Conflicting practice of Turkish customs on customs tools for classification of imported and exported goods
Turkey’s customs tariff system is called the Customs Tariff Statistics Positions (“GTIP”), a twelve-digit coding for identification and classification of imported and exported goods which is modified from the World Customs Organization’s Harmonized System in accordance with Turkish customs regulations. The GTIP is a list that defines and specifies the taxes to be applied to the importation and exportation of products for proper implementation of the customs rules in a concrete and a precise way. Thus, it is considered as one of the most important tools of international trading affairs where all customs duties and operations are determined in accordance with the classifications set forth within the customs tariff.
Considering the tax liabilities which have administrative and criminal aspects, the correct classification is crucial for the importers to carry out their importation activities in accordance with liberal trading principles and opportunities and not to be confronted with any problems as to the tax liabilities arisen from classification failures. Therefore, the customs regulations grant them the right to receive official information regarding the correct tariff classification for their goods, from the General Directorate of Customs, with which they will be able to securely carry out their business.
On the other hand, the “Binding Tariff Information” (“BTI”) regulated under Article 9 of the Customs Law numbered 4458, is an administrative tariff classification that is given upon written request by the Undersecretariat of Customs and that helps the importers who are having difficulties in classifying the goods. The BTI, providing certainty in relation to the correct tariff classification of the imported and exported goods is legally binding on all customs administrations for up to six years from the date of issue. Furthermore, considering that BTI provides the importer with relevant information regarding the legal obligations, liabilities and rights for tax and customs related duties as well as licensing requirements, quotas or other restrictions, it is deemed a general guide for the importers.
For the correct classification of goods, there is another tool called the Customs Laboratory Analysis Report (“CLA”) regulated under the Regulation Concerning the Activities of the Customs Laboratories published on the Trade Registry Gazette numbered 27392 on October 31, 2009. Accordingly, the main objective and duty of the Customs Laboratories is to identify the imported goods within the framework of the Turkish Customs Tariff and to specify their customs tariff positions. Laboratory analysis does not only give a determination of the content of the imported goods but also provides a confirmation in relation to the compliance of the content and composition of the goods with the relevant regulations. However, a Binding Tariff Information cannot be applied for several goods which are listed in the Appendix 23 of the Customs Regulation.
Apart from these exceptions, the Customs Laboratory Analysis reports are deemed to be as binding as the BTI. Besides, in some cases, in terms of several specific products, the importers have no other alternative than complying with the Customs Laboratory Analysis Report, which is also the administrative way for classification.
However, in Turkish customs practice, the customs authorities do not consider the Customs Laboratory reports as legally binding documents as BTIs. This is highly risky for importers because the customs authorities who do not take CLA as officially binding and accept that it has the same effect as a BTI, they can impose additional tax assessments, tax fines or tax irregularity fines on the importers and even criminal complaints can be initiated against the importers. Considering the fact that such conflicts create unreliability and insecurity among customs practice and that it appears as an obstacle for the ease of international trading, many claims are being brought to courts where it is wished the administrative and tax courts would set several precedents on the issue.