New regulation on Turkey’s foreign trade body raises eyebrow

ANKARA

A source recently told the Hürriyet Daily News that Economy Minister Nihat Zeybekci wants more direct access to foreign trade for the government. AA Photo

A new regulation redefining the structure of Turkey’s Foreign Economic Relations Board (DEİK) has caused a stir, with many declaring it controversial in terms of economic liberty and legality.

DEİK, an arm of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), was put under the control and surveillance of the Economy Ministry as part of an omnibus law approved in Parliament on Sept. 10.

Meanwhile, a regulation that exposes the new working scheme and management structure of the body was published in the Official Gazette on Sept. 20, drawing reactions from jurists and the business world.

According to the regulation, the economy minister has been endowed with the extensive authorities to select and remove the DEİK chairman as well as determine the founding institutions.

The number of founding institutions has been increased from 40 to 99 in the regulation, while the minister will be able to increase or decrease this number by adding and removing the institutions he or she chooses.

The regulation also tasks the DEİK general assembly, which will consist of 25 delegates, with making foreign economic relations decisions, “taking development plans and government programs into consideration.”

The minister will also have right to convene a DEİK general assembly for an emergency meeting. 

A source recently told the Hürriyet Daily News that Nihat Zeybekci, the new economy minister who took over the post from Zafer Çağlayan, one of the ministers who lost their seat after the December 2013 graft probe, wants more direct access for the government to foreign trade.

The new law has been perceived as an open attempt to hand the foreign trade ropes over to the ministry, and the regulation confirmed the level of government intervention into an organization that was being controlled by the private sector.

Ali Coşkun, a former trade and industry minister from the Justice and Development Party (AKP) and a founder of DEİK, also expressed great concern about government intervention in the organization in comments to daily Cumhuriyet.

The former minister and renowned industrialist helped establish the board as TOBB chairman in 1986, upon the directive of the prime minister of the time, Turgut Özal, a staunch economic liberal.

“I was the TOBB chairman while the late Özal was opening up the Turkish economy to the world.
Exports were around $3 billion. We saw that bureaucracy was the biggest obstacle, and we founded DEİK and business councils to overcome this bureaucracy by initiating investment mobilization under the private sector’s leadership,” Coşkun said.

“We opened up to the world thanks to this. But now I see that my friends are going back to the early 1980s, when the state was intervening in trade and the economy,” said the former AKP minister. “This is called partial statism, and it’s really inconvenient.”

Questions over asset transfers

The regulation has also created controversy as jurists argue that an article that orders the transfer of all assets and properties of the former DEİK to the new one is “unconstitutional.”

The regulation also obligates Turkey’s largest business organizations, TOBB, the Turkish Industry and Business Association (TÜSİAD), the Independent Industrialists and Businessmen’s Association (MÜSİAD), the Turkish Exporters’ Assembly (TİM) and the Union of Con-tractors to give 1 percent of their annual income to DEİK.

The new arrangements regarding the asset transfer and the financial structure of DEİK were not included in the law and introduced with the regulation.

Union of Turkish Bar Associations (TBB) head Metin Feyzioğlu also told Cumhuriyet that “no regulation has the powers of law.”

“If there is no arrangement in the law, nobody’s assets can be seized with a regulation or expropriated,” Feyzioğlu said, adding that they had not seen any article regarding the asset transfer in the law.

“This being the case, doing this [asset transfer] is against the ‘right of property’ rule in the Constitution and in the European Convention of Human Rights,” he also said.

“You also cannot impose a financial obligation or tax without any legal base,” he added, referring to new fee payment responsibility imposed on business organizations.