIC FUNDAMENTALS AND DYNAMICS
Turkey’s economy is a mix of modern industry and commerce along with traditional agriculture, which still accounts for nearly 40% of employment. It has a growing private sector, yet the state still plays a major role in basic industry, transport and communication. The most important industry-and largest exporter- is textiles and clothing. Since the mid-1980’s, Turkey’s economy has moved strongly away from the statist principles on which the Republic was founded, unleashing Turkey’s dynamic private sector as the engine of economic development. The country’s economic turnaround continues to rely on market forces, export-led development, integration with the world economy, and privatization.
3.2.1
Dynamic Markets
Energy The Turkish Parliament passed Law No. 4628 on 20 February 2001, which enforces liberalization of the electricity market. This law allows the private sector to generate, distribute and sell electricity freely in the Turkish market under licenses to be issued by the Energy Market Regulatory Agency (EMRA). More information on this law and the new regulations is available at EMRA’s Web site at www.emra.org.tr. EMRA issues all licenses for power generation. The Privatization Administration of Turkey (www.oib.gov.tr) plans to privatize the existing 33 regional electricity distribution grids in Turkey. These power plants have a total capacity of nearly 8,000 MW. Except for the gas-fired power plants in Bursa, Hamitabat and Ambarli II, the remaining plants are all coal-fired. In the future, the GOT may envisage the privatization of existing hydroelectric power plants.
Telecommunications The Turk Telekom Company is the main fixed line telecommunications operator with a subscriber number approaching 20 million. The GOT is considering the sale of some of Turk Telekom’s shares as bonds, convertible to potential shares of Turk Telekom.
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Transport The Turkish Government has entered into a bilateral finance agreement with the Government of Japan for the construction of a tube tunnel in Istanbul under the Bosphorus to connect Europe with Asia.
Information Technology There are approximately 4 million computers in Turkey, with schools requiring computer science studies at a young age. This equates to a growing demand for hardware and software products. E-commerce has taken root in its early stages and consumer confidence in the electronic media is growing. International telephone tariffs remain comparatively high, inhibiting growth in international telephonic communications. The GOT is taking steps to improve the E-commerce environment having made recent changes in customs regulations easing the importation of small packages and shipments into Turkey, especially improving the business climate for B2C transactions. Additionally, commercial banks are offering Internet Point of Sale (POS) support, which makes payment by credit card simpler.
Textiles The textile sector is Turkey’s largest manufacturing industry and its largest export sector. Turkey’s textile producers are generally modern and highly competitive.
Other Principal Industry Sectors Other principal industry sectors are defense technology, tourism services, building products, automobile spare parts and service equipment, mining equipment and electronics. In the defense sector, despite delays or cancellations in new systems, the GOT is still procuring equipment and services to maintain one of the world’s largest air, sea and land forces.
3.2.2
Government Intervention Risks
Today, Turkey’s private sector dominates economic production and is the engine for growth. Despite the growing role of the private sector, the GOT continues to be a major actor in the economy due to bureaucratic “red tape” requirements, lack of transparency in regulations and standards, and weak enforcement of existing regulations. The GOT adopted a foreign direct investment law in early June 2003 that aims at decreasing the bureaucratic hurdle for investors.
3.2.3
Balance of Payments Issues
International Economic Relations On January 1, 1996, the EU and Turkey entered into a customs union, based on a commitment made between the two parties in 1973. The agreement covers industrial products and processed agricultural goods, and includes transitional protection for a short list of sensitive items. Turkey has also adopted the EU’s Common External Tariff, resulting in lower duty rates for third countries, like the United States. Under the terms of the agreement, Turkey has harmonized most of its commercial laws and regulations with the EU, and is still adopting new laws to be in compliance with EU standards.
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Turkey is a member of the World Trade Organization (WTO). It signed a free trade agreement with the European Free Trade Association (EFTA) in 1991, and has free trade agreements in place with Israel and most Central and Eastern European counties. In 1992 Turkey and ten other regional nations formed the Black Sea Economic Cooperation Organization, but this organization has had a limited impact on trade and business. Turkey is also a founding member of the ECO, the Economic Cooperation Organization, and in 1999 Turkey became a member of the Group of 20 (G-20) forum of finance ministers and central bank governors from “systematically important” countries from around the world. Due to its proximity, as well as linguistic and ethnic ties, Turkey has continued to develop links to many of the Central Asian and Caucasus states. The GOT encourages the establishment of joint ventures between Turkish and foreign firms to further tap the potential of the emerging markets of these regions.
3.2.4
Infrastructure Development
Airports Major international gateway cities are Istanbul (Ataturk International Airport), Izmir (Adnan Menderes Airport), and Ankara (Esenboga Airport). However, airports open to international air traffic also include, but are not limited to, Nevsehir, Adana, Trabzon, Isparta (Suleyman Demirel Airport), Antalya, Dalaman, and Milas-Bodrum. Ataturk International Airport is the main gateway to the country for international flights and the central point of connection to the country’s extensive domestic network. Ataturk Airport’s modern international passenger terminal, built under a build-operate-transfer (BOT) arrangement, began operations in January 2000. With a capacity of 14 million passengers per annum and an area of 186,000 sq. meters, the new terminal is three times larger than its predecessor and is one of the largest in Europe. With 18 boarding bridges and another 12 gates, the terminal can handle 30 simultaneous gate arrivals and departures. Throughout Turkey, there are 33 airports, 22 of which are open to international traffic. The Sabiha Gokcen International Airport (named for Turkey’s first woman aviator and the adopted daughter of Ataturk) on Istanbul’s Asian side became operational in January 2001. In its first year of operation, the Sabiha Gokcen International Airport had fewer than 100,000 passengers use the facility, despite a terminal capacity of 3.5 million passengers. The airport, which is the first privately managed airport in Turkey, services primarily cargo and charter operations. The airport, with a potential capacity of 10 million passengers, is well positioned to vector arriving and departing traffic from Istanbul’s Ataturk International, thereby potentially alleviating the increasing congestion in the Istanbul Ataturk Airport’s terminal control area (TCA). Turkish Airlines (THY) and several private firms operate extensively on domestic lines. Major international airlines serving Turkey include Delta, Air France, Austrian Airways, Alitalia, British Airways, KLM, Lufthansa, Olympic Airways, Singapore Airlines, and Swiss. American Airlines, having announced a marketing agreement with THY in 1999, continues to offer flights from Istanbul to its hubs at JFK and Chicago through a code-share arrangement with THY. American further services THY passengers with onward direct flights to a number of domestic U.S. destinations. United serves Istanbul and Ankara under a code-share agreement with Star Alliance partner Lufthansa. The United Sates and the GOT signed an “open skies” aviation agreement in May 2000, with the Council of Ministers approving the agreement on July 18, 2001.
Ports Shipping plays a major role in the Turkish economy and a number of large ports dot the country’s 8,300-kilometer coastline. Along Turkey’s 1,100-kilometer Black Sea coast lie the ports of Hopa, Rize, Trabzon, Giresun, Samsun, Sinop, Zonguldak, Bartin, and Karadeniz Ereglisi, which handle mainly exports of steel products, tea and hazelnuts and import cargo of coal, iron ore, raw minerals, fertilizers and bulk construction materials.
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The area along the Marmara Sea is one of Turkey’s industrial powerhouses and home to about one quarter of the country’s population. It encompasses both the Bosphorus and the Dardanelles Straits, the only passage between the Mediterranean and the Black Sea. This is one of the busiest maritime routes in the world with an annual average of 12,000 transit passages. The main Marmara ports, Bandirma, Mudanya, Canakkale and Gemlik are dwarfed by the ports of Istanbul. The oldest port in Istanbul is Haydarpasa, which is owned by the Directorate General of Turkish Railways (TCDD) and specializes in container operations. Salipazari is reserved for cruise ships. Construction on Zeytinburnu has been completed, and the port is in operation. The region around the Gulf of Izmit is the country’s industrial heartland and its ports play an important economic role. There are seven public ports and berths, as well as 17 private berths, handling a combined annual average of 30 million tons of cargo. Cargo is mostly in the form of raw industrial inputs, semi-finished materials, chemicals, steel, and petroleum. The ports on the Aegean Sea Coast include Izmir (operated by TCDD-Turkish Railways), Gulluk, Kikili, Nemrut, Aliaga, Marmaris, Cesme and Gocek (operated by TDI-Turkish Maritime Enterprises). The port of Kusadasi is the main Aegean port for the cruise industry. Turkey’s main Mediterranean ports are Iskenderun, Yumurtalik, Mersin and Antalya. About 75 percent of the country’s steel exports transit through Iskenderun. The largest Mediterranean port is Mersin, which acts as the export hub for southeast Anatolia’s products and is one of the main ports in the eastern Mediterranean. The Yumurtalik port (through Ceyhan) serves the Iraqi oil pipeline. Antalya has a large modern cold storage facility (10,000 tons) and handles both domestic and international cargo traffic.
Railways Of Turkey’s approximately 10,508 kilometers of railways, 8,824 kilometers are electrified. Diesel locomotives power most trains in the Turkish rail system. The aging system badly needs renovation.
Highways Turkey’s road network is extensive; there are 1,726 kilometers of motorways, some of which are operated as toll roads. Additionally, there are 311,345 kilometers of state highways and 29,540 kilometers of provincial roads. Turkey’s third city, Izmir, is a major land transportation hub, however highway construction is still necessary to connect Izmir with Adana, Ceyhan, Mersin and Iskenderun.
Courier Services Major international courier firms operating in Turkey include DHL, Federal Express, TNT, UPS, and Airborne Express International.
3.3 3.3.1
POLITICAL RISKS Economic Relationship with the United States
Turkey has been a vital U.S. ally since the beginning of the Cold War. The U.S.-Turkish security cooperation through NATO, the war on terrorism, and several peacekeeping operations - including Afghanistan. The United States is the primary supplier of Turkish military equipment and Turkey maintains the second-largest army in NATO. www.icongrouponline.com
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Turkey’s policies and actions are largely a positive force across a range of difficult regional issues, including: •
Afghanistan, where Turkey led the ISAF force in Kabul.
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Iraq, where Turkey was our partner in Operation Northern Watch and where we are now engaged in building a lasting democratic regime.
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The Caucasus, where Turkey shares our commitment to a peaceful, prosperous, and Euro-Atlantic communityoriented region.
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The Balkans, where Turkish F-16s flew side-by-side with U.S. aircraft in NATO operation Allied Force over Kosovo and where Turkish forces are engaged with us in keeping the peace.
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The Middle East, where Turkey has endorsed the President’s Middle East Roadmap and continues to support the Arab-Israeli peace process. Turkey is committed to expanding its ties with Israel, Jordan, and Egypt.
3.4
POLITICAL RISKS
Turkey was formally recognized as a candidate to join the European Union at the Helsinki summit in December 1999. The EU-Turkish accession partnership agreement, finalized in November 2000, established a “road map” of human rights, democratization, and other reforms required for Turkey to formally accede to the EU. This process will have profound implications for the expansion of human rights in Turkey, enhancing its role as a model of secular democracy in the region. Beginning in the early 1970’s, and with a break only between the September 1980 coup and 1983 restoration of civilian rule, domestic terrorism has afflicted Turkish society. Between 1984 and 1999, the Kurdistan Workers’ Party (PKK) employed terrorism in an unsuccessful effort to establish an independent state in southeastern Turkey. Following the arrest of PKK leader Abdullah Ocalan in February 1999 and his conviction in June 1999, the PKK almost completely ceased to use terrorism as a political tool, although it did not comprehensively reject terrorism. Ocalan remains jailed for life after Turkey removed the death penalty from its criminal law in accordance with EU policy. The United States recognizes the PKK’s successor organization, Kurdistan Freedom and Democracy Congress (KADEK), as an international terrorist organization. Other terror groups remain active. The Chief of Police of Diyarbakir was assassinated in January 2001, apparently by Turkish Hizbullah, a fundamentalist Islamic terror organization.
3.4.1
The Political System
The Turkish political system, as defined by the 1982 Constitution, is a secular, parliamentary democracy with executive, legislative and judicial branches. The executive branch includes a President, who serves as chief of state, the Prime Minister, who heads the government, and the Council of Ministers (or Cabinet). The President, who plays a non-partisan role, has broad powers of appointment and supervision, and is chosen by the Parliament for a term of seven years and cannot be reelected. The legislative branch of the government is the Turkish Grand National Assembly, which consists of 550 deputies elected in national elections at least every five years. The Prime Minister administers the government; and the Prime Minister and Cabinet are responsible to the Parliament. Elections are by proportional representation. To participate in the distribution of seats, a party must obtain at least ten percent of the votes cast at the national level. www.icongrouponline.com
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The judicial system consists of a constitutional court, a series of state courts that consider terrorist crimes, a council of state, and a high council of judges and prosecutors.
3.5 3.5.1
MARKETING STRATEGIES Distribution Channel Options
Marketing of most foreign products in Turkey is through foreign suppliers’ representatives or distributors. Depending on the location of consumers/end-users, most distributors have a dealer network throughout the country or in areas where the product is most used. Commission representatives/agents, on the other hand, periodically visit their customers together with their foreign principals to maintain strong personal contact, a very important marketing tool in Turkey.
3.5.2
Agents and Distributors
Unless a U.S. firm’s interests are large enough to warrant opening an office in the country, the most effective means of selling in Turkey is through a reliable and qualified local representative. Personal contact is extremely important in Turkish business in both private and public sectors. When dealing with government tenders, an agent is an absolute necessity in view of complicated bureaucratic procedures and the language barrier. An American firm should carefully investigate the reputation and possible conflicting interests of any prospective representative or agent before signing contractual agreements. Agency agreements under Turkish law are private contracts between two parties and their stipulations vary according to mutual consent. There are no fixed commission rates. It is recommended that sole manufacturer representatives/distributors be appointed, either for a particular sales territory, by product or for a particular market niche. In cases where a large volume of government business is expected, it is essential either to appoint an Ankara firm or an Istanbul firm with a branch office in the capital. Commercial Service Turkey, through its offices in Ankara, Istanbul and Izmir, provides a Gold Key Service, arranging custom-tailored appointment programs for visiting American business people. The Commerce Department’s International Partner Search, as well as the Matchmaker, Trade Mission, and Catalog Show programs are other options for U.S. companies looking for assistance in entering the Turkish market. The Foreign Agricultural Service also provides information and assistance to firms interested in marketing agricultural commodities in Turkey. For more information on the Commercial Service in Turkey, please visit our Web site at www.csturkey.com.
3.5.3
Franchising Activities
Since 1986, franchising has grown in the Turkish market. The Turkish National Franchising Association, Ulusal Franchising Dernegi (UFRAD), a member of the International Franchising Association (IFA), is traditionally the first point of contact and is an excellent meeting point for prospective franchisers and franchisees. Foreign franchises in Turkey are concentrated in fast foods and apparel, but other areas are increasingly represented as well. In terms of a legal framework, franchising is considered in the same category as foreign investment. The GOT agency responsible for reviewing foreign franchise transactions is the Foreign Investment General Directorate (FIGD) of the Undersecretariat of the Treasury (UT). Foreign franchise proposals are generally favorably received by FIGD in view of their potential for generating employment opportunities.
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Franchises are governed under Foreign Capital Incentive Law 6224, promulgated in 1984, and Decree No. 86/10353 dated February 1, 1986, with its communiqué No. I. These regulations stipulate that an applicant provide the FIGD with: •
A copy of the master franchise agreement
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Documents confirming the existence of the physical facilities for the franchise operation;
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A feasibility report
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Information on the foreign entity making the application (sales volume, assets, etc.); and
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Documentation of the product or service’s patent (if it is patented)
After the approval of the master franchise agreement by the FIGD, royalty revenue can be transferred abroad subject to a ten percent tax. The Block Exemption Decree (relief from the Free Competition Law) No. 1998/7 dated December 1998 is based on the European Community’s Law No. 4087/88. If a franchise agreement meets the requirements of this decree, it is exempt from the Free Competition Law, which is often in conflict with certain aspects of the franchising concept. Until this decree, each franchisee was obliged to obtain an individual exemption status by applying to the Competition Committee.
Franchising Contacts National Franchising Association (Ulusal Franchising Dernegi-UFRAD) Ergenekon Caddesi Pangalti Is Merkezi 89/15 80240 Pangalti Istanbul, Turkey Tel: [90] (212) 296-6628 Fax: [90] (212) 224-5130 Contact: Mr. Mahir Saranga, President Internet: http://www.ufrad.org.tr UFRAD annually organizes a franchising fair, which attracts significant interest. The fair will be held September 1215, 2002 at the CNR International Fair Center in Istanbul. Undersecretariat of Treasury Directorate General of Foreign Investment Eskisehir Yolu, Inonu Bulvari Emek Mevkii, Ankara, Turkey Tel: [90] (312) 212-8800 (switchboard), [90] (312) 212-8414 or 212-8915 Fax: [90] (312) 212-8916 E-mail:
[email protected] Internet: http://www.treasury.gov.tr The International Franchising Association in Washington, D.C. (1350 New York Avenue, NW, Washington, D.C. 20005-4709, tel. (202) 628-8000; fax: (202) 628-0812), has been active in Turkey, organizing visits to Turkey by potential U.S. franchisers and, in cooperation with UFRAD, putting them in contact with potential local franchisees. Most large U.S. accounting/auditing/consulting firms, many U.S. banks, and several U.S. law firms also have offices in Turkey to assist American firms interested in the Turkish market.
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Direct Marketing Options
Unless a U.S. firm has established an office in Turkey, direct marketing from the United States without an agent or representative is not recommended. In fact, it is virtually impossible to surmount complicated bureaucratic requirements, language obstacles, and purchasing transactions without a competent local representative/agent. Especially for those firms with sales potential large enough to warrant it, a local affiliate is the best possible way of selling to this market without an agent, representative or distributor.
3.5.5
Joint Ventures and Licensing Options
Although 100 percent foreign ownership is permitted (except in the media), most U.S. investment in Turkey is in the form of joint venture or licensing operations. Most Turkish companies prefer to establish joint ventures with U.S. suppliers to overcome shipping costs and European competition. Especially in view of customs duties applied to U.S. products vis-à-vis zero customs charges for European-origin goods (Turkey joined the European Customs Union in 1996), many U.S. firms have chosen local production as a way to profitably penetrate the Turkish market. Law No. 6224 and Decree No. 86/10353 govern joint ventures/licensing, as well as direct foreign investment in the country. The Undersecretariat of the Treasury, General Directorate of Foreign Investment governs investment regulations. Especially in large urban centers, a highly sophisticated infrastructure exists (legal support, financial and consulting services) which may be required by potential foreign investors or joint venture partners. Major U.S. accounting/auditing firms, law firms and banks also have established branches in Turkey.
3.5.6
Creating a Sales Office
Foreign investment and the establishment of offices in Turkey are governed by Foreign Investment Law number 6224 (dated January 18, 1954--published in the Official Gazette on January 24, 1954)—“The Law Concerning the Encouragement of Foreign Capital,” and the “Foreign Capital Framework Decree” number 92/2789 (dated March 4, 1992--published in the Official Gazette on March 20, 1992). Under these regulations, foreigners may invest in Turkey, engage in commercial activities, participate in partnerships, purchase shares, open branch offices, and establish liaison offices. The General Directorate of Foreign Investment (GDFI) of the Undersecretariat of the Treasury is responsible for implementing foreign investment regulations. A foreign company is free to choose between a corporation (Anonim Sirket--A.S., or “Societe Anonyme” type corporation), private limited company (limited liability company), or branch office as the form for its operations in Turkey. The ‘A.S.’ form is more suitable for larger enterprises, since corporations can attract a large number of shareholders. The limited liability company form is more appropriate for the establishment of sales and distribution entities.
Company Formation Application for the establishment of a new company, opening a branch office, or initiating participation in an existing company is made to the GDFI in writing. The investment law requires that each partner invest a minimum of USD 50,000. This may be in cash or in kind. After permission is granted, the foreign investor can form a company, open a branch office or begin participation in an existing company.
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Liaison Offices Application to establish a liaison office is also made to the GDFI in writing. A liaison office cannot engage in any activity in Turkey that generates revenue. The expenditures of a liaison office must be met entirely from foreign currency brought in from abroad. Commercial Service Turkey suggests that an attorney be retained to obtain additional details and handle the application process and entity formation. Use of an accountant for tax planning is also recommended. Listings of American and Turkish lawyers and accountants resident in major Turkish cities are available from the Commercial Service in Turkey.
3.5.7
Selling Strategies
Once an American firm appoints a manufacturers’ representative or agent, the agent or distributor expects--and should receive--the principal’s full support with regard to literature, technical information and advertisement materials. Possible government buyers and potential private-sector importers should receive catalogs and other literature clearly indicating the name and address of the local representatives/distributors. A common and very effective support practice by European principals is to invite the representative/agent to the principal’s country every year for an annual sales meeting. Both agents and, if possible, their principals, should periodically visit existing and potential customers since the importance of personal contact in Turkey cannot be overemphasized. Especially in larger Turkish cities, international trade promotional events, such as fairs, exhibitions and seminars, are common methods of sales promotion. These fairs are also opportunities for U.S. companies to assess (and meet) existing competition, since all major foreign and local suppliers participate in such events. The catalogs of the events serve as ‘trade lists’ on specific product categories. Currently, there are about seventy international fair and exhibit organizers in Turkey.
3.5.8
Advertising and Trade Promotion
Chambers of Commerce and Industry, various associations, and specific sectoral publications serve as potential channels for advertisement. Television commercials or ads in major newspapers are also highly effective. In Turkey, there are 16 national TV channels. Major newspapers include: •
Cumhuriyet
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Hurriyet
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Milliyet
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Sabah
All of the above newspapers have their headquarters in Istanbul with branch offices in Ankara. The country’s foremost commercial/economic daily newspaper is Dunya. Major weekly periodicals are: •
Anka Haber (economy)
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Barometre (economy)
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Briefing (weekly inside perspective on Turkish political, economic and business affairs)
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Detay (economy-also publishes tenders on equipment procurement and infrastructure projects)
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Eba Newsletter (economy/English daily)
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Eba Report (a weekly special survey of Turkish business, industry and business contacts)
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Tebanews (weekly magazine--in English--on tenders, investment projects and the economy)
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There are many periodicals issued monthly. The most important publications in this category are: •
Bilgisayar (computer and related equipment)
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Bilisim (computer and related equipment)
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BT/Haber (weekly/computer and related equipment)
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Dunya Insaat (construction machinery)
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Finans Dunyasi (finance and economy)
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Turkey (economy)
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Yazilim Donanim (software)
3.5.9
Pricing Issues
Price has traditionally been the most important consideration in government tenders. Private sector buyers emphasize quality, but price remains a significant issue. In both public and private sales, creative financing which reduces up front cash outlays can mitigate this. While imports from European Union and EFTA countries are exempt from duties, American firms can still be competitive by offering financing alternatives to credit-hungry Turkish buyers. Financing also includes GSM-102 export credit guarantees, which is available for most agricultural products. The Commercial Service urges U.S. suppliers to utilize instruments like letters of credit and U.S. Ex-Im Bank products when establishing a new relationship with a Turkish importer. Supplying U.S. suppliers should identify local agents/distributors with the necessary service and maintenance capability. Depending on the level of business activity, a U.S. firm may also consider establishing its own office in Turkey to set up servicing facilities in the country’s major business centers.
3.5.10
Selling to the Government
The GOT procurement system is often frustrating and inconsistent, but it does not discriminate against international suppliers, with the United States succeeding in winning a large number of tenders. The main law that regulates government procurement is the State Procurement Law No. 2886, dated September 8, 1983. This law covers the agencies which have funds allocated from the central budget. In Turkey, many state-owned corporations (state economic enterprises-SEEs) generate revenues through sales of raw materials, semi-finished and finished products and services. Each of these has its own procurement rules and regulations in its operating charter. These regulations are much more flexible than Law No. 2886 since these SEEs operate as quasi-private sector companies. In terms of financial obligations and practices, SEE procurement regulations are largely based upon a government decree called “the Decree on the Operations of the State Economic Enterprises” No. 233 of June 8, 1984, Turkey’s Law of Obligations No. 818, dated April 22, 1926, and the Turkish Commercial Code No. 6762, dated June 29, 1956. Other exceptions are the Undersecretariat of Defense Industries (SSM) and the Ministry of National Defense. SSM procurement is financed off budget, through special taxes, and is not subject to Law 2886.
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Price, quality, financial credit terms, and length of repayment period are the most important factors in purchasing decisions. Other factors that affect sourcing decisions are the suppliers’ reputation, the reputation of the quality and reliability of their products, and previous experience in dealing with particular suppliers. In GOT tenders, state organizations give particular importance to the way proposals are prepared and to their adherence to administrative and technical specifications. Generally, the validity of the proposal must be three to six months from the bid date and the same validity is expected for the bid bond (generally a stand by letter of credit). If a company retracts its offer, the bid bond is forfeited. The bid bond is usually obtained from the actual supplier for three percent of the bid amount. The performance bond is usually six percent of the contract amount and is valid throughout the delivery or final acceptance beginning from the contract date. All bonds have to be counterguaranteed (confirmed) by a Turkish national bank. The GOT enacted the Electricity Market Law on February 20, 2001, which envisages a market that is competitive, transparent, and operates in accordance with provisions of private law. The law also established the Electricity Market Regulatory Authority. The Turkish Parliament passed the Natural Gas Market Law No. 4646 on April 18, 2001. This law liberalizes the trading of natural gas and authorizes the same independent regulatory body for electricity trading to also regulate the natural gas market. Companies are free to supply natural gas at wholesale to customers buying in excess of one million cubic meters of gas per year. Electricity generation companies are also able to purchase its own gas from the free market. The regulatory body issues the required licenses. This law also permits the private sector to distribute gas in cities.
3.5.11
Intellectual Property Risks
In 1995, as part of Turkey’s harmonization with the EU in advance of a customs union, the Turkish parliament approved new patent, trademark and copyright laws. Turkey also acceded to a number of multilateral intellectual property rights (IPR) conventions. Although the new laws provide an improved legal framework for protecting IPR, they required further amendments to be consistent with the standards contained in the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Amendments to the Copyright Law were passed by the Turkish Parliament in June 2001, further strengthening IPR enforcement and making Turkish IPR law TRIPS compliant. Turkish police and prosecutors are working closely with trademark, patent and copyright holders to conduct raids against pirates in Turkey. With greater IPR enforcement, prior U.S. industry concerns should be allayed. Intellectual Property Rights are addressed through the following two laws, six decree laws, two decrees and five regulations promulgated in 1994 and 1995: •
Decree Law No. 554, June 24, 1994 provides for the establishment of and functions of the Turkish Patent Institute
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October 25, 1994 decree for accession to the Stockholm Act of the Paris Convention
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Decree Law No. 551, June 27, 1995 provides for protection of patent rights
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Decree Law No. 554, June 27, 1995 provides for protection of industrial designs
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Decree Law No. 555, June 27, 1995 provides for protection of geographical indications
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Decree Law No. 556, June 27, 1995 provides for protection of trademarks
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Law No. 4115, July 7, 1995 provides for accession to the Patent Cooperation Treaty
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Decree No. 95/7094, July 12, 1995 provides for accession to Nice, Vienna and Strasbourg Agreements
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Decree Law 566, September 22, 1995, the amendment of the Transition Period of Patent Protection of Pharmaceutical and Veterinary Products and Processes
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Law No. 4128, November 7, 1995, the addition of penal provisions to the Decree Laws No. 551, 554, 555 and 556
3.5.12
Hiring Local Counsel
English-speaking attorneys specializing in commercial law, investment legislation, joint ventures, corporate law, tax law, bankruptcy law, public finance, banking corporations, criminal law, and civil law are available for consultation with U.S. business representatives. A list of specialized attorneys is available from CS offices in Turkey.
3.5.13
Performing Due Diligence
Companies can minimize their risk of exporting to new customers or entering into business with new partners by utilizing the U.S. Department of Commerce International Company Profile (ICP) program. An ICP provides up-todate information that includes bank and trade references; names of principals, key officers and managers; product lines; the number of employees; financial data; sales volume; reputation and market outlook, all at a reasonable price. For more information, please visit our Web site at www.csturkey.com.
3.6 3.6.1
IMPORT AND EXPORT REGULATION RISKS Tariffs, Non-Tariff Barriers, and Import Taxes
On January 1, 1996, Turkey and the European Union (EU) formed a customs union. The agreement covers industrial products and processed agricultural goods. The Republic of Turkey adopted the EU’s common external tariff (CCT), resulting in lower duties for imports from third countries, including the United States. The union establishes zero duty rates and no quotas for non-agricultural items of EU and European Free Trade Association (EFTA) origin. The Government of Turkey (GOT) estimates that as a result of its accession to the European Customs Union, the average duty rate for imports from the European Union and EFTA countries has dropped from approximately ten percent to zero. For products imported from third countries, including the United States, the average duty rate has dropped from ten percent to approximately five percent. Turkey has reserved some exempted categories for sensitive products with tariffs on these items generally much higher than the CCT. Turkey is a member of GATT/WTO and regulates its customs practices in line with GATT requirements. In 1989, Turkey, along with the United States, converted to the new GATT Harmonized System. While generally in compliance with the WTO agreement, Turkey has exceeded its annual export subsidy limits for sugar and wheat in the past. Turkey regularly fails to notify the WTO of changes to import requirements. Application of non-tariff barriers also poses problems for agricultural products such as wheat and bananas. Maintenance of high import duties on agricultural products, while consistent with WTO obligations, is not consistent with the spirit of the WTO agreement. Turkey’s failure to establish protocols for the importation of all meat products (except for breeding cattle-beef and dairy), effectively banning all imports is in violation of WTO obligations.
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Valuations on Imports
Import duties are calculated on the CIF value. Turkey is a signatory to Article VII of the General Agreements on Tariffs and Trade (GATT). The agreement stipulates that the customs valuation is the transaction value (the price that is actually paid or payable plus costs and expenses). Turkey is also obliged to comply with other Article VII provisions including the rapidity of clearance of goods, currency convertibility, and appeal privileges and rights. Turkish regulations do not allow for advance rulings on customs HS classification or on the applicable import duties on particular products. Customs surcharges including a value-added tax (VAT) being levied on most imported, as well as domestic, goods and services. The importer is responsible for paying the VAT. The VAT is calculated on a C.I.F. basis plus duty rate and any other applicable charges levied before the goods clear customs. It has a ceiling of 26 percent; however; most industrial products are charged a rate of 18 percent. Capital goods, some raw materials, imports by government agencies and state owned enterprises, and products for investments with incentive certificates are exempt from import fees.
3.6.3
Licenses Required for Imports
The 1996 Turkish import regime abolishes the requirement that every importer needs an import license and that the importer must obtain an import authorization from a bank. An importer only needs a tax number to import all but restricted items, e.g., firearms, hazardous materials, etc., which can be imported only by authorized establishments, or for which the approval of the Directorate General of Security is required. Agricultural imports, though, often do require import licenses and control certificates. The Ministry of Agriculture and Rural Affairs issues certificates.
3.6.4
Controls on Exports
The export of sensitive and dual-use materials covered by various international non-proliferation agreements and arrangements to which Turkey is a party, is controlled by a two-tier mechanism which involves licensing by the Ministry of National Defense (MND) and registration by the Undersecretariat for Foreign Trade (UFT) through the appropriate exporters’ union. Law No. 3763, of 1940, “The Control of Private Industrial Enterprises Producing War Weapons, Vehicles, Equipment and Ammunition,” requires a MND license for the export of all weapons and ammunition as well as the materials used for the production of weapons and ammunition. Sporting and hunting rifles are exempt from MND licensing. The second tier, UFT control via registration, was promulgated via Decree number 95/7623 in December 1995. As a part of the over all process, MND consults with UFT regarding proposed export sales. All exporters are required to be a member of one of the 13 exporters’ unions in Turkey. Sensitive goods, technology and dual-use materials are registered by the Istanbul Metals and Minerals Exporters’ Union (IMMIB) thereby creating a centralized mechanism monitoring the export company, product, quantity, and value. It is IMMIB that determines whether the intended export items require MND licensing and provides the UFT registration. It is UFT’s role to draft the general export policies and to monitor and control the overall trade control process.
3.6.5
Documentation Required for Trade
Turkish documentation procedures require a commercial invoice, a certificate of origin and a bill of lading or airway bill to accompany all commercial shipments. Import licenses and phytosanitary certificates are necessary for food and agricultural commodity imports. www.icongrouponline.com
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Commercial Invoice The commercial invoice must be submitted in triplicate, including the original copy; and must contain a complete description of the goods and all required payment terms. The original must be endorsed by the exporter as follows: “We hereby certify that this is the first and original copy of our invoice, the only one issued by our firm for the goods herein mentioned.” The Turkish Embassy or Consulate in the United States must certify the document. At least one copy of the invoice should accompany the goods, and the original should be sent to the importer through the correspondent bank.
Certificate of Origin The certificate of origin is to be prepared in duplicate. No corrections are permitted on this document, which is to be prepared in English by a local chamber of commerce. The certificate of origin must be certified by the Turkish Embassy or Consulate in the United States. One copy of the document must be surrendered to the customs authorities at the time of importation.
Bill of Lading/Airway Bill Details in the bill of lading should correspond exactly to those given in other shipping documents.
Proforma Invoices The proforma invoice must not be more than six months old at the time of application. It must contain an unexpired option (if appropriate), indicate freight and insurance charges separately, and bear the importer’s name.
3.6.6
Special Documentation
Special health certificates are required for imports of plants, seeds, animals and animal products. Plants, including fruits and vegetables, must be substantially free from pests and diseases and must have been grown in an area substantially free from prohibited pests and diseases. Additional information may be obtained from the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) at Tel: (301) 734-7885 or Fax: (301) 734-6402 (Veterinary Services) and Tel: (301) 734-8537 or Fax: (301) 734-5786 (Plant Protection and Quarantine). APHIS inspects and certifies that plants, plant products and live animals conform to health and sanitary requirements as mandated by the Turkish government. U.S. exporters are encouraged to obtain information from the importer prior to shipment because of the complexity of phytosanitary regulations.
3.6.7
Entering Temporary Imports
Goods may be temporarily imported into Turkey without payment of duties and tax if they are to be used in the production or manufacture of a product that is to be exported. The importer gives security in the form of a bank guarantee (temporary import bond) in the amount of applicable duties and taxes. Upon exportation of the finished product, the guarantee is remitted. Temporary admission of goods intended for re-export in their original form is permissible free of import duties and taxes with the approval of the Undersecretariat for Foreign Trade. Turkey is a signatory to the International Convention to Facilitate the Importation of Commercial Samples and Advertising Material. Samples of no commercial value are admitted duty-free. Other samples are assessed duties and taxes at the time of import, but these are refunded if the samples are re-exported within six months from the date of import. A letter of guarantee will be provided to Turkish Customs for a temporary import, with the guarantee www.icongrouponline.com
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being returned at the time of re-export. Samples should be listed on an invoice. Books, ne wspapers, magazines, catalogs, pamphlets, brochures, and similar advertising materials are exempt from customs duty. U.S. traders may also wish to consider a more simplified procedure in the form of an “ATA Carnet.” Carnets are international customs documents permitting the holder to temporarily import products as samples without paying customs duties or posting bonds. Virtually all goods, personal and professional, including commercial samples, professional equipment, goods intended for use at trade shows and exhibitions, computers, tools, cameras and video equipment, industrial machinery, automobiles, apparel and even jewelry are covered under a carnet. The reader may wish to check the “General List” to see if the goods are covered by ATA Carnet guidelines or call the Carnet-Help-Line at (800) 5-DUTYFREE or visit the Web site www.uscib.org for clarification. Normal processing of an ATA Carnet is five working days; expedited service is available at an extra charge. In the United States, carnets are sold by the U.S. Council for International Business and Roanoke Trade Services at the following locations: •
New York, NY: (212) 708-5078
•
Long Beach, CA: (800) 421-9324 or (562) 628-9306
•
Schaumburg, IL: (800) 762-6653 or (847) 969-8211
•
San Francisco, CA: (800) 255-4994 or (415) 732-5480
•
Miami, FL (also serves Houston): (800) 468-5467 or (305) 593-5583
•
Hunt Valley, MD: (800) 422-9944 or (410) 771-6100 x 12
•
Boston, MA: (800) 233-3620 or (617) 368-9907
•
Houston, TX (pick up site only): (800) 456-0422 or (713) 582-6464 x 102
With the carnet, goods may be imported without payment of duties and taxes. Carnets are valid for one year and may be used for multiple exists and entries to countries that accept the Carnet.
3.6.8
Labeling Issues
All packages, cases, and bales must bear shipping marks, numbers, dimensions, and the gross weight of the merchandise. Packages along with accompanying bills of lading for goods to be shipped through Turkey must be marked “In Transit.” All goods entering Istanbul or any other entry port in Turkey (Ankara, Iskenderun, Izmir, Mersin, Sinop, Samsun, and Trabzon) will be cleared through customs, and full payment of duty will be required unless the packages and bills of lading are marked “In Transit.” If so marked, the goods may be cleared for entry and reshipment.
3.6.9
Restrictions on Imports
Products currently prohibited include weapons and narcotics. However, under certain conditions the Ministry of the Interior, Security General Directorate will provide clearance to import shotguns, hunting rifles, and explosives.
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Local Standards
The International Standards Organization (metric) system is used for weights and measures. Electrical current is 220 volt, 50 hertz. Time in Turkey is Universal Time Coordinated (UTC) plus two hours, and it is seven hours ahead of Eastern Standard Time. Daylight Savings Time is April through October. The Turkish Standards Institute (TSE), established in 1954, sets standards in Turkey and keeps abreast of standards in other countries. TSE, an accredited agency in international markets, issues standards certificates. Almost allmajor companies seek TSEs certification for their products and services. This certificate helps to ensure manufacturers fair competition and ensures the customer of the quality of goods purchased. Correspondence to the TSE should be addressed as follows: Turk Standartlari Enstitusu (TSE) Necatibey Caddesi 112 Standart Hazirlama Baskanligi 06100 Bakanliklar Ankara, Turkey Tel: [90] (312) 417-0020 Fax: [90] (312) 425-4399 Web site: www.tse.org.tr Turkey has approximately 15,563 standards, 95 percent of which are compatible with ISO/EN standards. Turkey ranks third among European countries in terms of number of standards. Importers must receive TSE approval on imports of goods covered by obligatory standards. About 250 foreign companies, including DaimlerChrysler, Hitachi, General Electric, Philips, and Siemens that export their products to the Turkish market have received TSE certificates. All electrical products must be Turkish Standards Organization certified, however, products displaying the CE mark and being compliant with the appropriate EU directives are much easily accepted by the Turkish Standards Institute. Following Turkey’s resolution to implement the ISO 9000 Quality Management Standards in 1988, the TSE prepared the compatible TS-EN-ISO 9000 Series Turkish standards. Currently 441 companies have received ISO 9000 certification, 1,042 firms have received ISO 9001 certification and four companies received ISO 9003 certification.
3.6.11
Additional Trade Issues
Alcohol can only be imported at present by the government monopoly enterprise, TEKEL. A new law is being proposed to allow exporters shipping more than eight hundred thousand liters of alcoholic beverages to Turkey to be allowed importation and distribution rights independent from the TEKEL state enterprise. Private traders may import wine through TEKEL only for use in hotels and restaurants. Cigarettes can only be imported by TEKEL and cigarette producers who are permitted by the government under a special decree (such as Philip Morris, RJ Reynolds, British Tobacco, etc.). The Tobacco Law passed parliament in 2001. X-ray film can only be imported by the Red Crescent Association (sister organization to the Red Cross). Precious metals and stones, excluding diamonds, can only be imported by commercial banks authorized by the Central Bank (Decree No. 93/4143, March 21, 1993). Importing products such as pharmaceuticals; organic chemicals, especially those used to produce medicines and medical products; vaccines for both humans and animals; cosmetic products; chemicals used in cleaning and the food industry; live animals and plants; grains and plant seeds; and hormones require import permission certificates from the Directorate General of Curative Care Service of the Ministry of Health and Agriculture.
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Products requiring after-sales service such as motor vehicles, household electrical goods, office equipment and computers, cash registers, TV and video equipment, heaters, gas-fired burners, industrial machinery, automobiles, and wireless equipment require an import permit from the Ministry of Industry and Trade. In order to obtain such a permit, importers must guarantee that they will provide service and spare-parts in each of Turkey’s seven geographic regions, either by establishing offices or by signing agreements with existing service/parts firms. In July 2001, the GOT codified a regulation, which requires additional maintenance facilities to be established for companies importing automobiles into the Turkish Republic. Telecommunications equipment such as automatic data processing machines, electrical apparatus for line telephony or telegraphy, and telephone answering machines need type-approval of the Turkish Telecommunications Regulatory Authority. Further, all wireless equipment also requires approval from the Directorate General of Wireless Affairs (TGM). Under a regulation published in the Turkish Official Gazette of February 1, 1996 (No. 22540-supplementary issue), which discusses certain compulsory standards for about 70 products, importers are required to obtain a control certificate from the Ministry of Environment for materials considered detrimental to the environment. Such materials include hard coal, lignite, petrocoke, petroleum, arsenic, mercury, lead sulfides and carbonates, fluorocarbons, other chemicals and scrap metals.
3.6.12
Adherence to Free Trade Agreements
The EU confirmed Turkey’s status as an EU candidate status in December 1999, and Turkey has begun to reap the benefits of its 1996 customs union agreement with the EU, particularly in terms of improved economic efficiency. The customs union commits Turkey to adopt the EU’s common external tariff and a commercial policy “substantially similar” to that of the EU, including adoption of the EU’s preferential trade regime with third countries. Turkey has already signed Free Trade Agreements with the EFTA member countries and is in the process of finalizing agreements with the other EU applicant countries. Turkey is a founding member of the Black Sea Economic Cooperation (BSEC) in which the governments of Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and the Ukraine are nurturing multilateral cooperation among the members on a number of issues including trade. Turkey, along with Pakistan and Iran, is a founding member of the Economic Cooperation Organization (ECO). ECO, whose membership beyond the founders includes Afghanistan, Azerbaijan, Turkmenistan, Uzbekistan, Kyrgyzstan, Tajikistan and Kazakhstan has had limited success in improving trade cooperation. Turkey is a founding member of the Southern Europe Cooperative Initiative (SECI); a regional association aimed at encouraging cooperation among its member states on a variety of issues including customs, transportation and anti-crime efforts. SECI member states include Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Greece, Hungary, the Former Yugoslav Republic of Macedonia, Moldova, Romania, Slovenia and Turkey.
3.7 3.7.1
INVESTMENT CLIMATE Openness to Foreign Investment
The Government of Turkey (GOT) views foreign direct investment as vital to the country’s economic development and prosperity. Accordingly, Turkey has one of the most liberal legal regimes for FDI in the OECD. With the exception of some sectors, areas open to the Turkish private sector are generally open to foreign participation and investment. However, all companies - regardless of nationality of ownership - face a number of obstacles: high inflation, political and macroeconomic uncertainties, excessive bureaucracy, weaknesses in the judicial system, high and inconsistently collected taxes, weaknesses in corporate governance, arbitrary decisions taken at the municipal
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level, and frequent, sometimes unclear changes in the legal and regulatory environment. As a result, FDI inflows, at well below one percent of GDP over the last decade, have been far below that of more investor-friendly emerging markets as well as of Turkey’s potential. The GOT’s far-reaching program of economic and political reform agreed with the World Bank and IMF, and motivated also by multilateral agreements and EU accession, should address many of these problems, if fully and effectively implemented. Regulations governing foreign investment are, in general, transparent. A 1954 law on foreign investment (Law No. 6224) was substantially modified and liberalized by a 1995 Decree (Decree No. 95/6990) and associated communiqué. Legislation approved by Parliament in June 2003 (Law 4875 on Direct Foreign Investment) further liberalized the foreign direct investment regime by: eliminating screening of foreign investors in favor of a notification system; providing national treatment in acquisition of real estate to foreign-owned entities registered under Turkish law; and abolishing the specific minimum capital requirement for foreign investments (general capital requirements for all companies contained in the Turkish Commercial Code will continue to apply). The June 2003 law also scrapped several additional requirements, including a minimum USD 50,000 investment requirement to establish a corporation, become partners in an existing company, or open a branch office; the requirement to seek permission from Treasury if the capital increase would change the participation ratio between the foreign investor and any local partners; and Turkish companies were required to register with Treasury any licensing, management, or franchising agreements concluded with foreign persons. Foreign investors are subject to restrictions on establishment in certain sectors. The equity participation ratio of foreign shareholders is restricted to 20 percent in broadcasting, and 49 percent in aviation, value-added telecommunication services, and maritime transportation. However, companies receive full national treatment once they are established. Establishment in financial services, including banking and insurance, and in the petroleum sector requires special permission from the GOT for both domestic and foreign investors. The GOT privatizes State Economic Enterprises through block sales, public offerings, or a combination of both. Foreign investors generally receive national treatment in privatization programs. Turkish law allows foreign investors to acquire up to 45 percent of Turk Telecom, the monopoly provider of voice and other telecommunications services, with the Turkish government retain a single “golden” (blocking) share, in the company’s upcoming privatization. Turkish law and regulation concerning investment climate continues to evolve. We recommend checking with appropriate Turkish government sources for current and detailed information in this area. The following Web site provides the text of regulations governing foreign investment and incentives: www.treasury.gov.tr/english/ybsweb. A summary of these regulations can be found at: www.dtm.gov.tr/english/doing/iginvest/invest/htm and www.igeme.org.tr/introeng.htm.
3.7.2
Conversion and Transfer Policies
Turkish law guarantees the free transfer of profits, fees and royalties, and repatriation of capital. This guarantee is reflected in Turkey’s Bilateral Investment Treaty with the United States, which mandates unrestricted and prompt transfer in a freely usable currency at a legal market-clearing rate for all funds related to an investment. There is no difficulty in obtaining foreign exchange. There are no limitations on the inflow or outflow of funds for remittances.
3.7.3
Expropriation and Compensation
Under the 1990 Bilateral Investment Treaty with the United States (codifying existing Turkish law), expropriation can only occur in accordance with international law and due process. Expropriations must be for public purpose and
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non-discriminatory. Compensation must be reasonably prompt, adequate, and effective. Under the Bilateral Investment Treaty, U.S. investors have full access to the local court system and the ability to take the host government directly to third party international binding arbitration to settle investment disputes. There is also a provision for state-to-state dispute settlement. As a practical matter, the GOT occasionally expropriates private property for public works or for State Enterprise industrial projects. The GOT agency expropriating the property negotiates and proposes a purchase price. If the owners of the property do not agree with the proposed price, they can go to court to challenge the expropriation or ask for more compensation.
3.7.4
Dispute Settlement
There are no outstanding expropriation or nationalization cases. However, there are several investment disputes between U.S. companies and Turkish government bodies, particularly in the energy and tourism sectors. Turkey’s legal system provides means for enforcing property and contractual rights. The court system is overburdened, however, which sometimes results in slow decisions and judges lacking sufficient time to grasp complex issues. The judicial system is also perceived by the public and by business to be susceptible to external political and commercial influence to some degree. Judgments of foreign courts need to be reconsidered by local courts before they are accepted and enforced. Turkey has written and consistently applied commercial and bankruptcy laws. Monetary judgments are usually made in local currency, but there are provisions for incorporating exchange rate differentials in claims. Turkey is a signatory of the Washington Convention, and a member of the International Center for the Settlement of Investment Disputes (ICSID), and is a signatory of the New York Convention of 1958 on the recognition and enforcement of foreign arbitral awards. Turkey ratified the Convention of the Multinational Investment Guarantee Agency (MIGA) in 1987. The Turkish government accepts binding international arbitration of investment disputes between foreign investors and the state; this principle is included in the U.S.-Turkish Bilateral Investment Treaty (BIT). For many years, there was an exception for “concessions” involving private (primarily foreign) investment in public services. In 1999, the Parliament passed amendments to the constitution allowing foreign companies access to international arbitration for concessionary contracts. In 2000, the Turkish government completed implementing legislation for arbitration. In 2001, the Parliament approved a law further expanding the scope of international arbitration in Turkish contracts. In practice, however, Turkish courts have on at least one occasion failed to uphold an international arbitration ruling involving private companies.
3.7.5
Performance Requirements and Incentives
Turkey is a party to the WTO Agreement on Trade Related Investment Measures (TRIMS). Turkey provides investment incentives to both domestic and foreign investors, though these were scaled back in 2003. These include a corporate tax exemption of 40 percent of specified investment expenses deductible from future taxable profits for investments greater than 5 billion TL (approximately USD 3,600). Certain other incentives may require an incentive certificate from the Turkish Treasury Undersecretariat. Investment incentives are defined in a May 2003 Finance Ministry decree. For more information on the Turkish incentive system, please visit: www.investinturkey.gov.tr/incentives.htm.
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There are no performance requirements imposed as a condition for establishing, maintaining, or expanding an investment. There are no requirements that investors purchase from local sources or export a certain percentage of output. However, domestic or foreign investors who commit to realizing USD 10,000 of exports upon completion of the investment may be exempt from certain fees and taxes, such as those related to land registration or company establishment. Investors’ access to foreign exchange has no relation to exports. There are no requirements that nationals own shares in foreign investments, that the shares of foreign equity be reduced over time, or that the investor transfer technology on certain terms. There are no government imposed conditions on permission to invest, including location in specific geographical areas, specific percentage of local content - for goods or services - or local equity, import substitution, export requirements or targets, employment of host country nationals, technology transfer, or local financing. The GOT does not request that investors disclose proprietary information, other than publicly available information, as part of the regulatory approval process. Enterprises with foreign capital must send their activity report, submitted to the general assembly of shareholders, auditor’s report, and balance sheets to the Treasury’s Foreign Investment Directorate every year by May. With the exceptions noted under Section 1 “Openness to Foreign Investment” and Section 8 “Transparency of the Regulatory System”, Turkey grants all rights, incentives, exemptions and privileges available to national capital and business to foreign capital and business, on a MFN basis. American and other foreign firms can participate in government-financed and/or subsidized research and development programs on a national treatment basis. Visa, residence, or work permit requirements have not generally inhibited foreign investors. Expatriates may be assigned as managers or technical staff. We are aware of one case in the tourism sector in which denial of a residence permit has hindered operations for a foreign investor. Outside of the agricultural sector, Turkey generally has a liberal foreign trade regime. There are no discriminatory or preferential export or import policies directly affecting foreign investors. Turkey harmonized its export incentive regime with the European Union in 1995, prior to the start of the Customs Union. Turkey currently offers a number of export incentives, including credits through the Turkish Eximbank, energy incentives, and research and development incentives. Cash incentives for exporters have been eliminated. Foreign investors can participate in these export incentive programs on a national treatment basis. More information on Turkey’s trade regime can be found at www.foreigntrade.gov.tr. Military procurement generally requires an offset provision in tender specifications when the estimated value of the imported goods and/or services exceeds five million dollars. Turkish procedures provide little incentive for U.S. companies to satisfy offset requirements (the obligation to invest or buy Turkish exports as a condition of winning defense contracts) by investing in non-defense industries.
3.7.6
Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to freely establish and own business enterprises and engage in all forms of remunerative activity. As noted above, restrictions exist in the establishment of firms in certain sectors where the share of foreign ownership is limited to 20 percent in broadcasting and up to 49 percent in aviation, maritime transportation, and value-added telecommunication services. Certain activities are reserved for GOT owned enterprises. Beyond these areas, private entities may freely establish, acquire, and dispose of interests in business enterprises, and foreign participation is permitted up to 100 percent. Competitive equality is the standard applied to private enterprises in competition with public enterprises with respect to access to markets, credit, and other business operations. Turkey is adopting the EU’s competition policy; a Competition Board was established in 1997 to implement the 1994 competition (anti-monopoly) law. www.icongrouponline.com
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Intellectual Property Risks
Secured interests in property, both chattel and real are recognized and enforced. There is a recognized and reliable system of recording such security interests. For example, there is a land registry office where real estate is registered. Turkey’s legal system protects and facilitates acquisition and disposal of property rights, including land, buildings, and mortgages, although some parties have complained that the courts are slow in rendering decisions and that they are susceptible to external influence. Turkey’s intellectual property rights regime has improved, but still presents problems. In 1995, the Turkish Parliament approved new patent, trademark and copyright laws in connection with preparations for Turkey’s customs union with the EU. In 2001, the Parliament enacted amendments to the copyright law, which provide retroactive protection, expand the list of protected items and include deterrent penalties against piracy. These amendments brought Turkey into compliance with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) in most areas. Intellectual property holders have praised Turkey’s 2001 legislation as a significant improvement in the legal regime. In the software area, piracy rates have come down in recent years following an anti-piracy campaign and a directive to legalize software used in government bodies. However, piracy rates for recorded music remain persistently high. Trademark holders contend that there is widespread and often sophisticated counterfeiting of their marks in Turkey. Turkey’s 1995 patent law replaced a law originally passed in 1879. New trademark, industrial design, and geographic indicator laws were passed at the same time, completely revamping Turkey’s foundation for industrial property protection. Turkey also acceded to a number of international conventions in 1995, including the Stockholm Act of the Paris Convention, the Patent Cooperation Treaty, and the Strasbourg Agreement. The Turkish Patent Institute (TPI) was established in 1994 as an independent legal entity (Law No. 4004, June 16, 1994) under the Ministry of Industry and Trade. TPI’s mission is to support technological development in Turkey, establish and protect intellectual property rights and provide public information on intellectual property rights. Currently, TPI is understaffed to affect countrywide protection. In accordance with the 1995 patent law and Turkey’s agreement with the EU, patent protection for pharmaceuticals began on January 1, 1999. Turkey has been accepting patent applications since 1996 in compliance with the TRIPS agreement “mailbox” provisions. The patent law does not, however, contain interim protection for pharmaceuticals in the R&D “pipeline.” The key IPR concern for research-based pharmaceutical companies is Turkey’s lack of data exclusivity protection, which is required by the TRIPS agreement. The lack of data exclusivity, combined with the lack of interim patent protection, poses substantial problems for research-based pharmaceutical companies.
3.8
TRANSPARENCY OF THE REGULATORY SYSTEM
The GOT has adopted policies and laws, which in principle should foster competition and transparency. However, foreign companies in several sectors claim that regulations are sometimes applied in a nontransparent manner. The government in principle follows competitive bidding procedures. In 2003, Law 4734 on Public Procurement entered into force. The law established a board to oversee public tenders, and lowered the minimum-bidding threshold at which foreign companies can participate in state tenders. However, the law restricts preferences for domestic bidders to Turkish citizens and legal entities established by them. Domestic bidders who form joint www.icongrouponline.com
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ventures with foreign bidders are not eligible for the preference. The public procurement law may be further amended in the future. In general, labor, health and safety laws and policies do not distort or impede investment, although legal restrictions on discharging employees may provide a disincentive to labor-intensive activity in the formal economy. Certain tax policies distort investment decisions. High taxation of cola drinks discourages investment in this sector. Generous tax preferences for free zones provide a stimulus to investment in these zones, perhaps at the expense of investment elsewhere in Turkey. These preferences may be trimmed under legislation currently under consideration. Particularly beyond the establishment phase, bureaucratic “red tape” has been a significant barrier to companies, both foreign and domestic. Parliament passed Law 4884 in June 2003 to simplify company establishment procedures. The law repeals the permit requirement from the Industry and Commerce Ministry for certain firms, institutes a single company registration form and enables individuals to register their companies through local commercial registry offices of the Turkish Union of Chambers and Commodity Exchanges. The goal is to enable registration to be completed in as little as one day and to encourage electronic sharing of documents.
3.8.1
Capital Market Risks
The government has taken a number of important steps in recent years to strengthen and better regulate the banking system, whose weaknesses had contributed to macroeconomic instability over the previous decade. Parliament passed a law in June 1999 creating an independent agency, the Banking and Regulation and Supervision Agency (BRSA), to monitor and supervise Turkey’s banks. BRSA is headed by a board whose seven members would be appointed by the cabinet for six-year terms. The law’s provisions also toughen conditions for establishing new banks or branches, set credit limits to protect bank solvency, and strengthen regulatory and sanctioning powers, including authorizing the board to merge weak banks with stronger ones. BRSA launched an auditing and recapitalization program in early 2002 that resulted in increased transparency and better accounting for non-performing loans. The BRSA also has issued regulation limiting the extent of connected lending (between a bank and related corporate entities) and requiring frequent BRSA on-site monitoring. One of the most significant achievements of the reform program has been to restructure the state banks, which continue to control more than one-half of Turkish banking assets. The government liquidated one state bank (Emlak Bank), is trying to privatize another (Vakif Bank), and has significantly downsized (Ziraat Bankasi and Halkbank). Also, it largely eliminated state bank duty losses - unreimbursed subsidized loans from these banks - which had created an enormous financial hole that helped bring about the most recent financial crisis There is a regulatory system established to encourage and facilitate portfolio investments, though it needs improvements in transparency, accounting, and enforcement provisions to bring it up to EU and U.S. standards. The Capital Markets Board is responsible for overseeing the activities of capital markets, including activities of ISEquoted companies, and securities and investment houses. The Turkish private sector is dominated by a number of large holding companies, whose upper management is controlled by prominent families. Most large businesses continue to float publicly only a minority portion of company shares in order to limit outside interference in company management. Hostile takeovers are unknown in Turkey. There has been no attempt at a hostile takeover by either international or domestic parties in recent memory. There are no laws or regulations that specifically authorize private firms to adopt articles of incorporation or association to limit or prohibit foreign investment, participation, or control. Neither is there any attempt by the private sector or government to restrict foreign participation in industry standard-setting consortia or organizations.
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Political Violence
The general security situation throughout Turkey is stable, but sporadic incidents involving terrorist groups have occurred. The Turkish government is committed to eliminating terrorist groups such as the Kurdistan Workers’ Party (PKK - now renamed Kadek) and various other militant groups. These groups have used terrorist activity to make political statements, particularly in Istanbul and other urban areas of Turkey. Although the Turkish government takes air safety seriously and maintains strict controls, particularly on international flights, hijacking attempts have occurred.
3.8.3
Corruption
Corruption is perceived to be a major problem in Turkey by private enterprise and the public at large. The Turkish government conducted two significant anti-corruption operations in 2001, one in the Energy Ministry and the other in the Public Works Ministry. Several individuals were charged with corruption and wrongdoing in government contract tenders. The operations resulted in the resignation of both ministers and the arrest of many high-level officials. Parliament continues to probe corruption in the Energy Ministry and other government bodies. Corruption is reputedly a serious problem in public procurement, with frequent allegations that contracts are awarded on the basis of personal and political relationships of businesspersons and government officials. The judicial system is also perceived to be susceptible to external political and commercial influence to some degree. Turkish legislation outlaws bribery and some prosecutions of government officials for corruption have taken place, but enforcement is uneven. Turkey ratified the OECD antibribery convention, and passed implementing legislation in January 2003 to provide that bribes of foreign officials, as well as domestic, are illegal and not tax deductible. Bribes cannot be deducted from taxes as a business expense. The Turkish government became a party to three conventions of the Council of Europe in 2001: the Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime; the Criminal Law on Corruption; and the Civil Law on Corruption. By becoming a party to these conventions, the Turkish government agreed to define corruption as a predicate offense for money laundering and to address private sector corruption, as well as public sector corruption, as a crime. The Turkish government signed the UN Convention against Transnational Organized Crime in 2001. U.S. firms have sometimes alleged that corruption, or at a minimum nontransparent practices, have been a barrier to direct foreign investment. American companies operating in Turkey have complained about contributions to the community solicited, with varying degrees of pressure, by municipal or local authorities. The Prime Ministry’s Inspection Board, which advises a new Corruption Investigations Committee, is responsible for investigating major corruption cases. Nearly every state agency has its own inspector corps responsible for investigating internal corruption. The National Assembly can establish investigative commissions to examine corruption allegations concerning Cabinet Ministers for the Prime Minister; a majority vote in the parliament is needed to send these cases to the Supreme Court for further action. Transparency International has an affiliated NGO in Istanbul.
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Bilateral Investment Agreements
Since 1985, Turkey has been negotiating and signing agreements for the reciprocal promotion and protection of investments. Turkey has signed or initiated negotiations on bilateral investment treaties with 79 countries. Forty- six of these agreements are now in force, including with the United States, United Kingdom, Germany, the Netherlands, Belgium Luxembourg, Denmark, Austria, Sweden, Switzerland, Spain, Hungary, Poland, Romania, Tunisia, Kuwait, Bangladesh, China, Japan, South Korea, Indonesia, Croatia, Cuba, the Czech Republic, Estonia, Russian Federation, Kazakhstan, Georgia, Tajikistan, Ukraine, Uzbekistan, Belarus, Macedonia, Pakistan, Turkmenistan, Moldova, Kyrgyzstan, Albania, Bulgaria, Argentina, Bosnia, Malaysia, Egypt, Mongolia, Greece and Israel. Turkey’s bilateral investment treaty with the United States came into effect on May 18, 1990. A bilateral tax treaty between the two countries took effect on January 1, 1998. Turkey has signed avoidance of double taxation agreements with 59 countries; 39 of these are in force.
3.8.5
OPIC and Other Investment Insurance
The Overseas Private Investment Corporation (OPIC) offers a full range of programs in Turkey, including political risk insurance for U.S. investors, under its bilateral agreement with Turkey. OPIC is also active in financing private investment projects implemented by U.S. investors in Turkey. OPIC-supported direct equity funds, including the USD 200 million Soros Private Equity Fund can make direct equity investments in private sector projects in Turkey. Small- and medium-sized U.S. investors in Turkey are also eligible to utilize the new Small Business Center facility at OPIC, offering OPIC finance and insurance support on an expedited basis for loans from USD 100,000 to USD 10 million. In 1987, Turkey became a member of the Multinational Investment Guarantee Agency (MIGA). The U.S. Government annually purchases approximately USD 19 million of local currency. Embassy purchases are made at prevailing market rates, which fluctuate in accordance with Turkey’s free floating exchange rate regime.
3.8.6
Labor
The Turkish labor force numbers around 20.2 million persons, with nearly 35 percent employed in agriculture. Students are required to complete eight years of schooling and to remain in school until they are 15 years old. Turkey has an abundance of unskilled and semi-skilled labor. However, there is a shortage of qualified workers for highly automated high-tech industries. Individual high-tech firms, both local and foreign-owned, have generally conducted their own training programs for such job categories. Vocational training schools for some commercial and industrial skills exist in Turkey at the high school level. Apprenticeship programs, both formal and informal, remain in place, although they are dying out in some traditional occupations. Turkey’s labor force has a reputation for being hardworking, productive and dependable. Labor-management relations have been generally good in recent years. Employers are obliged by law to negotiate in good faith with unions that have been certified as bargaining agents. Strikes are usually of short duration and almost always peaceful. Since 1980 Turkey has faced criticism by the International Labor Organization (ILO), particularly for shortcomings in enforcement of ILO Convention 98 (right to organize and collective bargaining). In 2003, Parliament approved a Job Security Bill, which aims to ensure consultation between employers and labor groups in some areas while providing employers with greater flexibility in laying off staff. The 1995 and 2001 constitutional amendments reduced restrictions on the right to strike to a certain degree and civil servants (defined broadly as all employees of the central government ministries, including teachers) are allowed to form trade unions and to engage in limited collective negotiations, but are prohibited from striking. An amendment to Free Zones Law No. 3218 rescinds the prohibition against the right to strike in these zones. www.icongrouponline.com
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33
Free Trade Zones
Since passage of the Turkish law on free zones in 1985, 21 zones have been established. The zones are open to a wide range of activity, including manufacturing, storage, packaging, trading, banking, and insurance. Foreign products enter and leave the free zones without payment of any customs or duties. Income generated in the zones is exempt from corporate and individual income taxation and from the value-added tax, but firms are required to make social security contributions for their employees. Additionally, standardization regulations in Turkey do not apply to the activities in the free zones, unless the products are imported into Turkey. In contrast to most other free zones, sales to the Turkish domestic market are allowed. Goods and revenues transported from the zones into Turkey are subject to all relevant import regulations. There are no restrictions on foreign firms operations in the free zones. Indeed, the operator of one of Turkey’s most successful free zones located in Izmir is an American firm.
3.8.8
Major Foreign Investments
Turkey’s largest foreign investors include Telecom Italia, Renault, Toyota, Fiat, Castrol, Enron Power, Citibank, Pirelli Tire, Unilever, RJR Nabisco, Philip Morris, United Defense, Honda, Hyundai, Bosch, Siemens, DaimlerChrysler, JP Morgan Chase, AEG, Bridgestone-Firestone, Cargill, Novartis, Coca Cola, Colgate-Palmolive, General Electric, General Motors-Opel, ITT, Ford Motor Co., Lockheed Martin, Gillette, Goodyear, Hilton International, Aventis, McDonald’s, Nestle, Mobil, Pepsi, Pfizer, Procter and Gamble, InterGen, Abbot Laboratories, Aria and Shell.
3.9 3.9.1
TRADE AND PROJECT FINANCING The Banking System
The banking sector plays less of a financial intermediary role than one would expect in an economy of Turkey’s size and sophistication. The three state -owned commercial banks plus the six largest private banks hold nearly a twothirds share of total bank assets. Turkish banks engage in core banking services, securities brokering and other businesses. In terms of trade finance, treasury operations, electronic banking, and information management, the dozen leading Turkish banks are as sophisticated as their other OECD counterparts. However, given chronically high government budget deficits, bank profitability has been treasury-based, not lending-based, and most banks have yet to develop solid lending cultures and risk-asset management systems. One hundred percent deposit insurance since 1994 is an additional complicating factor. Moreover, accounting practices are neither at commonly accepted international GAAP standards or evenly applied across the sector. U. S. and U.S.-affiliated investment and commercial banks present in Turkey include Citibank, JP Morgan Chase, American Express, Wachovia and the Bank of New York. The Istanbul Stock Exchange, formed in 1986, is becoming one of the major players in the capital market. In 1995, the Istanbul Gold Exchange opened for trading. The Capital Market Board, based in Ankara, is responsible for overseeing the activities of capital markets. The Central Bank of the Republic of Turkey is headquartered in Ankara and together with Turkish Treasury is responsible for the integrity of the banking system. In 1994, the Central Bank became an autonomous body but is not independent. The Central Bank supervises bank activities in order to guarantee that they meet liquidity requirements and operate in a responsible fashion. While the Central Bank’s Bank Supervision Division acts as the government’s supervisory authority, the Undersecretariat of the Treasury is responsible for the enforcement of banking laws. Treasury’s Banking and Exchange General Directorate conducts criminal investigations of banks and is the government agency www.icongrouponline.com
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that determines punitive actions taken against institutions violating banking or securities laws. The bank regulatory authority (BRSA) determines the disposition of insolvent banks.
3.9.2
Exchange Control Risks
There are no known foreign-exchange limits placed on importers by the GOT, and there are no restrictions on the transfer of funds in or out of the country. Although the Turkish lira (TL) is fully convertible, most international transactions are denominated in U.S. dollars or Euros due to these currencies’ universal acceptance and the continuing monetary uncertainty caused by Turkey’s high inflation rate. Banks are allowed to deal in foreign exchange and to borrow and lend in foreign currencies. Foreign exchange is freely traded and widely available. Foreign investors are free to convert and repatriate their Turkish lira profits.
3.9.3
General Financing Availability
Traditionally, Turkish corporations have satisfied most of their financing requirements through the banking industry. Corporation / banking relationships are close. Locally, commercial banks account for about 80 percent of the credits outstanding in the Turkish financial system. However, given the continuing gap between Turkey’s extensive needs and its limited internal resources, external financing of public and private project investment will be a crucial factor in this and coming years. Because of high inflation and high public-spending requirements, the cost of local currency funds is very high. Exporters are advised to provide financing for their exports. In addition to short and medium-term credits available from commercial banks in local and foreign currencies, lower-cost TL credits are also available from Turkish Eximbank.
3.9.4
How to Finance Exports and Methods of Payment
Letters of Credit (LCs) are traditional import instruments for private-sector transactions. LCs should be irrevocable and confirmed by a prime U.S. bank. As Turkish importers develop long-term contacts and prove their creditworthiness, suppliers may be willing to accept documents against payment (d/p) or documents against acceptance (d/a). Deferred payment schedules are not common except in cases of large transactions where supplier financing plays a role. Turkish banks continued to have seen some tightening in their access to international credit, though the major banks are able to borrow internationally. Suppliers should consider unconventional project financing packages (e.g., forfeiting, factoring and utilization of third-country export credits) when bidding on major government infrastructure projects. Exporters should be flexible and try to accommodate customers’ needs, building any additional associated cost into the offer price. Firms bidding on GOT contracts should pay careful attention to the way proposals are prepared and should strictly follow the administrative specifications. Financing costs and foreign exchange rate risks, wherever applicable, should be factored into the bid price. Bids, which do not comply with administrative specifications (which include financial criteria), are generally rejected. Generally, validity of a proposal is required to be 3 to 6 months from the bid date. Government tenders often involve bid and performance bonds. Bid bonds are normally equivalent to 3 percent of the value of the tender, while performance bonds are usually equivalent to 6 percent of the contract value. The government only calls these bonds in cases of substantial non-performance. All bonds have to be counterguaranteed by a Turkish national bank.
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A number of leasing companies operate in Turkey, most owned by Turkish banks. They finance purchases of expensive capital goods such as aircraft, auto fleets or special equipment. Financial leasing used to account for only 1 to 2 percent of capital expenditures in Turkey versus 20 percent in developed countries. The terms of leasing are usually four years, with a balloon payment at the end. Turkish leasing companies are eager to work with U.S. counterparts. Turkish factoring companies (again, usually offshoots of banks) generally belong to the International Factors Group based in Belgium. Like leasing companies, all factoring and forfeiting companies are having funding difficulties. Both factoring and forfeiting maximize cash flow, reduce transaction risks, and may enhance competitiveness by offering flexible payment terms to the buyer. All U.S. banks active in Turkey know and deal with at least one of the major leasing and factoring companies.
3.9.5
Types of Available Export Financing and Insurance
The Export-Import Bank of the United States (Eximbank) is open for business in Turkey and offers a variety of credit facilities to U.S. firms exporting to Turkey as well as providing project financing for U.S. investments. Eximbank does not have a ceiling for Turkey as long as a Treasury guarantee is provided (for the public sector). For the private sector investments, Eximbank considers the financial records of the Turkish company or the ability of a project to generate enough revenue to pay back the loan. The U.S. Trade and Development Agency (TDA) is active in financing pre-feasibility and feasibility studies and pre-design work for major government projects and private sector projects, while the Overseas Private Investment Corporation (OPIC) insures and provides investment credit financing to many U.S investments in Turkey. U.S. firms may also compete for contracts financed by the World Bank. Most major government tenders still require suppliers’ credits. In 1999, the Export-Import Bank of the United States (Ex-Im Bank), the Overseas Private Investment Corporation (OPIC), and the U.S. Trade and Development Agency (TDA) opened the Caspian Finance Center (CFC), the agencies’ first joint regional office anywhere in the world. Located at the United States Embassy in Ankara, the CFC houses representatives from OPIC and TDA who promote increased trade and investment in Turkey, the Caucasus and Central Asia. Working together with the U.S. Commercial Service and the Department of State, the Center’s efforts also focus on supporting American participation in projects throughout the region and Afghanistan. USDA’s Commodity Credit Corporation offers three-year GSM-102 export credit guarantees for imports of a wide range of agricultural products. Seven-year GSM-103 guarantees are available for imports of breeder cattle and poultry. In October, 1998, USDA announced Turkey’s eligibility for a five year Facilities Credit Guarantee Program for sales of U.S. manufactured goods and services to improve existing agricultural related facilities and a USD 5 million Supplier Credit Guarantee Program targeted at imports of high value products from the United States.
3.9.6
Project Financing Availability
Project financing is available through a multitude of sources including Turkish and foreign commercial banks and investment banks. OPIC is another source for project financing for U.S. investors. Interested U.S. companies should note that American banks active in Turkey are among the leaders in project financing.
3.9.7
Types of Projects Receiving Financial Support
Turkey offers numerous major project opportunities in telecommunications, energy, transportation, and building of infrastructure projects such as dams, airports, harbors, roads, and water and sewerage systems. Supplier financing is
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the key to winning these large projects. U.S. Eximbank established a project financing office in 1994 to provide financing on a project basis. Traditionally, U.S. Eximbank financing, along with OPIC and TDA programs, are available to U.S. suppliers. The World Bank continues to fund major projects in Turkey including the Turkey Emergency Flood and Earthquake Recovery Project (TEFER) for housing, infrastructure and emergency infrastructure.
3.9.8
Regional Financing
The Overseas Private Investment Corporation has expanded the scope of the Southeast Europe Equity Fund (SEEF), managed by Soros Private Fund s Management, and is currently permitted to invest in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Montenegro, Romania, Serbia, Slovenia, Turkey, Armenia, Azerbaijan and the Republic of Georgia. The fund is capitalized at U.S.$ 200 million and is available for investment in new, expanding, restructuring and privatizing businesses to promote greater regional economic integration and development.
3.9.9
Small Business Support
The Overseas Private Investment Corporation (OPIC) has established small business centers to assist qualified small businesses the opportunity to utilize OPIC’s resources with improved customer service and easier access through a streamlined approval process. OPIC stands ready to assist small and medium sized business grow through investments in over 150 emerging markets around the world. The Small Business Centers will support the financing and political risk insurance needs to eligible small business. To support small and medium sized business enterprises in their international trading activity, the United States Commercial Service and the Overseas Private Investment Corporation entered into a partnership that combines the strength of the Commercial Service’s network of 105 offices in the United States and 150 offices overseas with the investment finance and political risk insurance support of the Overseas Private Investment Corporation. The cooperation agreement signed on May 12, 2003 by Assistant Secretary of Commerce and Director General of the Commercial Service Maria Cino and OPIC President and CEO Dr. Peter Watson clearly demonstrates the synergistic value of combining export marketing and trade finance resources. This cooperation agreement has been established to better assist small- and medium-sized business enterprises. These businesses account for ninety-seven percent of all U.S. exporters, and small business continues to be the bulwark of the U.S. economy.
3.9.10
Defense Offsets
Large defense-related tenders usually require an offset proposal. Offset proposals play an important role in the decision to award large defense contracts. Direct offsets are preferred. The Undersecretariat for Defense Industries (SSM) is the agency responsible for offset oversight. New offset requirements established a weighting mechanism to ensure all offsets are established to build an indigenous defense industry.
3.9.11
Banks with Correspondent U.S. Banking Arrangements
Almost every Turkish bank, regardless of size, has correspondent relations with American banks. A selection follows: •
Akbank T.A.S.
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Kocbank A.S.
•
Turkiye Cumhuriyeti Ziraat Bankasi
•
Turkiye Garanti Bankasi A.S.
•
Turkiye Halk Bankasi
•
Turkiye Is Bankasi A.S.
•
Vakiflar Bankasi T.A.O.
•
Yapi ve Kredi Bankasi A.S.
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TRAVEL RISKS Local Business Practices
The Turkish people feel close to their traditions and culture. However, having ties with western countries, Turkish people in major cities have adopted a western way of life. A foreigner visiting any one of the large cities in Turkey will find himself or herself in an atmosphere similar to that of a contemporary western city. There are no local customs, beyond the bounds of normal courtesy that a visiting businessman should feel compelled to observe. In general, a personal relationship is an important basis for a successful business relationship in Turkey. It is usually important to allow time for friendly conversation before commencing with a business agenda. Business cards are almost always exchanged, and visitors are usually offered a glass of tea or a cup of Turkish coffee.
3.10.2
Travel Issues
U.S. citizens are required to obtain visas before entering Turkey. A passport and visa are required. Holders of all types of passports can purchase a 90-day sticker visa at the port of entry for $100, if they are traveling to Turkey as tourists. for further information, travelers in the U.S. may contact the Embassy of the Republic of Turkey at 2525 Massachusetts Avenue, NW, Washington, D.C. 20008, telephone: (202) 612-6700, or the Turkish consulates general in Chicago, Houston, Los Angeles, or New York. Information may also be found at Internet address http://www.turkey.org/. Overseas, travelers may contact a Turkish embassy or consulate. Holders of official and diplomatic passports on official business must obtain a visa from a Turkish embassy or consulate before arrival in Turkey. Holders of official and diplomatic passports on private travel may receive a visa free of charge from a Turkish embassy or consulate, or obtain one upon arrival at the port of entry for $100. All those who are planning to stay more than three months for any purpose are required to obtain a visa from a Turkish embassy or consulate. Such travelers must also apply for a residence/work permit or Turkish ID card within the first month of their arrival in Turkey. For example, this would include anyone who plans to spend more than three months doing research, studying, or working in Turkey. All travelers are advised to obtain entry stamps on the passport page containing their visa at the first port of entry before transferring to domestic flights. Failure to obtain entry stamps at the port of entry has occasionally resulted in serious difficulties for travelers when they attempt to depart the country. In an effort to prevent international child abduction, many governments have initiated procedures at entry/exit points. These often include requiring documentary evidence of relationship and permission for the child’s travel from the parent(s) or legal guardian not present. Having such documentation on hand, even if not required, may facilitate entry/departure.
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Street crime is relatively low in Turkey, although it is increasing in large urban centers such as Istanbul and Izmir. Women appear to have been targeted for muggings or robberies. Visitors should not be complacent regarding personal safety or the protection of valuables. The same precautions employed in the U.S. should be followed in Turkey. As in other large metropolitan areas throughout the world, common street crimes include pickpocketing, purse snatching, and mugging. English-or French-speaking foreigners, who identified themselves as Tunisian, Moroccan, Egyptian, Kuwaiti, or Romanian, have also targeted foreign tourists. These persons have befriended the tourists and then drugged them, using teas, juice, alcohol, or food. Two common drugs used are nembitol, known on the street as sari bomba (the yellow bomb) and benzodiazepine; when used incorrectly they can cause death. In similar cases, tourists are invited to visit clubs or bars, and then presented with inflated bills (often exceeding $1000), and coerced to pay them by credit card. The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. Travelers are encouraged to carry a photocopy of their passport, to assist in getting a replacement passport if the original is stolen. U.S. citizens may refer to the Department of State’s pamphlet, A Safe Trip Abroad for ways to promote a trouble-free journey. The pamphlet is available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.access.gpo.gov/su_docs, or via the Bureau of Consular Affairs home page at http://travel.state.gov/. An “Istanbul Street Crime Briefing” is available on the U.S. Embassy Ankara’s Web site at http://www.usembankara.org.tr or from the Consular Affairs Web site at http://travel.state.gov/turkey.html. The general security situation throughout Turkey is stable, but sporadic incidents involving terrorist groups have occurred. The Turkish government is committed to eliminating terrorist groups such as the Kurdistan Worker’s Party (PKK) and various leftist and fundamentalist groups. Although these groups have not completely disbanded, their operational capabilities have greatly diminished. These groups have used terrorist activity to make political statements, particularly in Istanbul and other urban areas of Turkey. Visitors to any part of southeastern Turkey are advised to travel only during daylight hours and on major highways. The Turkish Jandarma (Gendarmerie) and police forces monitor checkpoints on roads throughout the southeastern region. Travelers are cautioned not to accept letters, parcels or other items from strangers for delivery either in or outside Turkey. The PKK has attempted to use foreigners to deliver messages and packages in or outside of Turkey. If discovered, individuals could be arrested for aiding and abetting the PKK-a serious charge. Additional information is available on the U.S. Embassy web page at www.usemb-ankara.org.tr and on the State Department Web site: www.travel.state.gov or http://travel.state.gov/turkey.html. Turkish law has a broad definition of “antiquities” and makes it a crime to remove any from the country. Offenders are prosecuted. Under Turkish law, all historic sites such as fortresses, castles and ruins, and everything in them or on the grounds or in the water, are the property of the Turkish government. While many sites do not have signs cautioning the unwary, official silence does not mean official consent. One may buy certain antiquities, but only from authorized dealers who have been issued a certificate by a museum for each item, which they are authorized to sell. If one has acquired a possible antiquity without having obtained the necessary certificate, competent museum personnel should evaluate it before its removal from Turkey. U.S. visitors may obtain updated information on travel and security in Turkey from the U.S. Embassy in Ankara or Consulates in Istanbul and Adana, or click on the Embassy’s home page: www.usemb-ankara.org.tr.
3.10.3
Infrastructure for Conducting Business
Transportation The national flag carrier, Turkish Airlines (THY), together with its subsidiaries, dominates air passenger service and flies non-stop daily to most major European, Middle Eastern, Asian cities and U.S. gateways including Tokyo, London, Frankfurt, Paris, New York and Chicago. Major European airlines have also frequent non-stop flights to www.icongrouponline.com
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Turkey. American Airlines and THY have a code-share arrangement with THY serving American’s hubs in New York and Chicago. United Airlines and Lufthansa offer code-share service with Lufthansa serving Istanbul and Ankara from its Star Alliance Frankfurt and Munich hubs. Rail transportation is also available between most of the major cities. Comprehensive networks of long distance buses, which are inexpensive, operate between the major cities. Car rental is relatively expensive although gasoline (benzene) is cheaper than in Western Europe, and fuel stations are numerous. Public transportation is available in the cities. However, businessmen are advised to use taxis, as taxis are relatively inexpensive.
Language The official language spoken by more than 90 percent of the population is Turkish. Most educated Turks have a command of at least one foreign language, with sufficient fluency to carry out business transactions. Most company executives were educated in western countries. English is the dominant language for international business. Other frequently spoken languages are German and French.
Communication The telephone system in Turkey’s major cities is good. E-mail and faxes are widely used in international business.
Lodging Medium to luxury-type hotels, including international hotels such as the Hilton, Sheraton, Hyatt, Holiday Inn, Conrad, Four Seasons, Ritz Carlton and Swissotel, are available in major cities. Apartment rents in Istanbul are expensive. Rents in Ankara and Izmir are more reasonable. Payment on an apartment rental, in a popular area of a city, is usually made in a foreign currency. Generally, six months to one year’s rent is expected in advance.
Health Medical facilities are available, but may be limited outside urban areas. Food and water borne diseases are prevalent throughout Turkey. Anyone coming to Turkey should have comprehensive medical insurance. Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State’s Bureau of Consular Affairs brochure, Medical Information for American Traveling Abroad, available via the Bureau of Consular Affairs home page at www.travel.state.gov or autofax: (202) 647-3000.
Vaccines Vaccines necessary for Turkey are all childhood immunizations, Typhoid, Hepatitis B, Hepatitis A (or Immune Globulin as an alternative). Visitors who will visit rural areas, or go on hiking, or trekking trips in the country may wish to get Rabies vaccine although this is not required. Information on vaccinations and other health precautions can be obtained from the Center for Diseases Control and Prevention’s (CDC) hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747), fax 1-800-CDC-FAXX (1-800-232-3299), or via CDC’s Internet site at http://www.cdc.gov.
Food Turkish cuisine is characterized by the freshness of its ingredients and most American business travelers have no trouble finding a good meal. All major hotels have at least one restaurant serving continental cuisine. Several European and ethnic restaurants are also available in major cities. Prices at these places are usually moderate-toexpensive. Good food is available not only at expensive restaurants but also at moderately priced establishments. One also has the choice of fast food restaurants such as McDonald’s, Wendy’s, Kentucky Fried Chicken, Burger
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King and their Turkish equivalents such as Kebap 49. A variety of fresh fruits and vegetables are available throughout the year.
3.10.4
Temporary Entry of Goods
Travelers entering Turkey on a temporary basis and carrying items such as laptop computers and accessories, display and exhibit materials are permitted to bring these items into Turkey duty free. Customs officials register the items to the traveler’s passport and subsequently cancel them as the traveler exits the country with the same items. Catalogs, brochures, pamphlets, and similar advertising materials are exempt from customs duty.
3.10.5
Pricing Issues
Pricing strategies in Turkey reflect the dynamics of the market place and are influenced by various market forces that include demand and supply. While there is not one typical pricing scheme, a model pricing structure based on general merchandise follows: Imported merchandise CIF + Import Duty (a) @ 5 pct + VAT (KDV) (b) @ 18 pct + Distributor markup (c) @ 25 pct + Retailer markup (c) @ 25 pct
100.00 105.00 123.90= cost to distributor 154.88= cost to retailer 193.60 = cost to consumer
(a) Duties: Turkey applies EU’s common external tariffs to third countries including the U.S. Overall duty rates have been declining over time and are now averaging approximately five percent. (b) VAT Tax: VAT tax varies depending on the product: •
Luxury items: 26 percent
•
General: 18 percent
•
Food: 1 percent
•
Automobiles ( exceeding 1600 cc): 40 percent
(c) Markups are hypothetical, but reflect observed prices. Distributor / retailer markups are not limited by law, only demand and competition.
3.10.6
Country Data
Population Population Growth Rate Religion Government System Language Work Week
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67,308,928 (July 2002 - World Fact Book est.) 1.2 percent (July 2002 - World Fact Book est.) Moslem 99.8 percent (mostly Sunni) Parliamentary Democracy Turkish Monday through Friday
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KEY CONTACTS U.S. Mission Trade-Related Personnel
Commercial Affairs Mr. Amer Kayani Commercial Counselor The United States Commercial Service
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2467 Fax: [90] (312) 467-1366 Mr. Erik Hunt Commercial Attaché The United States Commercial Service
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2568 Fax: [90] (312) 467-1366 Ms. Mary Boscia Commercial Consul The United States Commercial Service
[email protected] American Consulate General Mesrutiyet Caddesi No. 104-108 Tepebasi, Istanbul,Turkey Tel: [90] (212) 251-1651 Fax: [90] (212) 252-2417 Ms. Berrin Erturk Commercial Specialist The United States Commercial Service (CS)
[email protected] Izmir Office Izmir Chamber of Commerce Ataturk Caddesi No. 126, 5th Fl. 35210 Pasaport, Izmir, Turkey Tel: [90] (232) 441-2446 Fax: [90] (232) 489-0267
Trade and Development Agency (Caspian Finance Center) Ms. Jennifer Snyder Director, Caspian Finance Center www.icongrouponline.com
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U.S. Trade and Development Agency (TDA)
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2075 Fax: [90] (312) 466-6082
Overseas Private Investment Corporation Mr. Peter Ballinger Director, Caspian Finance Center Overseas Private Investment Corporation (OPIC)
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2075 Fax: [90] (312) 466-6082
3.11.2
United States Department of State
United States Consulate - Adana Ms. Greta Holtz Principal Officer and Consul
[email protected] American Consulate Ataturk Caddesi Vali Yolu, Bossa Apt. 1 01120 Adana, Turkey Tel: [90] (322) 454-2145 Fax: [90] (322) 457-6591
United States Consulate - Izmir Mr. Scott Edelman Principal Officer and Consul
[email protected] American Consulate, Izmir For commercial inquiries: Izmir Chamber of Commerce Ataturk Caddesi No. 126, 5th Fl. 35210 Pasaport, Izmir, Turkey Tel: [90] (232) 441-2446 Fax: [90] (232) 489-0267
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Economic Affairs Mr. Scot A. Marciel Economic Counselor Economic Section (ECON)
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2254 Fax: [90] (312) 468-6138
Political Military Affairs Mr. Stuart Brown Political Military Counselor PolMil Section
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2522 Fax: [90] (312) 468-4775
Unites States Department of Agriculture Mr. James Higgiston Agricultural Counselor Agricultural Affairs Office
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2406 Fax: [90] (312) 467-0056
Office of the Defense Attaché Col. Roman N. Hrycaj (USAF) (pronounced: Hi-Ritz-I) Defense Attaché Defense Attaché Office (DAO)
[email protected] American Embassy Ataturk Bulvari 110 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 455-5555 ext. 2300 Fax: [90] (312) 467-4468
Office of Defense Cooperation Major General Quentin Peterson (USAF) Chief ODC (Formerly JUSMMAT) ODC-Office of Defense Cooperation, Turkey www.icongrouponline.com
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Ismet Inonu Bulvari No. 94 Balgat, Ankara, Turkey Tel: [90] (312) 418-5296 DSN: 672-2101 Fax: [90] (312) 287-9978
3.11.3
Contacts in Washington D.C
U.S. Department of Commerce Mr. David S. De Falco, Esq. U.S. Department of Commerce-Turkey Desk Officer Office of Western Europe
[email protected] U.S. Department of Commerce 14th and Constitution Avenue, NW Washington, D.C. 20230 Tel: (202) 482-2178 Fax: (202) 482-2897 U.S. Department of State Ms. Katharina Gollner-Sweet U.S. Department of State- Desk officer for Turkey
[email protected] Department of State Office of Southern Europe Room 5511 U.S. Department of State 2201 C Street NW Washington, DC 20520 Tel: (202) 647-6114 Fax: (202) 647-5087 Trade and Development Agency Mr. Daniel D. Stein Regional Director for Russia, NIS, and Turkey
[email protected] U.S. Trade and Development Agency (TDA) Room 309. SA-16 Washington, D.C. 20523-1602 Tel: (703) 875-4357 Fax: (703) 875-4009 U.s. Department of Agriculture, Foreign Agricultural Service Mr. James Dever Area Officer/FAA-Mail Stop 1080
[email protected] Department of Agriculture 14th and Independence Ave., SW Washington, D.C. 20250-1000 Tel: (202) 690-4053 Fax: (202) 690-2909 www.icongrouponline.com
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Export-Import Bank of the United States Mr. Paul Tumminia, Business Development Officer
[email protected] Export-Import Bank of the United States 811 Vermont Avenue, NW Washington, D.C. 29571 Tel: (202) 565-3413 Fax: (202) 565-3628 Overseas Private Investment Corporation Mr. Abed R. Tarbush, Regional Manager
[email protected] Overseas Private Investment Corporation 1100 New York Avenue, NW Washington, D.C. 50527 Tel: (202) 336-8632 Fax: (202) 408-5145
3.11.4
U.S.-Based Multipliers
Mr. Lincoln McCurdy, President
[email protected] American-Turkish Council (ATC) 1010 Vermont Avenue, NW, Suite 1020 Washington, D.C. 20005-4905 Tel: (202) 783-0483 Fax: (202) 783-0511
3.11.5
Turkish Government Contacts
Agriculture and Rural Affairs Tarim ve Koyisleri Bakanligi (Ministry of Agriculture and Rural Affairs) Tarimsal Uretim Gelistirme Genel Mudurlugu (General Directorate of Agricultural Production Development) www.tarim.gov.tr Milli Mudafaa Caddesi No. 20 06100 Kizilay, Ankara, Turkey Tel: [90] (312) 424 0580 Fax: [90] (312) 425 4495 Contact: Mr. Huseyin Velioglu, General Manager Tel: [90] (312) 418 2059 Fax: [90] (312) 417 0026 Tarim ve Koyisleri Bakanligi (Ministry of Agriculture and Rural Affairs) Koruma ve Kontrol Genel Mudurlugu (General Directorate of Protection and Control)
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www.tarim.gov.tr Akay Caddesi No. 3 Bakanlikler, Ankara, Turkey Contact: Dr. Nihat Pakdil, Director Tel: [90] (312) 425-7789 Fax: [90] (312) 418-6318 Orman Bakanligi (Ministry of the Environment and Forestry) www.orman.gov.tr Ataturk Bulvari No. 153 Bakanliklar, Ankara, Turkey Tel: [90] (312) 417 6000 Fax: [90] (312) 418 7354 Contact: Prof. Dr. Hasan Zuhuri Sarikaya, Undersecretary Tel: [90] (312) 425 1285 Fax: [90] (312) 417 0237 Toprak Mahsulleri Ofisi (TMO) (Turkish Grains Council) www.tmo.gov.tr Milli Mudafaa Caddesi No. 18 06100 Kizilay, Ankara, Turkey Tel: [90] (312) 417 4400 Fax: [90] (312) 417 5934 Contact: Mr. Burhanettin Koroglu, Acting Deputy Director General Tel: [90] (312) 418 2313 Fax: [90] (312) 417 5934 Koy Hizmetleri Genel Mudurlugu (General Directorate of Rural Services) www.khgm.gov.tr Eskisehir Yolu 9 Km, Ankara, Turkey Tel: [90] (312) 287 3360 Fax: [90] (312) 287 8097 Contact: Mr. Ali Altuntas, General Manager Tel: [90] (312) 287 7212 Fax: [90] (312) 287 7213
Communications Ulastirma Bakanligi (Ministry of Communications and Transportation) www.mt.gov.tr Hakki Turaylic Cad., No. 5 Bahcelievler Son Durak 06338 Emek, Ankara, Turkey Tel: [90] (312) 212-6730 Fax: [90] (312) 212-4930 Contact: Mr. Metin Kati, Head of Foreign Relations Tel: [90] (312) 212-4366 Fax: [90] (312) 212-7937 www.icongrouponline.com
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Activity: Construction of harbors, airports, and railways, establishes telecommunications policy and monitors telecom privatization. Turkiye Radyo ve Televizyon Kurumu, Genel Mudurlugu (TRT) (General Directorate of Turkish Radio and Television) www.trt.net.tr Turan Gunes Bulvari 06109 Oran, Ankara, Turkey Tel: [90] (312) 490-4300 Fax: [90] (312) 490-1109 Activity: Television and radio broadcasting Telekomunikasyon Kurumu (Telecommunications Authority) www.tk.gov.tr Yesilirmak Sokak No. 16 06430 Demirtepe, Ankara, Turkey Tel: [90] (312) 550-5095 Fax: [90] (312) 550-5151 Contact: Mr. Omer Arasil, President Tel: [90] (312) 550-5100 Fax: [90] (312) 550-5151 Turk Telekom A.S. www.telekom.gov.tr Samsun Yolu Kavsagi 06103 Aydinlikevler, Ankara, Turkey Tel: [90] (312) 555-1000 Fax: [90] (312) 313-1919 Contact: Mr. Mehmet C. Ekinalan, Director General and Member of the Board Tel: [90] (312) 313-1121 Fax: [90] (312) 313-1919 Activity: Telecom parastatal, scheduled for privatization. It operates fixed lines and telecommunications satellites serving Turkey, lease channels and transponders from satellites.
Defense and National Security Milli Savunma Bakanligi (MND), Dis Tedarik Dairesi Baskanligi (Ministry of National Defense, Foreign Procurement Department) www.msb.mil.tr Mudafaa Caddesi, Bakanliklar Ankara, Turkey Tel: [90] (312) 418-9616 Fax: [90] (312) 417-7342 Activity: Defense procurement in accordance to programs and priorities of the Turkish General Staff. Milli Savunma Bakanligi, NATO Enf. Grup Baskanligi (Ministry of National Defense, NATO Infrastructure Group Department) Bakanliklar, Ankara, Turkey Tel: [90] (312) 418-9814; 402-4202 Fax: [90] (312) 418-3384 Contact: Col. Sinasi Calis, Head of NATO Infrastructure Group Dept.
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Savunma Sanayii Mustesarligi (SSM) (Undersecretariat for Defense Industries) www.ssm.gov.tr Inonu Bulvari, Kirazlidere Mevkii 06100 Bahcelievler, Ankara, Turkey Tel: [90] (312) 417-2326 Fax: [90] (312) 417-3266 Contact: Prof. Dr. D. Ali Ercan, Undersecretary Tel: [90] (312) 411-9009 Fax: [90] (312) 417-3266 Activity: Defense equipment and systems procurement. Agency promotes the establishment of an indigenous Turkish defense industry. Jandarma Genel Komutanligi, Tedarik Daire Baskanligi-Dis Tedarik Sube Mudurlugu (Turkish Gendarmerie Command, Foreign Procurement Department) Ankara, Turkey Tel: [90] (312) 456-2487 Fax: [90] (312) 418-9208 Contact: LTC Munir Guzel, Head of Foreign Procurement Dept. Emniyet Genel Mudurlugu (General Directorate of Security Affairs) www.egm.gov.tr Dikmen Caddesi No. 89 Dikmen, Ankara, Turkey Tel: [90] (312) 468-5600 Fax: [90] (312) 425-6520 Contact: Mr. Gokhan Aydiner, Director General Tel: [90] (312) 419-5600 Fax: [90] (312) 425-6520
Education and Training Services Milli Egitim Bakanligi (MEB) (Ministry of National Education) www.meb.gov.tr Bakanliklar, Ankara, Turkey Tel: [90] (312) 419-1410 Fax: [90] (312) 417-7027 Contact: Mr. Ibrahim Barbaros, Deputy Undersecretary Tel: [90] (312) 418-6979 Fax: [90] (312) 425-3315 Activity: Primary and secondary schools, setting education policy and establishing teaching standards. Yuksek Ogretim Kurulu (YOK) (Higher Education Council) www.yok.gov.tr Bilkent Universitesi 06539 Ankara, Turkey Tel: [90] (312) 298-7000 Fax: [90] (312) 266-4759 Contact: Prof. Dr. Kemal Guruz, President Tel: [90] (312) 298-7066 www.icongrouponline.com
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Fax: [90] (312) 266-4759 Activity: Autonomous public body to administer the activities of all universities, schools, and institutions of higher education.
Energy and Natural Resources Enerji ve Tabii Kaynaklar Bakanligi (Ministry of Energy and Natural Resources) www.enerji.gov.tr Inonu Bulvari No. 27 06440 Bahcelievler, Ankara, Turkey Tel: [90] (312) 212-6915 Fax: [90] (312) 286-4769 Contact: Sami Demirbilek, Undersecretary Tel: [90] (312) 222-4059; 223-0572 Fax: [90] (312) 223-4084 Activity: Electricity generation, transmission, and distribution, energy and petroleum affairs and natural resources development. TEDAS - Turkiye Elektrik Dagitim A.S. (Turkish Electricity Distribution Co., Inc.) www.tedas.gov.tr Inonu Bulvari No. 27 06440 Bahcelievler, Ankara, Turkey Tel: [90] (312) 212-6900 Fax: [90] (312) 213-8873 Contact: Mr. Hasim Keklik, Chairman and Director General Tel: [90] (312) 212-6915 Fax: [90] (312) 222-8101 Activity: Electricity Distribution Grids Operation and Maintenance. EUAS - Elektrik Uretim A.S. (Electricity Generation Co., Inc.) www.euas.gov.tr Inonu Bulvari No. 27 06490 Bahcelievler, Ankara, Turkey Tel: [90] (312) 212-6915 Fax: [90] (312) 222-9890 Contact: Mr. Onder Piyade, Acting Chairman & Director General Tel: [90] (312) 222-9537 Fax: [90] (312) 212-9430 Activity: Power Generation. TEIAS - Turkiye Elektrik Iletim A.S. (Turkish Electricity Transmission Co., Inc.) www.teias.gov.tr Inonu Bulvari No. 27 06490 Bahcelievler, Ankara, Turkey Tel: [90] (312) 222-9283 Fax: [90] (312) 212-9430 Contact: Mr. Ilhami Ozsahin, Chairman & Director General Activity: Electricity transmission.
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TETAS - Turkiye Elektrik Ticaret A.S. (Turkish Electricity Trading Co., Inc.) www.tetas.gov.tr Inonu Bulvari No. 27 06490 Bahcelievler, Ankara, Turkey Tel: [90] (312) 222-9583 Fax: [90] (312) 212-9430 Contact: Haci Duran Gokkaya, Chairman & Director General Activity: Electricity Trading Turkiye Petrolleri Anonim Ortakligi (TPAO) (General Directorate of the Turkish Petroleum Corp.) www.tpao.gov.tr Mustafa Kemal Mahallesi 2. Cadde No. 86 06520 Sogutozu, Turkey Tel: [90] (312) 286-9100 Fax: [90] (312) 286-9000 Contact: Mr. M. Mete Gurel, Chairman and Director General Tel: [90] (312) 286-9440 Fax: [90] (312) 286-9070 Activity: Exploration, drilling and production of oil, natural gas and geothermal energy. BOTAS-Boru Hatlari ile Petrol Tasima (Petroleum Pipeline Corporation) www.botas.gov.tr Bilkent Plaza, A2 Blok Bilkent, Ankara, Turkey Tel: [90] (312) 297-2401 Fax: [90] (312) 266-0623 Contact: Mr. Mehmet Takiyyuddin Bilgic, Chairman and Director General Activity: Construction and operation of oil and gas pipelines. PETKIM-Petrokimya Holding A.S. (General Directorate of Petrochemical Industries) www.petkim.com.tr P.O. Box 12 35801 Aliaga, Izmir, Turkey Tel: [90] (232) 616-1240 Fax: [90] (232) 616-1248; 616-2490 Contact: Mr. M. Sedat Ertunc, Director General Tel: [90] (232) 616-1450 Fax: [90] (232) 616-1439 Activity: Petrochemicals producer. The company is currently being privatized by the Government of Turkey
Environment and Forestry Affairs Cevre Bakanligi (MOE) Ministry of Environment General Directorate of Environmental Impact, Assessment and Planning www.cevre.gov.tr Eskisehir Yolu - 8. Km. Ankara, Turkey Tel: [90] (312) 287-9963 www.icongrouponline.com
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Fax: [90] (312) 285-2910 Contact: Mr. Hasan Zuhuri Sarikaya, Undersecretary Tel: [90] (312) 286 3165 Fax: [90] (312) 286 3459 Contact: Mr. Ertugrul Alparman, Director General Tel: [90] (312) 285-3283 Fax: [90] (312) 285-2910 Activity: Regulatory agency for the environment.
Health Issues Saglik Bakanligi (MOH) (Ministry of Health) Foreign Relations Department www.saglik.gov.tr 06343 Sihhiye, Ankara, Turkey Tel: [90] (312) 431-2486 or 431-4797 Fax: [90] (312) 433-9885 Contact: Mr. Kamuran Ozden, Head of Foreign Relations Department Activity: Hospital and primary care provider, provincial health services, and health care policy.
Mining and Mineral Resources Turkiye Demir ve Celik Isletmeleri, Genel Mudurlugu (TDCI) General Directorate of Turkish Iron and Steel Works www.tdci.gov.tr Ziya Gokalp Caddesi Kurtulus, Ankara, Turkey Tel: [90] (312) 435-4900 Fax: [90] (312) 434-4705 Turkiye Komur Isletmeleri Kurumu, Genel Mudurlugu (TKI) General Directorate of the Turkish Coal Enterprises Hipodrom Caddesi Ulus, Ankara, Turkey. Tel: [90] (312) 384-1720 Fax: [90] (312) 384-1635 Contact: Dr. Selahaddin Anac, Chairman and Director General Tel: [90] (312) 384-1600 Fax: [90] (312) 384-1612 Turkiye Taskomuru Kurumu, Genel Mudurlugu (TTK) (General Directorate of the Turkish Hard Coal Enterprises) Zonguldak, Turkey Tel: [90] (372) 252-4000 Fax: [90] (372) 251-1900 Contact: Mr. Omer Yenel, Director General Tel: [90] (372) 252-1934 Fax: [90] (372) 253-1661 Karadeniz Bakir Isletmeleri A.S. (KBI) (Black Sea Copper Works Co.) www.icongrouponline.com
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www.kbi.gov.tr Ziya Gokalp Caddesi No. 17 06420 Ankara, Turkey. Tel: [90] (312) 435-5400 Fax: [90] (312) 435-1689 Contact: Mr. Rustem Ates, Chairman & Director General Tel: [90] (312) 431-2012 Fax: [90] (312) 435-5211 Activity: Mining of copper ore and copper Maden Tetkik ve Arama Enstitusu (MTA) (Mineral Research and Exploration Institute) www.mta.gov.tr Ismet Inonu Bulvari Balgat, Ankara, Turkey Tel: [90] (312) 287-3430 Fax: [90] (312) 287-9151
Public Works and Housing Bayindirlik ve Iskan Bakanligi (Ministry of Public Works and Settlement) www.bayindirlik.gov.tr Vekaletler Caddesi No. 1 Bakanliklar, Ankara, Turkey Tel: [90] (312) 417-9260 Fax: [90] (312) 418-0406 Contacts: Mr. Sabri Ozkan Erbakan, Undersecretary Mr. Sahin Yildirim, Deputy Undersecretary Tel: [90] (312) 424 0327 Fax: [90] (312) 418 5979 Iller Bankasi Genel Mudurlugu (Municipalities Bank) www.ilbank.gov.tr Ataturk Bulvari No. 21 Opera, Ulus, Ankara, Turkey Tel: [90] (312) 310-3141 Fax: [90] (312) 312-2989; 310-7459 Contact: Mr. Hidayet Atasoy, Director General Tel: [90] (312) 384-6126; 384-6226 Fax: [90] (312) 341-2071 Activity: Municipal financing authority. T.C. Basbakanlik- Guneydogu Anadolu Projesi (GAP) (Prime Ministry- Southeastern Anatolia Project) Regional Development Administration www.gap.gov.tr Willy Brandt Sokak No. 5 06680 Cankaya, Ankara, Turkey Tel: [90] (312) 409-2220; 409 2221 Fax: [90] (312) 442-4351 Contact: Dr. I. H. Olcay Unver, President www.icongrouponline.com
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Activity: Development authority for the Southeastern Anatolia Project Devlet Su Isleri Genel Mudurlugu (DSI) (General Directorate of State Water Works) www.dsi.gov.tr Inonu Bulvari, 06100 Yucetepe Tel: [90] (312) 417-8300 Fax: [90] (312) 418-2498 Contact: Prof. Dr. Veysel Eroglu, Director General Tel: [90] (312) 418-3409 Fax: [90] (312) 418-2498 Activity: Construction of dams and hydroelectric power plants. Demiryollari, Limanlar ve Hava Meydanlari (DLH) (General Directorate of Railways, Harbors, and Airports Construction) www.dlh.gov.tr Ulastirma Bakanligi Bahcelievler, Ankara, Turkey Tel: [90] (312) 215-2222 Fax: [90] (312) 212-3847 Contact: Mr. Niyazi Zalgi, Director General Tel: [90] (312) 212-5308 Fax: [90] (312) 212-3847 Activity: Infrastructure construction of new railways, harbors and airports
Trade and Economy Devlet Planlama Teskilati (State Planning Organization) (SPO) www.dpt.gov.tr Necatibey Caddesi No. 108 06100 Bakanliklar, Ankara, Turkey. Tel: [90] (312) 294-5000 Fax: [90] (312) 231-3498 Contact: Dr. Ahmet Tiktik, Undersecretary Tel: [90] (312) 294-5641 Fax: [90] (312) 231-3681 Contact: Mr. Ahmet Celenkoglu, Head of Conjunctural Evaluations Dept Tel: [90] (312) 294-6105: 294-6106 Fax: [90] (312) 232-1089; 294-6177 Contact: Mr. Erhan Usta, General Director of Annual Programs and Conjunctural Evaluations Tel: [90] (312) 294-6110; 294-6130 Fax: [90] (312) 232-1089; 294-6177 Activity: Develops and administers the State’s investment programs. It is the approval agency for allocating government funds for projects and is responsible for the preparation of Turkey’s Five Year Plans Hazine Mustesarligi (Undersecretariat of the Treasury) www.treasury.gov.tr Eskisehir Yolu, Inonu Bulvari 06510 Emek, Ankara, Turkey Tel: [90] (312) 212-8800 Fax: [90] (312) 212-8778 www.icongrouponline.com
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Contact: Mr. Ibrahim Canakci, Undersecretary of Treasury Tel: [90] (312) 212-8630 Fax: [90] (312) 212-2297 Contact: Mr. Aydin Karaoz, Deputy Undersecretary of Treasury Tel: [90] (212) 212-8719 Fax: [90] (312) 212-1071 Contact: Ms. Berrin Bingol, Deputy Director General Director General, Foreign Investment Department Tel: [90] (312) 212-8914 Fax: [90] (312) 212-8916 Contact: Mr. Zafer Baltaci, Director General of Banking and Foreign Exchange Tel: [90] (312) 212-8723 Fax: [90] (312) 212-8775 Contact: Mr. Arif Erden, Deputy Director General, Foreign Economic Relations Tel: [90] (312) 213-0297 Fax: [90] (312) 212-8855 Activity: Information source on foreign investment opportunities, procedures and incentives. The agency is the primary source of information on Turkey’s banking regulations. Dis Ticaret Mustesarligi, Ithalat Genel Mudurlugu (Undersecretariat of Foreign Trade, General Directorate of Imports) Eskisehir Karayolu, Inonu Bulvari 06510 Emek, Ankara, Turkey Tel: [90] (312) 212 8800 Fax: [90] (312) 212 8765 Contact: Mr. Tuncer Kayalar, Undersecretary for Foreign Trade Tel: [90] (312) 215-7016 - 17- 18 - 19 Fax: [90] (312) 212-8765 Contact: Mr. Omer Faruk Dogan, Deputy Undersecretary Tel: [90] (312) 212-8731 Fax: [90] (312) 212-8765 Contact: Mr. Baki Alkacar, Deputy Undersecretary Tel: [90] (312) 212-8902 Fax: [90] (312) 212-8765 Contact: Ms. Ulker Guzel, Deputy Undersecretary Tel: [90] (312) 3312-8725 Fax: [90] (312) 212-8765 Contact: Ms. Samiye Aydar, Deputy Director General for Imports Tel: [90] (312) 222-5277 Fax: [90] (312) 212-8765 Activity: Information on Turkish import regulations. This agency also establishes customs duties and surcharges Basbakanlik Ozellestirme, Idaresi Baskanligi (Prime Ministry, Privatization Administration) www.oib.gov.tr Huseyin Rahmi Gurpinar Sokak No. 2 06680 Cankaya, Ankara, Turkey Tel: [90] (312) 430-4560 Contact: Mr. Metin Kilci, President Tel: [90] (312) 432-0595 Fax: [90] (312) 432-3914; 434-4124 Contact: Ms. Hande Ascili, Head of Turk Telekom Privatization Committee Tel: [90] (312) 430-4560 www.icongrouponline.com
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Fax: [90] (312) 467-5259 Activity: Privatization of state economic enterprises Devlet Istatistik Enstitusu (DIE) (State Institute of Statistics) www.die.gov.tr Necatibey Caddesi No. 114 06100 Ankara, Turkey Tel: [90] (312) 417-6440 Fax: [90] (312) 417-0432 Contact: Dr. Omer Demir, President Tel: [90] (312) 418-8719; 425-3514 Fax: [90] (312) 425-3387; 418-1182 Turk Standartlari Enstitusu (TSE), Standart Hazirlama Baskanligi (Turkish Institute of Standards, Standards Preparation Department) www.tse.org.tr Necatibey Caddesi No. 112 06100 Bakanliklar, Ankara, Turkey Tel: [90] (312) 417-8330 (9 lines) Fax: [90] (312) 425-4399 Contact: Mr. Kenan Malatyali, President Tel: [90] (312) 425-4101 Fax: [90] (312) 417-2551 Contact: Mr. Mustafa Agus, President, Standards Preparation Dept. Tel: [90] (312) 417-0020 Fax: [90] (312) 424-1216 Turk Patent Enstitusu Baskanligi (Turkish Institute of Patents) www.turkpatent.gov.tr Izmir Caddesi No. 28 Kizilay, Ankara, Turkey Tel: [90] (312) 232-5425 Fax: [90] (312) 232-5437 Contact: Mr. Selim Mustafa Sengun, President Tel: [90] (312) 232-5415; 232-5416 Fax: [90] (312) 230-4430 Activity: Patent and trademark agency TUBITAK-Turkiye Bilimsel ve Teknik Arastirma Kurumu (The Scientific and Technical Research Council of Turkey) www.tubitak.gov.tr Ataturk Bulvari No. 221 06100 Kavaklidere, Ankara, Turkey Tel: [90] (312) 468-5300 Fax: [90] (312) 427-7409 Contact: Prof. Dr. Namik Kemal Pak, President Tel: [90] (312) 467-7798 Fax: [90] (312) 427-2672; 467-9582 Activity: Scientific research and technology development IGEME-Ihracati Gelistirme Merkezi www.icongrouponline.com
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(Export Promotion Center) www.igeme.org.tr Mithatpasa Caddesi No. 60 Kizilay, Ankara, Turkey. Tel: [90] (312) 417-2223 Fax: [90] (312) 417-2233 Contacts: Mr. Omer Faruk Dogan, Secretary General and Deputy Undersecretary for Foreign Trade Tel: [90] (312) 212-8753 Contact: Ms. Ulker Guzel, Deputy Undersecretary, Foreign Trade Tel: [90] (312) 417-2223 Fax: [90] (312) 212-8255 Contact: Ms. Beratiye Oncu, Assistant Secretary General Tel: [90] (312) 425-0372 Fax: [90] (312) 425-7174 Activity: Turkish exports promotion organization. Publishes periodicals on Turkey’s export products and producers. Prepares market research on specific industry sectors.
Transportation Karayollari Genel Mudurlugu (General Directorate of State Highways) www.kgm.gov.tr 06350 Yucetepe Mahallesi, Ankara, Turkey Tel: [90] (312) 415-7000 Fax: [90] (312) 417-4738 Contact: Mr. Ismail Tumay, Director General Tel: [90] (312) 415-8821 Fax: [90] (312) 425-7308 Activity: Highway construction Turk Hava Yollari Genel Mudurlugu (THY) (General Directorate of Turkish Airlines) www.turkishairlines.com.tr Ataturk Havalimani,Yesilkoy Istanbul, Turkey Tel: [90] (212) 663-6300 Fax: [90] (212) 663-4744 Contact: Mr. Abdurrahman Gundogdu, Director General Tel: [90] (212) 663-6601 Fax: [90] (212) 574-3420 Activity: National airline of Turkey. Devlet Hava Meydanlari Isletmesi (DHMI) (State Airports Administration) www.dhmi.gov.tr Bahcelerarasi Caddesi 06330 Etiler, Ankara, Turkey Tel: [90] (312) 212-6120 Fax: [90] (312) 212-5222 Contact: Mr. Mahmut Tekin, Director General Tel: [90] (312) 215-2266 Fax: [90] (312) 212-5222 Activity: Agency responsible for airport construction, operations and ATC www.icongrouponline.com
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Devlet Demiryollari Genel Mudurlugu (TCDD) (General Directorate of State Railways Administration) www.tcdd.gov.tr Istasyon, Ankara, Turkey Tel: [90] (312) 309-0515 Fax: [90] (312) 311-7634 Contact: Mr. Suleyman Karaman, Director General Tel: [90] (312) 311-3088 Fax: [90] (312) 310-3727 Activity: National railway. Maintains track, stations, rolling stock and operations infrastructure
Travel and Tourism Kultur ve Turizm Bakanligi (Ministry of Culture and Tourism) www.turizm.gov.tr Inonu Bulvari No. 5 06100 Emek, Ankara, Turkey Tel: [90] (312) 212-8300 Fax: [90] (312) 212-8590 Contact: Mr. Ismail Kokbulut, Undersecretary Tel: [90] (312) 296-9310 (2 lines) Fax: [90] (312) 212-3199 Contact: Mr. Nadir Alpaslan, General Director, Operations and Investments Tel: [90] (312) 296-9340 Fax: [90] (312) 212-8368 Contact: Mr. Selami Karaibrahimgil, General Director, Information Tel: [90] (312) 213-1785 Fax: [90] (312) 212-8595 Contact: Ms.Emine Bagli, Deputy Undersecretary for Personnel, Education and Finance Tel: [90] (312) 296-9341 Fax: [90] (312) 212-8368 Activity: Promotion of Turkish culture and tourism
Trade Associations DEIK-Dis Ekonomik Iliskiler Kurulu (Foreign Economic Relations Board) www.deik.org.tr Istiklal Caddesi, 286/9 34430 Odakule Is Merkezi, Beyoglu Istanbul, Turkey Tel: [90] (212) 243-4180 Fax: [90] (212) 243-4184 Contact: Ms. Cigdem Tuzun, Director Contact: Ms. Basak Kizildemir, Turkish-U.S. Business Council, Regional Coordinator Activity: External economic relations promotion authority and source of commercial information. DEIK promotes U.S.-Turkish bilateral business relations. EGEV-Ege Ekonomisini Gelistirme Vakfi (Foundation for the Development of the Aegean Region) www.egev.org E-mail:
[email protected] www.icongrouponline.com
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Cumhuriyet Bulvari, 1380 Sokak Alyans Apt. No. 2/1, Kat 6, Daire 11 Alsancak, Izmir, Turkey. Tel: [90] (232) 463-4878 Fax: [90] (232) 421-2259 Activity: Foundation having 85 members including city administrators, chambers of industry and commerce, businessmen’s associations and regional universities. EGEV is a foreign investment promotion authority. EGIAD-Ege Genc Isadamlari Dernegi (Aegean Young Businessmen’s Association) www.egiad.org.tr E-mail
[email protected] Mustafa Kemal Sahil Bulvari Levent Marina, Cakalburnu Izmir, Turkey Tel: [90] (232) 278-3030 Fax: [90] (232) 278-3030 Contact: Mr. Fatih Dolan, Chairman Activity: Business association in the Izmir region ESIAD-Ege Sanayicileri ve Isadamlari Dernegi (Aegean Industrialists and Businessmen’s Association) (TUSIAD’s Izmir extension) www.esiad.org.tr E-mail:
[email protected] Sehit Fethi Bey Caddesi No. 55, Kat 8 35210 Izmir, Turkey Tel: [90] (232) 483-8833 Fax: [90] (232) 483-3525 Contact: Mr. Enis Oztaruhan, Chairman Activity: Industrialists and businessmen’s organization established to promote business in the Aegean region TABA/AmCham - Turk-Amerikan Isadamlari Dernegi (Turkish-American Businessmen’s Association/ Turkish-American Chamber of Commerce) www.taba.org.tr E-mail:
[email protected] Büyükdere Caddesi No. 18 Tankaya Apt . Kat 7 , Daire 20 80223 Þiþli Istanbul, Turkey Tel: [90] (212) 291-0916 Fax: [90] (212) 291-0645 Contact: Dr. Zeynel Abidin Erdem, Chairman Activity: Promote business ties between the United States and Turkey. Promote U.S.-Turkish business relations in the NIS and Central Asia. TUSIAD-Turk Sanayicileri ve Isadamlari Dernegi (Turkish Industrialists’ and Businessmen’s Association) www.tusiad.org.tr E-mail:
[email protected] Mesrutiyet Caddesi No. 74 80050 Tepebasi, Istanbul, Turkey www.icongrouponline.com
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Tel: [90] (212) 249-5448; 249-0723 Fax: [90] (212) 249- 1350 Contact: Mr. Tuncay Ozilhan, Chairman Activity: Association of the largest business owners in Turkey. It is a business lobby, and the association publishes an authoritative annual report on the Turkish economy Union of Chambers of Commerce, Industry, Maritime Commerce and Commodity Exchanges of Turkey (TOBB) www.tobb.org.tr E-mail:
[email protected] Ataturk Bulvari No. 149 06640 Bakanliklar, Ankara, Turkey Tel: [90] (312) 413-8000 Fax: [90] (312) 418-3268 Contact: Mr. Rifat Hisarciklioglu, Chairman Contact: Ms. Fusun Karacasoy, Manager, Foreign Economic Relations Dept. Activity: Promotes investment and joint ventures on behalf of the member firms. YASED-Yabanci Sermaye Koordinasyon Dernegi (Association for Foreign Capital Coordination) www.yased.org.tr E-mail:
[email protected] Barbaros Bulvari, Morbasan Sokak Koza Is Merkezi B Blok/Kat 1 80700 Besiktas, Istanbul, Turkey Tel: [90] (212) 272-5094 Fax: [90] (212) 274-6664 Contact: Mr. Faruk Yoneyman, Chairman Activity: Promotes investment and foreign direct investment to Turkey.
Agriculture Turkiye Ziraat Odalari Birligi (Turkish Farmers Union) www.tzob.org.tr E-mail:
[email protected] Gazi M.K. Bulvari No. 25 06440 Demirtepe, Ankara, Turkey Tel: [90] (312) 231-6300 Fax: [90] (312) 231-7627 Contact: Mr. Semsi Bayraktar SETBIR-Turkiye Sut, Et, Gida San. Ve Ureticileri Birligi (Turkish Dairy, Meat, Food Industry and Producers Union) www.setbir.org.tr Mebusevleri Mahallesi, Ayten Sok. No. 27/8 06580 Tandogan, Ankara, Turkey Tel: [90] (312) 212-7902 Fax: [90] (312) 212-3662 Contact: Mr. Olgun Erguz, Chairman BESD-BIR-Beyaz Et Sanayicileri ve Damizlikcilar Birligi (White Meat Industrialists Association) www.besd-bir.org.tr www.icongrouponline.com
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Cetin Emec Bulvari 8. Cadde No. 4/6 06460 Ovecler, Ankara, Turkey Tel: [90] (312) 479-6246 Fax: [90] (312) 479-6247 Contact: Mr. Kemal Akman, Chairman Un Sanayicileri Birligi (Flour Millers Association) E-mail:
[email protected] Selanik Caddesi No. 82/30 Kizilay, Ankara, Turkey Tel: [90] (312) 417-5357 Fax: [90] (312) 417-5358 Contact: Mr. Adnan Hekimoglu, Chairman Yem Sanayicileri Birligi (Turkish Feed Millers Association) E-mail:
[email protected] Cetin Emec Bulvari 8. Cad. 79. Sok. No. 3/1 06460 Ovecler, Ankara, Turkey Tel: [90] (312) 479-9591 Fax: [90] (312) 479-0698 Contact: Ms. Ulku Karakus, President Turkiye Tohum Endustrisi Birligi (Turkish Seed Industry Association) E-mail:
[email protected] Tuna Caddesi No. 14/14 06420 Yenisehir, Ankara, Turkey Tel: [90] (312) 432-0050 Fax: [90] (312) 432-2650 Contact: Mr. Ayhan Elci, Secretary General Makarnacilar Dernegi (Union of Pasta Producers) www.makarna.org.tr E-mail:
[email protected] Cinnah Caddesi No. 59/5 Cankaya, Ankara, Turkey Tel: [90] (312) 441-5547 Fax: [90] (312) 438-3433 Contact: Mr. Yavuz Nimeti Omuroðlu, Secretary General
Advertising Options Reklamcilar Dernegi (Advertising Firms’ Association) www.rd.org.tr E-mail:
[email protected] Yildiz Cicegi Sokak No. 19 80630 Etiler, Istanbul, Turkey Tel: [90] (212) 257-8873 Fax: [90] (212) 257-8870 www.icongrouponline.com
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Contact: Ms. Nesteren Danutoglu, President
Automotive Ithal Otomobilleri Turkiye Mumessilleri Dernegi (Imported Vehicles Turkey Representatives’Association) www.iod.org.tr E-mail:
[email protected] Barbaros Bulvari Bahar Sokak No. 4 Baraz Ishani Kat 3, Daire 6 Balmumcu, Istanbul, Turkey Tel: [90] (212) 288-6184 Fax: [90] (212) 266-4409 Contact: Mr. Fahir Gurkan, General Coordinator ISOD-Otomotiv Sektoru Mensuplari Dernegi (Automotive Sector Member’s Association) E-mail:
[email protected] Taksim Caddesi No. 119/5 Taksim, Istanbul, Turkey Tel: [90] (212) 238-9312 Fax: [90] (212) 238-9316 Contact: Mr. Hakan Ozer, Chairman OSD-Otomotiv Sanayii Dernegi (Automotive Industry Association) www.osd.org.tr E-mail:
[email protected] Atilla Sokak No. 10 81190 Altunizade, Istanbul, Turkey Tel: [90] (216) 318-2994 Fax: [90] (216) 321-9497 Contact: Mr. Ercan Tezer, Secretary General OYDER-Otomotiv Yetkili Saticilari Dernegi (Vehicle Sellers’ Association) www.oyder.tr.com E-mail:
[email protected] Fahrettin Kerim Gokay Caddesi Okul Sokak Altunizade Sitesi B Blok K 4 D: 20 Altunizade, Uskudar Istanbul, Turkey Tel: [90] (216) 327-9229 Fax: [90] (216) 327-0044 Contact: Mr. Erol Civelek, Secretary General TAYSAD Tasit Araclari Yan Sanayi Dernegi (Auto Parts Association) www.taysad.org.tr E-mail:
[email protected] TOSB-TAYSAD Organize Sanayi Bolgesi Sekerpinar, Gebze www.icongrouponline.com
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41490 Kocaeli, Turkey Tel: [90] (262) 658-9818 Fax: [90] (262) 658-9839 Contact: Mr. Barbaros Demirci, Secretary General
Contracting and Construction Turkiye Muteahhitler Birligi (Turkish Contractors Association/The Union of International Contractors) www.tca-uic.org.tr E-mail:
[email protected] Ahmet Mithat Efendi Sokak No. 21 96550 Cankaya, Ankara, Turkey Tel: [90] (312) 439-1712 Fax: [90] (312) 440-0253 Contact: Mr. Nihat Ozdemir, President Turkiye Prefabrike Betonarme Yapi Ureten Kurulus Mensuplari Birligi (Prefabricated Concrete Construction Producers Union) www.prefab.org.tr E-mail:
[email protected] Farabi Sokak, Bag Apt. No. 39/10 Kavaklidere, Ankara, Turkey Tel: [90] (312) 467-6195 Fax: [90] (312) 4676295 Contact: Mr. Gur Coskun, President Toplu Konut Yapimcilari Dernegi (Mass Housing Builders Association) www.tokyad.org.tr Perpa Ticaret Merkezi B-Blok, Kat 9 No. 1372 Okmeydani, Istanbul, Turkey Tel: [90] (212) 210-9113 Fax: [90] (212) 210-9114 Contact: Mr. Suat Cumhur Oktar, President Contact: Mr. Reha Medin, Secretary General Yapi Endustri Merkezi (The Building and Industry Center - YEM) www.yem.net Cumhuriyet Caddesi No. 329 80200 Harbiye, Istanbul, Turkey Tel: [90] (212) 219-3939 Contact: Dogan Hasol, Chairman
Defense Industry SASAD-Savunma Sanayii Imalatcilari Dernegi (Defense Industries Manufacturers’ Association) www.sasad.org.tr E-mail:
[email protected] Paris Caddesi, Yazanlar Sokak 4/206 www.icongrouponline.com
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06680 Kavaklidere, Ankara, Turkey Tel: [90] (312) 426-2255 Fax: [90] (312) 426-2256 Contact: Mr. Mehmet Baspinar, President
Educational Fulbright Commission Sehit Ersan Caddesi 28/4 06680 Cankaya, Ankara, Turkey www.fulbright.org.tr E-mail:
[email protected] Tel: [90] (312) 427-1360 or 428-4824 Fax: [90} (312) 468-1560 Contact: Professor Dr. Ersin Onurkan, Executive Director Fulbright Commission, Istanbul Office Dumen Sokak 3/11, Gumussuyu 80090 Taksim, Istanbul, Turkey E-mail:
[email protected] Tel: [90] (212) 244-1105 Fax: [90] (212) 249-7581 Contact: Mr. Surreya Ersoy, Director Activity: Fulbright offices provide information to U.S. colleges and universities on student recruitment activities and exchange programs. Fulbright also acts as a liaison between U.S. academic institutions and Turkish universities, high schools, government agencies, and the media.
Electronics Elektronik Sanayicileri Dernegi (Electronic Industrialists Association) www.tesid.org.tr E-mail:
[email protected] Bagdat Caddesi No. 477/4 81070 Suadiye, Istanbul, Turkey Tel: [90] (216) 386-0909 Fax: [90] (216) 386-0910 Contact: Dr. Fikret Yucel, President
Environment and Pollution Control Cevre Teknolojisi Uygulayicilari Dernegi (Association of Practitioners of Environmental Technology) Irfan Bastug Caddesi,Yuva Apt. 3/10 80280 Gayrettepe, Istanbul, Turkey Tel: [90] (212) 272-2904 Fax: [90] (212) 272-2904 Turkiye’nin Tabiatini Koruma Dernegi (Association for Preservation of Turkey’s Nature) Kemeralti Caddesi, Vekilharc Sokak No. 16 Kadikoy, Istanbul, Turkey Tel: [90] (216) 349-6602 www.icongrouponline.com
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Fax: [90] (216) 336-5212
Franchising Activities Ulusal Franchising Dernegi (UFRAD) (Turkish National Franchising Association) Ergenekon Caddesi, Pangalti Ishani 89/15 80221 Pangalti, Istanbul Turkey www.ufrad.org.tr E-mail:
[email protected] Tel: [90] (212) 224-6628 Fax: [90] (212) 224-5130 Contact: Mr. Mahir Saranga, President The Turkish National Franchising Association currently serves 46 members in the Republic of Turkey.
Information Technology TUBISAD-Turkiye Bilgi Islem Sanayicileri Dernegi (Turkish Data-Processing Industrialists’ Association) www.tubisad.org.tr E-mail:
[email protected] Meydan Sokak, Meydan Apartmani 6/9 Akatlar - Ýstanbul Tel: [90] (212) 352-39 73 Fax: [90] (212) 352-39 72 Contact: Erol Bilecik, President Activity: Association of Turkish computer manufacturing, marketing, software and computer related service companies Turkiye Bilisim Dernegi www.tbd.org.tr E-mail:
[email protected] Çetin Emeç Bulvarý 4. Cad No : 3/11-12 06450 A.Öveçler, Ankara, Turkey Tel: [90] (312) 479-3462 Fax: [90] (312) 479-3467 Contact: Rahmi Aktepe, President Activity: Association for Turkish computer firms; publishes monthly computer periodical.
Insurance Turkiye Sigorta Sirketleri Birligi (Turkish Insurance Firms’ Association) www.tsrsb.org.tr E-Mail:
[email protected] Büyükdere Caddesi Büyükdere Plaza N195 Kat:1-2 80620 Levent-Istanbul -Turkey Tel: [90] (212) 324-1950 Fax: [90] (212) 325-6108
www.icongrouponline.com
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Medical and Health Care Tabibler Odasi (Chamber of Medical Doctors) Turkocagi Caddesi 17, Kat 3 Cagaloglu, Istanbul, Turkey Tel: [90] (212) 522-1911 Fax: [90] (212) 522-7374 Dis Hekimleri Birligi (Turkish Dental Association) Mesrutiyet Caddesi 32/8 Yenisehir, Ankara, Turkey Tel: [90] (312) 417-7492 Fax: [90] (312) 417-1922 Association of Research-Based Pharmaceutical Companies Barbaros Bulvari 85/A, D.4 Besiktas, Istanbul, Turkey E-mail:
[email protected] Tel: [90] (212) 327-7981 Fax: [90] (212) 327-7987 Contact: Dr. Altan Demirdere, Chairman (Novartis) Contact: Mr. Roberto Giusti, Vice Chairman (Eli Lilly) Contact: Mr. Per Wesslau, Vice Chairman (Astra Zeneca)
Mining and Minerals Turkiye Madenciler Dernegi (Turkish Miners’ Association) E-mail:
[email protected] Istiklal Caddesi No. 471/1 Beyoglu, Istanbul, Turkey Tel: [90] (212) 245-1503 Fax: [90] (212) 293-8355 Genc Madenciler Dernegi (Young Miners Association) 4. Levent, Cinar Sokak No. 19 80620 Besiktas, Istanbul, Turkey Tel: [90] (212) 264-6922 Fax: [90] (212) 264-2996
Packaging and Packing Ambalaj Sanayicileri Dernegi (Packaging Industrialists’ Association) www.ambalaj.org.tr Kozyatagi, Inonu Caddesi STFA Bloklari Blok 3, Kat 8, Daire 35 81090 Kadikoy, Istanbul, Turkey Tel: [90] (212) 362-8155 Fax: [90] (212) 352-8156 www.icongrouponline.com
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Karton, Ambalaj Sanayicileri Dernegi (Carton/Paper Packaging Industrialists’ Association) 23 Temmuz Meydani No. 1, Kat 2 80300 Esentepe, Istanbul, Turkey Tel: [90] (212) 267-4933 Fax: [90] (212) 267-1207
Paper and Pulp Seluloz ve Kagit Sanayicileri Vakfi (Paper and Paper Pulp Industrialists’ Foundation) Buyukdere Caddesi No. 81 Kurgu Is Hani Kat 8, Daire 15 80300 Mecidiyekoy, Istanbul, Turkey Tel: [90] (212) 266-9524 Fax: [90] (212) 266-9524
Safety and Security Equipment and Technologies GESIDER- Guvenlik Endustrisi Sanayicileri ve Isadamlari Dernegi (Security Industry Industrialists and Businessmen’s Association) Perpa Ticaret Merkezi B Blok Kat 11 No. 1657 www.gesider.org E-mail:
[email protected] or
[email protected] Tel: [90] (212) 210-5309 Fax: [90] (212) 210-5308 Contact: Mr. Orhan Aksel, President Activity: GESIDER has 70 members and was founded in 1996. GUSOD-Guvenlik Sistemleri ve Goztetim Organizasyon Dernegi (Safety Equipment and Surveillance Organization Association) Talatpasa Caddesi Duru Sokak 1 Kat. 3 80640 Gultepe, Istanbul, Turkey www.gusod.com E-mail:
[email protected] Tel: [90] (212) 280-2808 Fax: [90] (212) 280- 4700 Contact: Mr. Unver Oryal, President Activity: GUSOD has 45 members and was established in 1994.
Textiles and Apparel Turkiye Giyim Sanayicileri Dernegi (Turkish Clothing Manufacturers’ Association) Yildiz Posta Caddesi Dedeman Is Hani 48/8 80700 Gayrettepe, Istanbul, Turkey Tel: [90] (212) 274-2525 Fax: [90] (212) 272-4060
www.icongrouponline.com
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Travel and Tourism BETUYAB-Belek Turizm Yatirimcilar Birligi (Union of Belek Tourism Investors) E-mail:
[email protected] Kuzgun Sokak No. 88/1 Asagiayranci, Ankara, Turkey Tel: [90] (312) 441-5427 Fax: [90] (312) 441-5428 Contact: Mr. Mustafa Nazik, President Activity: Hotel and resort development association in Belek MARYAT-Marina Yatirimcilari ve IsletmecileriDernegi (Association of Marina Investors and Operators) Turizm Bakanligi Sektor Temsilciligi Inonu Bulvari 5 Emek, Ankara, Turkey Tel: [90] (242) 814-1490 Fax: [90] (242) 814-1552 Activity: Association representing the Ministry of Tourism in marina development and investment TUROB-Turkiye Otelciler Birligi (Union of Turkish Hotel Operators) Mete Caddesi, Mete Palas 26/2 Taksim, Istanbul, Turkey Tel: [90] (212) 249-5153 Fax: [90] (212) 252-1664 Contact: Mr. Sinan Babila, President Activity: Hotel owners lobbying organization. Maintains information on hotel and resort projects. TURSAB-Turkiye Seyahat Acentalari Dernegi (Association of Turkish Travel Agencies) www.tursab.org.tr Fulya Asik Kerem Sokak No. 48/50 Dikilitas Mahallesi Besiktas, Istanbul, Turkey Tel: [90] (212) 259-8404 Fax: [90] (212) 259-0656 Contact: Mr. Basaran Ulusoy, President Activity: Supports travel agents and the tourism industry. TYD-Turkiye Turizm Yatirimcilari Dernegi (Tourism Investors Association) www.ttyd.org.tr E-mail:
[email protected] Yildiz Posta Cad., Dedeman Ticaret Merkezi No. 52 K.6 80700 Esentepe, Istanbul, Turkey Tel: [90] (212) 347-2135 Fax: [90] (212) 347-2146 Contact: Mr. Tavit Koletavitoglu, President Contact: Ms. Nedret Koruyan, General Coordinator Activity: Turkish tourism investment.
www.icongrouponline.com
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Chambers of Commerce
Union of Chambers of Commerce, Industry, Maritime Commerce and Commodity Exchanges of Turkey (TOBB) www.tobb.org.tr Ataturk Bulvari No. 149 06640 Bakanliklar, Ankara, Turkey Tel: [90] (312) 418-4327 Fax: [90] (312) 417-9711 Contact: Mr. Rifat Hisarciklioglu, Chairman Activity: Association of local chambers of commerce and industry Ankara Chamber of Commerce www.atonet.com E-mail:
[email protected] Eskisehir Yolu, Sogutozu Ankara, Turkey Tel: [90] (312) 286-4036; 285-7950 Fax: [90] (312) 286-3446 Contact: Mr. Sinan Aydin Aygun, Chairman Ankara Chamber of Industry www.aso.org.tr Ataturk Bulvari 193/4 Kavaklidere, Ankara, Turkey Tel: [90] (312) 417-1200 Fax: [90] (312) 417-2060 Contact: Mr. Zafer Caglayan, Chairman Istanbul Chamber of Commerce www.ito.org.tr Ragip Gumuspala Caddesi No. 84 34378 Eminonu, Istanbul, Turkey Tel: [90] (212) 455-6000 Fax: [90] (212) 520-1526 Contact: Mr. Mehmet Yildirim, Chairman Contact: Mr. Ismail Ozaslan, Secretary General Ms. Fugen Camlidere, Asst. Secretary General Istanbul Chamber of Industry www.iso.org.tr E-mail:
[email protected] Mesrutiyet Caddesi 118 80050 Tepebasi, Istanbul, Turkey Tel: [90] (212) 252-2900 Fax: [90] (212) 249-3963 Contact: Mr. Tanil Kucuk, Chairman Contact: Mr. Husamettin Kavi, ViceChairman Deniz Ticaret Odasi (Chamber of Maritime Commerce) www.chamber-of-shipping.org.tr E-mail:
[email protected] www.icongrouponline.com
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Meclisi Mebusan Caddesi No. 22 80154 Salipazari Istanbul, Turkey Tel: [90] (212) 252-0130 Fax: [90] (212) 293-7935 Contact: Mr. Cengiz Kaptanoglu, Chairman Izmir Chamber of Commerce www.izto.org.tr Ataturk Caddesi No. 126 35210 Pasaport, Izmir, Turkey Tel: [90] (232) 441-7777 Fax: [90] (232) 483-7853 Contact: Mr. Ekrem Demirtas, Chairman Aegean Chamber of Industry www.ebso.com.tr E-mail:
[email protected] Cumhuriyet Bulvari No. 63 Izmir, Turkey Tel: [90] (232) 441-0909 Fax: [90] (232) 446-5354; 445-2904 Contact: Mr. Salih Esen, Chairman
3.11.7
Market Research Firms
IBS-International Business Services A.S. www.ibsresearch.com E-mail:
[email protected] Istiklel Cad. Turnacibasi Sok. No. 19/3 Beyoglu, Istanbul, Turkey Tel: [90] (212) 252-2460 Fax: [90] (212) 252-2430 Contact: Mr. David Tonge, General Manager Deloitte & Touche Turkey Denet Mali Danismanlik A.S. E-mail:
[email protected] Buyukdere Caddesi - Yapi Kredi Plaza B Blok Kat 5 80620 Levent, Istanbul, Turkey Tel: [90] (212) 283-1585 Fax: [90] (212) 283-1937 Contact: Mr. Levent Yaveroglu, Chairman
3.11.8
Major Commercial Banks
Akbank T.A.S. Sabanci Center, 4. Levent 80745 Istanbul, Turkey
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Tel: [90] (212) 270-0044 Fax: [90] (212) 269-8255 www.akbank.com.tr Citibank, N.A. www.citibank.com Buyukdere Cad. Maya Is Merkezi 100 80280 Esentepe, Istanbul, Turkey Tel: [90] (212) 288-7700 Fax: [99] (212) 288-7768 Koc Bank www.kocbank.com.tr Ataturk Bulvari No. 78 Kizilay, Ankara, Turkey Tel: [90] (312) 418-1804 Fax: [90] (312) 425-3237 Turkiye Is Bankasi A.S. www.isbank.net.tr Is Kuleleri, 4. Levent Istanbul, Turkey Tel: [90] (212) 316-0000 Fax: [90] (212) 316-0990 Yapi ve Kredi Bankasi A.S. Yapi Kredi Plaza A Blok Buyukdere Caddesi 80620 Levent, Istanbul, Turkey Tel: [90] (212) 339-7000 Fax: [90] (212) 339-6000 T.C. Ziraat Bankasi Gazi Mustafa Kemal Bulvari Sihhiye, Ankara, Turkey Tel: [90] (312) 310-3747; 310-3750 Fax: [90] (312) 310-1134 Turkiye Garanti Bankasi A.S. www.garanti.com.tr Buyukdere Caddesi No. 63 80670 Maslak, Istanbul, Turkey Tel: [90] (212) 285-4040 Fax: [90] (212) 285-4040 Turk Ticaret Bankasi A.S. www.turkbank.com.tr Yildiz Posta Caddesi No. 2 80280 Gayrettepe, Istanbul, Turkey Tel: [90] (212) 288-5900 / Ext. 4130 Fax: [90] (212) 288-6113
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Exhibition Management Companies
Interteks Uluslararasi Fuarcilik A. S. Mim Kemal Oke Caddesi 10 80200 Nisantasi, Istanbul, Turkey
[email protected] E-mail:
[email protected] Tel: [90] (212) 225-0920 (12 lines) Fax: [90] (212) 225-0933/36 Contact: Ms. Zubeyde Haliloglu, International Sales Coordinator Interteks Organizes Seventeen Exhibitions Annually Tuyap Tum Fuarcilik Yapim A.S. Saglam Fikir Sokak Gazeteciler Mah. 19 80300 Esentepe, Istanbul, Turkey www.tuyap.com.tr E-mail:
[email protected] Tel: [90] (212) 212-3100/07 Fax: [90} (212) 212-3109 Contact: Ms. Oya Akgun, Sales Group Manager Activity: Tuyup organizes thirty-six exhibitions in various industry sectors every year in Ankara, Istanbul and Izmir. CNR Uluslararasi Fuarcilik ve Ticaret A.S. Dunya Ticaret Merkezi Ataturk Havalimani Karsisi 34801 Yesilkoy, Istanbul, Turkey www.itf-exhibtions.com, www.idef2003.com E-mail:
[email protected] Tel: [90] (212) 663-0945 Fax: [90] (212) 663-7059 Contact: Ms. Yeynep Kislali, Manager, International Department Activity: The CNR hosts 16 exhibitions at the CNR World Trade Center in Istanbul annually. ITF Istanbul Fuarcilik A.S. CNR Uluslararasi Fuar Merkezi Dunya Ticaret Merkezi Yesilkoy, Istanbul, Turkey www.itf.exhibitions.com E-mail:
[email protected] Tel: [90] (212) 663-0881 Fax: [90] (212) 663-0973/74 Contact: Ms. Pinar Bayoglu, International Marketing Coordinator Activity: ITF Istanbul Fairs hosts 13 exhibitions in Istanbul per year. Major exhibitions include the Textile and Accessories Fair, the International Automotive and Accessories Fair, and the International Furniture and Interior Design Fair.
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4 4.1
DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS DISCLAIMERS & SAFE HARBOR
Summary Disclaimer. This publication ("Report") does not constitute legal, valuation, tax, or financial consulting advice. Nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s), city(ies) or country(ies) discussed. It is offered as an information service to clients, associates, and academicians. Those interested in specific guidance for legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Information was furnished to Icon Group International, Inc. ("Icon Group"), and its subsidiaries, by its internal researchers and/or extracted from public filings, or sources available within the public domain, including other information providers (e.g. EDGAR filings, national organizations and international organizations). Icon Group does not promise or warrant that we will obtain information from any particular independent source. Published regularly by Icon Group, this and similar reports provide analysis on cities, countries, industries, and/or foreign and domestic companies which may or may not be publicly traded. Icon Group reports are used by various companies and persons including consulting firms, investment officers, pension fund managers, registered representatives, and other financial service professionals. Any commentary, observations or discussion by Icon Group about a country, city, region, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. Further, the financial condition or outlook for each industry, city, country, or company may change after the date of the publication, and Icon Group does not warrant, promise or represent that it will provide report users with notice of that change, nor will Icon Group promise updates on the information presented. Safe Harbor for Forward-Looking Statements. Icon Group reports, including the present report, make numerous forward-looking statements which should be treated as such. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995, and similar local laws. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's, city's, country's or industry's actual results or outlook in future periods to differ materially from those forecasted. These risks and uncertainties include, among other things, product price volatility, exchange rate volatility, regulation volatility, product demand volatility, data inaccuracies, computer- or software-generated calculation inaccuracies, market competition, changes in management style, changes in corporate strategy, and risks inherent in international and corporate operations. Forward-looking statements can be identified in statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate,'' "estimate," "expect,'' "project,'' "intend,'' "plan,'' "feel", "think", "hear," "guess," "forecast," "believe," and other words and terms of similar meaning in connection with any discussion of future operating, economic or financial performance. This equally applies to all statements relating to an industry, city, country, region, economic variable, or company financial situation. Icon Group recommends that the reader follow the advice of Nancy M. Smith, Director of SEC's Office of Investor Education and Assistance, who has been quoted to say, "Never, ever, make an investment based solely on what you read in an online newsletter or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn't well known … Assume that the information about these companies is not trustworthy unless you can prove otherwise through your own independent research." Similar recommendations apply to decisions relating to industry studies, product category studies, corporate strategies discussions and country evaluations. In the case of Icon Group reports, many factors can affect the actual outcome of the period discussed, including exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, changes in reported data quality, changes in methodology and similar factors. Information Accuracy. Although the statements in this report are derived from or based upon various information sources and/or econometric models that Icon Group believes to be reliable, we do not guarantee their accuracy, reliability, quality, and any such information, or resulting analyses, may be incomplete, rounded, inaccurate or condensed. All estimates included in this report are subject to change without notice. This report is for informational purposes only and is not intended as a recommendation to invest in a city, country, industry or product area, or an offer or solicitation with respect to the purchase or sale of a security, stock, or financial instrument. This report does not take into account the investment
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objectives, financial situation or particular needs of any particular person or legal entity. With respect to any specific company, city, country, region, or industry that might be discussed in this report, investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the information in this report. Investing in either U.S. or non-U.S. securities or markets entails inherent risks. In addition, exchange rate movements may have an effect on the reliability of the estimates provided in this report. Icon Group is not a registered Investment Adviser or a Broker/Dealer.
4.2
ICON GROUP INTERNATIONAL, INC. USER AGREEMENT PROVISIONS
Ownership. User agrees that Icon Group International, Inc. ("Icon Group") and its subsidiaries retain all rights, title and interests, including copyright and other proprietary rights, in this report and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this report ("Report"). Restrictions on Use. User agrees that it will not copy nor license, sell, transfer, make available or otherwise distribute the Report to any entity or person, except that User may (a) make available to its employees electronic copies of Report, (b) allow its employees to store, manipulate, and reformat Report, and (c) allow its employees to make paper copies of Report, provided that such electronic and paper copies are used solely internally and are not distributed to any third parties. In all cases the User agrees to fully inform and distribute to other internal users all discussions covering the methodology of this Report and the disclaimers and caveats associated with this Report. User shall use its best efforts to stop any unauthorized copying or distribution immediately after such unauthorized use becomes known. The provisions of this paragraph are for the benefit of Icon Group and its information resellers, each of which shall have the right to enforce its rights hereunder directly and on its own behalf. No Warranty. The Report is provided on an "AS IS" basis. ICON GROUP DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, PERFORMANCE UNDER THIS AGREEMENT, THE REPORT. Icon Group makes no warranties regarding the completeness, accuracy or availability of the Report. Limitation of Liability. In no event shall Icon Group, its employees or its agent, resellers and distributors be liable to User or any other person or entity for any direct, indirect, special, exemplary, punitive, or consequential damages, including lost profits, based on breach of warranty, contract, negligence, strict liability or otherwise, arising from the use of the report or under this Agreement or any performance under this Agreement, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Indemnification. User shall indemnify and hold harmless Icon Group and its resellers, distributors and information providers against any claim, damages, loss, liability or expense arising out of User's use of the Report in any way contrary to this Agreement. © Icon Group International, Inc., 2007. All rights reserved. Any unauthorized use, duplication or disclosure is prohibited by law and will result in prosecution. Text, graphics, and HTML or other computer code are protected by U.S. and International Copyright Laws, and may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit permission. Permission is granted to quote small portions of this report with proper attribution. Media quotations with source attributions are encouraged. Reporters requesting additional information or editorial comments should contact Icon Group via email at
[email protected]. Sources: This report was prepared from a variety of sources including excerpts from documents and official reports or databases published by the World Bank, the U.S. Department of Commerce, the U.S. State Department, various national agencies, the International Monetary Fund, the Central Intelligence Agency, and Icon Group International, Inc.
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END
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