ATR1, “House” Bills of Lading and Turkish Import Procedures

We recently completed a sea freight shipment consisting of one 40’ GP container which travelled from Canada to Turkey. Whilst organizing the initial contract and the shipment, three queries were raised which bear commenting on with specific reference to the issuance of an ATR1, “House” Bills of Lading and Turkish Import Procedures.

The first query was related to the concept that because the underlying contract was between a UK company and a Turkish company, an ATR1 could be issued. An ATR1 is a document which enables goods to qualify for tariff preference on imports and exports between the European Community (EC) and Turkey. Effectively, in some circumstances, goods can be imported without paying any duty. An ATR1 can only be issued for industrial products which are considered to be in free circulation in either the EC or Turkey.

Goods are deemed to be in free circulation when all import formalities have been completed and any customs duties or equivalent charges have been paid and not repaid in whole or in part. Therefore, goods imported under IPR (Inward Processing Relief) or as End Use goods are not eligible.

An ATR1 is a movement certificate, which means that it applies to the physical movement of the goods and not to the underlying contract. Therefore, since the physical shipment of the goods was from Canada direct to Turkey, no ATR1 could be issued because the goods were never cleared through any EU border into free circulation within the EU.

The problem could arise that if a contract has been signed and an ATR1 promised, then there is a very good legal argument for the exporter being responsible for the payment of the duty for the Turkish import. Therefore it should be part of a exporting company’s policy that there is no agreement to supply an ATR1 in a legal contract unless the exporting company can ensure that the goods involved are entitled to preference.

In issuing an ATR1, the exporter is making a declaration that their goods qualify as originating products. If this declaration is incorrect, then an offence under C&E Management Act 1979, Section 167 will have been committed and Community legislation allows for the collection of back taxes for a period of 3 years after the goods have been imported.

The second query concerned the Freight Forwarder’s insistence on only issuing “House” Bills of Lading with the names of the shipper and consignee, whilst the “Master” Bill of Lading was issued in the name of the Canadian Freight Forwarder and consigned to their Turkish agent.

An original Bill of Lading is a negotiable document. This means that whoever holds the Original Bill of Lading holds ownership of the goods. But the question arises that if a “Master” Bill of Lading is issued, showing the Freight Forwarder as the exporter, then who holds ownership of the goods? What legal rights does a “House” Bill of Lading provide to the actual exporter?

Most Freight Forwarder’s will specify their right to issue “House” Bills of Lading in their Terms and Conditions and by accepting these Terms and Conditions each exporter or importer (depending on who is responsible for the shipment) is accepting that “House” Bills of Lading can be issued. There are often circumstances where this facility from the Freight Forwarder ican be helpful. For example, if the exporter wishes to keep their supplier base secret from their customer base, then the facility of “House” Bills of Lading can come in very useful.

Nevertheless, if someone is concerned about “House” Bills of Lading being issued by their Freight Forwarder then they can either communicate these concerns to their Freight Forwarder right from the start and negotiate accordingly, or deal direct with a Shipping Line.

The third query arose when we tried to import the goods into Turkey. Only Turkish legal entities can import into Turkey i.e. any person, firm or organization who is registered for tax purposes in Turkey. Therefore, try to avoid DDU and DDP contracts with Turkish companies because they can be rather difficult to organize.

Any clearance agent who is contracted to clear the goods into Turkey must have a Power of Attorney issued by the Turkish importer that allows them to import on that importer’s behalf. There are probably waivers for courier shipments, but with sea freight and air freight shipments, a Power of Attorney must be issued and be in place before clearance can progress. In addition, there is a Turkish Customs procedure which states that if a clearance agent has completed a clearance procedure for a Turkish importer, they must invoice that Turkish importer for the clearance. The clearance cannot be invoiced to any other third party, either in Turkey or outside Turkey.

Import taxes (unless a valid ATR1 is supplied), Value Added Tax (VAT) and Special Consumption Tax (SCT) are all collected at the time of importation.

Interestingly enough, if the Turkish importer has not paid the value of the goods to the exporter before customs clearance has started, then an additional tax is charged by Turkish Customs which is not refundable. A tax of 3% is added to the CIF price of the import and then the duty and other taxes are calculated on this increased price. Therefore, the Turkish importer has to provide proof that they have paid for the goods before they import the goods into Turkey.

In addition, if there is a discrepancy in the tariff classification or the number, the weight or the valuation of the goods, in addition to all the existing duties, a penalty of threefold of all these duties and taxes can be charged as a fine. Therefore, it is really important that the exporter issues their documentation with care and accuracy. This should be a given with all exports, but it could be very costly to the Turkish importer if the exporter makes a documentary mistake.

In conclusion, only issue an ATR1 if the right conditions apply, ensure that if “House” Bills of Lading are issued for your shipments, it is with your agreement and an understanding of the reasons behind such an issue and that if your Turkish customer seems to be unnecessarily fussy about the description of goods, they actually have a very good reason.

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training.  She is based in the United Kingdom.  If you require any further assistance with the matters mentioned above, please do contact us by e-mail on or check out other international trade articles on the Point to Point Export Services website at

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