APPLICATION OF CUSTOMS TARIFF CODES HS CODES TO

APPLICATION OF CUSTOMS TARIFF CODES (HS CODES) TO WA-ML LISTED ITEMS THE TURKISH EXPERIENCE 1

LICENSING OF ITEMS LISTED UNDER THE WASSENAAR ARRANGEMENT CONTROL LISTS Two licensing agencies: WA Munitions list : Ministry of National Defence WA Dual-Use Items List : Ministry of Economy 2

EXPORTS OF WA-ML & MTCR LISTED ITEMS The Ministry of National Defence (Mo. ND) is responsible for the exports of all items listed under the Wassenaar Arrangement Munitions List and the Missile Technology Control Regime list. A consolidated control list is published at the beginning of each year in the Official Gazette in accordance with Law No: 5201. 3

PROCEDURE: Exporter submits request for exports to Mo. ND, together with a valid End-User Certificate. Mo. ND checks paper-work to see if everything is in order Mo. ND sends application to: Ministry of Foreign Affairs >> political evaluation Turkish General Staff >> military evaluation If deemed necessary, National Intelligence Agency for proliferation-related investigation 4

INTRODUCTION OF HS CODES TO CONSOLIDATED CONTROL LIST Studies begin in 2010 between Mo. ND and Ministry of Customs and Trade to introduce HS codes to the control list implemented by the Mo. ND. PURPOSE: To expedite processing both at the licensing and the customs levels by codifying the customs declaration through the use of HS codes and minimizing the use of verbal descriptions which sometimes lack precision. To ensure military items have the necessary licensing by way of a final check by Customs officials through customs declarations. 5

First list with HS codes: First consolidated control list with HS codes published in Official Gazette in January 2012. Result? Initially system seemed to work fine. After a short period, problems started to surface. Mo. ND, Ministry of Customs and Trade and Ministry of Economy began consultations to smooth out problems. 6

25 Ocak 2014 CUMARTESİ Resmî Gazete Sayı : 28893 TEBLİĞ Millî Savunma Bakanlığından: 5201 SAYILI KANUN GEREĞİNCE KONTROLE T Bİ HARP ARAÇ VE GEREÇLERİ İLE SİLAH, MÜHİMMAT VE BUNLARA AİT YEDEK PARÇALAR, PATLAYICI MADDELER VE BUNLARA AİT TEKNOLOJİLERE İLİŞKİN LİSTE (2014 YILI KONTROLE TABİ MALZEME LİSTESİ) MADDE 1 – Aşağıda ana başlıklar altında belirtilen Kontrole Tâbi Liste kapsamında yer alan kalemlerin üretilmesi ile ihracat ve ithalatına ilişkin izin işlemleri, Millî Savunma Bakanlığı sorumluluğunda ve bilgisi dâhilinde yapılacaktır. KTL MD. NU. 1. MADDE İÇİNDE YER ALABİLECEĞİ GTİP GRUBU NAMLULU SİL HLAR: 1. a. 9302. 00. 00 Her çap ve model ateşli yivli setli tabancalar, makineli tabancalar ve bunların ana parçaları (gövde/çerçeve, sürgü/kapak takımı/üst gövde, namlu, toplu tabancalar 9305. 10. 00 için top/hazne/silindir, mekanizma komplesi ve tetik tertibatı) ile balistik öneme haiz parçaları (ateşleme iğnesi, mekanizma dip tablası, tırnak, çıkarıcı, namlu) - 1. b. Her çap ve model tek veya otomatik atışlı yivli setli tüfekler, keskin nişancı tüfekleri, yivli setli av tüfekleri ve bunların ana parçaları (gövde/çerçeve, kapak takımı/üst gövde, namlu, mekanizma komplesi, şarjör komplesi ve tetik tertibatı) ile balistik öneme haiz parçaları (ateşleme iğnesi, mekanizma dip tablası, tırnak, çıkarıcı, namlu) Not: Yivsiz av tüfekleri, nişancılık eğitiminde kullanılan tüfekler, spor amaçlı kullanılan tüfekler ve parçaları hariç. 9301. 90. 00 9303. 20. 95. 00 9305. 20. 00. 90. 00 9305. 91. 00 - 1. d. Her çap ve model hafif ve ağır toplar, obüsler ve bunların ana parçaları (namlu, kama payı, v. b) ile bu silahlarda kullanılan namlucuk aparatı. 9301. 10. 00 9305. 91. 00 - 2. TAKTİK ARAÇLAR: 2. a. 2. c. 8710. 00 Tanklar, tırtıllı (paletli) ve tekerlekli zırhlı muharebe araçları, zırhlı personel taşıyıcılar, zırhlı silah taşıyıcı araçlar. 9301 8702 8703 Üzerinde askerî ekipman (silah, komuta kontrol düzeneği, elektronik harp ve elektronik karşı tedbir sistemleri v. b) bulunan askerî amaçlı her türlü tekerlekli taktik 8704 araçlar. 8705 8710 7/16

What went wrong? No problem with items carrying HS codes that are strictly military. Too many civilian or dual-use items carrying the same HS codes as military items. Customs diverts all such items to the Mo. ND for licensing. Majority of such items civilian, some dual-use. 8

Majority outside Mo. ND’s area of authority Great number of applications diverted to Mo. ND, causing loss of valuable time for Mo. ND. Loss of time for exporter/importer. Loss of money for company as merchandise being kept at Customs warehouse. 9

SOME EXAMPLES OF IDENTICAL MILITARY/CIVILIAN HS CODES 10

HS 8903 (1/2) 11

HS 8903 (2/2) 12

HS 9013 (1/2) 13

HS 9013 (2/2) 14

HS 5903 (1/2) 15

HS 5903 (2/2) 16

HS 3606 (1/2) 17

HS 3606 (2/2) 18

HS 8463. 90 (1/2) 19

HS 8463. 90 (2/2) 20

DISCONTINUATION OF THE USE OF HS CODES After three years of use of HS codes for WA-ML and MTCR items, practice discontinued as of January 2015. REASONS FOR DISCONTINUATION: The length of digits used in the process only allows to define the “upper category” of the controlled goods. Hence the level of precision not at the required level to differentiate between military-use and civilian-use. HS Codes worked well with strictly military items BUT, goods and technologies that have civilian or dual-use applications proved difficult to differentiate using only HS Codes. Many exports ”lacking licenses” held by Customs and referred to Mo. ND, causing delays and incurring additional costs 21

CURRENT PRACTICE: The use of HS Codes discontinued and paperwork at Customs switched to a «declaration-based» system. Customs officials continue to monitor the nature of goods as has been before. As of the end of April 2015, minimal difficulties in the application process for the export and imports of listed items. 22

ADDITIONAL REMARKS Despite not achieving the desired outcome, the experimentation of the use of HS Codes has been a teaching experience. Having precise and identifying HS Codes can greatly facilitate and expedite export and import procedures. Having precise HS Codes for all items listed under the various export control regimes would be a major breakthrough in the export control and data gathering on the trade of such items. Could be a topic of interest for the World Customs Organisation, if not already. 23

THANK YOU FOR YOUR ATTENTION! Aykut Renda Head of Department, Arms Control and Disarmament Ministry of Foreign Affairs Ankara – Turkey 24