Considering seasonally adjusted values, both exports and imports dropped considerably below the levels prior to Russia’s invasion. Russia’s share in EU’s extra-EU imports fell from 9.5% to 4.3% between February 2022 and December 2022. Over the same period, Russia’s share in the EU’s total extra-EU exports dropped from 4.0% to 2.0%.

The EU’s trade deficit with Russia peaked at €18.2 billion in March 2022 before progressively decreasing to €6.0 billion in December 2022. The value of imports from Russia fell by 53%, from €21.8 billion in March 2022 to €10.3 billion in December 2022.

With Russia being gradually replaced by other trade partners, Russia’s share in extra-EU imports for six key products decreased, with strong declines visible for coal, natural gas, fertilisers, petroleum oil and iron & steel.

In particular, the highest drops have been recorded for coal (from 45% in 2021 to 22% in 2022), natural gas (from 36% to 21%), fertilisers (from 29% to 22%), petroleum oil (from 28% to 21%) and iron & steel (from 16% to 10%).

Source: Eurostat
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It came into existence as a unique and promising model of multilateral political and economic initiative aimed at fostering interaction and harmony among the Member States, as well as to ensure peace, stability and prosperity encouraging friendly and good-neighborly relations in the Black Sea Region.

The BSEC Headquarters- the Permanent International Secretariat of the Organization of the Black Sea Economic Cooperation (BSEC PERMIS) – was established in March 1994 in İstanbul.

With the entry into force of its Charter on 1 May 1999, BSEC acquired international legal identity and was transformed into a full-fledged regional economic organization: Organization of the Black Sea Economic Cooperation. With the accession of Serbia in April 2004, the Organization’s Member States increased to twelve.

BSEC covers a geography encompassing the territories of the Black Sea littoral States, the Balkans and the Caucasus with an area of nearly 20 million square kilometers. BSEC region is located on two continents and it represents a region of some 350 million people with a foreign trade capacity of over USD 300 billion annually.

Source: Ministry of Customs and Trade

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People in Ukraine blamed Gontareva on the government’s failure to prosecute private bank owners and also she was accused of corruption and money laundering.

On the other hand, she claimed that her resignation was her own choices.

Source: Euronews

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Ukraine’s Prime Minister Volodymyr Groysman expressed that diplomatic relations of Turkey and Ukraine have exceeded 25 years. “Relation of Turkey and Ukraine is really good. With the agreement signed yesterday, citizens will have free access to each country with their national identity cards. Turkey and Ukraine can work on a large spectrum of fields comprising of aerospace technology and mining.” There is an increase in the number of Ukrainian tourist to Turkey; we project a 3 billion USD revenue in tourism. He continued his words by saying “I believe in joint success; thus, agreements will be signed in a short time of period. Turkey is an innovative country with many opportunities, be bold and brave in your investments.”

Turkey’s Deputy Prime Minister Mehmet Şimşek, “We want to develop our relations with Ukraine, thus, we believe that Free Trade Agreement, Tax Agreement and Agreement on Mutual Protection will be key enablers. Trade volume in 2008 was 8 billion USD yet our joint target is 20 billion USD. In order to develop trade volume, we must invest and trade more. Now that both countries’ citizens can travel with their national identity card, this will translate to higher investment and trade. Our companies are interested in bids. Turkey has been through hard times and it is open to future investment from Ukraine. Turkey and Ukraine will hold firm stance to expand Custom Union with the European Union”.

DEİK Executive Committee Member Ebru Özdemir, expressed that Turkey gives great importance to relations with Ukraine and both countries share same vision. “Two countries complete each other geographically. Ukraine and Turkey are not only significant in Eurasia but also in Europe. Two countries’ joint strategic vision will enable development and stability in the region. Economic and investment relations should develop more rapidly to reach 20 billion USD target by 2020. Legal infrastructure must be completed to ease economic and trade relations between Turkey and Ukraine. Free Trade Agreement needs to get signed. Cooperation will not only create a win-win situation for both countries but it will add value to the entire region. We need to get it done really fast.”

DEİK/Turkey-Ukraine Business Council President Ruşen Çetin stated that Ukraine and Turkey complete each other, and both countries’ traditions and lifestyles are similar.Mutual investments and trade should increase, Çetininvited Turkish entrepreneurs to invest in Ukraine and Ukrainan business people to Turkey.

Turkey-Ukraine Trade Figures (Ministry of Economy- 2016)
Turkish Export to Ukraine: 1.2 billion USD
Main Export items: Citrus, textile, motor vehicles, sunflower seeds
Turkish Import from Ukraine:2.5 billion USD
Main Import items: Iron and steel, soya bean, vegetable oils, basic metals
Trade Volume:3.8 billion USD
Trade Balance: 1.2 billion USD in favor of Ukraine

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Legal Framework of Foreign Direct Investment
1. Foreign Direct Investment (FDI) Law No. 4875

The aim of the Foreign Direct Investment (FDI) Law No. 4875 is:

• to encourage FDI in the country
• to protect the rights of investors
• to align the definitions of an investor and investment with international standards
• to establish a notification-based system rather than an approval-based one for FDI
• to increase the volume of FDI through streamlined policies and procedures

The FDI Law provides a definition of foreign investors and foreign direct investments. In addition, it explains important principles of FDI, such as;

• freedom to invest,
• national treatment,
• expropriation and nationalization,
• freedom of transfer,
• national and international arbitration and alternative dispute settlement methods,
• valuation of non-cash capital,
• employment of foreign personnel,
• liaison offices.

The Regulation on the Implementation of the FDI Law consists of specifying the procedures and principles set forth in the FDI Law. The aim of the FDI Law with regard to the work permits for foreigners is:

• to regulate the work carried out by foreigners
• to stipulate the provisions and rules on work permits given to foreigners

  2. Bilateral Agreements
  2.a. Bilateral Agreements for the Promotion and Protection of Investments
  Bilateral Agreements for the Promotion and Protection of Investments were signed from 1962 onwards with countries that show the potential to improve bilateral investment relations. The basic aim of bilateral investment agreements is to establish a favorable environment for economic cooperation between the contracting parties by defining standards of treatment for investors and their investments within the boundaries of the countries concerned. The aim of these agreements is to increase the flow of capital between the contracting parties, while ensuring a stable investment environment. In addition, by having provisions on international arbitration, they aim to prescribe ways to successfully settle disputes that might occur among investors and the host state. Turkey has signed Bilateral Investment Treaties with 94 countries. However, Turkey is a dualist country, where an international treaty has to be ratified and promulgated in order to become part of the national legal system. Within this regard, 75 Bilateral Investment Treaties out of these 94 have gone into effect so far.

75 countries
Afghanistan, Albania, Argentina, Australia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium-Luxembourg, Bosnia and Herzegovina, Bulgaria, China, Croatia, Cuba, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Libya, Lithuania, Macedonia, Malaysia, Malta, Moldova, Mongolia, Morocco, Netherlands, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Syria, Tajikistan, Thailand, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uzbekistan, Yemen
Source: Ministry of Economy

2. b. Double Taxation Prevention Treaties
Turkey has signed Double Taxation Prevention Treaties with 80 countries. This enables tax paid in one of two countries to be offset against tax payable in the other, thus preventing double taxation.

80 countries
Albania, Algeria, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, China, Croatia, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Moldova, Mongolia, Morocco, Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Serbia and Montenegro, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sudan, Sweden, Switzerland, Syria, Tajikistan, Thailand, Tunisia, Turkish Republic of Northern Cyprus, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uzbekistan, Yemen
Source: Revenue Administration

Turkey is continuing to expand the area covered by the Double Taxation Prevention Treaty by adding more countries on an ongoing basis.

2. c. Social Security Agreements
Turkey has signed Social Security Agreements with 26 countries. These agreements make it easier for expatriates to move between countries. The number of these countries will increase in line with the increased sources of FDI.

26 countries
Albania, Austria, Azerbaijan, Belgium, Bosnia and Herzegovina, Bulgaria, Canada and the Province of Quebec, Croatia, Czech Republic, Denmark, France, Georgia, Germany, Libya, Luxembourg, Macedonia, Netherlands, Norway, Romania, Slovakia, Serbia, South Korea, Sweden, Switzerland, Turkish Republic of Northern Cyprus, United Kingdom
Source: Social Security Institution (SSI)

3. Customs Union and Free Trade Agreements (FTA)
A Customs Union Agreement between Turkey and the European Union has been in effect since 1996. The agreement allows trade between Turkey and the EU countries without any customs restrictions. The EU-Turkey Customs Union is one of the steps toward full Turkish membership of the EU itself.

Turkey has FTAs with 37 countries, creating a free trade area in which the countries agree to eliminate tariffs, quotas and preferences on most goods and services traded between them. This framework explains why many global companies are now using Turkey as a second supply source and manufacturing base, not only for the EU and rapidly growing Turkish markets, but also for the Middle East, Black Sea and North African markets, with the added advantage of a relatively low-cost but well-educated labor force, coupled with cost-effective transportation.

37 countries
Albania, Bosnia and Herzegovina, Egypt, Georgia, EFTA, Israel, South Korea, Macedonia, Morocco, Malaysia, Mauritius, Palestine, Jordan, Syria*, Tunisia, Montenegro, Serbia, Chile
Countries that have finalized the negotiation process: Faroe Islands, Ghana, Kosovo, Lebanon, Moldova, Singapore
Countries in the negotiation process: Democratic Republic of the Congo, Cameroon, Colombia, Ecuador, Gulf Cooperation Council, Japan, Libya, Mexico, Mercosur, Peru, Seychelles, Ukraine *suspended
Source: Ministry of Economy

 Date: 13 March 2017

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