ARTICLE 1- The 8th Article of the Turkish Free Zones Legislation published in the Official Journal dated March 10, 1993 and numbered 21520 has been amended as follows.

Article 8- Treasury or public land allocated for the establishment of  the Zone may be leased by the General Directorate in part or in whole, to the operator or the Z.F.O., or to those real or leagl entities which are deemed appropriate to have an Operation Licence, by means of a contract.

Buildings and facilities in the zone may be constructed by the Operator, the Z.F.O. as well as the users. They may be rented or transferred to other users,  they may also be selled in case when they belong to the Z.F.O. or the users.

All approvals and supervisory work during the construction phase shall be performed by the Zone Directorate.In zones with a Z.F.O., the Zone Directorate may delegate its responsabilities concerning approvals and supervisory work to the Z.F.O. But construction projects of special facilities shall be approved by the General Directorate.

Firms which are deemed appropriate to have an Operation Licence would sign a rental or a sale contract with the Operator or the Z.F.O. After that this contract would be approved by the Zone Directorate, the General Directorate would grant the Operation Licence and then the users could start their investments in the Zone.  After preparing their projects and fullfilling their superstructural commitments, users who would construct some buildings or facilities would apply to the Zone Directorate in order to get an "Occupation Permit". The granting of an Occupation Permit shall mark the end of the investment phase and the beginning of the operational phase.

The project preparation and construction work is to be accomplished within the period specified in the Operation Licence Application Form.This period would be included to the operational phase specified in the Operation Licence. However, in case when the project and the construction could not be finished in time due to some acceptable reasons, an additional period may be granted to the user according to the provisions of Article 54. Additional periods would not be included to the operational phase.

Users may start their commercial activity in their buildings or in another building they would rent prior to finish their construction on the land they bought or rented (before taking their Occupation Permit) by taking a "Transitory Occupation Permit" from the Zone Directorate. In such a case, the date they would take a Transitory Occupation Permit or the one they would rent a closed area would mark the beginning of the operational phase.

The user who rents an open area and constructs its building on it, may transfer this building to another user deemed to be appropriate by the General Directorate, provided that the total duration of the Operation Licence is not exceeded.

In free zones where the land belongs to the Treasury, in case when the Operation Licence is cancelled or its time has expired, the propriety of buildings and facilities constructed by the Operator, the Z.F.O. or users would be transferred to the Treasury. These buildings and facilities shall be transferred under good conditions. The Operator/ the Z.F.O. and the Zone Directorate shall take together the necessary measures for this purpose.

In free zones where the land is privately owned, when the firm constructs a building on the land it has rented, at the end of the duration of the Operation Licence, a new Operation Licence may be granted to the firm until the end of the rent contract, provided not to exceed the duration foreseen in the land rent contract for the transfer of the superstructure.At the end of the duration specified in the rent contract, the propriety of buildings or facilities constructed there would be transferred to the Z.F.O. In case when the user decides to end its commercial activity within this period or if its Operation Licence is cancelled, he may transfer his right concerning the use of the superstructure until the end of the period specified in the contract to another real or legal person deemed to be appropriate by the General Directorate. Otherwise, the propriety of buildings and facilities would be transferred to the Z.F.O.   

In free zones where the land is privately owned, users who construct their building on the land they buy or rent, may take another Operation Licence at the end of their operational phase. In case when the Operation Licence of these users would be cancelled, they may sell their land together with the buildings and facilities to another real or legal person deemed to be appropriate by the General Directorate.

Structure and construction principles concerning the superstructure to be constructed in the Zone would be determined for each Free Zone by the General Directorate.Projects of superstructure which are going to be constructed  would be approved by the General Directorate prior to the start of activities in the Zone. 

ARTICLE 2- The 14th Article of the same Legislation, together its title have been amended as follows.

Suspension of Commercial Activities and Cancellation of the Operation Licence

Article 14-a) Under the circumstances stated below, the demands of users for selling their goods inside or outside the  Zone would be suspended by the Free Zone Directorate for 3 months.

1) When information and documents that have to be given to the General Directorate or the Zone Directorate are not ready on time or when they are misleading or false.

2) When it is established that the user, his authorized representative or his employees have caused damage to the facilities, equipment, machinery and vehicles of the Zone and that this damage has not been compensated in spite of the warning made by the Free Zone Directorate.  

3) When it is confirmed that the user does not act appropriately to the provisions of the rent and/or sale contract it has signed with the Operator or the Z.F.O.

4) When it is confirmed that there has been an act contrary to the provisions of laws, regulations and circulars or that there have been actions to the detriment of the order in the Zone.

5) When changes concerning undertakings and declarations in the Operation Licence Application Form have not been reported.

In case when the user fulfills the necessary conditions for correcting the situations stated above, their Free Zone Transaction Forms would be taken into consideration by the Free Zone Directorate.

b) In cases stated below, the Operation Licence would be cancelled by the General Directorate without any warning;

1) When it is established with a written report by the Free Zone Directorate that, at the end of the period stated in paragraph (a),  no improvement has been achieved concerning the above mentioned circumstances,

2) When it is confirmed by investigations and deliberations or by checks made following tip-offs, that the conditions and qualifications declared in the Free Zone Application Form are not fulfilled or have later been lost or have proven false,

3) When it is established that tax evasion has taken place with revenues and earnings accruing from activities conducted outside the Zone and/or through the presentation of counterfeit or misleading documents for this purpose,

4) Except where the existence of a state of force majeure, when the user does not realize any commercial activity for one year,

5) When it is established that the user acted contrary to the legislation concerning the entry and exit of goods to the Zone, or when there is a surplus or lack between the existing stocks and the inventory records,

6) Except where the existence of a state of force majeure, when the construction work is not finished in the period undertaken in the Application Form,

7) When it is established that there has been an act contrary to the provisions of laws, legislations, directives and circulars.

If the duration of the Operation Licence has expired or if it has been cancelled due to one of the reasons mentioned above, the user can no longer bring goods to the Zone . The existing goods of the users would be liquidated according to the 52nd Article of this Legislation.

ARTICLE 3- The 32nd Article of the same Legislation, together with its title have been amended as follows.

Goods Prohibited in the Zone or Those Necessitating Special Structure/ Arrangement

Article 32- It is prohibited to bring firearms, ammunition, radioactive substances, dangerous and toxic wastes to the Zone.

Combustible, explosive, inflammable, fire-inducing, dangerous materials and their drugs may only enter the Zone if the necessary special structure and arrangements are ready.

The entry and exit  of narcotic substances and other related chemical materials is subject to the provisions of the national and international legislation applied by the Ministry of Health.

ARTICLE 4- The 40th Article of the same Legislation has been amended as follows.

Article 40- Main accounts of revenue and expenditure will be opened by the General Directorate with the Central Bank of the Republic of Turkey, in Turkish Lira and U.S. Dollars or other foreign currency to enable the payments of expenditures and the collection of revenues connected with the "Free Zones Establishment and Development Fund". In addition, secondary accounts of revenue and expenditure shall be opened with any public bank by the General Directorate in the center and by Zone Directorates in each zone in Turkish Lira, U.S. Dollars or other convertible currency. If there is no public bank in the zone, the Zone Directorate may open these accounts in one of the banks which is situated near the zone. Payments which will be made to these secondary accounts will be transferred to the main account in the Central Bank of the Republic of Turkey within five working days.  

The inspection of accounts and operations concerning the Fund will be made by the Upper Inspection Council.  

ARTICLE 5- The paragraph no.1 of the 3rd subparagraph of clause (d) of the first paragraph of Article 41 of the same Legislation has been amended as follows. Furthermore, the clause (f) has been added, the second clause of Article 41 has been amended as follows and a third clause has been added. 

In free zones where the land belongs to the Treasury, in case when it is found appropriate to rent an open area to investor real or legal persons having an Operation Licence, the rent amounts will be collected by the Operator or the Z.F.O. according to the periods determined in the rent contract in the framework of Article 8. The Operator or the Z.F.O. is responsible from rent amounts which are not paid in time, together with the user. Respectively 90 per cent or 63 per cent of the rent revenue to be paid by the Operator or the Z.F.O. by the end the 5th day following the term if the revenue in question coul be collected or within the next month following the term even if the revenue could not be collected,

f) 4 per cent of the rent collected by the Z.F.O. for lands and buildings,

Provided that they open separate account books, the Operator or the Z.F.O. will not have to make a contribution to the Fund on their revenues that arise from the renting of buildings and facilities they constructed (or they have made constructed)  on the land belonging to the Treasury. The Operator or the Z.F.O. will not have to make a payment to the Fund on revenues they have obtained on their behalf with a separate Operation Licence or on revenues they have obtained as a result of their setting up partnerships in organizations engaged in activities envisaged to be performed in the Zone, provided that they open separate account books.

If the user wants to make a purchase concerning the finishing of a closed construction, the realization of extra investments, the renovation of machinery and equipment, or if he wants to buy some new machinery and equipment for increasing its capacity, these purchases will be evaluated as entry of investment goods during the investment phase. The inspection concerning the entry of investment goods will be made by the Zone Directorate. 

ARTICLE 6- The 50th Article of the same Legislation has been amended as follows.

Article 50- Those who wish to perform various service activities in the Zone, such as insurance, customs brokers, sworn-in financial consultants, self-employed accountants and financial consultants, experts, may do so with an "Entry Permit" to be issued by the Zone Directorate.

ARTICLE 7- The 52nd Article of the same Legislation, together with its title  have been amended as follows.

Referring to the Court Bailiff and Liquidation

Article 52- Operations about referring to the court bailiff which will be carried out in the Zone will be subject to the Legislation Concerning Bankruptcy and Legal Action for Collecting Debts.

In case when the Operation Licence is cancelled or its duration has expired, the user has to liquidate its goods within one month starting from the date of cancellation or expiration. If not, or in case when the goods are abondonned, then they would be liquidated by a Liquidation Committee including an appointee of the Operator or the Z.F.O. or a person entrusted by local professional organisations under the chairmanship of a person appointed by the Zone Directorate.

Goods to be liquidated will be sold over a value determined with a report by the Commission by auction. The date of the auction must be announced in the local media twice, with an interval of three days. In case when goods could not be sold at the first auction, they would be sold from the highest price at the second auction which will take place at a date determined by the Commission.

The expenditures incurred by the Commission for the sale shall be deducted from the sale amount and the rest of the sum shall be seized as income to the Fund.  

Goods which may not be liquidated within the Zone would be delivered by a written report to the Customs Administration.

Entry into Effect

ARTICLE 8- The paragraph no.1 of the 3rd subparagraph of clause (d) of the first paragraph of Article 41 amended with the 5th Article of this Legislation will be effective 6 months after the date of publication of this Legislation .Other articles will be effective from the date of its publication.

Execution

ARTICLE 9- This Legislation shall be executed by the Minister to whom the Undersecretariat for Foreign Trade is attached.