Legislation

2011 and 2012 have been important years in terms of legal regulations regarding the lubricants industry in Turkey. The regulations issued in order to prevent the use of non-fuel products as fuel has had direct impacts on lubricants industry. The regulations made since 2011 are discussed below in chronological order.

23 January 2011: A point scoring system began to be used in lubricants production after the Production Competency Evaluation system was initiated with the Capacity Criteria published by TOBB and the amendment made by EMRA on 10 August 2011 introduced “the requirement for lubricants licenses to include a submission of the capacity report to the Energy Market Regulatory Authority evidencing a minimum production competence point of 50 per cent”.

12 February 2011: “Communiqué Pertaining to Packaging and Marketing of Lubricants” issued by

Energy Market Regulatory Authority and published in the Official Gazette dated 12 February 2011 and numbered 27844 regulates the procedures in the lubricants industry from the production of products until they are offered into the market. The Communique was amended twice on 17 February 2011 and 23 December 2011. With the regulation made on 28 April 2011, the procedures and principles of production for different brands were specified.

As per “Communiqué Pertaining to Packaging and Marketing of Lubricants”, oil producers are liable to ensure that all the products supplied to the market, including exported products, conform to TSE standards. This obligation has brought about the necessity of modification/revision of approximately all lubricants standards. The modification and revision of the standards which began in 2011 is an ongoing process due to current requirements. Moreover, because of the constant technological developments in lubricants industry, these standards need to be revised continuously in accordance with the changes and developments in the world.

According to the Communiqué, in the case that a standard pertaining to the product being produced is amended, the certificate of conformity to the revised standard shall be issued for the product within six months at the latest.

With another amendment made in the Communiqué, it is a requirement to display certain information specified by the Authority (TSE standard number, typical properties, amount in kg or liter, Customs Tariff Statistical Position number) on the labels of the lubricants supplied to the market over 5 liters.

It is a requirement to submit the import, production, sales data and period-end stocks stating Customs Tariff Statistics Positions to Ministry of Finance Revenue Administration quarterly, in 35 days following the last day of each quarter. It is a legal obligation to obtain a Certified Public Accountant Report for the inspection of all import, production and sales activities and to keep the report to be submitted during inspections.

5 January 2012: Another problem that has arisen since 2008 is the tax loss and unfair profit caused by certain activities conducted within the scope of deferment/cancellation practice. As per the Excise

Tax Circular No.16 issued by Ministry of Finance Revenue Administration on 5 January 2012, it is a

requirement to authenticate the Customs Tariff Code, which must be displayed on the labels, delivery notes and invoices of the products to be supplied to the market, at the relevant units of Ministry of Customs and Trade (customs laboratories). However, because of high deferment rates and the difficulty of monitoring the implementation, the problem continued to grow.

25 February 2012: Because the inconsistencies between the taxes imposed on lubricants and preparations were being exploited, excise tax amounts of lubricants, base oil and preparations listed in sections 27 and 34 were equalized with the Council of Ministers Decree on 25 February 2012 and such exploitation was prevented to some extent. Moreover, although lubricants additives listed in section 38 were not used in such activities due to their high excise tax amounts, some items listed in section 38 which are not subject to excise tax were sold with “0” excise tax as lubricants additives.

12 June 2012: As the excessive amount of base oil import in 2011 (over 1 million tons) did not decrease in 2012, the sale of solvents and base oil for free circulation was prohibited at the bonded warehouses with the legislation issued by Ministry of Customs and Trade on 12 June 2012 in order to slow down base oil import.

17 August 2012: Import deposit imposed on non-fuel products was increased to 25% from 5% with the Excise Tax General Communique issued by T.R. Ministry of Finance on 17 August 2012.

27 August 2012: After the Prime Ministry Circular on Fight Against Fuel Smuggling issued on 27 August 2012 in order to prevent illegal activities carried out under the name of Number 10 Oil despite all the regulations, a new phase promising a complete solution to the problem has begun.

9 October 2012: Following the Prime Ministry Circular, amendment studies regarding the Petroleum

Market Law were initiated in order to prevent illegal fuel activities and a draft communique on the import of non-fuel products was published by EMRA. With the Council of Ministers Decree on 9

October 2012 and EXCISE TAX Communique issued by T.R. Ministry of Finance on 11 October 2012, deferment/cancellation practice was abolished and refund system was put into practice regarding the Special Consumption Tax.

With a Leading Case issued by the Supreme Court in October, it was decided that not only those who sell but also those who buy and use Number 10 Oil are responsible as well and this Leading Case had media coverage stating that it filled a loophole.

We hope that the lubricants industry, which has been undervalued because of illegal and illicit activities using base oils, will find its well-deserved place in Turkey as in the world after the legislations.

2016 Legislation Booklet released (In Turkish)
Any laws, regulations, announcements, notifications and decisions regarding the sector are all covered in the updated Legislation Booket issued by PETDER. You may access the Legislation Booklet via our website and also our smart-phone application.