TURKEY: An Introduction to Shipping

Esenyel&Partners, General Overview, Turkey: Shipping

In addition to their geopolitical and strategical importance, the Turkish Straits are highly congested with international maritime traffic, due to being the only waterway between the Black Sea and the Mediterranean without any alternative. In the last year nearly 40,000 ships in total have passed through the İstanbul Strait.

Turkey's geographical location alone makes for a strong maritime industry. The shipyards cater to administrative and private customers worldwide. Also, since Turkey links Europe and Asia, suppliers of all sectors consider this place a clever option to conduct their trade. The shipbuilding and repair industry is considered to be one of the most promising industrial sectors in Turkey, and there have been significant developments in this market in recent years.

The Aliağa region, located in İzmir province, is in leading position for ship breaking and recyling activities with 22 operative facilities. The ship recycling industry is a part of the maritime sector that finds itself between the withdrawal of ships which have completed their economic lives and their replacement with ships with new technologies, environmentally friendly and with high operating efficiency.

The total number of yachts in the Mediterranean basin has reached approximately 1 million today, and there are significant increase every year. France, Spain and Italy make up 75% of the Mediterranean basin marina capacities. However, the restriction on new investment locations in these countries, the pollution of the Western Mediterranean and the increase in operator fees made the Eastern Mediterranean countries attractive. As of August 2021, there are a total of 649 boat manufacturing sites, 152 of which are on the Turkish coast, and a total of 151 boatyards, 27 of which are on the Turkish coast. 38 of these structures have tourism operation or investment certificates. Our yacht mooring capacity in the sea of the coastal structures with tourism operation certificate is 15,150.

From the legal perspective, The Turkish Commercial Code 1957 has recently been amended by a New Turkish Commercial Code (new TCC) which came into force on 1 July 2012. The language of the new TCC is simplified compared to the previous one. In the past many of the international maritime conventions to which Turkey is a signatory had been incorporated into its domestic legislation by the German Commercial Code (GCC) which formed part of the old TCC. The new TCC was introduced to address general dissatisfaction with the lack of uniformity in the previous legislation. In the case of maritime casualties such as collisions, grounding and other casualties, the TCC is the primary legal source followed by International Maritime Conventions that Turkey is a signatory of.

The Turkish Commercial Code includes the Maritime Law, which is very important for foreign investors interested in doing business in this field in Turkey. This law regulates major issues, such as: buying and selling ships, the rights of a vessel's owner, how to use the Turkish flag, the owner’s liabilities etc.

In the Commercial Code, a foreign investor may find the regulations related to loading, discharging, the transportation of goods and the accidents that may happen at sea. The accidents are also regulated by the international legislations. The Turkish authorities are represented by the Coastal Safety and Vessel Salvage Management, an entity that is present in all Turkey's ports and its waters.

To protect the waters, the Turkish Environmental Code is used as the main law to prevent pollution linked to shipping activities. Under this code, significant fines are imposed on ships that contribute to pollution by releasing petroleum, chemicals, garbage and sewage and other environmentally harmful materials into the Turkish waters. Turkey and the shipping sector also include International Environment Conventions as part of the regulations to protect the waters.

Regarding the COVID-19 pandemic, the Turkish authorities also took measures to ensure safety, especially since the Maritime Health Declaration issued in the middle of 2020 has been effective in the control of the spread of COVID-19, and to minimise its damage. One specific measure was the exemption to truck drivers and seamen to present PCR test and quarantine requirements put on others coming into the country, which has allowed all transactions in Turkish ports to be more effectively handled. Some of the health measures are still in place, including quarantine for positive crew members, PCR testing and other measures to ensure the safety of the work environment.

As international trade started to recover from the COVID-19 pandemic, the shipping sector in Turkey is expected to grow significantly in the post-pandemic years. The increased development of the digital logistic and the number of smart ports in Turkey are some evolutions to help boost back the industry.

As previously said, Turkey has a geographical advantage in the maritime industry, developments in the shipping sector throughout the country as well as legal and technical regulations are regularly updated by the authorities, and Turkey has the potential to be a central hub of the international maritime and shipping sector and to attract investors to invest in the country.