Importers in Türkiye may encounter a practical difficulty when the invoice price of imported goods is lower than the unit value specified in an import surveillance communiqué. In such cases, the importer is normally required to present a surveillance certificate. Where no certificate is available, importers often declare an additional amount—usually under the “other foreign expenses” field—in order to bring the customs value up to the surveillance threshold and secure the release of the goods.

This practice increases the basis on which customs duties and import VAT are calculated, even though the additional amount may not reflect the price paid to the foreign seller or any other actual cost of the transaction.

The resulting disputes concern the relationship between two separate legal mechanisms: import surveillance and customs valuation. A decision of the Turkish Tax Litigation Chambers Board of the Council of State (Vergi Dava Daireleri Kurulu, “VDDK”) dated 24 January 2024 has clarified that a surveillance value cannot replace the declared transaction value unless the customs administration first examines that value and establishes a lawful basis for rejecting it.

1. Customs valuation under Turkish law

The customs value of imported goods is determined under Articles 23 to 31 of Customs Law No. 4458 and the relevant provisions of the Customs Regulation. These provisions are based on the WTO Agreement on Implementation of Article VII of GATT 1994, commonly known as the WTO Customs Valuation Agreement.

The system gives priority to the commercial value of the individual import transaction. Under Article 24 of Customs Law No. 4458, the primary method is the transaction value: the price actually paid or payable for goods sold for export to Türkiye, adjusted where required under Articles 27 and 28.

The transaction value method applies where the statutory conditions are met. In particular, there must be no disqualifying restrictions on the buyer’s use of the goods; the sale or price must not depend on conditions whose value cannot be determined; and any relationship between the buyer and seller must not have influenced the price.

If the customs value cannot be determined under the transaction value method, Article 25 provides for four alternative methods to be applied successively:

- the transaction value of identical goods,

- the transaction value of similar goods,

- the deductive value method and

- the computed value method.

The order of the deductive and computed value methods may be reversed at the importer’s request. If the customs value still cannot be determined under Articles 24 and 25, Article 26 permits its determination through reasonable means consistent with the principles and general provisions of the WTO Customs Valuation Agreement, Article VII of GATT and the valuation provisions of the Customs Law, using data available in Türkiye. This is commonly referred to as the fall-back method.

Apart from this limited exception, the order is mandatory. The customs administration cannot move directly to a market price, a surveillance value or another reference figure without first establishing why the preceding valuation method is unavailable.

The administration may question a declared value and request further evidence where it has reasonable doubts about its truth or accuracy. A price below values observed in comparable transactions may justify such an examination. It does not, on its own, establish that the invoice price is false. If the administration decides to reject the transaction value, it must identify concrete reasons and continue through the remaining valuation methods must be applied in the order prescribed by the Customs Law..

The Ministry of Trade has adopted the same general approach in its guidance on customs valuation. In particular, it has indicated that a low price alone is not sufficient to bypass the transaction value method and that the reasons for moving from one valuation method to another must be explained. Turkish Ministry of Trade – Administrative Guidance on Customs Valuation

2. Import surveillance and surveillance values

Import surveillance is a trade-policy measure governed by the Council of Ministers Decision on Import Surveillance No. 2004/7304 and its implementing regulation. Product-specific communiqués determine which goods are subject to surveillance and set out the applicable unit values and documentary requirements.

The purpose of surveillance is to monitor developments in the importation of particular goods, including import volumes, import conditions and their effects on domestic producers. Under Article 4 of Decision No. 2004/7304, prospective surveillance is implemented by requiring a surveillance certificate in addition to the documents otherwise required under customs legislation. Decision on Import Surveillance No. 2004/7304

The value specified in a surveillance communiqué is therefore a threshold for applying a trade-policy requirement. It is not a customs valuation method and does not constitute conclusive evidence of the commercial value of the goods.

This distinction is important. The term “reference price” is sometimes used broadly for indicative values employed in customs practice. In the context of Turkish import surveillance, however, “surveillance value” is a more precise term. It refers to the unit value below which a surveillance certificate is required. It does not create a statutory minimum import price or directly impose an additional customs duty.

A transaction below the surveillance value may attract examination, but the customs value must still be determined........

© Hukuki Haber