SECTION TWO

Fields of Activity, Operation Licences, Entry Permits and Service Cards

Fields of Activity in the Zone

Article 10- All industrial, commercial and service operations deemed appropriate by the Supreme Planning Board (S.P.B.) may be conducted in the Free Zone.

Granting of Operation Licences

Article 11- Real or legal persons wishing to engage in operations in the Free Zone may submit their “Operation Licence Application Form” either directly to the General Directorate or by way of the Zone Directorate or by registered mail in order to obtain an “Operation Licence”. In cases when the application is made by post, the mailing date of the application form shall be regarded as the date of submission to the General Directorate.

When the “Application Form for Operation Licence” has been filled in and submitted by one of above means and the Operation Licence Application fee has been deposited in the Fund account in the Central Bank of the Republic of Turkey, the application shall be considered made. Those whose applications, assessed in the light of the opinions of the Zone Directorate, the Operator or the Z.F.O., are found suitable for operating in the Zone and who hence become eligible for an “Operation Licence” will obtain their Operation Licence from the General Directorate after renting and purchasing the premises where they are to conduct their business within 30 days of being notified ( Purchasing is applicable in Zones where the land is in private ownership). Failure to complete the procedures for a lease contract or a purchase within this period will result in the loss of the right to an Operation Licence.

The General Directorate may, after evaluating the Application Form for Operation Licence, reject the application if it is convinced that conditions are not right.

Operation Licences shall be granted for an appropriate period of up to 99 years, taking into consideration the request of the applicant, the type of activity to be conducted, the amount of the investment and other issues relevant for each Zone.

The period of validity of the Operation Licence and the principles for the Operation Licence Application fee are determined by the General Directorate.

Users possessing an Operation Licence for warehouse activities may store the goods of other users or those of real or legal persons who are not users once they have obtained the approval of their lease contract by the Zone Directorate.

Keeping of Industrial and Commercial Registers

Article 12- Any real or legal persons granted an “Operation Licence” shall be registered in the “Registration Book” at the registrar of the Zone Directorate prior to operation. The information in the licence, the profession and commercial activity to be practiced by the person concerned shall be entered in this record precisely and a commercial or industrial registration number and a Registration Document that features this information shall be issued to him. After the person concerned starts to operate, his annual income and expenditures, the results of his balance sheet and profit and loss accounts and the main details of his operations shall be entered in the records. Each person is obliged to report any changes in his proffessional or commercial activities to the Zone Directorate and consequently has to have these entered in this registration records. Each person is obliged to report or submit to the Registrar the information documents relating to his annual activities without need for any request, within four months of the end of each calendar year.

With the exception of parts relating to matters such as patents, licences and know-how, these records of the real or legal persons operating in the Zone may be inspected at the discretion of the Zone Directorate.

Entry Permits and Service Cards

Article 13- Real or legal persons holding “Operation Licences”, their representatives, employees and workers and persons conducting any kind of business or activity may enter the Zone provided that they obtain an “Entry Permit” from the Zone Directorate. Short-term entry to the Zone may also be given by a “Special Entry Document” issued by the Zone Directorate.

Entry permits are issued by the Zone Directorate. Each features the title and seal of the Zone Directorate, the date of issue, a photograph of the bearer, his first name and surname, the address of his workplace and the period of validity of the permit. Special Entry Permits do not state the name of the bearer. These documents are issued in different colours and Special Entry Permits are returned to the officials on exit.

The staff of the Zone Directorate and other public agencies or the persons employed by the Operator or Z.F.O. are presented with “ Service Cards” issued by the Zone Directorate and encompassing the same information as is contained in the “Entry Permit”. Such officials shall have to display these cards in order to enter and work in the Free Zone.

Workers hired on a casual basis by the Operator, the Z.F.O. and / or users for construction, maintenance and repair works been carried out during the establishment and operation phases may be issued “Special Entry Permits” upon presentation of their identity cards. In this case, the special entry permits to be issued correspond to the number of workers. When there is a change in the number of workers employed, those cards in excess of the number of workers are taken back to be annuled, while new cards are issued if the number of cards falls short of the number of employees.

Annulment of Operation Licences

Article 14- The Operation Licence of a user may be annulled if the existence of any of the following circumstances is confirmed by an investigation and assessment conducted by the General Directorate:

a) When it is confirmed through a written report of the Zone Directorate that there has been an act contrary to the provisisons of Laws and regulations or of the circulars, written instructions and directives of the General Directorate and that the action is to the detriment of order in the Zone,

b) When it is established that tax evasion has taken place with revenues and earnings accruing from activities conducted outside the Zone being declared as income earned in the Zone and/or through the presentation counterfeit or misleading documents for this purpose,

c) When it is confirmed by investigations and deliberations or by checks made following tip-offs, that the conditions and qualifications declared in the Application Form for Operation Licence are nor fulfilled or have later been lost or have proven false, or when it is established that changes in the information declared in the Application Form for Operation Licence have not been reported,

d) Except where the existence of a state of force majeure as stipulated in Article 41 of the Regulation is verified by the relevant authority, when it is established through a written report of the Zone Directorate that construction work has not started within 60 days of the date of approval of construction projects by the Zone Directorate or in the case of rented premises that the operation has not been launched within 6 months,

e) When the General Directorate or Zone Directorate has twice been denied information or has not received a response within the specified period, or has been supplied with misleading or false information regarding activities in the Zone which it has requested in writing,

f) When it is established through a written report of the Zone Directorate that the user or his responsible authorized representative or employees have caused damage to the facilities, machinery and equipment in the Zone or to third parties and that this has been repeated despite the issue of a written warning,

g) When it has been demonstrated at least twice by a Commission established by the Zone Directorate that the user has not conformed to the provisions of his contract with the Operator or the Z.F.O., and that he has not ceased to contravene it within 15 days of being notified in writing following a third observation by the Commission.

The Operation Licence Application Fee is forfeited as revenue to the Fund and not reimbursed in cases of annulment of Operation Licences.

Any person attempting to continue his activities in the zone despite the fact that his Operation Licence has expired or been annulled for above reasons, shall be expelled from the Zone by the police or Customs Officers upon the request of the Zone Directorate. The possessions of such persons in the Zone will be subject to liquidation in accordance with Article 52 of the Regulation.

Annulment of Entry Permits, Special Entry Permits and Service Cards

Article 15- Any person whose “Operation Licence” has been annulled, or any employee of such a person, as well as any person in possession of an “Entry Permit” or a “Service Card” who has engaged in any of the actions specified in Article 14, as confirmed by a written report of the Zone Directorate, will have their “Entry Permit” or “Service Card” annulled and the person concerned will be notified of the annullment. In cases when a “Special Entry Permit” is annulled, it shall be confiscated by the authorities and the person concerned expelled from the Zone.

Users are obliged to inform the Zone Directorate on the same day when they dismiss an employee. In such cases, the “Entry Permit” of the person concerned shall be annulled by the Zone Directorate. However, if such a person finds a new job in the zone, his “Entry Permit” will be returned after the change has been recorded, provided that it has not expired.

Any person whose “Entry Permit” or “Service Card” or “Special Entry Permit” is annulled will be expelled from the Zone by the police or customs officers and Customs regulations shall apply for any goods subject to customs duty found on this person while his posessions in the Zone shall be subject to the provisions of Article 52 of the Regulation.