International Trade and Customs Law

International trade and customs law is a complex legal field governing cross-border flows of goods and services, import-export processes, customs regimes and the commercial activities of foreign investors in Turkey. A single error — a poorly drafted contract, an incomplete customs declaration, a missed objection deadline — can quickly turn a commercial relationship into a dispute.

At Keleş Law and Consultancy Office, we provide legal consultancy and representation in this field to Turkish companies, foreign investors and international businesses trading through Turkey. With language support in Turkish, English, Arabic and Russian, we stand by our clients without allowing language barriers to disrupt process management.

Turkey operates under a civil law system, not a common law system. There are no juries, no concept of precedent binding lower courts, and no plea bargaining. Contracts governed by Turkish law are interpreted strictly according to the written text — context and implied terms carry far less weight than in UK or US law. The CISG (Vienna Sales Convention) applies automatically to international sale of goods contracts unless excluded, which differs from the position in the United States (non-signatory) and requires attention when drafting.

What Is International Trade and Customs Law?

International trade law covers the sale of goods, provision of services and cross-border commercial contracts between parties established in different countries. It is not just one country's domestic law that applies — international conventions, World Trade Organization (WTO) rules, bilateral trade agreements and Law No. 5718 on Private International Law and Procedural Law (MÖHUK) all come into play simultaneously. In every commercial dispute involving a foreign element, determining the applicable law, identifying the competent court or arbitration institution, and recognising and enforcing foreign judgments in Turkey are all governed within this framework.

Customs law is the practical application layer of this framework: it governs the passage of goods across borders, the calculation of customs duties, tariff classification of goods, rules of origin and customs regimes. Turkey's membership of the EU Customs Union gives its customs legislation a distinctive character requiring careful management.

Legal Framework for International Trade in Turkey

Law No. 4875 on Direct Foreign Investment: Grants foreign investors equal rights to Turkish investors. This law forms the legal foundation for foreign-capital companies to operate freely in Turkey.

Turkish Commercial Code No. 6102: Governs company formation, commercial contracts and transport law.

Customs Law No. 4458 and Customs Regulation: Covers all procedural rules, customs regimes and objection mechanisms for import and export transactions. Under Article 210 of the Law, the refund of customs duties collected unlawfully may be requested within 3 years of notification.

CISG (UN Convention on Contracts for the International Sale of Goods): Turkey has been a party to this convention since 2011. The CISG, to which 89 countries are party, may apply automatically to international sale of goods contracts unless excluded by the parties. This must always be considered when drafting contracts.

INCOTERMS 2020: Rules published by the ICC that standardise the delivery of goods in international trade. Delivery terms such as FOB (Free on Board), CIF (Cost, Insurance and Freight), EXW (Ex Works) and DAP (Delivered at Place) determine who bears transport costs, insurance obligations and risk of loss. Selecting the wrong Incoterms term can create serious financial liabilities.

Turkey-EU Customs Union (1996): Eliminated customs duties on industrial goods on a mutual basis; however, agricultural products and certain service sectors remain outside its scope. It offers significant advantages for imports from the EU and exports to the EU, while also creating compliance obligations.

Law No. 5718 — MÖHUK: Governs the applicable law in cases involving a foreign element, the international jurisdiction of Turkish courts, and the recognition and enforcement of foreign court decisions. Under MÖHUK Art. 48, foreign natural and legal persons must deposit security determined by the court when filing a lawsuit in Turkey. Exemption from this requirement may be possible under bilateral treaties or the principle of reciprocity — this should be assessed before commencing proceedings.

Practical Guide: The Customs Process Step by Step

Many clients assume customs procedures consist of nothing more than filing a declaration. In reality, each stage carries its own distinct legal risk:

1. Tariff Classification (HS Code / GTİP) Placing goods in the correct customs tariff statistical position determines the applicable tax rate and potential restrictions. Customs duty is calculated by multiplying the "customs value" — the sum of the declared value in the commercial invoice plus insurance and transport costs — by the tariff rate. Incorrect classification may result in a tax difference, a penalty and goods being held at customs. The right to object to classification must be exercised within 15 days of notification.

2. Customs Valuation Customs duty is calculated on the customs value of the goods. Where a dispute arises with the Customs Administration over valuation, an objection may be lodged — this process requires specialist legal support.

3. Certificate of Origin and Preferential Tariff Under free trade agreements (FTAs) to which Turkey is party, it is mandatory to obtain the appropriate certificate of origin (EUR.1, A.TR, Form A, etc.) to benefit from reduced customs duties. Errors in determining origin may result in the loss of preferential tariff entitlement.

4. Declaration Review and Examination Responding to requests from the administration in a timely manner at the stages of document review, physical examination or laboratory analysis is critical. Unanswered requests may create grounds for goods to be left at customs or confiscated.

5. Customs Duty, Additional Levies and Refund In addition to customs duty, additional obligations such as VAT, Special Consumption Tax (SCT), anti-dumping duty and countervailing duty may arise. Correctly calculating these obligations before importation is essential for commercial profitability. Refund of customs duties paid unlawfully may be requested within 3 years of notification under Article 210 of Law No. 4458.

6. Customs Regimes and Advantageous Arrangements Special regimes such as inward processing, temporary importation, customs warehousing and free zones can significantly reduce operating costs through tax deferral or exemption. Compliance with the conditions of these regimes is mandatory — violations lead to serious sanctions.

Payment Methods in International Trade and Legal Risks

The choice of payment method in international trade directly determines the risk borne by buyer and seller:

Letter of Credit (L/C): The most secure payment method, operating under bank guarantee. When the seller presents documents conforming to the letter of credit conditions to the bank, the payment guarantee arises. It is critical that the L/C terms are consistent with the contract and that the type of L/C (irrevocable, confirmed, etc.) is correctly selected.

Documentary Collection: A bank-intermediated method that is less secure than a letter of credit. There is a risk that the buyer may obtain the documents before making payment.

Advance Payment and Open Account: The highest-risk methods. The trust relationship and trading history between the parties are decisive for these methods. In open account arrangements, debt collection may need to be taken to legal proceedings.

Legal evaluation of each payment method under UCP 600, URDG 758 and relevant ICC rules enables risks to be identified before the contract is concluded.

Turkish Trade Law for Foreign Investors

Company Formation in Turkey for Foreigners

Foreign natural persons and foreign-capital legal entities may freely establish companies in Turkey under Law No. 4875. Each of the options — limited liability company (LLC/LTD), joint stock company (JSC/A.Ş.) and branch opening — produces different results in terms of capital requirements, liability and tax. For all the legal steps, documents and processes that foreigners need to be aware of when setting up a company in Turkey, you can read our article Company Formation in Turkey for Foreigners.

Mandatory Legal Counsel for Joint Stock Companies

As of 2026, the obligation to retain legal counsel for joint stock companies has become more prominent. For detailed information on the current regulation and obligations in this area, you can read our article Mandatory Lawyer for Joint Stock Companies

Foreign Company's Commercial Activity in Turkey: Branch or Independent Company?

Foreign companies wishing to commence commercial activity in Turkey face three principal options: a fully-fledged independent company, a branch and a liaison office. A branch has no legal personality and directly represents the parent company — court decisions in Turkey produce legal consequences directly against the parent company. An independent company is a separate legal entity; the liability of shareholders is limited to their committed capital.

Foreign Security Obligation

Under MÖHUK Art. 48, foreign natural and legal persons must deposit security determined by the court when filing a lawsuit in Turkey. This obligation is designed to secure the litigation costs and potential damages of the opposing party. Exemption from the obligation may be possible under bilateral agreements or the principle of reciprocity — this should be assessed before commencing proceedings.

Key Considerations in Contracts with a Foreign Element

The correct determination of the applicable law, competent court or arbitration institution and Incoterms conditions in international sale of goods contracts directly affects the rights of the parties when a dispute arises. It is of great importance that the contract expressly states whether or not CISG is to apply.

Resolving International Commercial Disputes: Arbitration or Court?

International Commercial Litigation in Turkish Courts

Where a commercial dispute involving a foreign element requires service abroad (under the Hague Convention procedure) or the taking of evidence by letters rogatory, the litigation period may extend to 3–5 years at first instance; including the appeal and cassation stages, the process may reach 7 years.

International Arbitration

Arbitration is the preferred mechanism for disputes involving a foreign element and operates much faster than state courts. Under the New York Convention (1958) to which Turkey is a party, arbitral awards are recognised and enforced in more than 170 countries — making arbitration significantly more advantageous than the court route.

Principal arbitration institutions:

ICC (International Chamber of Commerce): The most widely used for global commercial disputes
ISTAC (Istanbul Arbitration Centre): Turkey-based, cost-advantageous and fast-operating
LCIA (London Court of International Arbitration): Widely used in finance and maritime trade cases
SCAI / SIAC: Preferred centres for their neutral country advantage

When inserting an arbitration clause into a contract, copying the institution's own recommended standard clause verbatim prevents jurisdiction disputes that may otherwise arise.

Recognition and Enforcement

For a foreign court or arbitration decision to be enforceable in Turkey, an enforcement (tenfiz) action must be brought. Under MÖHUK Art. 54, the basic conditions are that the decision must be final and must not be contrary to Turkish public policy. The enforcement action is brought at the court of the defendant's place of residence in Turkey; if none, at the courts of Ankara, Istanbul or Izmir.

Areas of Practice

International Commercial Contracts — Preparation, review and adaptation of sale of goods contracts, franchising, distribution, agency and sole agency agreements. Evaluation under CISG, UNIDROIT Principles and ICC Incoterms 2020. Legal analysis of letter of credit and documentary collection payment conditions.

Customs Law Consultancy — HS code classification advice; customs valuation objections; certificate of origin issues; inward processing, temporary importation and warehousing regimes; anti-dumping procedures; objections to customs penalties; refund and remission applications (Art. 210).

Import and Export Law — Pre-import authorisations, export control compliance, foreign exchange regulation compliance and currency control advice.

Foreign Investment Consultancy — Selection of company formation structure (LLC, JSC, branch, liaison office); investment incentive applications; free zone operations; bilateral investment treaty analysis.

International Commercial Disputes — ICC, ISTAC or LCIA arbitration in disputes arising from contracts with a foreign element; representation in foreign-element cases before Turkish courts; recognition and enforcement actions under the New York Convention; international debt collection.

Customs Offences and Administrative Sanctions — Legal defence against customs smuggling investigations, administrative fines and seizure proceedings; management of disputes with customs administration.

Multilingual Contract and Document Services — Contract drafting and translation support in Turkish, English, Arabic and Russian; informing foreign clients in their own language at every stage of the process.

Frequently Asked Questions

Can a foreign national establish a company in Turkey? Yes. Under Law No. 4875, foreign natural and legal persons have equal rights to Turkish citizens. Companies may be established in any sector except those subject to restrictions (media, aviation, maritime transport, etc.).
Can a foreign company open a branch in Turkey? Yes. Branch opening requires registration with the Trade Registry; the required documents must be translated into Turkish and apostilled. A branch has no legal personality; court decisions produce legal consequences directly against the parent company.
What taxes are paid when importing into Turkey? Depending on the nature and origin of the goods, customs duty, VAT, SCT and, where applicable, anti-dumping duty may be payable. For industrial goods of EU origin, customs duty may be zero under the Customs Union — it is possible to benefit from this advantage with the correct certificate of origin.
What happens if an incorrect HS code classification is made? The tax difference may be collected together with a late payment interest charge, an administrative fine may be applied and goods may be held at customs. The objection to classification must be made within 15 days of notification.
Can I recover customs duties paid unlawfully? Yes. Under Article 210 of Customs Law No. 4458, where customs duty that should not have been paid has been paid, it is possible to recover it by applying to the customs directorate within 3 years of notification.
Which law should I choose in an international contract? The choice should be consistent with the commercial interests of the parties and the anticipated dispute resolution mechanism. Where Turkish law is chosen, it should also be expressly stated whether or not CISG is to apply. Under MÖHUK Art. 24/4, where no choice of law has been made, the law most closely connected to the contract applies.
Should I prefer arbitration or Turkish courts? International arbitration (ICC, ISTAC, LCIA) is generally preferred for disputes involving a foreign element. The recognition and enforcement of awards in more than 170 countries under the New York Convention, and the much shorter duration of proceedings compared to court, make arbitration advantageous.
What is CISG and does it apply in Turkey? CISG is an international convention signed by 89 countries to which Turkey has been a party since 2011. It may apply automatically to contracts for the international sale of goods unless excluded by the parties. For this reason, whether or not CISG is to apply must always be stated in contracts.
How is a foreign court judgment enforced in Turkey? An enforcement (tenfiz) action must be brought under MÖHUK Art. 51. The basic conditions are that the decision must be final and must not be contrary to Turkish public policy. If the defendant has no place of residence in Turkey, the action may be brought at the courts of Ankara, Istanbul or Izmir.

Why Keleş Law and Consultancy Office?

Foreign Investor-Focused Approach: A significant portion of our client profile consists of foreign national investors and international companies. This profile enables us to understand the priorities and risks of foreign investors in international trade and customs law in depth.

Integration Across Multiple Areas of Law: International trade processes frequently intersect with company law, tax law, immigration law and criminal law. Our office provides services across all of these legal fields, giving clients access to integrated consultancy.

MÖHUK and International Arbitration Experience: Active representation in determining the applicable law in cases involving a foreign element, identifying the competent court, conducting enforcement actions under MÖHUK and managing international arbitration proceedings.

Multilingual Communication: Turkish, English, Arabic and Russian — no communication barrier at any stage.

Transparent Fee Policy: The consultancy fee is determined in writing at the first meeting; no unexpected additional costs.

Practical and Preventive Approach: Correctly structuring contracts and customs processes before a dispute arises is far less costly than intervening afterwards.