BATTLE FOR SURVEILLANCE VALUE

One of the issues that countries monitor most closely is their trade balance. A trade surplus does not harm the country, but combating a trade deficit is essential to ensure the continuity of international trade. For this reason, countries like ours, which consistently run trade deficits, try to reduce the deficit by increasing exports and reducing imports. However, if every country acted on this impulse, international trade would become impossible. For this reason, the rules of international trade are regulated by international organizations, primarily the World Trade Organization, through joint decisions, or in other words, international agreements.

The most significant barrier to international free trade is customs duties, which we refer to as tariff barriers. This is because customs duties increase the cost of imported goods, making them more expensive. When you hear the term customs duties, you think of customs duty rates. This is true, but in addition to tax rates, the tax base is also an important factor affecting the amount of tax collected.

Customs duty rates are strictly controlled by the WTO. From time to time, countries use arguments that affect the customs duty base to reduce imports because they cannot increase tax rates. We have examined one of these arguments, namely the surveillance practice, which reduces imports by increasing the tax base rather than the tax rate.

Customs Value

The value used to calculate customs duty is known as the “customs value of the goods.” The value of the goods used for taxation purposes, i.e., the customs value of the goods, is the CIF value. The CIF value consists of the sale price of the goods, the freight charges (transportation costs) incurred for transporting the goods to the Turkish customs territory, and the insurance premium paid against the risks incurred during the transport of the goods to the Turkish customs territory. 

How the customs value of goods subject to customs duty is determined is regulated by Article VII of the General Agreement on Tariffs and Trade (GATT) and the Customs Law. 

The preamble to the Agreement on the Implementation of Article VII of GATT lists the following as the fundamental purpose and rationale of the agreement: 

To develop the objectives of GATT and ensure that developing countries derive additional benefits from international trade, 

- To clarify Article VII of GATT concerning value and ensure uniform application in this regard, 

- To prevent the use of arbitrary and fictitious customs values, 

- To base the customs value of goods, as far as possible, on the transaction value,

- To link customs value to simple and fair criteria consistent with commercial practices,

- To avoid converting value-determining transactions into dumping practices.

Again, in accordance with the Customs Law, minimum customs values and arbitrary or fictitious values shall not be taken as a basis for determining customs value.

Let us state at the outset what we will say at the end: the surveillance practice is contrary to these legal texts.

What is this Surveillance Practice?

The surveillance practice is the examination conducted to determine whether imported goods have a negative impact on the country's economy and domestic producers. As a result of this examination, the import of the goods under review is only permitted with a surveillance certificate for the purpose of monitoring the import effects of these goods. However, goods subject to surveillance are not subject to surveillance if they are declared above the specified value. In other words, goods declared below the specified value are subject to a surveillance certificate, while goods declared above this value are not subject to a surveillance certificate. 

Surveillance is not actually an import license application but rather the monitoring of imports. However, since the presentation of a document is required for imports in our country, it has taken on the nature of a license. 

Again, surveillance can be applied to goods originating from specific countries, but it can also be applied without distinction of country. In Türkiye, it is seen that no distinction of country is made in the application of surveillance.

The fact that goods are subject to a surveillance certificate does not prevent the application of the provisions of the Customs Law relating to the “Customs Value of Goods.”

For goods subject to surveillance to be released for free circulation, a surveillance certificate is required at the stage of registration of the customs declaration. However, during the import of goods subject to surveillance, if the declared value is at or above the value level for which a surveillance certificate is required, the import procedures are completed without requiring a surveillance certificate. If the invoice value of the goods is below the surveillance value, in accordance with the General Circular No. 2019/1 of the General Directorate of Customs, the difference is added to the customs duty base as foreign expenses, thereby increasing the value of the goods to a level where a surveillance certificate is not required, and the import transaction is carried out using this method. 

In response to this practice, importers first carried out imports by increasing the value of the goods to the surveillance value level, then requested a refund of the excess taxes paid, and upon the rejection of their requests, began to recover the taxes through litigation. To prevent the liable party from winning the lawsuits filed, the Law on Amendments to Certain Laws and Decree Laws No. 7333 dated July 18, 2021 stipulates that if the customs value of goods subject to trade policy measures is increased based on the liable party's own declaration and the taxes have been paid or accrued, requests for the refund or cancellation of these taxes shall not be accepted.

On the other hand, even if the lawsuit is won, since a surveillance certificate must be presented for imports made at a value below the surveillance value, and the import was made without this certificate, the party is now facing severe penalties under the Customs Law.

Subsequently, the Council of State annulled the General Directorate of Customs' Circular No. 2019/1, and the penalty application was also abolished. This time, the requirement arose that imports of goods subject to surveillance value should not be permitted without first raising them to the surveillance value, but that the same method could not be applied in cases where imports made at a lower value were subsequently detected.

 As of 2025, there are over 150 Communiqués and nearly 3,300 HS-Codes subject to surveillance. These figures are constantly changing. However, one thing remains unchanged: the surveillance wars will continue.

The public sector uses the limited arguments at its disposal to protect domestic producers, even if they violate international law, while importers insist on not paying taxes that they believe are unfairly imposed on them under international law and the Customs Code.

We thought that the issue would continue for a long time, but the issue was settled with the decision of the Council of State Tax Litigation Chambers, Case No. 2025/15, Decision No. 2025/16, published in the Official Gazette dated November 13, 2025.

The assessment of the decision will be in our next article.