SECTION FOUR

The Operator or the Zone Founder and Operator

The Operating or Establishment and Operating Contracts with the Operator or the Z.F.O.

Article 24- The Zone may either be operated within the framework of an “Operation Contract” by a Company established on the basis of a decision of the Council of Ministers or established and operated under an “Establishment and Operation Contract”, again by a Company established in accordance with a decision of the Council of Ministers.

In the first of the cases described in the above paragraph the contract is named the “Operation Contract” and the company authorized the “Zone Operator”, whereas in the second case the contract is labeled the “Establishment and Operation Contract” and the company the “Zone Founder and Operator-Z.F.O”. The contracts determining the way in which the Operator or the Z.F.O. is to operate shall state the financial and administrative obligations of the Companies as specified in the Regulation as well as principles for their management and supervision.

Financial, Administrative and Service Obligations of the Operator or the Z.F.O.

Article 25- The financial, administrative and service obligations of the Operator or the Z.F.O. are stated below:

a) If the land which is deleated as the Free Zone is in the ownership of the Treasury or a public institution and is allocated to the Operator by the U.F.T through the signing of an Operation Contract, the obligations of the Operator are specified in the Contract.

If the Operator of the Zone is entrusted with buildings belonging to the Treasury and with the management of buildings and facilities built by users but automatically reverting to the Treasury upon the expiry of the “Operation Licences” of the users, the content of the general and special conditions for leases will be specified in detail in the Operation Contract signed by the General Directorate and the Operator. In cases where users who have built buildings and facilities in the Zone but whose “Operation Licences” have expired ask to rent the same buildings and facilities, the Operator will accord preferential treatement to these users, provided that they have renewed their Operation Licences.

b) The Z.F.O. shall not seek payment of construction costs or rent for buildings which it builds for the use of the Zone Directorate, the Security and Customs Administrations and other institutions deemed necessary. However, where the zone is established on land owned by the Treasury or by a public institution, the Z.F.O. shall not be obliged to pay rent for the land required for infrastructure, entry-exit gates and roads, internal roads, green areas, areas occupied by the buildings and facilities used by the Zone Directorate, Security and Customs units and other administrative bodies or for the land required for the distribution of infrastructural services such as electricity, water and natural gas.

c) The Operator or the Z.F.O. is responsible for maintenance and repair work arising from the destruction or deterioration of the infrastructural facilities in the Zone the management of which is entrusted to it through an Operation or Establishment and Operation Contract.

d) The Operator or the Z.F.O. is obliged to fulfill the functions specified in the present Regulation as well as to carry out other works and services envisaged by the Operation or Establishment and Operation Contract that it has signed with the U.F.T.

The Powers and Functions of the Operator or the Z.F.O.

Article 26- The Powers and functions of the Operator or the Z.F.O. are stated below:

a) To operate the zone in accordance with the provisions of the “Operation” or “Establishment and Operation Contract” signed with the U.F.T.

In cases when it is specified in the Contract that the public sector will not provide infrastructure, to construct infrastructural facilities in the Zone and to lease and / or sell construction areas in conformity with the parcellation plan to a sufficient number of users.

b) Within the framework of the principles of the “Operation” or “Establishment and Operation Contract” , to receive the applications of users concerning their activities, to draw up with the users Rent Contracts for the operation of depots, warehouses, sheds and bonded warehouses and Service Contracts to provide or arrange for the provision under its supervision, of shipping, port and other services that users may require in the Zone, and to finalize those Rent and Service Contracts that have not been rejected within three working days by the Zone Directorate, to which a copy of each draft contract is sent, to inform the applicant in the case of rejection by the Zone Directorate and to collect in advance fees, rent and deposits in accordance with the contracts signed.

c) To include in the contracts drawn up with the users provisions to ensure that users take safety and hygienic precautions in the areas they have rented and elsewhere, to prevent any changes being made without permission, to prevent any contraventions of the working practices and conditions stipulated by the Free Zone Legislation and by circulars/ directives taking place in the depots, warehouses, sheds and bonded warehouses and hence carefully to safeguard order in the Zone.

d) To obtain the information and documents that users are required to supply to the Zone Directorate, the Port, Airport, Customs and Security Authorities and other public institutions.

e) To take the necesary measures for the uninterrupted supply of electricity, water, gas, fuel and communication services and to coordinate with relevant public and private organizations to making arrangements for the collection of charges and their payment to the appropriate bodies.

f) To insure all buildings and facilities leased in the Zone against fire, and to coordinate as necessary with the local public institutions to ensure the availability of fire prevention and water pumping equipment and an adequate number of fire fighting vehicles and tools to enforce general safety measures and to establish the first aid and life-saving services required in case of injury in industrial and other accidents or of sudden illness.

g) To identify any person responsible for damages to the infrastructure or to other property in the zone and ensure that such damage is fully compensated for.

h) To meet the demand for the transportation of goods and people in the Zone, to construct the planned parks and green areas and ensure their maintenance and preservation, to organize places for public use such as restaurants, cafeterias, kiosks etc. and to operate them or arrange for their operation by third parties and to solve all cleaning and general hygiene problems of the area.

Relations with Users

Article 27- (Amended with the Official Journal No. 24849 and dated 17.08.2002)

Users that want a service to be performed for themselves in connection with their activities in the zone fill in the Free Zone Procedure Form and submit it to the Zone Directorate. They deposit the related fee to the Special Account opened with the banks for collection of revenues of the Zones, attach one of the two copies of the receipt for the payment to the other copy of the Free Zones Procedure Form and have it delivered to the Zone Directorate and submit these copies to the officials of the Operator or the ZFO. Where no fee needs to be paid to the Special Account, the application procedure is completed when remaining copies of the Free Zone Procedure Form are obtained back from the Zone Directorate and delivered to the Operator or the ZFO.

The Free Zone Procedure Form is in the force of a service contract specifying the work relationship between the User and the Operator or the ZFO This contract comes into effect when the form is signed by the officials of the Operator or the ZFO and a copy is returned to the user.

Subject to a charge, users may request that the Operator or the ZFO provide services such as the loading, unloading, transport and storage of goods which are in the zone or entering or leaving the zone. Where the Operator or the ZFO is unable to supply the machinery and equipment that users require for their activities, the latter may acquire them from other users operating in the zone subject to the permission of the Zone Directorate and the coordination of the Operator or the ZFO The Operator or the ZFO may not seek any charge for such services other than the fee for the coordination services that s/he provides.

Where the Free Zone Procedures Form of a user involves a request for a service which must be performed by a private sector agency, the user, after acquiring preliminary permission from the Zone Directorate, pays the service charge to the Operator or the ZFO and submits one of the two copies of the receipt to the officials of the Operator or the ZFO for attachment to the copy of the Free Zone Procedure Form which is available at the Zone Directorate.

Tariffs and conditions pertaining to services performed by the Operator or the ZFO are determined by the Directorate General.