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BEFORE THE OTTOMAN EMPIRE 

Some foreign historians believe that although Turks led a nomadic life in ancient times, they had an organized tax system from the beginning of their history. The organized tax system certainly included the customs taxes and duties.

It has been known that Turks had commercial relations with other countries, and consequently customs organizations were established and customs formalities were applied before the Ottoman and before the even Islamic era. We don’t have sufficient information on customs technique and customs formalities about those days.

Conventional rules were applied to the customs other than the Islamic rules in the Seljuks Anatolian tribes and the Ilhans after the introduction of Islam. In this period, the Seljuks established direct and continuous commercial relations with other Islamic countries.

The Seljuks were influenced by the traditions of the Karahans, the Gaznes, the Samanoguls and the Sasani as well as the Islamic rule, and in this way, Turkish traditions were extended to some Islamic countries.

Some historians found that the Great Hun Empire (B.C. 161-126) established a certain customs system and commercial relations; the Gokturks (552-744) had customs officials and applications; the Uygurs (744-1353) had some customs organizations; the Samanoguls had a settled customs organization and an instution of customs inspectors and also applied customs tax on the basis of freight but not value of the goods; the Karahans adopted and carried on the Samanoguls’ customs organization and the Gaznes had customs terminology; and the Anatolian tribes also had a customs organization and applied customs tax and duties.

DURING THE OTTOMAN EMPIRE

Some foreign historians recorded that many administrative and financial institutions were derived collectively from the Byzantine Empire after the conquest of Istanbul (Constantinople) during the Ottoman Empire. Some claim that our customs organization was established and organized on the basis of the Byzantian customs system after the conquest of Istanbul in 1453.

Traditional or written rules were gathered and classified as the customs arrangements after the conquest of Istanbul as indicated in “ Hatt-ı Hümayun” at the beginning of Fatih Code.

The Ottomans used the term of “customs” meaning “place” in financial terminology. The term of “customs” was used for the office where the products were discharged during the export or importof the Ottoman products to foreign countries and the foreign products to the Ottoman territories, and also for the duties imposed for all products.

The taxes and duties collected before the Tanzimat¹ era were called “Ezmine-i Atika”. These were determined by various laws and regulations in time and not subject to a convention signed with any foreign country.

Customs had different names depending on location. For instance; if it was located on the sea-shore, it was called a “coastal customs office”; if it was located along the border, it was called “border customs office”; if it was located within the territory, it was called “inland customs office”.

The inland customs offices were generally related with goods of national trade; the coastal customs offices were related with both national and foreign commercial goods. Istanbul, Izmir, Antalya, Salonica, Beirut, Trabzon, Kefe were certainly significant places not only in respect of foreign trade but also national trade as they were seaports and customs centers . The inland customs offices were established as customs duties were imposed on the transportation by road. The inland offices were established in some smaller cities in addition to large cities, such as Bursa, Erzurum, Tokat, Diyarbakır, Baghdad, Damascus and Halep.

Small customs offices generally were affiliated with a large customs offices in the close proximity. Only the large customs offices were used in official correspondences; the others were referred as “dependent customs offices”. The number of the customs offices were over 100 in 1801.

When a necessity arose to establish an inland customs offices and to unit some of them to places where they were dependent on, the export and import customs offices were separated and independent customs offices were established in some large seaports. For instance, customs offices for goods and customs offices for grains were distinguished as of the customs entry office and country of origin.

Customs duties were collected by contractors in accordance with the “iltizam” system before the Tanzimat Era during the Ottoman Empire. However, there were some complaints that contractors had gained considerable profits.

Therefore the contract system was annulled in 1840 and the deposit system was initiated in Istanbul and its surroundings, and salaried officials were appointed to other offices.

During the Tanzimat Era and as a result of new arrangements, Customs and Finance were separated and organized as “Rüsumat Emaneti” (“Deposit Office”) directly dependent to the Grand Vizier and also “Customs Inspection Office” and “Customs Enforcement Organization” were established.

A trade agreement was signed between the Ottoman Empire and other countries in 1861. After this agreement the customs duties were increased and smuggling became widespread. As an anti-smuggling measure it was planned to establish the first Customs Enforcement Organization under the Deposit System. However, Customs enforcement officials were charged with guarding regions of contractors. After the establishment of the Customs Enforcement Organization, the structure of “Rüsumat Emaneti” became identical to that of the Ministry of Customs and Finance in respect of function and dependent organizations.

One of the important activities carried out in the economic field during the Tanzimat era was that “Rüsumat Emaneti” was abolished by the regulations in 1909 during Meşrutiyet II² ; however after a short period it was reorganized as the “General Directorate of Deposit” under the Finance Organization.

In addition to such administrative changes, some important studies were carried out in the customs legislation; and the basis of the current customs system was determined. Customs Expert Sir Richard Crawford was consulted and the declaration system was introduced by new Regulations in 1909. Moreover, the customs tariff system was prepared and put into practice on September 1, 1916. The First Customs Law came into practice on 11.04.1918. Customs had been governed by the regulations until the Law was put into force. The era of regulations ended with the introduction of the Customs Law; and the Law era began.

During Meşrutiyet II there were not any significant improvements in the Customs Enforcement Organization and anti-smuggling. Customs were closed due to the Balkan War, World War I and The Independence War.

THE REPUBLICAN ERA 

The organizational structure in the Mesrutiyet II era was maintained for the first nine years of the Republican era. However, fundamental measures were taken for Customs.

The customs legislation was in a disorganized state with various laws, decrees and commentaries at the beginning of this era. Laws of Prohibition and Prosecution of Smuggling No.1126 and 1510 entered into force in the first nine years of the Republican era. A new committee was constituted by the Ministerial Board Resolution to prepare the new Customs Tariffs; and consequently the first “Customs Tariff Law” No.1499 of 01.06.1929 on the basis of a specific system was put into force on 01.10.1929. “Customs Importation General Tariff Schedule” which constituted a great part of the Law was prepared with an arrangement proposing that some tax should be imposed on each 100 kg of any goods to be brought to Turkey.

The “Customs Entry Tariff Schedule” based on the existing “Advalorum” system was regarded as Law No.474 of 14.05.1964.

The first Customs Law was Law No.5383 of 02.05.1949 issued independent from the Tariff Law.

As the Customs Tariff Law No. 1499 was applied as of 01.10.1929 and the customs taxes and duties were increased, smuggling also considerably increased, especially along the Southern borders.

Therefore, some measures were taken to provide a better customs service and to increase efficiency in combating smuggling. A paramilitary General Commandership of Customs Enforcement was established with Law No.1841 of 27.07.1931 on our southern border.

As a significant administrative measure, Ministry of Customs and Monopoly was established by Law No.1909 of 29.12.1931.

Moreover, General Commandership of Customs Enforcement was established by Law No. 1917 and Administration of Monopoly under the control of the Ministry of Finance was affiliated with the Ministry of Customs and Monopoly. In this way, administrations of customs and monopoly were reorganized under a Ministry. Such reorganization was justified as follows:

“As the Customs procedures are of great importance and the monopoly services have a comprehensive capacity, it shall be beneficial that the Ministry of Finance shall govern and prosecute all these duties independent from its fundamental duties. In this respect, considering its crucial functions, it is argued that such a Ministry should be established so as to fulfil these critical functions properly in favour of government. Uniting and centralizing all customs and monopoly services shall not create an extra burden on the budget. For such reasons .it is regarded advantageous to establish...”

A Law for organization and functions of the Ministry was prepared. It was composed of the following main services in accordance with the provisions of the Law for organization and functions of the Ministry of Customs and Monopoly, General Directorate of Customs, General Directorate of Monopoly, para-military General Commandership of Customs Enforcement.

The administrative structure of the regional and local offices were organized as regional directorate, local directorate, directorate, chief office and office.

The Regulations for Organization and Functions of the Ministry of Customs and Monopoly No. 2/14153 was issued in this era.

Great importance was attached to the personnel policy to effectively combat smuggling. The draft Law No.1920 of 07.01.1932 (which had been expanded by the Law No. 2350) was put into force. This Law includes certain provisions for those officers determined to be “incapable” due to various reasons after some inspections and investigations to expel their duty with a Ministerial Discipline Board Resolution.

However, as the Customs Law that was in effect before the declaration of the Republic was not able to meet the rapidly changing economic conditions satisfactorily, the draft Law was legalized as a result of studies carried out in this field. The Law No. 5383 of 1949 was the first Customs Law in the Republican era.

Turkey followed recent international developments closely, and participated in the General Agreement on Tariffs and Trade (GATT) (today’s World Trade Organization) which had been established in Geneva in 1947 and activated in 1948. Turkey was among the first members of the Customs Cooperation Council (today’s World Customs Organization) established in Brussels in 1950.

Turkey became a party to the Nomenclature and Valuation Contracts prepared by Customs Cooperation Council with the Law No.6449 of 07.01 1955 in order to facilitate international trade and to make the customs applications uniform among the countries; the specific tariff system was abandoned and a new nomenclature system was introduced on the basis of the valuation system.

General Commandership of Customs Enforcement was abolished by Law No.6815 of 16.07.1956 and the tasks of guarding border lines, coast and territorial borders; and investigation and prevention of smuggling in the customs territory were transferred to the Ministry of Interior. However, the tasks of customs enforcement applications in the air and sea ports, and customs gates and the customs territory along the Marmara sea and the Dardanelles and the Black sea were assigned to the Ministry of Customs and Monopoly.

The administrative structure of the regional and local offices were re-organized with a Law Amendment No.6851 to the Law For Organization and Functions of the Ministry of Customs and Monopoly No.2825 and General Commandership of Customs Enforcement was replaced by Customs Enforcement Directorate in headquarters.

With some internal arrangements realized in 1975 some units, such as General Directorate of Control and General Directorate of Foreign Agreements were established; and General Directorate of Liquidation Affairs was established in 1981. Customs Enforcement Directorate and Directorate of Personnel and Registry Affairs were re-organized as General Directorate of Personnel Affairs and Training.

Customs Law No.1615 of 19.07.1972 was put into force on 01.02.1973. This law obligates that a tax-payer whether a real or a juridical person who enters his goods into the customs territory; and customs rateable value shall be calculated on the selling price of the goods; and the customs tax shall exist when a declaration is given to the customs office for entering the goods subject to customs tax into Turkish customs territories.

The customs taxes and duties are collected before the goods enter or leave the Customs territory. Moreover, it is obligatory to draw up a written customs declaration in accordance with the customs tariff schedule. The customs tariff rates are defined in the customs tariff schedule.

As smuggling had increased after 1931, Prof. Dr. Alfred ISAAC, an academician from Istanbul University, Faculty of Economics was assigned by the Prime Ministry to research the customs administration and monopoly administration. In his research report, he stated that the Ministry of Customs and Monopoly was the most suitable organization for the Turkish administrative and economic structure; and some application defects could be removed easily. However later in 1983 the Ministry of Customs and Monopoly was abolished and the Ministry of Finance and Customs was established with a Law Decree No. 178 of 13.12.1983.

With a new arrangement, the General Directorates of Monopoly and Tea were affiliated to the Ministry of Finance and Customs; and the General Directorate of Liquidation Affairs was re-organized by the Law No. 3007 of 16.05.1984 as the General Directorate of Liquidation Affairs Revolving Fund.

Throughout its history, the Customs organization was re-affiliated to the Ministry of Finance in 1983 and maintained this organizational structure until 1993. The customs organization was separated from the Ministry of Finance with the Law-decree for Organization and Functions of Customs Undersecretariat No.485 of 02.07.1993 and re-organized as an Undersecretariat affiliated to the Prime Ministry.

According to Article 1, (titled as “Objective” of the Law-decree) “the Law-decree aims to define the principles for the establishment and functions of the Customs Undersecretariat of the Prime Ministry in order to organize and coordinate the customs and customs enforcement services and to combat smuggling. The Prime Minister shall be able to exercise his authority over administration of the organization by the charged State Minister if necessary”.

According to Article 2, titled as “Function” of the Law-decree, the functions of the Customs Undersecretariat are as follows: a) to contribute to the preparation of customs policy, b) to assist to apply the provisions of the Customs Law and other related legislation and international agreements, c) to assist to determine the customs tariff rates and to collect and to control the customs taxes and other revenues and funds, d) to control and inspect goods and vehicles and to take necessary precautions to carry out the procedures effectively and swiftly, e) to compile the statistical data concerning the customs, f) to assist to protect the goods and vehicles subject to customs control. and to control whether they comply with the certain norms and standards, g) to prevent, inspect and investigate the smuggling in the customs gates and “laissez-passer”¹ gates on territorial borders and customs seaports and airports and free trade zones and various warehouses and inland customs territories, h) to prevent and prosecute and investigate the smuggling, if necessary, in collaboration with the other related organizations in other locations, i) to pursue studies on the Undersecretariat services and to make decisions and to coordinate national and international activities, j) to execute duties assigned to the Undersecretariat with various laws, k) to train professionals to fulfil their tasks duly and to organize the relevant studies, l) to pursue and evaluate and investigate and control whether the above-mentioned functions are fulfilled properly.

In accordance with Article 6 of the said Law-decree. the Undersecretariat comprises the following main service units: Customs General Directorate, General Directorate of Customs Enforcement, General Directorate of Customs Control, General Directorate of EC and External Relations; and in accordance with Article 11 of the said Law-decree, Information and Control Units comprise the following sub-units: Head of Inspection Board, Head of Research, Planning and Coordination, Legal Department, Counsellors to the Undersecretariat; and the supporting units comprise Department of Personnel, Department of Training, Department of Administrative and Financial Affairs, Department of Communication and Data Processing and Department of Defence.

Considering the taxes collected by the Customs in the Republican era, we realize that the customs organization has evolved throughout its history. All taxes collected by the customs are called “customs taxes”. The most important taxes and duties collected in importation are customs taxes. Such tax was based on the Customs Law. Some special tax and fees, such as “Production tax”, “Harbour Fee”(“Duties for Transportation Infrastructure”), “Stamp Duty”, “Municipal fund” and “Funds” are collected on the importation. The production tax collected on the basis of the Law No. 6802 was annulled with the Law for VAT No. 3065 of 25.10.1984; and consequently “VAT for importation” was put into practice as of 01.01.1985; “Duties for Transportation Infrastructure” based on the Law No.827 and “Municipal Fund” based on the Law No.6802 and “Stamp Duty in the importation” collected on the basis of the Law No.3657 were annulled with the Law No.3824 of 25.06.1992.

Imported goods are still subject to the customs tax and VAT; funds are collected on some goods such as agricultural products. The application of exportation tax was cancelled. There is not any other tax applied to the exportation of some domestic products than the funds.

The most significant development for our Organization in the Republican era is “The Customs Union” between The European Community and Turkey.

The process began with The Ankara Agreement which entered into force on 01.12.1964 and followed by the Additional Protocol which was signed on 23.11.1970 and entered into force in 01.01.1973, and completed with establishment of the Customs Union as of 01.01.1996 with the 36^th Turkey-EC Joint Committee Decision of 06.03.1995 as of 01.01.1996.

Turkish Customs legislation was adapted to EU legislation so as to enable two or more countries to annul the customs taxes mutually and impose them on third countries due to the establishment of the Customs Union; and the applications of Customs Union were started in the Turkish Customs as of 01.01.1996.