Question: What is the Inward Processing Procedure?
Answer: The inward processing procedure is a custom procedure with economic impact; based on the principle that goods not in free circulation are imported temporarily to the customs territory of Turkey for processing operations and re-exporting of the compensating products obtained as a result of processing.
Question: What is the purpose of the Inward Processing Procedure?
Answer: The purpose of the Inward Processing Procedure can be expressed as boosting exports by providing raw materials at the world market prices, enhance the competitiveness of exporting products in the international markets, improving and diversify export markets.
Question: What are the applicable systems within the scope of the Inward Processing Procedure?
Answer: There are two types of measure within the scope of the Inward Processing Procedure called as Suspension System and Drawback System.
Suspension System: In Suspension System, raw materials, auxiliary materials, packaging and operating supplies not in free circulation and used in the production of the exported goods are imported by the residents in the customs territory of Turkey, without being subjected to import duties or commercial policy measures due to collateralizing that emerged during the import and the collateral received before is returned following the export of good obtained as a result of production within the scope of Inward Processing Authorization Certificate/ Inward Processing Permission.
Suspension System: In Suspension System, raw materials, auxiliary materials, packaging and operating supplies not in free circulation and used in the production of the exported goods are imported by the residents in the customs territory of Turkey, without being subjected to import duties or commercial policy measures due to collateralizing that emerged during the import and the collateral received before is returned following the export of good obtained as a result of production within the scope of Inward Processing Authorization Certificate/ Inward Processing Permission.
Drawback System: In case of export of the compensating product obtained from raw materials, auxiliary materials, packaging and operating supplies in free circulation, duties taken during the import is refund. In this context, commercial policy measures are implemented by Customs Office for imported goods and other procedures, including technical regulations in foreign trade and standardization legislation for importation of goods must be completed.
Question: What are Compensating product, Main Compensating Product, Secondary Compensating Product, Processing Operations and Deficiency?
Answer: Compensating Product: It refers to all products resulting from processing operations.
Main Compensating Product: The product that is intended to be obtained within the scope of inward processing.
Secondary Compensating Product: This term states the product obtained as a result of processing operation except for the main compensating product
Processing operations: The working of goods, including mounting, assembly and adjustment to other goods, the processing of goods, and the repair of goods, including overhaul and tuning; the use of certain goods that do not appear in the compensating products, but that facilitate or simplify the production of these products, even if they are entirely or partially used up in the process.
Deficiency: It refers to non-economic valued waste which is lost and destructed especially in the form of desiccation, evaporation, leakage or gas leakage during processing operations.
Main Compensating Product: The product that is intended to be obtained within the scope of inward processing.
Secondary Compensating Product: This term states the product obtained as a result of processing operation except for the main compensating product
Processing operations: The working of goods, including mounting, assembly and adjustment to other goods, the processing of goods, and the repair of goods, including overhaul and tuning; the use of certain goods that do not appear in the compensating products, but that facilitate or simplify the production of these products, even if they are entirely or partially used up in the process.
Deficiency: It refers to non-economic valued waste which is lost and destructed especially in the form of desiccation, evaporation, leakage or gas leakage during processing operations.
Question: What is the usage of Equivalent Goods within the scope of Suspension System?
Answer: Equivalent goods are the goods in free circulation and used instead of the import goods for the manufacture of compensating products. Equivalent goods can be used in suspension system. Equivalent goods must be of the same quality, have the same characteristics and the minimum 8 digits HS code as the import goods.
In suspension System of the Inward Processing, compensating products obtained from equivalent goods may be exported before importation of the import goods. This application is called “Pre-Export” in the suspension system. Import corresponding with export can be completed until the duration of Inward Processing Authorization Certificate ends in case of pre-export. In this context, all taxes (including the value-added tax) are collateralized and commercial policy measures are not implemented.
In suspension System of the Inward Processing, compensating products obtained from equivalent goods may be exported before importation of the import goods. This application is called “Pre-Export” in the suspension system. Import corresponding with export can be completed until the duration of Inward Processing Authorization Certificate ends in case of pre-export. In this context, all taxes (including the value-added tax) are collateralized and commercial policy measures are not implemented.
Question: Where should be applied to receive Inward Processing Authorization Certificate/ Inward Processing Permission?
Answer: In order to receive Inward Processing Authorization Certificate, the resident companies in customs territory of Turkey must apply to Ministry of Economy electronically; on the other side, in order to receive Inward Processing Permission, they must apply to Customs Office.
Question: Is there a period of time within the scope of Inward Processing?
Answer: Period of Inward processing authorization certificate or inward processing permission can be determined maximum 12 months according to sectors. On the other hand, period of the certificate or permission related with export of the products which have more than 12 months production process, together with ship building, complete facilities etc. and defense industry products can be identified in accordance with the period of the project.
Question: How is application for closure of inward processing authorization certificate/ inward processing permission done?
Answer: Companies must apply electronically for closure of Inward Processing Authorization Certificate to the Regional Directorate of Ministry of Economy in 3 months beginning from the end of certificate period with the essential information and documents. On the other side, it obligatory to apply for closure of Inward Processing Permission to the Customs Office in 3 months beginning from the end of permission period with necessary information and documents.
Question: What are the sanctions for the infringement of the Inward Processing Procedure measures?
Answer: If there are import duties related to import which had done within the context of certificate/permission, they and the pecuniary fine according to Article 238 of the Customs Code are received in case of infringement of the Inward Processing Procedure provisions.
Question: Who can receive the Inward Processing Authorization Certificate/Permission?
Answer: The certificate/permission is given in line with the request of the person who makes or arranges processing operations related to Article 110 of the Customs Code within the framework of inward processing permission in accordance with Article 80.
Resident companies in the customs territory of Turkey (except for free zones) can take advantage of Inward processing procedure, however processing permission may also be allowed to persons established outside of the customs territory of Turkey in case of non-commercial import with inward processing purposes.
Resident companies in the customs territory of Turkey (except for free zones) can take advantage of Inward processing procedure, however processing permission may also be allowed to persons established outside of the customs territory of Turkey in case of non-commercial import with inward processing purposes.
Question: I want to repair my damaged goods brought from abroad in the country. What are the procedures that I have to fulfill?
Answer: Allowed operations by the customs authorities, information about not allowed items by the customs authorities and conditions which are required Inward Processing Authorization Certificate are situated in 2006/12 numbered Communiqué of the Inward Processing Procedure. In this respect, detailed information can be obtained from Articles 108-122 of the Customs Code, Articles 349-375 of the Customs Regulation, 2005/8391 numbered Inward Processing Procedure Decree and numbered 2006/12 Notification of the Inward Processing Procedure.