Turkey-EU Relations and Accession Negotiations Law 207, 25 December 2007

1. Turkey-EU Relations and Accession NegotiationsLaw 207, 25 December 2007 Highlights of the Session Association (Ankara) Agreement and the Additional Protocol 1/95 Decision on Customs Union Accession Partnership National Programme for the Adoption of the Acquis Communautaire Negotiating Framework 2007 Progress report Pınar Artıran, Lecturer in European & International Economic Law, Istanbul Bilgi University

2. Short history • The creation of the EEC: 1958 • Turkey’s first membership application to the EEC: July 1959 EEC’s response: Let’s establish an association for the time being until Turkey’s circumstances permit its accession. • Negotiations resulted in the signature of the Agreement Creating an Association between the Republic of Turkey and the European Economic Community: 12 September 1963. • The agreement - entered into force on 1 December 1964, - aimed at securing Turkey's full membership in the EEC through the establishment in three phases of a customs union which would serve as an instrument to bring about integration between the EEC and Turkey.

3. Association Agreement (Ankara Agreement) 1963First (Preparatory) stage • Short term goal: Establishment of a customs union Long-term consideration: Full membership of the then EEC. • Ankara Agreement Article 28: "as soon as the operation of the Agreement has advanced far enough to justify envisaging full acceptance by Turkey of the obligations arising out of the Treaty establishing the Community, the Contracting Parties shall examine the possibility of accession of Turkey to the Community". • Three stages of the association: 1. Preparatory stage 2. Transitional stage 3. Final stage Preparatory Stage (1964-1973):EEC granted unilateral concessions to Turkey in the form of agricultural tariff quotas and financial assistance, but Turkey was not required to make any reciprocal trade concessions.

4. Association Agreement3rd (Final) stage: Customs Union (Decision 1/95) • at the Association Council meeting in 1995 to create a customs union (excluding agriculture) starting on 1 January 1996. • In anticipation of the entry into force of the CUD, Turkey had already started the process of adoption of a wide range of EU trade and trade-related legislation, covering the external trade regime, competition policy, intellectual property and consumer protection. • In addition, the CUD required Turkey to implement: - the elimination of customs duties and charges having equivalent effect in mutual trade in industrial goods, by 1 January 1996; - the adoption of the EU's Common External Tariff (CET) against third country imports ofindustrial goods and the industrial component of processed agricultural goods, by 1 January 1996 and adoption of all of the preferential agreements concluded by the EU with third countries, by 1 January 2001;

5. Cont’d - elimination of quantitative restrictions or measures having equivalent effect in trade ofindustrial goods with EU, by 1 January 1996; - the approximation and implementation of the EU commercial policy (including externaltextiles) regulations, by 1 January 1996, - the adoption of EU competition rules, by 1 January 1996; - the incorporation into its legislation of the EU instrument relating to the removal of technical barriers to trade, by 1 January 2001; and - the provision of assurance of adequate and effective protection and enforcement of intellectual, industrial, and commercial property rights; adoption of most measures immediately, and on 1 January 1999 adopt patentability of pharmaceuticals, utilizing a transition period ending on 31 December 1999 under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

6. On the way to membership: Accession Negotiations • The Helsinki European Council of December 1999 granted the status of candidate country toTurkey. • The December 2004 Brussels European Council concluded that Turkey sufficiently fulfils the Copenhagen political criteria to open accession negotiations. (Copenhagen political criteria require: • stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities • the existence of a functioning market economy and the capacity to cope with competitive pressure and market forces within the Union; • the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union and the administrative capacity to effectively apply and implement the acquis) • Negotiations started on 3 October 2005 when the Council adopted a Negotiating Framework.

7. Negotiating FrameworkAdopted by the Council of the European Union on 12 October 2005 • Accession implies the acceptance of the acquis communautaire (rights and obligations attached to the Union systemand its institutional framework). • Furthermore, in addition to legislative alignment, accession implies timely and effective implementation of the acquis. • The acquis includes: - the content, principles and political objectives of the Treaties on which the Union is founded; - legislation and decisions adopted pursuant to the Treaties, and the case law of the Court of Justice; - other acts, legally binding or not, adopted within the Union framework, such as interinstitutional agreements, resolutions, statements, recommendations, guidelines; - joint actions, common positions, declarations, conclusions and other acts within the framework of the common foreign and security policy; - joint actions, joint positions, conventions signed, resolutions, statements and other acts agreed within the framework of justice and home affairs; - international agreements concluded by the Communities, the Communities jointly with their Member States, the Union, and those concluded by the Member States among themselves with regard to Union activities.

8. Cont’d • Economic and monetary union: Turkey will participate in EMU from accession as a Member Statewith a derogation and shall adopt the euro as its national currency following a Councildecision to this effect on the basis of an evaluation of its fulfilment of the necessaryconditions. The remaining acquis in this area fully applies from accession. • Freedom, justice and security: Membership of the EU implies that Turkey accepts in full on accession the entire acquis in this area, including the Schengen acquis. However, part of this acquis will only apply in Turkey following a Council decision to lift controls on persons at internal borders taken on the basis of the applicable Schengen evaluation of Turkey's readiness. • Environmental protection: • In all areas of the acquis, Turkey must bring its institutions, management capacity and administrative and judicial systems up to Union standards, both at national and regional level, with a view to implementing the acquis effectively or, as the case may be, being able to implement it effectively in good time before accession. At the general level, this requires a well-functioning and stable public administration built on an efficient and impartial civil service, and an independent and efficient judicial system.

9. Screening Process • The European Commission undertook a formal process of examination of the acquis, called screening: A process aimed at explaining the acquis to the Turkish authorities, at assessing the state of preparation of Turkey for opening negotiations in specific areas and obtaining preliminary indications of the issues that will most likely come up in the negotiations. • The Screening Process lasted about a year from October 20, 2005 until October 13, 2006. • For the purposes of screening and the subsequent negotiations, the acquis was brokendown into a number of chapters, each covering a specific policy area.

10. Negotiation Chapters • 1. Free movement of goods • 2. Freedom of movement for workers • 3. Right of establishment and freedom to provide services • 4. Free movement of capital • 5. Public procurement • 6. Company law • 7. Intellectual property law • 8. Competition policy • 9. Financial services • 10. Information society and media • 11. Agriculture and rural development • 12. Food safety, veterinary and phytosanitary policy • 13. Fisheries • 14. Transport policy • 15. Energy

11. Negotiation Chapters cont’d • 16. Taxation • 17. Economic and monetary policy • 18. Statistics • 19. Social policy and employment (including anti-discrimination and equal opportunities for women and men) • 20. Enterprise and industrial policy • 21. Trans-European networks • 22. Regional policy and coordination of structural instruments • 23. Judiciary and fundamental rights • 24. Justice, freedom and security • 25. Science and research • 26. Education and culture • 27. Environment • 28. Consumer and health protection • 29. Customs union • 30. External relations

12. Negotiation Chapters cont’d • 31. Foreign, security and defence policy • 32. Financial control • 33. Financial and budgetary provisions • 34. Institutions • 35. Other issues • Turkey then prepared a National Programme for Alignment with the Acquis.

13. Current State of Negotiations • Suspension of negotiations in December 2006 on 8 chapters due to restrictions practiced by Turkey against Cyprus: EC required that no chapter will be provisionally closed until Turkey fulfils its commitments under the additional protocol to the EU-Turkey association agreement. Chapter 1 Free movement of goods Chapter 3 Right of establishment and freedom to provide services Chapter 9 Financial services Chapter 11 Agriculture and rural development Chapter 13 Fisheries Chapter 14 Transport policy Chapter 29 Customs union Chapter 30 External relations • As of January 2007, the negotiations were back on the track on the chapters that were not suspended. • Accordingly,on 19 December 2007, the Accession Conference decided to open negotiations on two further new chapters: - Chapter 21: Trans-European Networks - Chapter 28: Consumer and Health Protection • Since the start of negotiations, 6 chapters have been opened, of which one has been provisionally closed (Science and Research Chapter)

14. Accession Partnership for Turkey as adopted by the Council • At its meeting in Luxembourg in December 1997, the European Council decided that the Accession Partnership would be the key feature of the enhanced pre-accession strategy, mobilizing all forms of assistance to the candidate countries within a single framework. • The first Accession Partnership for Turkey was adopted by the Council in March 2001. • A revised Accession Partnership was then presented by the Commission in March 2003 and adopted by the Council in May of the same year. (2nd AP) • In its recommendation of October 2004 the Commission proposed the adoption of a revised Accession Partnership in 2005. (3rd AP) • On 23 February 2006 the Council adopted the revised Accession Partnership for Turkey, based on the Commission's proposal presented on 9 November 2005. The partnerships contain short–term and medium–term priorities. • The Commission recently tabled a new proposal in order to update the Accession Partnership for Turkey (6.11.2007, COM (2007), 661)

15. Short-term priorities as laid down in the AP • Political dialogue • Democracy and the rule of law - Public administration - Civilian oversight of the security forces - Judicial system - Anti-corruption policy • Human rights and the protection of minorities - Observance of international human rights law - European Court of Human Rights - Promotion and enforcement of human rights - Civil and political rights Prevention of torture and ill treatment Access to justice Freedom of expression Freedom of assembly and association Civil society organisations Freedom of religion

16. Short-term priorities cont’d • Economic and Social Rights - Women’s rights - Children’s rights - Labour rights and trade unions - Anti-discrimination policies • Minority rights, cultural rights and protection of minorities - Cultural rights - Situation in the East and Southeast - Internally displaced persons • Regional issues and international obligations - Cyprus - Peaceful settlement of border disputes • Economic criteria • Ability to assume the obligations of membership Tasks to be performed by Turkey in the areas of 32 negotiation chapters are laid down.

17. Medium-term priorities • Economic criteria - Complete the privatisation programme. - Ensure the sustainability of public finance. - Continue to improve the general level of education and health, payingparticular attentionto the younger generation and women. - Upgrade the country's infrastructure, in particular in energy and transport, in order tostrengthen the competitiveness of the economy at large. • Ability to assume the obligations of membership • Ch 2: Free movement of workers • Ch 3: Right of establishment and freedom to provide services • Ch 5: Public Procurement • Ch 6: Company Law • Ch 7: Intellectual Property Law • Ch 8: Competition Policy • Ch 10: Information Society and Media • Ch 11: Agriculture and rural development • Ch 12: Food safety, veterinary and phytosanitary policy • Ch 13: Fisheries

18. Medium-term priorities cont’d • Ch 14: Transport policy • Ch 15: Energy • Ch 16: Taxation • Ch 18: Statistics • Ch 19: Social policy and employment • Ch 21: Trans-European networks • Ch 22: Regional policy and coordination of structural policy instruments • Ch 24: Justice, freedom and security • Ch 27: Environment • Ch 28: Consumer and health protection • Ch 29: Customs union • Ch 32: Financial control

19. Control mechanisms over the candidate’s performance • Conditionality: Community assistance for financing projects through the pre-accession instruments isconditional on the respect by Turkey of its commitments under the EC-Turkey Agreements,including Customs Union Decision 1/95 and other decisions, further concrete steps towardssatisfying effectively the Copenhagen criteria and, in particular, progress in meeting thespecific priorities of this revised Accession Partnership. • Monitoring: The implementation of the Accession Partnership shall be examined using the mechanismsestablished under the Association Agreement as appropriate and through the Commission’sprogress reports. The Association Agreement sub-committees provide the possibility to review implementationof the Accession Partnership priorities and progress as regards legal approximation,implementation and enforcement. The Association Committee discusses overalldevelopments, progress and problems in meeting the Accession Partnership priorities as wellas more specific issues referred to it by the sub-committees.

20. Turkey 2007 Progress Report by the EC Commission (6.11.2007) • The report: – describes the relations between Turkey and the Union; – analyses Turkey’s compliance with political criteria for membership; – analyses Turkey’s compliance with the economic criteria for membership; – reviews Turkey's capacity to assume the obligations of membership, i.e., the acquis communautaire. • ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP (Turkey’s legislative and administrative capacity to implement the acquis) 1. Ch 1: Free movement of goods Some progress can be reported regarding alignment on general principlesapplicable to freemovement of goods. As regards horizontal measures, progress can be reported in the area of standardisationThe Turkish Standards Institute (TSE) continued adopting EN standards of the EuropeanCommittee for Standardisation (CEN), the European Committee for Electro-technicalStandardisation (CENELEC) and the European Telecommunications Standards Institute(ETSI). More than 90% of EN standards are now adopted.

21. 2007 Progress Report cont’d In terms of conformity assessment, significant progress was achieved in the area of NotifiedBodies. Overall, progress is reported in areas such as accreditation, standardisation and conformityassessment. The overall system required for implementing the EU technical legislation is inplace, including the operation of Turkish Notified Bodies in some sectors. There was furtherprogress in the area of market surveillance. However, the extent and coordination of marketsurveillance activities remain limited considering the size of the country. Technical barriers totrade remain in non-harmonised areas and in areas covered under the old approach legislation. There is no progress on mutual recognition and licensing requirements. The level ofalignment is advanced in most areas, in particular concerning general principles, horizontalprovisions, new approach, and old approach. Alignment is more limited for notificationprocedures.

22. 2007 Progress Report cont’d 2. Ch 2: Freedom of movement for workers With regard to access to the labour market, new legislation on work permits for foreignnationals makes the procedure for obtaining such permits easier and exempts certainprofessionals, including those working for national and international projects, from therequirement to obtain work permits. Overall, limited progress has been achieved. Alignment is at an early stage. Theadministrative capacity needs to be strengthened further. 3. Ch 9: Financial services Good progress has been made in the area of banks and financial conglomerates. A newimplementing regulation on bank and credit cards has entered into force. This has improvedthe prudential standards and consumer protection. The Banking Regulatory and SupervisoryAuthority (BRSA) adopted implementing regulations to the Banking Law. Overall, progress has been made in banking, in particular with the adoption of the implementingregulations related to the Banking Law. Turkey also made good progress in the area ofinsurance and occupational pensions, in particular with the adoption of the new InsuranceSupervision Law. Progress has been recorded in the field of securities markets and investmentservices. Alignment is not complete, in particular with regard to undertakings for collectiveinvestment in transferable securities (UCITS).

23. 2007 Progress Report cont’d 4. Ch 12: Food safety, veterinary and phytosanitary policy Concerning general foodstuffs policy, Turkey has established the national Rapid Alert Systemfor Food and Feed in order to ensure proper monitoring of food safety alerts. The networkbetween the central and local units wasstrengthened by improving the IT infrastructure.However, the number of alerts remains high and they often relate to the same companies,which confirms the importance of continuing improvements of a follow-up to alerts. Overall, limited progress has been made concerning food safety, veterinary and phytosanitarypolicies. Transposition and implementation of the acquis in these fields require significantefforts to complete compliance. Moreover, strengthening administrative capacity at centraland local levels is vital in order to carry out the tasks required under this part of the acquis. 5. Ch 17: Economic and monetary policy Progress can be reported in the area of monetary policy. Turkey adopted new regulationsintroducing new internal audit standards for the Central Bank of Turkey (CBT). Progress canalso be reported as regards the prohibition of privileged access by the public sector tofinancial institutions, in particular through the adoption of the new Insurance Law.

24. 2007 Progress Report cont’d Overall, progress has been made in the area of economic and monetary policy. However, someimportant issues are outstanding, notably ensuring full central bank independence. 6. Ch 19: Employment and social policy There is no progress to report in the area of labour law. Shortcomings in the transposition ofa number of directives remain; these include the limited scope of application of the LabourLaw. On administrative capacity, recruitment of additional qualified personnel by theMinistry of Labour and Social Security and its affiliated institutions continued. Efforts to reduce child labour continued.As regards health and safety at work, Turkey has attained a good degree of alignment withthe acquis.However, shortcomings remain. Overall, Turkey has made limited progress on alignment with the acquis. Ensuring full tradeunion rights and combating undeclared work require particular attention.Genderequality should be improved in all economic and social life.

25. 2007 Progress Report cont’d 7. Ch 23: Judiciary and fundamental rights - There has been no progress either on the composition of the High Council of Judges andProsecutors or on the reporting lines of judicial inspectors. - In relation to the professionalism and competence of the judiciary, the Ministry of Justice andthe Justice Academy have organised training on a wide range of issues for judges, prosecutorsand court staff. - In terms of the efficiency of the judiciary, judges have reported positive results of the NationalJudicial Network Project (UYAP) on court proceedings. With the integration of a lawyers‘portal into the network in March, lawyers are now in a position to follow their on-going courtcases electronically, file new lawsuits, send documents related with their cases to the courtsand deposit trial fees and charges. - There were no significant developments in the area of judicial reform. - Limited progress can be reported in the area of anti-corruption. - As regards transparency in public administration, the use of the right of access to informationhas increased as a result of the amendments to the Law on Access to Information.

26. 2007 Progress Report cont’d • As regards fundamental rights, there has been limited legislative progress. - There have been no developments as regards the institutionsin charge of monitoring andpromoting human rights. These institutions, such as the Human Rights Presidency, lackindependence and resources. The Law on the establishment of the Ombudsman is still beforethe Constitutional Court following the veto by the President in November. - As regards the prohibition of torture and inhuman or degrading treatment or punishment,legislative safeguards continue to have positive effects. The downward trend in the number ofcases of torture and ill-treatment is confirmed. However, there continued to be reports oftorture and ill-treatment, especially before detention starts. Impunity remains an area ofconcern. - With regard to respect for private and family life and communications, amendments to theLaw on Police Duties and Authority in June 2007 authorise the law enforcement bodies totake fingerprints and pictures of persons applying for a drivers' licence, passport or a gunlicence. These data can be stored for up to 80 years. Turkey needs to align its legislation withthe Data Protection Directive and, in that context, to set up a fully independent data-protectionsupervisory authority.

27. 2007 Progress Report cont’d - Regarding freedom of thought, conscience and religion, a regulation adopted in Novemberlifts the requirement to fill in the religious affiliation in family registries. A delegationcomposed of high-level officials from various Ministries visited the religious leaders of thenon-Muslim communities in June in Istanbul. Following this visit, the Ministry of Interiorissued a Circular on freedom of religion of non-Muslim Turkish citizens,acknowledging theincrease in individual crimes against non-Muslim citizens and their places of worship andrequesting governors to take measures. However, problems encountered by the non-Muslimreligious communities and by Alevis continue to persist. - Regarding freedom of expression including freedom and pluralism of the media, theimplementation of certain provisions of the Turkish Criminal Code, in particular Article 301,has resulted in numerous prosecutions and, at times, convictions of people for the expressionof non-violent opinions on, among other things, Armenian and Kurdish issues, and the role ofthe military. - As regards freedom of assembly and association, including the right to form political parties,the right to establish trade unions, citizens have been able to exercise these rights withoutinterference by the authorities or the security forces in most cases. - With regard to right to education, the campaign to increase girls' enrolment in schools hascontinued.

28. 2007 Progress Report cont’d - With regard to gender equality and women's rights, and, in particular, domestic violence,amendments to the Law on the Protection of the Family adopted in April have included intothe scope of the law spouses living under separate roof and the workplace; also, they haveintroduced medical consultation or treatment in a health institution as a new measure that canbe enforced by courts on violent family members. Further, the law stipulates that no fees willbe charged for applications and execution of court decisions alleviating, thereby, the financialburden of legal proceedings for victims. - As regards the rights of the child, a child labour survey revealed a decrease in the proportionof working children, from 10.3% in 1999 to 5.9% in 2006. The gender gap in primaryeducation decreased to 4.6% in the 2006-2007 school year from 5% in the 2005-2006 schoolyear. The Ministry of Labour and Social Security has started to develop a national strategyagainst child poverty while a regulation implementing the Law on Child Protection hasentered into force. - With regard to liberty and securityas well as the right to a fair trial, there has been noprogress on the establishment of an organised, professional interpretation system in courts.Interpreters are not included on the list of expert witnesses and are often summoned amongcourt auxiliary staff.

29. 2007 Progress Report cont’d - Turkey's position with regard to minority rights and cultural rightshas not changed. Noprogress can be reported with respect to alignment of Turkish practices with internationalstandards. Overall: As regards the judiciary, some progress can be reported, in particular, on its efficiency.However, concerns remain regarding its independence and impartiality. There is no overallNational Reform Strategy for the Judiciary or a plan to implement it. As regards corruption, little progress has been made in developing a comprehensive anticorruptionstrategy and strengthening the legislative framework. There is still no overallstrategy or action plan to prevent and fight corruption. As regards fundamental rights, there has been limited progress in legislation and in practice.No major issue has been addressed and significant problems persist. Finally, the atmospherein the country in particular as regards issues related to minorities and religion has not beenconducive to the full respect of fundamental rights and might de facto restrict their exercise.

30. 2007 Progress Report cont’d 8. Ch 26: Education and Culture - Over the reporting period good progress has been made in the area of education, trainingand youth. Turkey has continued its successful participation in the Community's Leonardo daVinci, Socrates, and Youth programmes, and ensured smooth transition with the successorprogrammes Lifelong Learning and Youth in Action, for which a Memorandum ofUnderstanding was concluded. In 2006, the Turkish National Agency contracted 98% offunds allocated for projects under the three Community Programmes, involving more than18,000 Turkish participants. To increase the number of potential beneficiaries, Turkey hasprovided supplementary funds for Erasmus students and increased its financial contribution tothe Lifelong Learning and Youth in Action Programmes. - In the area of culture, Turkey signed an agreement to participate in the new Culture Programme (2007-2013). Turkey has signed but not yet ratified the UNESCO Convention onthe Protection and Promotion of the Diversity of Cultural Expressions. Overall, there has been good progress in the area of education, training, youth and culture. Turkeywill need to continue alignment with the Lisbon strategies.

31. 2007 Progress Report cont’d 9. Ch 27: Environment - A national environmental approximation strategy (UCES) was adopted by the High PlanningCouncil. It includes a plan for the transposition,implementation and enforcement of the EUenvironmental acquis, as well as an estimation of related costs. - As regards air quality, limited progress can be reported. Rules on control of fuel imports withregard to environmental protection were adopted. The network of monitoring stations wasexpanded. However, transposition of the air quality framework legislation and relateddirectives is not complete. - Some progress can be reported concerning the alignment with the waste management acquis. A regulation on waste tyres and a circular on the control of waste imports were adopted. An amendment to the packaging implementing regulation was adopted. Alignment in this area is well advanced. Overall, Turkey has made substantial progress in strengthening the administrative capacity at central level. However, limited progress can be reported on horizontal legislation, air quality, chemicals, noise and waste. Turkey made no progress in the area of industrial pollution and risk management. The overall level of transposition of the environmental acquis is low.

32. 2007 Progress Report cont’d 10. Ch 28: Consumer and Health Protection - There has been some progress in the field of consumer protection. With regard toadministrative capacity, the General Directorate for Protection of Consumer and Competitionof the Ministry of Industry and Trade improved its on-line services. Staff training was carriedout. However, the implementation of the decisions of the Consumer Council, as well as thenumber of legally qualified staff members is lagging behind. - No particular progress was made in the field of product-safety related issues. However, legalalignment is advanced. - In the area of non-safety related issues, there has been some progress. A new regulationobliges electricity distribution companies to inform consumers 48 hours before possibleelectricity cuts. The regulation also provides for compensation. Turkey further aligned itslegislation in the area of package travel. Preparations in this area are on track. - In the area of tobacco, legal alignment is advanced. A national tobacco control programmeentered into force and a national tobacco control committee was established. However, noprogress was made on further aligning tobacco product legislation, in particular on high taryields and oral tobacco, and tobacco advertising.

33. 2007 Progress Report cont’d Overall, Turkey made some progress in the area of consumer and health protection. Turkey hasreached a satisfactory level of alignment. However, further legal alignment is needed in thefields of blood, tissues and cells and to a lesser extend in tobacco legislation andcommunicable diseases. Implementation, especially in the area of consumer protection, islagging behind. The consumer movement in Turkey remained weak.