Atradius Recommends 10 Key Principles for Exporting to Turkey

AMSTERDAM, February 7, 2012 /PRNewswire/ --

• Credit insurer presents checklist for successful trade with Turkish customers
• Turkey grew faster than China in the first six months of 2011

In the first six months of 2011 the Turkish economy grew faster than that of China. However, along with the opportunities evident in trading with Turkey there are also risks that exporters need to take into consideration. International credit insurer Atradius has published a report highlighting 10 important principles that could improve a businesses chances of enjoying successful trade with Turkish companies.

"Turkey still suffers from a certain degree of currency instability and a rather high inflation rate. Additionally, there are signs that the market could overheat. These factors can affect the ability of Turkish customers to meet their payment obligations", says Michael Karrenberg, Risk Services Director for Atradius Germany, Central and Eastern Europe. "Firmly intent on European integration, both commercially and legally, trade with Turkey does not differ substantially from supply relations to other export markets, but one should be aware of some differences."

Compete fairly

Irrespective of the governing law chosen by the parties, any supply agreement relating to supplies to Turkey is subject to mandatory Turkish competition rules. For example, supply agreements that are governed by foreign law and contain clauses on limitation of liability should be carefully assessed, as they may not be enforceable in Turkey - especially where a customer or third party has a significantly weaker bargaining position than the supplier.

Protect your intellectual property

Under Turkish intellectual property laws, the Turkish customs authorities may suspend customs clearance procedures at the request of any applicant if there is evidence of a breach of intellectual property rights. Only after 10 days, when the customs authorities have not been notified of the institution of legal proceedings or interim measures, the suspension of customs clearance will be lifted and the goods permitted to be cleared under the normal procedure.

Take advantage of free trade zones

There are a number of free trade zones in Turkey where many provisions relating to foreign trade do not apply provided that the goods are ultimately intended for a customer within that area. A number of previously existing tax advantages for customers in free trade zones were abolished at the end of 2008. However, there is still a range of legal advantages to Turkish partners. Suppliers should bear these legal aspects in mind when negotiating supply agreements to ensure that they receive a 'fair share' of the economic advantages available in Turkish free trade zones.

Understanding who you deal with before delivery

In any sales relationship it is important to verify the corporate authority of the trading partner before the first delivery takes place. However, the corporate authority of a Turkish legal entity must be established under Turkish law. To this end, the required documentation ranges from certified articles of association and certificates of activity issued by the relevant trade registry to several corporate approvals. If the exposure under the supply contract will amount to a significant sum, it may even be advisable to request a notarized board resolution approving the execution of the relevant supply contract or a capacity opinion issued by a reputable Turkish law firm.

However, even the successfully verified corporate authority is no guarantee that the buyer will be able to meet its payment obligations after having received the goods. "To protect against payment defaults, sufficient security should be agreed to with Turkish customers in advance", concluded Andreas Tesch, Atradius Chief Market Officer. "Additional protection can be obtained through trade credit insurance that enables the exporter to focus greater emphasis on maximising the value of growth opportunities in Turkey."

The complete checklist can be downloaded from  www.atradius.com.

About Atradius

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence through 160 offices in 42 countries. Atradius has access to credit information on 60 million companies worldwide and makes more than 20,000 trade credit limit decisions daily. Its products help to protect companies throughout the world from payment default risks associated with selling products and services on credit.
http://www.atradius.com