Published in the Official Gazette dated 19/04/2001, No. 24378 

The Sugar Law 

Law No 4634            Date of Adoption: 4.4.2001 

PART ONE 

Purpose and Definitions 

Purpose 

Article 1 – The purpose of this law is to regulate the sugar regime in Turkey, the procedures and principles applicable to sugar production, and conditions and methods of pricing and marketing, with the objective of meeting local demand by local production and making exports thereof when necessary. 

Definitions 

Article 2 – The following terms shall have the meanings indicated below in the application of this Law: 

a) Ministry                         : The Ministry of Industry and Commerce

b) Undersecretariat            : The Undersecretariat of Foreign Trade

c) Authority                       : The Sugar Authority

d) Board                           : The Sugar Board

e) Sugar            : Crystallized saccharose that is classified as white sugar (standard, refined cube and crystalline 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,

f) Marketing year: The period between September 1 and August 31.

g) Quota A: The quantity of sugar which is produced according to domestic demand and which can be delivered to the domestic market within the marketing year,

h) Quota B: The quantity of sugar which corresponds to a certain percentage of the quota A and which is produced in order to be kept for safety purposes,

ý) Sugar C: The raw and white sugar which is produced outside the quotas A and B and which may not be marketed in the domestic market and which is procured in order to be processed for exportation,

j) Sugar factory: An undertaking which produces sugar by processing the products defined in paragraph (d) and raw sugar, excluding those undertakings using sugar as an input,

k) Company: A legal personality which has, and / or operates, one or more sugar factories.

l) Raw material: The main input used in production of sugar.

m) Processed product: The finished product which incorporates sugar as an input as a result of processing.

n) Manufacturer - exporter: A firm which produces and exports the processed product.

o) Storage reimbursement: The payments to be made to meet storage expenses to ensure that sugar is delivered regularly from producers to consumers at a stable price.

p) Storage deductions : The deductions to be made from the amounts due to sugar sales to offset all expenses stemming from the times of sales in order to ensure that sugar is delivered regularly from producers to consumers at a stable price. 

PART TWO

Determination of Quotas and Prices and Sugar Trade 

Quotas and Determination of Quotas 

Article 3 – The quantity of sugar to be marketed is determined with quotas for specific periods when necessary, according to the types of sugar, separately for saccharose based sugars and other types of sugar, in order to ensure stability in production and supply of sugar. Total Quota A to be determined for starch based sugars may not exceed 10 % of the national total of Quota A. The Cabinet is authorized to increase or decrease the said percentage by up to 50 % thereof by obtaining the opinion of the Authority. 

Quota B is not determined for other types of sugars which are not of storable nature, excepting the saccharose based sugars. 

Quotas A and B of the companies are determined by the Board no later than 30^th June  every year for the following five-year periods, by taking into consideration the domestic demand for sugar and processing and sugar production capacities of the factories. 

Quotas are calculated on the basis of the production periods of the factories and their average actual daily processing capacities and/or production quantities and yields in the last three years. Nominal production data are taken into consideration with regard to the factories which start production for the first time, which are in operation for less than 3 years and which have received capacity expansion permissions prior to the entry into force of this Law.  

It is compulsory to obtain quotas in advance to build new factories and/or to increase the capacities of existing factories. The Board is authorized to allocate new quotas to the companies.   

Cancellation and transfer of quotas 

Article 4 – If the supply of the companies falls below 90 % of the quotas allocated to themselves for two years in a row, they lose their quota rights corresponding to  the difference between the quota and the supply, for a time period to be determined by the Board. During the period in question, the companies may not secure new quotas in return for the quota rights they have lost.   

The quotas allocated to companies are cancelled if they are not used within the period determined by the Board. 

In necessary cases, sugar transfer may be made among the quotas within the marketing year. In case a portion of Quota A cannot be marketed, the portion that could not be marketed is transferred to the next year’s quota and Quota A of the following year is reduced by the quantity transferred or the whole or a portion of Quota A which could not be marketed may be transferred to sugar C on condition that it is exported within the current marketing year, if so requested by the companies and if such a request is approved by the Board in the same marketing year. 

Companies may make quota transfers among their factories with a decision to that effect of the Board, according to the capacity changes they will make and / or in case of establishment of occurrence of force majeure. 

Matters related with determination, allocation, cancellation and transfers of quotas and allocation of new quotas and inspection related with application are regulated by a regulation to be issued by the Ministry in the light of the opinions of the Undersecretariat. 

Prices of raw materials and sugars 

Article 5 – Sugar beet prices are determined every year through mutual agreement between the real and legal persons operating sugar factories and the producers and/or their representatives. The procedures and principles governing the same are arranged by a regulation to be issued by the Ministry. 

Other raw materials used in sugar production are procured by the companies from the producers and/or from the market. 

Sugar selling prices are determined freely by the real and legal persons operating sugar factories. 

Exportation and importation of sugar 

Article 6 – The Board advises the Undersecretariat of any regulations intended to be introduced with regard to sugar trade by taking into consideration the world market prices, domestic prices, supply and demand balance, speculative effects and other relevant issues.  

The foreign-sourced sugar, which is used by manufacturer - exporters as raw material or auxiliary material within the framework of the internal processing regime and/or similar practices is in the scope of Sugar C, and may not be marketed within the country directly or as a processed product. The Board advises the Under-secretariat of the sugar to be imported under this scope.  

PART THREE

Organization  

The Sugar Authority 

Article 7 – The Sugar Authority having the status of public legal personality has been established to ensure application of this Law and other related legislation, to supervise and conclude the application, to introduce arrangements within the framework of the powers granted under the Law and to fulfil other duties entrusted and exercise the powers granted by the Law. The Authority is headquartered in Ankara. The bodies of the Authority consist of the Sugar Board and the service units. The Authority is managed by the Sugar Board.  

The Ministry associated with the Authority is the Ministry of Industry and Commerce. 

The Sugar Board 

Article 8 – The Board is the decision-making body of the Authority and consists of seven members, of whom one is the President and one is Vice President, and takes and applies all kinds of decisions on matters coming under the scope of this Law.   

President of the Board is also the President of the Authority. The President represents the Authority versus administrative and judicial authorities and third parties. This responsibility includes the duty of keeping the public informed about the affairs of the Board. The Vice President assumes all of the duties and powers of the President when the latter is absent.   

The Cabinet selects and appoints one President and six members, of whom one member being appointed from among the two candidates to be proposed by each of the Ministry, the Ministry of Agriculture and Rural Affairs and the Ministry to which the Undersecretariat reports, the Company, which produces saccharose based sugar and whose capital belongs to the state and the umbrella union formed by the cooperatives of beet producers and one member being appointed from among the two candidates to be proposed by each the two companies from each group of the companies producing saccharose and starch based sugar, which have achieved the highest average production in the last 3 years from their factories in Turkey under their nominal production capacities. The Vice President is elected by the Board members from among themselves.  

The President and members of the Board are paid remuneration established by the Supreme Planning Council for the chairmen and members of the boards of directors of the public economic enterprises. 

The duty of the Board membership is outside the scope of the prohibition to take other jobs and services as regulated by the Civil Servants Law No 657 and the Decree-Law on Regulation of the Personnel Regime for the Public Economic Enterprises and Abrogation of Some Articles of the Decree-Law No 233.  

The Board members are selected from among the persons with the following qualifications: having completed higher education of minimum four years at home or abroad in the disciplines of law, economics, engineering, management, international relations, public administration or finance (this condition is not sought for the member representing the umbrella union formed by the cooperatives of beet producers), having adequate professional knowledge and experience and having worked in public or private sector in their professions for a period of minimum ten years. Besides, the members are required to meet the conditions set out in the sub-paragraphs 1, 4, 5, 6 and 7 of paragraph (A) of Article No 48 of the Civil Servants Law No 657.  

The term of office of the Board members is five years. The memberships of the Board members terminate automatically when they leave their posts in the establishments they represent. A new member is selected by the Cabinet within at most one month in lieu of any memberships terminating for this reason or any other reason, and their appointments are effected in accordance with the procedure stated in this article. Those appointed in this manner complete the remaining terms of office of their predecessors. 

The Board meets upon the call of the President at least twice a month with the absolute majority of the full number of the members. The Board may meet extraordinarily upon the call of the President or with written request of minimum three members and with the absolute majority of the full number of the members. The meetings are presided over by the President of the Board or by the Vice President in the absence of the President. The agenda of each meeting is prepared and communicated to the Board members by the President or by the Vice President in the absence of the President. 

The President and members of the Board shall, in principle, attend the meetings. Those Board members having excuses must inform the President of the Board of their excuses prior to the meeting. Those members who have failed to attend four meetings in a row or a total of ten meetings in one year without an excuse are deemed to have resigned. New members are appointed in their place in accordance with the procedures stated in this article.  

The Board adopts its resolutions with the vote of the absolute majority of the full number of the members in the same direction. The Board members may not cast abstention vote. 

The resolutions adopted at the meetings are communicated by the Board to those concerned.  

Duties and powers of the Board and supervision: 

Article 9 – The duties and powers of the Board are the following: 

a) It takes and applies decisions on determination, cancellation and transfer of Quotas A and B.

b) It determines contributions not exceeding five per thousand of the amount to be calculated on the basis of the ex-factory selling price, at the beginning of the relevant marketing year, of the quantity of sugar corresponding to the  Quotas A belonging to the current marketing year in case of active companies or belonging to the first marketing year in case of newly established companies, in order for the same to be used for the expenditures and operations of the Authority, storage reimbursement, research and development activities and similar administrative expenses, and it takes and applies decisions related therewith. One-twelfth of the amount of the contribution to be calculated for each marketing year and notified to the companies by the Board in the first week of September is transferred to the special account of the Authority within seven business days following the end of every month, which procedure will start in September and will be completed in August of the following calendar year. The Cabinet is authorized to re-determine the contributions.

c) It decides whether storage deduction will be made for sugar and whether reimbursement will be paid and applies such decisions. It takes decisions on making arrangements in the operation of domestic production and market in accordance with the objectives of this law and collection of storage reimbursement, determination, spending and offsetting of the reimbursement amounts.

d) It communicates to the Undersecretariat its opinions about the arrangements intended to be introduced for  sugar trade by taking into consideration the domestic prices, supply and demand balance and speculative effects.

e) It applies the administrative fines envisaged by this law.

f) It ensures organization by guiding research and development activities related to the sector and allocates funds where necessary.

g) When fulfilling the duties assigned to itself under this law, it may ask the public agencies and organizations and real and legal persons which are engaged in production, marketing and sale of goods or services in the market and all kinds of unions thereof to provide all kinds of information it may deem necessary. The information requested by the Board is submitted by the agencies and entities concerned to the Board fully and correctly, within the requested time limits.

h) It may carry out investigation and supervision in the companies and their factories in matters related with its duties. It may make use of relevant agencies, organizations and persons to this end when necessary.

ý) It takes and applies decisions on other matters related with the sector in line with the objectives of this law.

j) It may cooperate with organizations related to its field of operation at home and abroad and be a member in such organizations when necessary. 

The Board members are considered civil servants in respect of any offenses they have committed in connection with the money, documents having the effect of money, notes and other assets of the Board as well as the offenses they have committed in connection with balance sheets, minutes, reports and all kinds of similar documents and books, and provisions of Chapters Three and Six of Book Two of the Turkish Penal Code No 765 apply to them.  

In case the Board members disclose any confidential information they have learned during their terms of office, provisions of Article 229 of the Turkish Penal Code No 765 apply to them and their Board membership is terminated. Such persons may not be re-elected as Board members. 

The Board is assigned to determine and apply the procedures and principles that will prevent disclosure of all kinds of commercially sensitive information including commercial secrets and confidential information related with competition. 

Revenues belonging to the Board are accumulated in the accounts to be opened at the banks domiciled in Turkey. The Board is authorized to spend sums of money from such accounts in line with the objectives of this law.  

The Board is supervised by the Supreme Supervisory Council. 

The service units 

Article 10 – Duties required by the services of the Authority are performed by the service units. The personnel listed in the schedule attached hereto are employed pursuant to the provisions of Labor Law No 1475. The Board is authorized to change the titles and status in the permanent staff positions indicated in the said schedule on condition that the total number is not exceeded, and to employ staff below the said number. 

PART FOUR

Penal Provisions 

Administrative fines 

Article 11 – In case of real and legal persons that fail to maintain Quota B sugar or that sell them or transfer them free of charge outside the Board’s decisions, the Board shall apply an administrative fine to such persons, which shall be equal to the sum to be calculated on the basis of the ex-factory selling price of the quantity of sugar that is not maintained or that is disposed of, on the date when the same was found. 

The fines envisaged in the first paragraph are applied to those who have sold Quota C sugar or transferred Quota C sugar free of charge in the domestic market outside the Board’s decisions. 

In case of companies making quota transfers among their factories without the Board’s information and decision, the Board shall apply an administrative fine to such companies, separately to each of them, which shall be equal to the sum to be calculated on the basis of the ex-factory selling price of the quantity of the sugar transferred by them, on the date when the same was found. 

In case of companies making quota transfers among themselves in breach of the provisions of this Law, the Board shall apply an administrative fine to such companies, separately to each of them, which shall be equal to the sum to be calculated on the basis of the ex-factory selling price of the quantity of sugar corresponding to the quota transferred by them, on the date when the same was found. 

In case the sugar procured by the companies outside the scope of the Quotas A and B in violation of the objectives of this law are transferred or sold in the domestic market directly or indirectly, the fines envisaged in the first paragraph of this article apply to those engaged in such act. 

If, in case of information request or at-site inspection by the Board, it is found that the information furnished is wrong, deficient or misleading or if no information is furnished or if at-site inspection is not allowed, the companies engaging in such act  are warned to furnish requested information and/or to allow inspection within seven days. If the information requested is not furnished and/or if the inspection is not allowed within the said period, an administrative fine is imposed, amounting up to 3 % of the amount to be calculated on the basis of the ex-factory selling price (at the beginning of the current marketing year) of the Quota A quantity allocated by the Board to the companies for the current marketing year.  

In case of repetition of the acts entailing collection of administrative fines, the fine to be imposed is applied at twice the amount of the previous fine.  

10 % of the administrative fines collected is transferred to the special account of the Authority, with the remainder thereof being transferred to the Treasury accounts to be recorded as revenue to the budget. 

Administrative fines are notified in accordance with the provisions of the Notification Law No 7201. 

A petition of objection may be lodged against administrative fines with competent administrative court within thirty days from the date of notification. Any objections lodged do not stop enforcement of administrative fines.  

Provisions of Law No 6183 on Procedure of Collection of Monies Owed to the State apply to collection of finalized administrative fines.  

PART FIVE

Miscellaneous and Final Provisions 

Regulations 

Article 12 – Management and representation of the Authority, procedures and principles related with working of the Board, procedures and principles related with working of the service units, arrangements related to storage reimbursement and deduction and other matters are determined by regulations to be issued by the Ministry within four months from the date of the promulgation of this Law.  

Abrogated legislation  

Article 13 – The Sugar Law numbered 6747, dated 22.6.1956 and Article 8 of the Law numbered 79, dated 10.9.1960, on Pardoning National Protection Offenses, Liquidation of the National Protection Organization, Capital and Fund Accounts and Introduction of Some Provisions.  

Provisional Article 1 – The quota rights of those real and legal persons that have obtained Cabinet permission to establish and operate sugar factory in the country in accordance with Sugar Law No 6747 but that have not yet started production are reserved. Such rights are valid for a period of five years from the date of the entry into force of this Law. The quotas may not be transferred by such right holders to others during the said period. 

Provisional Article 2 – After entry into force of the Law, the Board determines the first marketing year by taking into consideration the raw material sowing period. The first quota is determined on the basis of the said marketing year. 

Provisional Article 3 – Relevant agencies inform the Ministry of their candidates for the position of Board member within one month following the entry into force of this Law. The President and members of the Board are appointed within one month following the said period.  

Provisional Article 4 – Until completion of formation of the Board and of the service units, affairs and procedures and transactions as well as required spending are fulfilled by the General Directorate of the Turkish Sugar Factories Corp. (Türkiye Þeker Fabrikalarý AÞ). 

Provisional Article 5 – Upon request of those companies which have sugar in their stocks at the beginning of the first marketing year to be determined by the Board, the whole or a part of their sugar stocks are included in the scope of Quota C Sugar with a decision to that effect of the Board.  

Provisional Article 6 – The membership to be determined through selection from among the two candidates to be proposed by the company which produces saccharose based sugar and whose capital belongs to the state, as referred to in Article 8 related with selection and appointment of the Sugar Board members, belongs to the company which has achieved the second highest average production in the last three years at the factories of the saccharose based sugar producing companies in Turkey in case the State-owned shares are transferred through privatization.  

Provisional Article 7 – Beet prices for the Year 2001 are determined by the Cabinet. 

Provisional Article 8 – On 31.12.2004, the Cabinet re-determines the duties, powers and terms of office of the Authority and its organs within the framework of the agreements made with the international organizations.  

Effectiveness

Article 14 – This Law enters into force on the date of its promulgation. 

Execution

Article 15 – The provisions of this Law are executed by the Cabinet.  

LIST NO (1) 

SCHEDULE OF THE PERSONNEL TO BE EMPLOYED BY THE SERVICE UNITS 

Title             No

Secretary General          1

Deputy Secretary General          1

Experts         20

Assistant Experts         10

Administrative personnel      25 

18/4/2001