PETROLEUM MARKET LAW

Anasayfa » PETROLEUM MARKET LAW

PETROLEUM MARKET LAW

Law Number: 5015 Date of Enactment: 4/12/2003

Published in the Official Gazette: Dated:

:20/12/2003, Issue No.: 25322, Published in the Code: Group: 5 Volume :42

PART ONE

General Provisions

SECTION ONE

Objective, Scope, Definitions and Abbreviations Objective and scope

Article 1- The objective of this Law is to regulate the guidance, surveillance and supervision activities in order to ensure the transparent, non-discriminatory and stable performance of market activities pertaining to the delivery of petroleum supplied from domestic and foreign resources to consumers, directly or after processing, in a reliable, cost-effective manner within a competitive environment.

This Law covers the regulation, guidance, surveillance and supervision procedures to ensure and improve the sound and regular operation of the markets pertaining to petroleum.

The activities of the Turkish Armed Forces within the scope of this Law and which are carried out directly via equipment and facilities under the ownership of the same and the activities which are carried out via equipment and facilities under the ownership of the Ministry of National Defense Liquid Fuel Transport and NATO POL Facilities Operation Directorate within the scope of Law No. 4636 dated 5 April 2001 on the establishment and duties of the same, shall not be subject to the provisions of this Law. (Supplementary sentence as added by: article 91 of the Law No. 6586 of 22/1/2015) However, the procedures, principles and exemptions for obtaining a license shall be determined by the Authority where the activities of the Directorate within Law No. 4636 are associated with storage and transmission activities.

(Supplementary paragraph as added by: article 34 of the Law No. 6455 of 28/3/2013) The liquidation procedures by the Ministry of Customs and Trade, provincial special administrations and revenue offices shall not be subject to the provisions of this Law.

Definitions and abbreviations (1)

Article 2- The terms used in this Law are defined as follows:

Ministry: Ministry of Energy and Natural Resources,
Authority: Energy Market Regulatory Authority,
Board: Energy Market Regulatory Board,
AFRA: The valuation of average freight rate published in London,
Liquid fuel: Benzine types, naphtha (except for raw material and solvent naphtha) gas oil, jet fuel, diesel oil and fuel oil types and other products determined by the Authority,
Liquid fuel Station: Places established in conformity with the relevant legislation (technical, quality, safety) by distributors or vendors who have signed exclusive purchase contracts with those distributors, and are operated under the registered trademark of a liquid fuel distributor or distributors from a different sub- title, and are specifically serving to meet the liquid fuel, lube oil, auto-gas, LPG needs of the vehicles, offering the facilities of cleaning, facultative maintenance and other basic needs of the customers except for LPG in bottles,
Products that can be blended with liquid fuel: Products which are or shall be subject to an equivalent tax as liquid fuel, such as methyl tarsier butyl ether (MTBE), ethanol (except for those produced artificially from domestic agricultural products and bio-diesel),
Asphalt: The product used for ground coating,

Vendor: Real or legal persons having the necessary equipment to perform vendor activities,
Vendor activity: The process of authorizing real or legal persons to deliver liquid fuel to consumers by liquid fuel distribution companies under a contract of the mutual liabilities, including a feasibility study,
Distribution undertaking: A capital company authorized to distribute liquid fuel and may perform storage, transportation, bunker and lube oil production activities provided that they are included in their licenses,
Distribution: All liquid fuel sale and transportation activities to vendors including wholesale and transportation of liquid fuel to eligible consumers,

(1) The paragraph numbers contained in this article were re-numerated by article 1 of the Law No. 5576 of 25/1/2007.

Feasibility: The report that includes the analysis of the investments to be made and is enclosed to the vendor activity contract but shall not necessarily be submitted to the Authority,
Crude Oil: Natural hydrocarbons produced from the ground in a liquid state,
Bunker: Liquid fuel and lube oil supplied to sea vehicles in and/or next to territorial waters or to domestic or foreign airplanes at airports, whether taxed or not,
Bunker Delivery Company and Vendor: License holding capital companies and vendors which supply bunker obtained domestically or from abroad to air and sea vehicles,
Transmission undertaking: A capital company that performs transmission activities,
Transmission: Transportation of petroleum through pipelines (except for the producers’ pipelines connected to the refinery or transmission grid and the pipelines within the facilities),
Processing: The procedures regarding the production of new products from petroleum and other chemical materials, except for the production of lube oil, and/or the alteration of the quality or quantity of products,
Processing undertaking: Capital company been granted the right to perform processing activities due to its license,
(As added by: article 1 of the Law No. 5576 of 25/1/2007; As amended by: article 35 of the Law No. 6455 of 28/3/2013) Illegal Petroleum: Petroleum and petroleum products which are considered as being illegal in the sense of Anti- Smuggling Law No. 5607 dated 21/3/2007,
Additive materials: Organic and inorganic materials that are aimed at improving the quality of liquid fuel products,
Kilometer limitation: The minimum distance between two liquid fuel stations on the same direction of public roads in the city or on high-ways that shall be determined by the regulation to be issued by the Board,
Malicious Intent: Any act or negligence causing loss, contamination, deterioration or misuse of petroleum while performing market activities,
Consumer: Real or legal persons utilizing petroleum,
Utilization: The consumption of petroleum only for personal and operational needs,
License: The certificate granted to real or legal persons by the Board indicating the permission to operate in the market as per this Law,
Licensed storage undertaking: A capital company performing licensed storage activities,
Licensed storage: Storage of the petroleum under the ownership of third parties to meet the stocking and operational requirements of those performing

market activities,

Lube oil producer: Real or legal persons performing lube oil production activities,
Lube oil: Natural or artificial materials turned into substances which reduce friction and/or abrasion between two moving and contacting surfaces or has cooling effect, upon addition of certain additives to base oil or to the materials processed with chemical synthesis method,
Special Process: Methods determined by the Authority pertaining to the transformation of the petroleum into another product,
Petroleum: Those defined in subparagraphs 5, 14 and 44 of this article,
Market activity: The import, export, refining, processing, storage, transmission, bunker delivery, transportation, distribution and vendor activity of petroleum,
Refining: The process of producing new products from crude oil,
Refining undertaking: A capital company which has been granted the right to perform refining and petroleum trade activities due to its license,
Eligible Consumer: The licensed consumer whose annual petroleum consumption is more than the amount determined by the Authority on product base, being no less than 5.000 tones in fuel-oil, heating fuel and diesel annually,
Solvent: Petroleum products consumed in chemical and industrial facilities and/or used for the production of new chemical and industrial products,
(As amended by: article 27 of the Law No. 5784 of 9/7/2008) Transportation: Transportation activities performed for the delivery of crude oil and fuel oil by coastal shipping and railway means,
Transportation undertaking: Real or legal persons performing transportation activities,
Unsafe Act: An act or negligence in the conduct of any market activity that causes or is likely to cause the death, disability or sickness of a person that is lawfully at the place or within the vicinity where market activity is performed or that causes or is likely to cause environmental pollution, ⁽¹⁾
(Supplementary paragraph as added by: article 1 of the Law No. 5576 of 25/1/2007) Technical arrangement: all kinds of arrangements, including administrative provisions that are required to be observed, which cover any or several issues related with standards, measurements, characteristics, processing and production methods, related terminology, symbols, packaging, marking, labeling and conformity evaluation process regarding petroleum and mineral oil,
Transit transportation: Transportation of petroleum from abroad to another country through Turkey via road and marine transportation,
National marker: Additive to be added to the liquid fuel at the refinery exit point or at customs entry point,
Production: The production, pre-processing and transportation via pipelines to storages within or in the vicinity of the field, transmission line or to the refinery or storage of petroleum,
Product: Any hydrocarbon of product or by-product produced from crude oil and/or crude oil products via physical and chemical processes or refining and other methods.
The word “injury” contained in this subparagraph was amended as “disability” by article 1 of the Law No. 6462 of 25/4/2013.

SECTION TWO

Principles and Procedures that Licenses shall be subject to, and Basic Right and Liabilities of the Licensees

Principles and Procedures that licenses shall be subject to

Article 3- Holding a license is obligatory for the following petroleum activities:

Performing refining, processing, lube oil production, storage, transmission, eligible consumer and bunker activities and to establish and/or operate facilities for the performance of aforesaid activities,
Performing liquid fuel distribution, transportation and vendor

The Authority may impose exemptions for holding licenses for transmission and processing activities in line with the principles and criteria to be developed. Licenses shall not be granted based on commitments.

The evaluation of license applications shall be concluded and notified in accordance with the provisions of article 3 and other aspects to be decided by the Authority no later than 60 days. The justifications for the rejection of applications shall also be notified.

In accordance with this Law, the process of granting, updating and temporarily suspending or canceling the licenses shall be undertaken by the Authority. In granting licenses, the technology, quality, safety and sustainability of the enterprise and service shall be taken into account with respect to market entry, and no limitations shall be placed on quantities such as the number of vendors or storage capacity (except for operation stock capacity). (Supplementary sentence as added by: article 92 of the Law No. 6586 of 22/1/2015) It is not required to be a stock corporation for obtaining a license where the activities of Ministry of National Defense Fuel Supply and NATO POL Facilities Operating Agency within the framework of Law No. 4636 are associated with storage and transmission activities. Licenses shall not be granted basing on commitments.

(Supplementary paragraph as added by: article 36 of the Law No. 6455 of 28/3/2013) Those condemned with a final imprisonment sentence due to their acts against Law No. 5607 shall not be granted a license. Where the licensee is a legal person, the shareholders having more than 10% of the shares in the legal personality as from the date of offense, resigned or active chairperson and members of the executive board and those authorized to represent and bind shall not be given a license and those persons are not entitled to directly have any share in the legal personalities applying for a license.

In the approval or rejection of the applications by the Authority, the conformity of the applications with terms and conditions stipulated in the legislation shall be taken into account.

Private law legal persons to perform the activities specified within the scope of a license shall be subject to the provisions of Turkish Commercial Code No. 6762 dated 29.06.1956. Private law legal persons that are capital companies as per the legislation of foreign countries, and performing market activities in Turkey shall be deemed settled in Turkey with regards to their activities in Turkey according to the legislation on the protection of value of Turkish Lira.

The licenses shall be issued in accordance with the aforesaid activity topics. Other sub-topics determined by the Authority shall also be specified in the licenses. The license shall be granted in the name of the real or legal persons granted the right to perform the activity written on it. Beside the activity type, the license shall also include information about the type and geographical position of facility,

technology and quantities required to perform the activity.

The Authority, in line with the powers vested in it by this Law, shall be authorized to enact regulations on the following:

The scope of the activities and/or operations requiring licenses,
The rights and liabilities as per the license,
Limitations on activities within the scope of the license,
Determination of special terms and conditions regarding the performance of the

The activities that require a modification in issues appearing on the license

shall not be performed unless they are approved and noted on the license by the Authority.

The following procedures, principles and matters pertaining to licenses shall be regulated by the regulations to be issued by the Authority:

Procedures for application, evaluation, and granting of licenses and their duration, modification, fees, termination and extension,
Classification terms for licenses which are deemed adequate for classification and their minimum size according to the class,
Processes for class changes in licenses which are subject to modification and classification,
Minimum qualifications to be sought and minimum assets to be under the ownership of the related parties,
Necessary records to be kept, registration methods and notification liabilities,
Sub-titles of activities and their definitions,
Issues regarding protection of life and property of public and consumers’ rights,
Subjects to be included in the license,
Guidance, surveillance, audit and related issues of the market activities whether they are within the scope of the license or not.

Licensees or consumers shall be able to construct and/or operate any petroleum storage facility or mechanism, except for licensed storages, provided that the provisions of this Law are reserved and that all necessary official procedures are completed in accordance with the related legislation.

Basic rights and liabilities of licensees

Article 4- The license shall convey the rights to the holder to perform activities included in the license and to enter into commitments on these matters.

The rights conveyed by the license shall be utilized provided that the specifics noted in this Law, related legislation and license, are fulfilled.

Those who perform market activities should avoid meticulously any kind of activity that would result in malicious intent or unsafe activities, take necessary measures to prevent their occurrence and eliminate any undesirable situations as soon as possible. Those who perform activities as per this Law, shall be obliged to:

Act in accordance with the commercial and technical legislation,
Take necessary measures to prevent environmental risks,
In case a condition arises that seriously threatens or adversely affects the security of life, property and environment of the public and their own facilities and activities, notify the public authorities and those related parties who might be adversely affected of such threat and also notify the Authority of the nature and dimensions of the threat and the measures being taken to prevent such threat,
Insure the facilities and/or activities that are in the scope of compulsory insurance liability,
Compensate any loss or damage suffered by third parties or the environment as a result of their operations,
Make notifications in compliance with the procedures and principles determined by the Authority as per paragraph 1 of article 14,
Submit the required information, documents and samples, sign the minutes and allow officials to conduct on-site investigation of the facilities when requested by the Authority as per paragraph 3 of article 14 of this Law,
Submit the copies of standard contracts pertaining to their main field of activity and notify the Authority of the modifications to be made on them before implementing such modifications,
Supply liquid fuel in market operations in accordance with the technical standards to be determined by the Board,
Meet demands on non-discriminatory basis except for the capacity restrictions on transmission and storage,

Grant equal rights and liabilities to equal receivers (categories) and not stipulate different terms and conditions,
(Supplementary paragraph as added by: article 37 of the Law No. 6455 of 28/3/2013) Not keep immobile or mobile tanks, mechanism or equipment contrary to the principles in the documents constituting a basis for the license in a way to acquire, sell illegal liquid fuel or false marker or to associate them with a market

SECTION THREE

License Types and Restrictions on Activities License Types

Refining undertaking

Article 5- Refining undertaking licensees shall also be able to perform the activities specified below in addition to the activities defined in article 9:

Provided that it is registered in the license, processing and storage activities within the facility or in the vicinity, and transportation activities to other facilities in the vicinity via pipelines,
Liquid fuel distribution activities via its distribution

The refining undertaking licensee should offer, on category basis, the same conditions to those demanding liquid fuel from himself as he does to his own distribution company.

The production and delivery of liquid fuel and other products needed for national security shall have priority. Refining undertakings shall be obliged to provide and protect the production capacity of tactical liquid fuels utilized by Turkish Armed Forces, in case such product is demanded.

(Supplementary paragraph as added by: article 38 of the Law No. 6455 of 28/3/2013.) Refining undertaking licensees shall be obliged to have the domestic and foreign sales tanks as well as crude oil, by-product, product-excluding liquid fuel- and liquid fuel tanks in their facilities registered in their licenses and shall be obliged to communicate to the Authority the information about utilization of the tanks. The principles and procedures regarding implementation of this article shall be determined in a regulation to be issued by the Authority after receipt of the relevant opinions to be delivered by the Ministry of Energy and Natural Resources, the Ministry of Customs and Trade, the Ministry of Interior and the Revenue Administration.

Transportation, processing, storage, transmission, lube oil production, eligible consumer, bunker delivery company and bunker vendor

Article 6- The Authority shall set forth the evaluation criteria to be applied in granting licenses for performing the activities defined in sub-paragraphs (16), (18), (19), (28), (29), (36) and (38) of paragraph 1 of article 2 and technical and financial provisions necessary for granting such licenses.

Distribution

Article 7- Distribution licensees shall have the right to distribute products defined as liquid fuel.

Distribution licensees shall also be able to perform transportation activities via pipelines to the facilities within the vicinity of storage facilities and liquid fuel wholesale activity to eligible consumers, besides liquid fuel distribution to the stations of vendors under their ownership or to be established by contracts. They shall not be able to distribute to vendors of other liquid fuel distributors.

Distribution undertakings shall be obligated to make annual marketing projections and submit them to the Authority with details in February of each year. They shall also be obligated to evaluate the realization of their projections quarterly every year and submit such evaluation to the Authority in January, April, July and October and provide explanations for an increase or decrease of more than 10% in their projections. Distribution undertakings shall establish vendors with contracts as defined in subparagraphs (10) and (13) of paragraph 1 of article 2. In case the contract is not renewed for the continuation of the vendor activity, the distribution undertaking shall meet the supply need of the vendor until the expiration of the contract term. At the end

of the contract term, the vendor shall continue its activity in a way to make it evident that it markets the products of its newly contracted distribution undertaking, and remove all the indications regarding the former distribution undertaking within one month at the latest.

The sale of distribution undertakings made through stations under their ownership shall not exceed 15% of the distributor’s total domestic market share. The domestic market share of the distribution undertaking shall not exceed 45% of the total domestic market. Distribution undertaking shall not grant subsidies to stations under their ownership or treat them differently from vendor stations.

(Supplementary paragraph as added by: article 2 of the Law No. 5576 of 25/1/2007; The sixth paragraph as amended by: article 39 of the Law No. 6455 of 28/3/2013) Distribution undertaking licensees shall be obliged to establish and implement a monitoring system that also covers the technological methods to prevent sale of illegal petroleum at its vendors in conformity with the principles specified by the Authority. The distribution undertaking licensee shall allow the access of the Authority to the system. The Authority shall allow the direct system access of the Ministry of Science, Industry and Technology, the Ministry of Customs and Trade, the Ministry of Interior, the Ministry of Finance, the Ministry of Transportation, Maritime Affairs and Communication and the other relevant public institutions and organizations to the extent the scope of their responsibility requires. The Authority shall also provide the information and documents needed by the aforementioned institutions and organizations to the extent the scope of their responsibility requires. The distribution undertaking shall be charged with an administrative fine in an amount referred to in article 19 where it is determined that the related distribution undertaking does not establish the mentioned system or could not ensure the audit in accordance with the procedures and principles determined by the Authority. Distribution undertaking licensees are not entitled to supply liquid fuel to the vendors found out not to have established a vendor audit system or the established system of which is found out not to be in accordance with the regulations by the Authority.

Distribution undertakings shall be obliged to carry out an efficient monitoring regarding the quality control of the activities performed under their registered trademarks, and notify the Authority of the cancellations of the vendor contracts with their justifications. Technical, safety, environmental and similar criteria related to the facilities and the equipment to be established for the liquid fuel distribution shall be determined by a regulation to be issued by the Authority.

Vendors

Article 8- The arrangements (technical, safety, capacity, environment etc.) regarding vendor licenses shall be made by the Authority. Vendors shall perform vendor activities according to the exclusive purchase contracts to be entered into with their distribution undertakings.

Vendors shall have the following obligations during the license period:

Not to take the delivery of liquid fuel from other distribution undertakings and their vendors other than the liquid fuel distribution undertaking whom they are the vendors of,
Not to add products that could be added for adulteration and/or for fraud to liquid fuel and keep such material in their

Upon notifying the Authority, vendors and distribution undertakings shall commence operating liquid fuel stations that are established according to their licenses. Liquid fuel stations shall be able to sell liquid fuel except LPG via tankers and village pumps for the requirements of agriculture sector by taking necessary measures.

The Board shall be able to establish vendor categories according to technical and economic criteria. In such case, vendor licenses shall be prepared in accordance with their categories. Distances between liquid fuel and LPG stations on the same direction shall be regulated by a regulation to be issued by the Board and shall be effective on 1.1.2005, being no less than 10 km. on highways and 1 km. within the city.

Restrictions of activities

Article 9- Suppliers of crude oil and liquid fuel from foreign countries shall hold a

license of refining undertaking, distribution undertaking or bunker delivery company. Producers producing crude oil in Turkey shall be able to import crude oil at an amount to blend with the low gravity domestic crude oil. Imports of crude oil and liquid fuel shall be made at the authorized customs administrations having the necessary equipment to perform specific technical and quantity measurements. The import to be made by distribution undertakings shall be limited with the liquid fuels registered in the sub-title of the license of the related party and can be made upon the notification to the Authority of its compliance with the marketing projection submitted to the Authority together with vendor information. Liquid fuel trade between distribution undertakings shall be subject to the Board’s permission. Crude oil trade within the country can only be performed by producers and refining undertakings and between each other.

Distribution undertakings should submit white product (petroleum, diesel oil) distribution projection at an amount of minimum 60,000 tons/year and vendor information to the Authority with their license applications and shall not deliver consumers liquid fuels that are not included in the sub-title of their licenses, except for the activities to be performed as a vendor of the distribution undertakings having a different license sub-title at the liquid fuel stations operated by vendors connected to their distribution network.

Bunker deliveries shall be performed by refining undertakings, distribution undertakings and bunker delivery companies. Those who perform bunker deliveries shall notify the Authority quarterly of the type and quantity of liquid fuel which is brought to customs entrepots and taken out with the purpose of supplying sea/air vehicles.

The activities, including the import and export of petroleum products excluding liquid fuel (solvent, lube oil and base oil, asphalt, solvent naphtha etc.), shall be performed as per the regulations to be issued by the Authority.

In the event that the product produced as a by-product at industrial facilities is used in a liquid fuel activity within the country, with the provision of notifying the Authority, the ones compliant with the technical regulations shall be delivered to distribution undertakings and the ones which are not compliant shall be delivered to refineries on the condition that the refineries’ approval is taken and an agreement is reached. Information regarding actual production and export shall be submitted to the Authority every month in the event that the products not delivered to refineries are exported.

Liquid fuels that are not in compliance with the technical regulations set forth in subparagraph (i) of paragraph 4 of article 4, shall not be used in any type of activity.

Liquid fuel supply to vehicles shall not be made in places except for liquid fuel stations holding a vendor license and equipped sufficiently, excluding places such as factory, work sites, transportation fleet base and related places having storage facilities for their own needs and liquid fuel supply capacity for their own vehicles.

(The sixth paragraph was abolished by: article 27 of the Law No. 5784 of 9/7/2008)

Where a facility is required in order to perform activities, the facility must be actively operating in order to benefit from the rights set forth in this article.

Refining undertakings shall be obligated to deliver products of required quality and distribution undertakings and vendors shall be obligated not to change the quality, quantity and the purpose of usage of the liquid fuel.

Products blended with liquid fuel in accordance with the principles and procedures to be determined by the Board shall be subject to the equivalent tax rate imposed on liquid fuel. However, the products obtained from domestic agricultural products and blended with liquid fuel shall be exempt from this provision.

Distribution undertakings shall inform their vendors of promotional campaign to be carried out with their participation in a transparent and clear manner together with the documents regarding the costs of such campaigns. However, the participation of the vendors in the campaign shall be optional.

Pricing

SECTION FOUR

Pricing, Expropriation, Access and Coordination

Article 10- The pricing for the purchase and sales of petroleum shall be constituted according to the nearest accessible global free market conditions. For domestic crude oil, “market price” formed in the nearest delivery port or refinery shall be accepted as the price.

For the crude oil produced in Turkey, such market price shall be deemed as the actually applicable sales price, excluding taxes, calculated by adding half of all the expenses -necessary for the delivery of crude oil of the same quality from the world market to the port or refinery which is the point of delivery in Turkey- to the free competitive price of the equivalent petroleum as determined in accordance with the usual adjustments of quality and specific gravity, within Turkey or in the nearest accessible world market; however, for the crude oil produced in or around Batman, it shall be deemed as the market price established at Batman refinery excluding the Suez Channel crossing and the Batman-Dörtyol Pipeline crossing fees; or as the price applied excluding the taxes at the points of delivery by the producers in Turkey where there is no accessible world market.

30-days term prices of Arab Medium crude oil (31 API) for 26 API or lighter crude oil and Ras Gharib crude oil (21.5 API) for crude oil heavier than 26 API shall be taken as basis for the domestically produced crude oil; and in the evaluation of the gravity differences between the equivalent petroleum and domestic crude oil with respect to prices:

2 US cent shall be added to or deducted from the barrel price of the equivalent petroleum for each 0,1 API gravity difference between the equivalent petroleum and domestic crude oil. However, the price of the lower gravity group shall not be higher than the price of the higher gravity group.

In the calculation of all expenses necessary for the delivery of equivalent crude oil to Turkey, the nominal freight charge announced in the “Worldscale” shall be taken as basis; the transportation cost shall be calculated by applying AFRA percentage determined for LR-2 category tankers.

Current insurance legislation and premiums shall apply to the price (C+F) calculated by adding gravity adjustment and transportation costs. Insurance premium implementations regarding hazardous and war situations shall be subject to the evaluation of the Ministry. The insurance premium amount until revised shall not exceed 0,075%.

Market price of the domestic crude oil shall be calculated by adding customs duties and levies collected for import. Transportation market value formed in the liquid fuel prices shall be taken for the domestic land transportation fees.

Monthly foreign exchange average selling rate announced by The Turkish Central Bank, barrel and metric ton as petroleum unit and US Dollar as foreign currency shall be used in the market price proposals. The Board shall be authorized to evaluate and solve the problems that may arise during the implementation of the components forming the market prices.

Refining undertakings shall purchase the domestic crude oil from such minimum prices formed upon the proposal of the crude oil producers and shall give priority to domestic crude oil in crude oil supply. Refining undertakings shall give a written response within 15 days to crude oil producers’ proposals offering the crude oil with the minimum price referred to in this article or higher. Refining undertakings shall not make any monetary demand and offer concerning delivery point and conditions which may adversely affect producers. Disputes on prices shall be settled no later than 30 days by the arbitration of the Authority, which award to be rendered in result of the arbitration, shall be binding on the parties.

Imported crude oil prices shall be considered as prices obtainable according to petroleum agreements concluded in line with the globally announced prices and spot market values. Information regarding actual import shall be submitted to the Authority every month.

Prices regarding activities performed within the scope of refining and distribution undertaking licenses shall be submitted to the Authority as ceiling prices prepared by licensees, taking into account the global free market prices at the closest accessible point.

Tariffs for processing, licensed storage that is not connected with pipelines and transportation activities shall be implemented after their preparation by the licensees and notification of the same to the Authority.

Tariffs for transportation and licensed storage activities within the facilities connected to these lines under the scope of transmission licenses shall be prepared by the licensees and implemented following the approval of the Board. The Board shall render decisions on the applications for tariff approvals within 30 days following the application date.

However, in the case that agreements or actions, which are aimed at hindering, disrupting or restricting the competitive environment or the activities in the petroleum market or which result in or may result in this effect, create impacts disrupting the market organization; the Authority shall be authorized to determine base and/or ceiling price(s) and take necessary measures to apply on regional or national basis in all phases of activities, not exceeding two months in each time, upon the initiation of the necessary procedures.

The principles and procedures and the amounts for the supporting of consumers without interfering with prices with respect to specific regions and specific purposes shall be determined by a Decree of the Council of Ministers upon the proposal of the Ministry.

Ownership, expropriation and special measures

Article 11- a) It is a principle that the acquisition of rights or properties regarding lands, estates and buildings necessary for the facilities included in the scope of this Law takes place primarily through agreements.

In the event that the activities put forward herein necessitate, the acquisitions regarding the following may also be realized through expropriation as per the provisions stated in the Expropriation Law No.2942:

Refineries and licensed storage facilities,
The establishment of easement rights on lands and plots of land where transmission lines cross and on other buildings standing as an inseparable part of such transmission lines, as well as and real properties located in the vicinity, and
Processing facilities to be determined by the Authority. The ownership of the expropriated real property shall belong to the Treasury and the right to use it shall belong to the licensee who has paid the expropriation cost. The right of utilization shall be registered in the title deed register in the name of the licensee and such right shall be a part of the license and continue until the termination of the license period. Expropriation costs paid by licensees shall not be returned in the event that the license terminates or is

The relevant expropriation decree to be issued by the Board shall be considered as a public interest decree and the expropriation process shall be realized as per the provisions of the Expropriation Law.

It shall also be noted in the title deed registers of the facilities owned by refining and transmission licensees, including the ones found appropriate by the Board, that no other note can be registered in the title deed registers unless approved by the Authority.

b) Real rights other than ownership, and leasing: In relation to their activities, on public lands, legal persons may request for establishment of real rights other than ownership and for the leasing of such lands, provided that the cost is paid by the related legal

If these requests are approved by the Board, the Authority shall consider the right of usufruct, servitude, right of construction or long-term leasing as per the related legislation and depending on the needs.

The legal person taking over the rights acquired in this way, shall be liable to pay the cost of holding these rights as determined by the Board. Utilization rights are an integral part of the relevant license or contract, and their validity period shall be

limited with the period of the validity of the same.

The limitations regarding construction, agricultural and dangerous activities that may create risks; within a minimum of 15 meters and maximum of 100 meters distant on both sides of transmission lines, within a maximum of 500 meters distant surrounding the facilities necessary for pipelines and refineries and licensed storage facilities, together with the principles and procedures regarding the same shall be set forth in the regulations to be issued by the Authority.

The provision of article 11 of the Telegraph and Telephone Law No. 406 shall not apply to transmission lines and to the relevant premises which are the inseparable parts of such transmission lines.

Access to transmission facilities and licensed storage facilities

Article 12- Transmission and storage licensees who have spare capacity in their facilities shall be liable to meet the transmission and storage demands on the condition that these demands meet the following conditions:

The demands should:

be in compliance with the tariff of the licensee,
be appropriate for the capacity of the relevant facility,
not have deteriorating or risk-increasing negative effects on the licensee’s facilities, operational rules and conditions and the petroleum transmitted or stored by the licensee,
be in conformity with the quality of the facility, transmitted or stored petroleum, and be at the minimum quantity determined in the tariff of the licensee,
for transmission, be made by producer, transmitter or distribution undertaking, taking into account also the type of petroleum and for storage, be made by all with the provision of exceeding the minimum quantity determined in the tariff of the licensed storage

Coordination

Article 13- It is a principle that the Authority is informed prior to and the participation of the Authority is provided in any of the preparatory studies (except for regulations regarding taxes, duties and levies) to be carried out by other authorities authorized for the matters related directly or indirectly with the petroleum market.

The representative of the Authority shall take part in laboratory preparatory studies to be carried out by the Turkish Standards Institution regarding petroleum market activities. The Turkish standards regarding petroleum market activities may be rendered compulsory by the Board’s approval.

The Authority shall be authorized to deliver opinions or make requests from the relevant authorities in following cases:

in cases which may cause substantial hazards to licensed facilities,
in case misleading advertisements and announcements and other similar activities which may cause unfair competition in the market are made,
in regulations and implementations regarding importers, producers and providers of goods and equipment and their authorized services performing activities in the market.

(The fourth paragraph as amended by: article 40 of the Law No. 6455 of 28/3/2013) The Authority may be a third-party intervener in criminal cases filed against licensees or their officials in relation to market activities. In addition to filing criminal complaints for these matters, the Authority may also request the judicial or civil authorities to order or impose sanctions for the proper implementation of the legislation.

SECTION FIVE

Information Gathering, Records, Audit, Notification and Insurance

Information gathering, records, audit and notification

Article 14- The notification liabilities shall be determined by the Authority for the purpose of gathering information regarding market operations. The Authority may determine specific principles and procedures regarding the preparation of documents

by and the record keeping system of the licensees, provided that the provisions of the Tax Procedure Law are reserved.

The Authority may request from public institutions and organizations as well as real and legal persons any information it deems necessary while fulfilling the duties assigned by this Law.

Regarding the market parties and/or facilities, the appointed Authority officials shall be authorized to review and examine any commodities and documents, including accounting books, take copies or samples, request for written or verbal explanations on the subject, prepare necessary records, inspect the facilities and operations. The letter of authorization shall include the framework of the objective, scope, duration and authority.

(The fourth paragraph as amended by: article 41 of the Law No. 6455 of 28/3/2013) The Authority shall audit the market activities via its own personnel or by the way of service procurement from public institutions and organizations and private auditing organizations when necessary. The Authority may establish accredited stable and mobile laboratories to be used for audits in cooperation with the Turkish Accreditation Agency and allocate resources for their establishment. The principles and procedures to be followed in audits, preliminary investigations and inquiries shall be regulated by a regulation to be issued by the Authority after receipt of the relevant opinions to be delivered by the Ministry of Customs and Trade, the Ministry of Energy and Natural Resources, the Ministry of Interior and the Ministry of Finance.

The fundamentals, principles and procedures regarding the disclosure of information to related parties and the public shall be set forth in a regulation to be issued by the Authority. Commercially confidential information with respect to the market shall not be disclosed.

The abstract information on the content of the license certificates of the licensees shall be announced by the Authority.

The provisions of the Notification Law No. 7201 shall apply to any notifications to be made by the Authority in accordance with this Law. However, notifications by publication shall be published in the Official Gazette.

Insurance

Article 15- It is compulsory to arrange insurance for the activities carried out within the scope of a license. The activities to be exempt from insurance coverage may be determined by a Decree of the Council of Ministers. The determination of the types of assets to be included to the insurance coverage, insurance types to apply to these assets and exemption issues shall be regulated in the relevant regulations to be issued by the Authority.

Petroleum stocks

SECTION SIX

Other Provisions

Article 16- For the purposes of sustaining continuation in the market, preventing the risks in crisis or extraordinary cases and fulfillment of the liabilities regarding state of emergency petroleum stocks as a requirement of international agreements, a petroleum stock shall be kept in an amount of at least 90 days’ amount of the net import in the previous year’s average daily consumption.

The national petroleum stock shall be obtained through the liability of the refinery, liquid fuel and LPG distribution undertaking licensees to keep minimum 20 times of the average supplied daily product amount at their own storage or licensed storage facilities whether as a whole or separately according to their status. Loaded tankers within territorial waters to be transferred to refineries and storage facilities and crude oil and semi-products in refineries shall be deemed as part of the national stock liability and shall be treated accordingly. The national petroleum stock might be kept tax-free according to the status of the stored place and with the provision of the allowance of the legislation.

Liquid fuel and LPG distribution licensees’ 20 days’ amount of the total stock, except for the portion in the bottom of their tanks, shall be taken as the minimum

operational stock of the company and deemed as part of the national petroleum stock. In addition, eligible consumers that consume 20,000 tons or more of each type of liquid fuel each year in a consumption facility shall be obliged to stock an amount in their storage to meet 15-days of their consumption and this stock shall be considered as part of the national petroleum stock.

The supplementary portion of the national petroleum stock shall be retained by refining undertakings and any funding need that may arise as a result of the acquisition of such supplementary portion, financing expenses and stocking and maintenance costs of such stocks shall be covered by the income added to the consumer prices (determined by the Board at a maximum of 10 US Dollars/ton) and the income at the utilization of the refining undertakings. In the event of imports except for refining undertakings, such income shall be paid to the refining undertaking by the importer. Refining undertakings are obliged to provide the Authority with information regarding the accounting of this income every year. The income shall be drawn to the level to cover the maintenance costs once sufficient storage facilities and stocks have been provided.

The Council of Ministers shall be authorized to render decisions to determine and increase the actual number of days of the national petroleum stock, to manage and impose liabilities on national petroleum stock, the term, type and amount of the national petroleum stock and to determine the location of stocking; and procurement of petroleum and services regarding the national petroleum stock; to take other decisions and measures regarding stock and stocking, to perform sales from the national petroleum stocks in extraordinary cases, to prepare the proposals to be submitted to the Council of Ministers and to determine the principles and procedures regarding the activities of the Commission established according to this Law etc.

(Supplementary paragraph as added by: article 42 of the Law No. 6455 of 28/3/2013) Within the scope of national petroleum stock regulation, the Authority shall be authorized to audit the stocks that the licensed refineries, liquid fuel and LPG distribution undertakings and the eligible consumers are obliged to keep, and to regulate the type of product and the conversion of products into each other in a way not to require a decrease in the stock amount.

The Commission shall be composed of the representatives of the Ministry of Defense, the Ministry of Interior, the Ministry of Finance, the Ministry of Foreign Affairs, the Undersecretariat of Treasury, the General Directorate of Petroleum Affairs and the Authority and chaired by the Undersecretary of the Ministry of Energy and Natural Resources. The Ministry shall implement the decisions taken by the Commission and carry out the secretarial works. The Ministry shall be the counterpart for the legal processes to be carried out against the decisions of the Commission.

Eligible consumers

Article 17- The principles and procedures for determining eligible customers and granting licenses shall be regulated by a regulation to be issued by the Board.

Distribution undertakings shall not perform sales at the liquid fuel stations operated by themselves to the consumers whose annual consumption of heating fuel, fuel-oil and diesel oil is below the annual consumption amount to be determined by the Authority not being less than 5000 tones.

National marker

Article 18- (The first paragraph as amended by: article 43 of the Law No. 6455 of 28/3/2013) Refining undertakings and distribution undertakings shall add a national marker, at the refinery exit or at the entry into free circulation, in the quality and nature to be required by the Authority, to the liquid fuel and to the products blended with liquid fuel to be marketed in Turkey. The centers for the first-stage of biofuel production and the national marker injection points for the liquid fuel to be sold off shall be determined by the Authority. The national marker addition procedures shall be carried out before the independent audit companies authorized by the Authority, in accordance with the principles and procedures to be determined by the Authority. The licensees and the independent audit companies shall be conjointly liable for the irregularities to occur in the process of national marker addition.

(The second paragraph as amended by: article 43 of the Law No: 6455 of 28/3/2013) The licensees that are obliged to add national marker shall submit their marketing projections for the following

year to the Authority in November every year, and the national marker to be provided by the Authority according to the said projection shall be delivered to the relevant licensees to be added to the liquid fuel in accordance with the principles and procedures principles to be determined by the Authority.

The Authority shall establish an audit system by adopting national marker, administrative and technological methods. In the event of an application by an authorized official, the governorates shall be obliged to ensure the collection of samples from consumers and vendors for the auditory purposes, and to ensure their security.

(The fourth paragraph as amended by: article 43 of the Law No: 6455 of 28/3/2013) When it is determined, by laboratory analyses, in the tests to be implemented on the samples that the national marker is not in the required quality and at the required level, the provisions of article 19 shall apply.

PART TWO

Miscellaneous Provisions

SECTION ONE

Penalties, Administrative Sanctions, Right to Legal Action, Regulation, and Repealed and Inapplicable Provisions

Administrative fines

Article 19- (As amended by: article 44 of the Law No. 6455 of 28/3/2013)

The imposition of administrative fines or administrative sanctions in accordance with this Law shall not constitute an impediment against the implementation of the other provisions of this Law. The imposition of penalties and measures in accordance with this Law shall not prevent any other acts, processes and procedures to be carried out in accordance with other laws.

As per this Law (2);

In the following cases, an administrative fine of one million Turkish Liras shall be imposed on the responsible person:

To carry out activities subject to a license, without holding
Violation of the subparagraph (l) of paragraph 4 in article
Violation of article
1. One fourth of the administrative fine referred to in the subparagraph (a) shall be imposed on the distribution undertaking licensees with which the vendor signs a contract, in the event of the violation of the subparagraph (l) of paragraph 4 in article 4 by the vendor
2. In the following cases, an administrative fine of eight hundred fifty thousand Turkish Liras shall be imposed on the responsible person:
  - Directly or indirectly prevention of or attempt to prevent the implementations conducted by the Authority in accordance with article
  - Noncompliance with the limitations referred to in article
  - Violation of articles 5, 6, 7, 8 and 17.
3. In case of the violation of article 8, one fifth of the administrative fine referred to in the subparagraph (c) shall be imposed on the
4. In the following cases, an administrative fine of three hundred fifty thousand Turkish Liras shall be imposed on the responsible person:
  - Without obtaining the relevant license, starting to construct or operate the facilities associated with the relevant right and the conduct of procedures resulting in the right of disposition over those

Conduct of the activities out of the rights granted by the relevant
Within one calendar year, despite the warning of the Authority, violation of the subparagraph (f) of paragraph 4 in article 4, and violation of the subparagraphs other than the subparagraph (l) of the same
Directly or indirectly prevention of access to the transmission and storage facilities under the provisions of

Except for the violations included in the scope of the subparagraph (l) of paragraph 4 in article 4, one fifth of the fine referred to in the subparagraph (e) shall be imposed on the
In case the independent audit companies authorized to monitor the national marker addition procedures do not fulfill their obligations, one fourth of the administrative fine referred to in the subparagraph (a) shall be

Under the judgment no. E.: 2015/109, K.: 2016/28 of 7/4/2016 rendered by the Constitutional Court, the provision “In the following cases, an administrative fine of eight hundred fifty thousand Turkish Liras shall be imposed on the responsible person”, contained in the paragraph 2 of this article, was annulled for the subparagraph (a) of the paragraph 2 in article 8 of this Law and for the third sentence of the paragraph 4 in article 7 of the Law, and it is ordered that the Judgment of Annulment shall enter into force after nine months, starting from 3/5/2016 namely the date when the Judgment was published in the Official

(h) The licensees that are obliged to keep a national petroleum stock in accordance with article 16 shall be punished with an administrative fine of two hundred Turkish Liras for each one-ton product lacking. In the calculation of lacking stock amount, fraction of tons shall be ignored.

In the event that the same act for which an administrative fine has been imposed is repeated before expiration of 2 calendar years, the above fines shall be two-folds.

The administrative fines shall be decided by the Board within three months at the latest, after the completion of the phase relevant to preliminary investigations and inquiries.

Resorting to a judicial remedy against the administrative fines imposed regarding the act of smuggling under this Law shall not suspend the collection procedures.

Where the administrative fines are not paid within thirty days following the notification date, collection of the fines shall be ensured through the relevant tax office. In the collection, the provisions of the Law No. 6183 of 21/7/1953 on the Collection Procedure of Public Receivables shall apply.

An administrative fine between one thousand five hundred Turkish Liras and seventy thousand Turkish Liras shall be imposed on the ones acting against the obligations under this Law except for those mentioned above.

The facilities shall be sealed until the related license is obtained or until the facilities are modified to a stage to perform an activity not requiring license as per this Law.

Administrative sanctions

Article 20- The Authority shall commence a preliminary investigation or inquiry in the event that the licensee does not comply with this Law, with regulations put into effect according to this Law, with written directives of the Authority or any matter registered in their licenses. In addition, the relevant licensee shall be notified that the noncompliance should be eliminated within fifteen days and that, otherwise, the subject market activities shall be suspended temporarily or permanently or the sanction “cancellation” shall be imposed directly. Despite such notification, in the event that the noncompliance continues at the end of the fifteen-day period, the Authority shall order that the market activity be temporarily suspended for not less than thirty and not more than one hundred and eighty days. During the period of temporarily suspension, no market activity shall be carried out except the ones to prevent unsafe act or malicious intent or harm on the products and to eliminate the

noncompliance causing the suspension. Cancellations of licenses shall be decided pursuant to an investigation to be carried out by the Authority.

The licenses of those who supply illegal products or products whose countries of origin are indefinite shall be cancelled. Those who supply products that do not comply with the technical regulations shall be held liable to compensate any damage incurred.

In case it is determined by the Authority that the vendor activities carried out at liquid fuel stations are incompliant with this Law or the regulations issued on the basis of this Law, liquid fuel supply at those stations shall be suspended by sealing temporarily or for an indefinite period of time by the Authority. The principles and procedures regarding the cancellation and sealing shall be set forth in the regulations to be issued by the Authority.

The provisions of article 203 in the Turkish Criminal Code shall apply to the officials of real or legal persons that continue carrying out activities despite the cancellation of license or sealing. (3)

The license shall be cancelled in case it is determined that there is fraud against law or misleading declaration in the demands submitted or procedures carried out under this Law.

The matter “compensation of the losses and damages to the consumers arising from the petroleum supply which is noncompliant with technical regulations” shall be stated in the licenses and contracts of the real and legal persons as the addressees of the consumers. The principles and procedures regarding the implementation shall be determined in a regulation to be issued.

Vendors connected to a distribution company whose distribution license has been cancelled or temporarily suspended shall carry out their activities as vendors of other distribution companies.

(Supplementary paragraph as added by: article 45 of the Law No. 6455 of 28/3/2013) All the activities subject to a license at any kind of facility, except refining undertakings, where it is found out that acts of smuggling defined under Law No. 5607 are committed, shall be suspended by the Authority until the relevant decision of non-prosecution or the court order becomes final; and within this period, no other real or legal person shall be granted a license for that facility.

The licenses of the licensees shall be cancelled in accordance with the final court order. No license shall be granted for the related facility before the payment of the administrative fine.

(Supplementary paragraph as added by: article 45 of the Law No. 6455 of 28/3/2013) In the event that the act of smuggling is related only with the level of national marker, the suspension decision shall be taken according to the accredited laboratory analysis results. The Authority shall take necessary administrative measures to prevent the illegal liquid fuel sales until the accredited laboratory analysis results are reported.

(3) The wording “article 274 of the Turkish Criminal Code No. 765”, contained in this article, was amended as “article 203 of the Turkish Criminal Code” by article 523 of the Law No. 5278 of 3/1/2008, and inserted into the text.

(Supplementary paragraph as added by: article 45 of the Law No. 6455 of 28/3/2013) In case the results of national marker test carried out through a portable control device are found to be invalid, the sample taken shall be delivered to the laboratory within five business days at the latest. The laboratory shall carry out the requested analyses without causing any change in the features of the sample within fifteen days and submit the results to the Authority within three business days at the latest.

Preliminary investigation, inquiry and the right to take legal action

Article 21- On its own initiative or upon a notification or complaint received by the Board, the Board shall decide directly to carry out an investigation or to initiate a preliminary inquiry in order to determine whether or not initiation of an investigation is necessary.

The principles and procedures to be followed in preliminary inquiries and investigations shall be determined by a regulation to be issued by the Authority.

(The third paragraph as amended by: article 67 of the Law No. 6352 of 2/7/2012) A legal action may be taken before the competent administrative court against the administrative sanction decisions. Any kind of legal action taken against the Board decisions shall constitute a priority.

Regulation

Article 22- The matters regarding market activities shall be regulated by the regulations referred to in the relevant articles of this Law and the regulations to be issued by the Authority on other matters needed during the operation of the market. These regulations shall be published in the Official Gazette.

Furthermore, the Authority is entitled to exercise its powers, by the decisions of the Board, to take specific decisions. Specific decisions concerning the public and the communiqués to be published for further clarification of the regulations to be issued shall be announced by press and broadcasting or special bulletins.

Repealed and inapplicable provisions

Article 23- A) Article 5 of the Law No. 79 of 10.9.1960 on the Discharge of National Preservation Crimes, National Preservation Organization, the Liquidation of Capital and Fund Accounts and Creating Other Provisions, and

Subparagraph 41 of the paragraph 2 of article 15 in the Municipality Law No. 1580 of 4.1930

are hereby repealed.

The provisions of the Petroleum Law No. 6326, which are contrary to this Law, shall be

SECTION TWO (4)

Amendments to the Electricity Market Law

Article 24– The paragraph 1 of article 5 of the Electricity Market Law No. 4628 of 20/02/2001 is amended as follows:

“The Board shall be composed of 9 members, out of whom are one President and one Vice President.”

Article 25– The following article 5/B is added after article 5/A of the Electricity Market Law No. 4628. “Duties of the Board regarding the petroleum market

ARTICLE 5/B. – The Energy Market Regulatory Board shall also fulfill the following duties regarding the petroleum market:

To implement the provisions of Petroleum Market Law, to issue and ensure implementation of any regulations regarding market
To determine the Authority’s views and recommendations regarding the plans, policies and practices regarding petroleum
To carry out audit, preliminary investigation and inquiry processes regarding petroleum market activities, to impose penalties and sanctions included in the scope of its powers, decide on the filing of any applications with any judicial or administrative authorities, including the filing of
To monitor the practices carried out by international organizations and institutions regarding the petroleum
To determine the fees for licenses and the fees for license procedures in the petroleum
To examine the audited financial statements of those carrying out activities in the petroleum market or to have those financial statements
To determine the scope of the reports regarding service reliability, service outages and other performance criteria to be required from those performing activities in the petroleum market and to ensure that they submit those reports the

Board on a regular basis.

To impose administrative fines and cancel licenses in cases where it is determined that there is noncompliance with the provisions of the Petroleum Market Law, tariffs and regulations approved by the Board, license terms and conditions and the Board’s ”

(4) Following the supplementary article 1 contained herein, the supplementary articles 3, 4

and 5 are added by article 3 of the Law No. 5576 of 25/1/2007, and the article numbers provided by the Law are exactly maintained.

Article 26- The following paragraphs are added to article 9 of the Electricity Market Law No. 4628. “Those who have been employed in public institutions and organizations for at least 5 years and possess an undergraduate degree, and have scored an “A” in the state personnel language tests and document these matters, or who have worked in the private sector for more than 5 years and have the same qualifications in terms of higher education and foreign language and whose service is deemed necessary, may be appointed as specialists to the appropriate vacant posts of the Authority until 31.12.2004 by taking into consideration also their de facto terms of office in these organizations and institutions provided that their degrees and grades are determined and without being subject to the exam and application requirements stipulated by the Law No. 657. The General Directorate of Petroleum Affairs personnel who do not have the aforesaid qualifications may also be employed in the Authority as office personnel upon their request and on the condition that it is agreed both by the Authority and the General Directorate of Petroleum Affairs. The appointment of those-being employed in accordance with the provisions of the Labor Law No. 4857- to the Authority’s posts on the basis of this provision shall be evaluated within the framework of the provisions contained in the aforesaid Law. Their seniority indemnities shall be paid by their institutions.

The reorganization of the Authority shall be made within 3 months following the enactment of this Law upon the proposal of the Board and based on the regulation to be enacted by the Council of Ministers. The State Personnel Presidency shall be informed within one month as of the coming into force of the aforesaid regulation, about the personnel whose cadre is cancelled, changed because of the institutional reorganization or surplus personnel and who are found insufficient by the Board with his qualifications for service necessities of the cadre, among the personnel who are employed on a contracted basis at the Authority under administrative service contracts and who are subject to the Civil Servants Law No. 657, except for wages and financial rights. This Presidency shall submit the appointment proposal of the related ones to public institutions and organizations within fifteen days. These public institutions and organizations shall appoint the related personnel whose appointment proposal has been made, to the appropriate vacant staff positions within ten days. The provisions of articles 62 and 63 of the Civil Servants Law No. 657 shall apply to the commencement terms and to the procedures to be carried out in the case that these personnel do not commence working. The wages and financial rights of the Authority’s personnel appointed to other public institutions and organizations shall be covered by the Authority until they begin working at their new appointments.”

Article 27- After the wording “in the event that”, the wording “except for auto- producers” is added to the paragraph 3 of article 2 of the Electricity Market Law No. 4628, and after the paragraph (B) of article 10 of the same Law, the following paragraph (C) is added.

“C) The revenues of the Authority regarding the petroleum market shall comprise of the following items:

Participation
Fees collected for license, approval, permission and visa

Publications and other revenues.
Grants to be extended by international organizations and institutions to finance studies and projects relating to development of the market, provided that the details of such grants are released to the

Payers of the participation fee referred to in the subparagraph (a) shall be the real and legal persons holding refining, processing, distribution, transmission, transportation, bunker, storage, vendor and lube oil production licenses. Joint license holders shall pay the participation fee based on their total net sales. The participation fee shall be determined by the Board provided that such rate does not exceed 0,1 % of the net sales amount contained in the license holders’ annual income statements and 2 million USD. The participation fee to be implemented within the current year shall be announced in December of the previous year.

If it is within the net sales profit, the sum of customs taxes, duties and levies and Special Consumption Tax paid for petroleum within the year shall be deducted from the sum of the net sales.

Licensees liable to pay a participation fee shall, without waiting for a prior notification, also be liable to submit their balance sheets and income statements of the previous year to the Authority by the end of May of each year and pay half of the fee by the end of June and the other half by the end of November.

Penal and administrative procedures regarding participation fees not declared in time and false declarations shall be completed by the Authority, and the judicial and administrative procedures shall be initiated before the relevant bodies. The provisions of the Law No. 6183 on the Collection Procedure of Public Receivables shall apply to financial liabilities not paid in time and to late payment interests, and it shall be ensured that they are collected through the relevant tax offices.”

Article 28- The following provisions are added to the end of the paragraph 2 of Provisional Article 2 of the Electricity Market Law No. 4628.

“The terms of office of the two members to be appointed not later than one month following the enactment of the Petroleum Market Law shall be 6 years. These members shall not be subject to the drawing of lots and new appointments shall be made for these two memberships at the end of the terms of office.”

Supplementary Article 1- (As added by: article 3 of the Law No. 5493 of 27/4/2006)

The sales price of the fuel oil sold by the holders of vendor licenses issued by the Energy Market Regulatory Authority under the fuel oil sub-heading in the vendor with station category, within the scope of article 7/A of the Special Consumption Tax Law No. 4760 and the paragraph (3) of article 14 of the Value Added Tax Law no. 3065, shall not exceed the obtaining price of the related fuel oil by more than eight percent.

Determination and disposal

Supplementary Article 3- (Added by: article 3 of the Law No. 5576 of 25/1/2007; Repealed by: article 47 of the Law No. 6455 of 28/3/2013)

Bonuses

Supplementary Article 4- (Added by: article 3 of the Law No. 5576 of 25/1/2007; Repealed by: article 47 of the Law No. 6455 of 28/3/2013)

Penalty provisions related with illegal petroleum

Supplementary Article 5- (Added by: article 3 of the Law No. 5576 of 25/1/2007; Repealed by: article 47 of the Law No. 6455 of 28/3/2013)

PART THREE

Temporary and Final Provisions

Provisional Article 1- Before the enactment of this Law, the provisions concerning the rights, interests and obligations -provided by the related legislation- of certificate holders as per the Petroleum Law No. 6326, and liquid fuel distribution and marketing entities permitted to carry out activities according to the regulations

issued by the Ministry shall be reserved until they are granted licenses regarding their activities within the period and in line with the conditions determined by this Law. On the enactment date of this Law, those who are actively carrying out activities that require a license as per this Law should bring their situations in compliance with the provisions of this Law within one year following the enactment of this Law and apply to the Authority along with the information and documents as required by the Authority. The Authority shall be authorized to grant time extensions not exceeding 3 months, for the continuation of the activities of those who have filed their applications, however, whose procedures have not been completed.

The activities of those who have not filed their applications in time or those who have not brought their situations in compliance with this Law in the stipulated period despite they have filed their applications in time, shall be ceased as of the expiration date of the period. All kinds of decisions, procedures and documents already granting right, permission or power shall become null and void without the requirement of any further procedure.

The provisions, contained in the petroleum products-related decrees, legislation, regulations and communiqués effective on the publication date of this Law, shall be reserved until the Authority issues the relevant regulations. Until the entry into force of the regulations and other legislation to be prepared by the Authority, the duties regarding activities and operations carried out by the Ministry of Energy and Natural Resources and/or the General Directorate of Petroleum Affairs shall continue to be carried out. However, no new preliminary permission and statutes regarding the incorporation of liquid fuel distribution and marketing companies shall be granted on the basis of the said legislation within this period.

License applications regarding activities shall not be made until the Licensing Regulation comes into effect. The entry into force of the Licensing Regulation shall not exceed 180 days following the publication date of the Law.

Article 5 of Law No. 79 of 10.9.1960 on the Discharge of National Preservation Crimes, National Preservation Organization, the Liquidation of Capital and Fund Accounts and Other Certain Provisions and the Council of Ministers Decree No. 98/10745 regarding petroleum products shall be valid until January 2005. This period may be extended up to six months, if necessary, by a Decree of the Council of Ministers. Free import activities of the distribution undertakings shall commence with the annulment of the Council of Ministers Decree No. 98/10745.

The General Directorate of Petroleum Affairs shall continue issuing certificates until the secondary legislation is prepared and the necessary arrangements are completed by the Board after the enactment of this Law. At the end of this process, the certificates-related provisions of the Petroleum Law No. 6326 shall cease to have effect.

The limitations regarding the materials which have been imported under the provisions of Petroleum Law No. 6326 by certificate holders with the exemption of customs and other import taxes and duties shall be revoked without the requirement of any further action. All kinds of obligations, liabilities and records, which have arisen in this regard, shall be cancelled and deleted.

Provisional Article 2- The Authority shall be informed about the privatization processes concerning the petroleum market. Granting of licenses and modifications on licenses as a result of privatizations realized in accordance with the applicable legislation shall be carried out by the Authority without the requirement of any other procedures.

The entities, included in the scope of privatization and operating on the matters which are subject to licenses as of the enactment date of this Law, shall not be subject to the Public Procurement Law No. 4734 of 4.1.2002, with regards to their production and trading activities until they are privatized. The Executive Boards of the entities shall be authorized to determine the total net monthly wages and other financial rights of the personnel working beyond the scope, provided that these wages and other rights do not exceed the two-folds of the net average monthly wage

of the Undersecretary of the Prime Ministry. However, as regards the personnel beyond the scope and whose wages and financial rights are determined according to this paragraph, in the event they are transferred to other public organizations or institutions in accordance with article 22 of the Law No. 4046 of 24.11.1994, while implementing the paragraph 5 of the same article, in determining the wages and other financial rights with regards to these personnel’s previous positions; the amount shall be calculated by applying the increase ratios and/or amounts -which will take place in the wages of the public personnel within the period elapsed between 15.11.2003 and the date of the relevant declaration to the State Personnel Presidency with regard to their cadres and positions on the date of declaration- to their wages and financial rights applicable on 15.11.2003 depending on their positions, which amount shall be taken as the basis. (The supplementary sentence as added by: article 18 of the Law No. 5398 of 3/7/2005) Such amount shall also be taken into consideration in determining the financial rights pertaining to the former positions of the concerned persons within the period to elapse after the date

when they are declared to the State Personnel Presidency. (5)

Provisional Article 3- Special Consumption Tax-free liquid fuel sales to be made to commercial sea vehicles shall be performed directly by distribution undertakings, except for the limitations set forth in the paragraph 2 of article 7.

Putting into force of the regulations and arrangements

Provisional Article 4- (As added by: article 4 of the Law No. 5576 of 25/1/2007)

The regulations and arrangements referred to in Supplementary Article 3 and Supplementary Article 4 shall be put into force within two months following the publication date of this Law.

Provisional Article 5- (As added by: article 46 of the Law No. 6455 of 28/3/2013)

The regulation referred to in the paragraph 4 of article 14 shall be put into force within six months.

Effectiveness

Article 29 – This Law shall become effective on the date of its publication.

Execution

Article 30 – The provisions of this Law shall be executed by the Council of Ministers

(5) The wording “within the period elapsed until the date they are assigned in accordance with the paragraph 2 of the same article”, contained in this paragraph, was amended as “within the period elapsed between 15.11.2003 and the date of the relevant declaration to

the State Personnel Presidency with regard to their cadres and positions on the date of declaration” by article 18 of the Law No. 5398 of 3/7/2005, and has been inserted into the text.

LIST INDICATING THE EFFECTIVE DATES AND THE OFFICIAL GAZETTE DATES AND ISSUE NUMBERS OF THE LEGISLATION SUPPLEMENTING AND AMENDING THE PETROLEUM MARKET LAW