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Published in the Official Gazette dated 27/01/2004, No. 25359 Regulation on Sugar Storage Deduction and Reimbursement Payments SECTION ONE Objective, Scope, Legal Ground and Definitions Objective Article 1 – The objective of this regulation is to set forth the procedures and principles concerning deductions and reimbursement payments to be made out of sugar sales amounts in order to eliminate the competition-distorting conditions arising from different selling times among the Companies for the purpose of ensuring that the sugar is conveyed regularly at a stabilized price from producer to consumer. Scope Article 2 – This Regulation covers A quota sugar that is in compliance with the standards defined in paragraph (a) of Article 4 of the Sugar Communiqué of Turkish Alimentation Codex except for the starch based isoglucose, liquid or dried glucose syrup and inulin syrup. Legal Ground Article 3 – This Regulation was prepared on the basis of Article 12 of the Sugar Law No. 4634 which was published in the Official Journal No. 24378 dated 19/04/2001. Definitions Article 4 – The following expressions used in this Regulation shall have the meanings provided herein below: a) Sugar: means crystallized saccharose that is classified as white sugar (standard, refined cube and crystal sugar), semi-white sugar, refined sugar, raw sugar and brown sugar and that is produced from sugar beet or sugar cane, and starch based isoglucose, glucose syrup liquid or dried state, sugar solution and invert sugar syrup composed of dissolving of saccharose or invert sugar or both in the water, and inulin syrup, b) Marketing year: means the period between 1 September and 31 August, c) A quota: means the quantity of sugar that is produced according to the domestic demand and that can be delivered to the domestic market within the marketing year, d) “Company” means the juridical entity embodying and/or operating one or more sugar factories, e) “Sugar Factory” means the undertaking that produces sugar by processing the products defined in paragraph (e) of Article 2 of Sugar Law No. 4634 and the raw sugar except for the undertakings that use the sugar as input, f) “Law” means the Sugar Law No. 4634, g) “Authority” means the Sugar Authority, h) “Board” means the Sugar Board, i) “Reimbursement” means the storage reimbursement payments to be made on the basis of the average of beginning stocks and ending stocks of a month and sugar selling prices of the companies in order to ensure that the sugar to be conveyed regularly at a stabilized price from producer to consumer, j) “Deduction” means the deductions to be made on the basis of actual sugar sales amounts and sugar selling prices in order to ensure that the sugar to be conveyed regularly at a stabilized price from producer to consumer, k) “Sugar Selling Price” means the average of selling prices on the basis of products that will be taken as basis for storage reimbursement and deduction, and that will be notified to the Authority at the beginning of the marketing year by the Companies; l) “Production Authorization Certificate” means the certificate issued in accordance with the Law No. 560 of Decree Law on Production, Consumption and Supervision of Foods and the relevant regulation published by the Ministry of Agriculture and Rural Affairs. SECTION TWO Procedures and Principles for the Storage Deduction and Reimbursement Payments in Sugar Trade Determining and Budgeting the Quantities Basis for Reimbursement and Deduction Article 5 – The Authority shall prepare an estimated budget for the storage reimbursement and deduction and determine the percentage (%) taken as basis for reimbursement/ deduction taking into account the quantity of supply determined with A quota of Companies for the following marketing year until 31 August of the previous marketing year at the latest every year. However, the Companies are required to notify to the Board in writing until 15 August of the previous marketing year at the latest in case of their sales estimations are different from annual quantities of supplies determined with A quota. The total of deductions calculated for any marketing year shall be determined to be equal to the total of reimbursements calculated. If the total of reimbursements and deductions is not equal in a marketing year, such difference shall be conveyed plus or minus to the following marketing year. The total of estimated reimbursements to be taken place in the budget shall be calculated by multiplying the A quotas of the Companies or the annual estimated sales amounts that are set forth in the first paragraph of this article and that will be notified to the Board by the Companies, with the sugar selling price and the percentage (%) taken as basis for the reimbursement/ deduction to be determined by the Board. The total of estimated reimbursements determined with the budget in the concerning marketing year shall be increased or decreased to the extent specified in the third paragraph of this article. The quantity to be taken as basis for deduction shall be determined by dividing the resulting figure to the estimated quantity of sugar that is produced within the scope of A quota and that will be marketed within that marketing year. Reimbursement Article 6 – The storage reimbursement shall be paid on the net weight of sugar to the Companies that have Production Authorization Certificate and that keep A sugar in their stocks. The quantity subject to the reimbursement for any month shall be equal to the arithmetic mean of the quantity of sugar in the stock at the beginning and end of the relevant month. The quantity subject to the reimbursement shall be calculated by the Board by taking basis the beginning of month – end of month stock quantities that are compulsory to be notified to the Board exactly and accurately within the first two weeks of the subsequent month on monthly basis by the Companies as per the second paragraph of Article 7 titled “Liability” of the Regulation on Regulating the Sugar Quotas that took effect upon publication in the Official Journal No. 24713 of 01/04/2002. The quantity subject to reimbursement as calculated in this way shall be multiplied with the percentage (%) to be determined by the Board as the basis for the sugar selling price as well as deduction and reimbursement payments, and the amount of reimbursement to incur shall be found in this way. In the calculation of reimbursement raw sugar shall be expressed as sugar equivalent by taking basis of the yield or sugar content. Within the framework of third paragraph of Article 4 of the Law, the Board shall be authorized to make decision for the concerned Company on the basis of the budget equivalence in such a manner not to cause repeated reimbursement/ deduction in the event that the companies request so and it is approved by the Board and in the case that whole or part of the A quota that cannot be marketed is transferred to C sugar and/or A quota of the subsequent year provided that it is exported within the same marketing year. Storage reimbursement shall not be granted for the product (except for the brown sugar) that is colored, flavoured and obtained by adding additive substances later. In the event that the sugar is transported from one warehouse to the other, the storage reimbursement shall be paid assuming that the sugar remains in the former warehouse until 24.00 on the last day of the month when the transportation is made and further assuming that the sugar remains in the new warehouse following 00.00 on the first day of the subsequent month. Deduction Article 7 – The storage deduction shall be made over the net weight of sugar from the Companies that have Production Authorization Certificate and that sell A sugar actually. In the calculation of the amount of deduction the total of estimated reimbursements within current marketing year shall be increased or decreased to the extent provided in third paragraph of Article 5 of this Regulation. The resulting figure shall be divided to the estimated sugar quantity that is produced within the scope of A quota and that will be marketed within that marketing year. The following actions shall be deemed “sales” for the purpose of calculating the amount of deduction: a) Exit of the sugar from the factory in such a way not to be transported to another warehouse owned or rented by the Company; b) Exit from the warehouse of Company (transportation from one warehouse to the other of the company shall not be deemed an exit); c) Transfer of ownership right without any sugar exit from the warehouse of the company; d) The sugar being processed by the company and converted to a product except for ones specified in position 17.01 of Common Customs Tariff; e) Adding different flavouring or coloring substances into the sugar or the mixture losing the entitlement to storage reimbursement after the sugar being mixed with any sugar not defined in paragraph (a) of Article 4 of this Regulation. Determining the Conversion Coefficient Article 8 –In calculating the storage reimbursement and deduction for the raw sugar, the coefficient of conversion to the white sugar equivalent shall be determined by the Board. Selected method shall not be changed during the marketing year. Collection and Payments Article 9 – For any month The Authority shall determine until the end of the following month at the latest the total amount of reimbursement to be granted and the total amount of deduction incurred of each company that is entitled to reimbursement or subject to deduction. The payment or collection concerning the amounts to be determined in the first paragraph shall be made in six – month parts, the first part being made in April of the marketing year concerned and the second part being made in October of the following marketing year. Correction of Differences Article 10 – In the case of any difference between the actual stocks and the stocks recorded for the reimbursement/ deduction, the Authority shall be authorized to make the necessary correction. The amount of reimbursement which is determined to be overpaid shall be notified to the relevant Company by the Authority. The Company shall pay this sum to the account of Authority within one month following the date of notification. Technical Specifications of Warehouses Article 11 – The sugar is required to be stored in the warehouses having the following technical specifications in order to be entitled to reimbursement payment. a) It must meet the requirements set forth in Article 32 of Regulation on Turkish Alimentation Codex published in the Official Journal No. 23172 (repeated) of 16/11/1997. b) The ground of warehouse should be asphalted concrete. c) It must be constructed approximately 1 meter above the earth level. d) The long walls of the warehouse must be in north – south direction. e) Maximum 4 tons of sugar must be stacked on each square meter. f) Grid made of thick and dry wooden palette must be placed on the ground 10-15 cm above the ground; the sugar bags or boxes must be stacked on this wooden palette. g) Necessary audits must always be performed and the Companies must always allow such audits. h) Temporarily transportation of sugar that does not meet the requirements set forth above due to the force majeure must be made by notifying to the Authority. i) The requirements set forth in items (c) and (d) of this Article shall not be asked for the warehouses constructed prior to the publication date of the Regulation. SECTION THREE Execution and Enforcement Provisional Article 1 – The sugar factories that do not have Production Authorization Certificate at the date of enforcement of this Regulation hereby are required to obtain this certificate within two years. Provisional Article 2 – The amounts transferred to the account of storage deduction from the account of contribution revenues before this regulation taken into force for using in the storage reimbursement payments shall be paid as storage reimbursement. Enforcement Article 12 – This Regulation shall come into force at the date of its publication for implementation from 2004 – 2005 marketing year. Execution Article 13 – The Sugar Authority shall execute the provisions of this Regulation. |