Turkey: Anti-Dumping Taxes In The Turkish Customs Legislation And Legal Remedies Against Them

A "dumping sale," in other words, the offer for sale of a product in a foreign country at a price lower than the home-market price or the cost of production, is a plague in almost any jurisdiction. In order to protect domestic products, countries that import goods neutralize the imbalance that are caused by dumping sales, by imposing an "anti-dumping tax" on such products.

On the Turkish front, Law No. 3577 on the Prevention of Unfair Competition in Imports defines "dumping" as the sale of a product to Turkey with an import price lower than the normal or usual value of a similar product.

In principle, it is accepted that anti-dumping measures must be taken if a dumping import product causes, or may cause, pecuniary damages

in a production area, or if it may cause delay in the establishment of a certain production area in Turkey. The Turkish Ministry of Economics has stated that as of November 2011, permanent or temporary protective measures have been applied to the importation of 14 products or product groups in Turkey.1

Anti-dumping measures in Turkey are regulated by the following legislation:

  • Law No. 3577 on the Prevention of Unfair Competition in Importation;
  • Law No. 4412 amending Law No. 3577;
  • Regulation on the Prevention of Unfair Competition in Importation2;
  • Resolution No. 99/13482 on the Prevention of Unfair Competition in Importation.

Subject to the conditions stipulated in this body of legislation, an anti-dumping tax can be imposed as a result of an anti-dumping investigation process. This process normally unfolds as follows:

The investigation process may be initiated upon a written complaint submitted with the customs authorities by a domestic producer or ex officio by such authorities. Upon the decision of the competent authority to examine the complaint and commence an investigation:

  • The country of origin of the subject-matter products (or the exporting country) will be officially notified within this scope;
  • An investigation will commence;
  • Questionnaires will be sent to the companies accused of dumping;
  • The answers thereto will be analyzed;
  • An inquiry will commence;
  • On-site visits will be conducted;
  • If necessary, temporary measures will be taken; and
  • After additional discussions and evaluations are made, the investigation will conclude with the rendering of the final decision.

If an anti-dumping measure is to be assessed against the local importer, an anti-dumping tax will be levied in addition to the regular customs duty.

Under normal circumstances, this tax will be the equivalent to the "dumping margin" determined as a result of the investigation. This law retroactively levies taxes on imports that have already entered Turkey. The retroactive effect cannot exceed 90 days from the imposition of a given temporary measure enumerated in Article 12 of Law No. 3577, such as requiring the importer to post a bond pending the investigation.

With respect to the effects of anti-dumping measures on international trade, importers of the country that has had anti-dumping measures imposed upon it will have to divert their orders to alternative markets.

In terms of economics, it is true that these taxes protect domestic producers of the same product. However, producers that use the imported product as an apparatus, or as a part of other products (such as an imported transmission system to be used in car manufacturing), will be damaged, naturally.

Moreover, according to some economists, the anti-dumping investigation process results in uncertainty in the markets that, in turn, causes a deviation in the economic indicators. Referring to economic research that is available in this field, some scholars emphasize that anti-dumping sanctions distort competition overall, especially from the perspective of foreign producers who are willing to penetrate into a specific foreign market.3

These negative effects to the economy may give ground to taxpayers, whose rights are affected, to file cancellation lawsuits because of the damages they have suffered as a result of these regulations. Such cancellation lawsuits can be filed with nominal court fees. Indeed, under Turkish law, judicial review is available for all transactions and actions of the administration. This principle is specifically set forth in Article 125 of the Constitution.

Paragraph 1 of Article 2 of the Code of Administrative Procedure defines cancellation lawsuits as challenges "of administrative transactions, on the grounds that they are unlawful in terms of competence or form, reason, subject-matter or purpose, to be filed by those whose interests are violated." As such, importers or professional associations who consider their interests to have been violated are entitled to file administrative lawsuits challenging such measures. The difficulty in such challenges lies in the technical nature of this field that rests at the intersection between administrative law (in particular customs regulations) and economics. It is no wonder, then, that those who take action challenging anti-dumping measures turn to a litigation team that is experienced in these areas.

For instance, from a purely procedural point of view, the chosen litigation team will have to observe strict time bars prescribed by the law. Unless otherwise provided in special laws, the statue of limitations for filing a lawsuit is 60 days for administrative courts, and 30 days for tax courts.4

As per Article 24 of Law No. 2575, the Council of State (or High Administrative Court) has jurisdiction to hear such challenges in its capacity as a court of first instance. Accordingly, importers who believe that their rights have been infringed upon must file a cancellation lawsuit with the Council of State. As part of such a lawsuit, it would be advisable to demand a "stay of execution," at the outset, with the first statement of claim. If a stay of execution request is granted, the affected taxpayers would be held immune to the concerned anti-dumping taxes, while awaiting the Council of State's final decision.

Furthermore, it should be kept in mind that an importer and its company officials, who act contrary to an anti-dumping measure, may be subject to a criminal investigation. In this respect, strict compliance with anti-dumping measures must be ensured, unless and until such measures are annulled, or suspended, by the Council of State.


1 Citation made from " http://www.mgbp.org/haberler/2208/ihrac-urunlerine-anti-damping-onlemi."

2 Published in the Official Gazette on 30 October 1999.

3 Ali Cem Budak, from the article, "New Anti-Dumping Protectionism."

4 Turkish Administrative Procedural Code, Article 7.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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