Benefits of Removing Barriers to International Trade and Investment in OECD Countries and Liberalizing Markets of Goods

Benefits of Removing Barriers to International Trade and Investment in OECD Countries and Liberalizing Markets of Goods

Hatice Kökden (*)

The liberalization of goods’ markets, the liberalization of international trade and the removal of barriers to international investment are among the key factors in terms of increasing economic efficiency and thus raising the standard of living in OECD countries, as well as in the rest of the world. Although OECD countries are generally better off in these aspects than other parts of the world, significant differences in these parameters between these countries and especially the US and the EU support the argument that large trade and income gains can be achieved if these differences are eliminated. Based on this argument, with a project carried out in two stages within the OECD, a project consisting of two stages, attempted to estimate the gains for the member-states from liberalization and removal of barriers in the international investments and trade.

The first stage attempted to estimate the effects of liberalization applied to the international trade and investments by the EU and the US. The second stage attempted to forecast the impact of these liberalization efforts if all of the OECD members applied these liberalization measures.

The report is based on a set of data sets evaluating the situation of OECD member countries in terms of goods’ market regulations, foreign trade and international investments. Of these, PMR (Indicators of Product Market Regulation) was created in 2003 with a survey study to measure the state of regulation in product markets in all OECD member countries. In this context, the extent to which product markets are subject to regulation, the level of public control, the obstacles to entrepreneurship, and the obstacles to investment and trade have been examined and the situation of the countries has been determined in these respects. The data that form the basis of the section on barriers to international investments are the results of a 2001 study on restrictions on foreign investments in member countries. These restrictions are mainly restrictions on the ownership of a companies by the foreigners, employment of the foreign personel as well as operational independence. Regarding foreign trade, bilateral tariff rates applied in OECD member countries were used on the basis of the most favored nation (MFN) with average trade weighted in 2003.

The main method followed by the study is to estimate the earnings to be obtained in terms of national income and foreign trade when the parameters of the “reference” country are approached in the three elements listed above (regulation of the product market, liberalization of foreign capital and foreign trade) by comparing each country or group of countries with the “reference” country at its best in these three elements. In the study, it was assumed that removing barriers to foreign trade and investment was implemented globally. Therefore, the impact of liberalization in both cases is spreading all over the world. On the other hand, it is assumed that reforms in the goods’ market will strengthen competition and countries will benefit from both reforms in the domestic goods’ market and reforms in the countries they trade with.

In the study, the analysis of the effect of reforms on foreign trade and production is made based on the results of some previous regression analysis carried out by the OECD on the determinants of economic growth, foreign trade and the drivers of direct foreign capital, as well as the results of the general equilibrium analysis of the GTAP (Global Trade Analysis Project).

The study primarily analyzes the level of integration among OECD member states. In this context, it has been observed that foreign trade between OECD member countries has increased at a higher rate than economic growth in the last two decades, however, this increase consists mostly of the commodity trade rather than service trade; similarly, international investments have increased rapidly, however, this increase is due to the change of ownership through company mergers and privatization rather than new investments; in contrast to international trade, foreign direct investments are concentrated in the service sector rather than the goods-producing sector; the activities of foreign companies’ affiliated companies in the domestic markets have increased in parallel with the increasing trends of foreign direct investments, however, the impact of foreign companies’ affiliated companies on the employment of the manufacturing industry and services sector has been limited; recent foreign trade, foreign investments and the increase in the activities of affiliated companies have increased the interdependence of OECD economies; multilateral investment and trade agreements continue to form an obstacle to the integration of trade and investments between national economies, while reducing the official barriers to those. These obstacles may be obstacles that directly affect integration such as tariffs, non-tariff barriers, obstacles to foreign ownership of the company, as well as indirect obstacles such as internal regulations that may affect the production costs of the exporter and thus the competitiveness of the international markets, or regulations that increase costs in the service sectors subject to trade that use domestic and foreign inputs in production.

After analyzing the level of integration among OECD members, barriers to competition in domestic markets were addressed through the aforementioned PMR indicators. In this context, OECD member countries were divided into three groups in terms of 2003 PMR indicators:

• In most English-speaking countries and Nordic countries, regulatory barriers to competition were found to be relatively low.

• It has been observed that these obstacles are relatively high in low-income member countries such as Mexico and Turkey, as well as in Eastern European countries such as Poland, Hungary and the Czech Republic and Southern European countries.

• Other European countries and OECD member countries in Asia were found to have moderate policies in terms of restrictive elements of competition.

When evaluated in terms of restrictions on foreign capital investments as of 2001, the study has found that the number of economic restrictions is generally lower in the EU and USA. The low restrictions on foreign capital in European countries are mostly attributed to the absence of such restrictions within the EU framework. Iceland, Mexico, Turkey and Canada are among the countries with the highest foreign capital constraints, while Japan, Korea and Australia are beyond the OECD average in this respect.

In terms of tariff barriers to foreign trade as of 2003, it has been observed that bilateral tariff rates have decreased significantly throughout the OECD with regional free trade agreements and multilateral trade liberalization. However, it has been observed that customs tariffs are relatively high among OECD members such as Mexico, Poland, Korea, Turkey and Hungary. In terms of non-tariff barriers, it is seen that obstacles such as quantity and price control measures have been largely eliminated by multilateral trade negotiations in the recent period. The remaining cross-border and non-tariff barriers were excluded from the analysis, taking into account the limited data availability as well as the trustworthiness of this data. When the regulations at the sectoral level and the obstacles applied at the border are examined, it is seen that the obstacles to international integration are mainly concentrated in certain sectors. While the manufacturing industry sector presents an image free of such obstacles, it has also been observed that such obstacles are concentrated in the services and agricultural sectors It has been determined that the sectors with the highest regulation among the service sectors are the railway transportation, natural gas and postal services sectors. Although the telecommunications sector and the transport sector are seen as relatively low-regulated sectors across the OECD, there are still differences between the countries. While the transport sector is subject to higher regulation in Greece, Italy and the Czech Republic, the telecommunications sector is heavily regulated in Turkey and Iceland. After this stage, the project moved on to the stage of determination of the differences between the countries referenced above according to the best practice criteria. The OECD countries subject to the least restrictions and regulation in these areas have been identified as “reference” countries. The determination of “reference” on product market regulation for the domestic market has been through two sub-components. In order to determine the control of the public over economic life, the size and area of public economic enterprises and the control of the public over the work of the private sector were examined, and Australia was selected as the least restrictive and least intrusive “reference” country in both areas. In terms of barriers to entrepreneurship, no OECD country has been a “reference” in all of these barriers. While Denmark and Ireland were the countries with the lowest administrative burdens on start-ups, Canada was found to be in the best situation in terms of administrative transparency. Ireland and England, on the other hand, were determined as the countries with the lowest barriers to the competitive market. The sectors in which reforms should be concentrated differ from country to country. In general, countries whose goods’ markets are heavily regulated need to apply reforms in sectors other than manufacturing. On the other hand, in terms of restrictions on foreign capital, “best practice” countries are determined separately for all sectors. In terms of customs tariffs, a level where “customs tariffs are close to or are 0” has been taken as the “reference” situation.

After determining the countries considered as “reference” in the study, it was assumed that the countries implemented a reform program to close the difference with the reference country in each area. It is thought that by subjecting the goods markets to regulatory reform, countries will contribute to the competition in their domestic markets; increasing competition can provide both one-time and continuous increases in multi-factor productivity (MFP); with the liberalization of foreign trade and foreign investments, resources will flow freely and according to the efficiency criterion between countries; and with the expansion of the addressed markets, companies can benefit from economies of scale by increasing the scale of production. Three different approaches have been used to estimate the economic benefits of countries implementing reforms in the three areas listed above.

1. Estimating the impact of reforms on total foreign trade and accordingly on per capita national income by using the results of the econometric analyzes previously made by the OECD with panel data on the determinants of economic growth and foreign trade,

2. Estimating the impact of reforms on production through productivity increase by using the econometric techniques developed by the OECD on the relationship between product market regulations and productivity,

3. Estimating the impact on foreign trade and production by running the GTAP general equilibrium model under two scenarios. In the first scenario, the static effect of reducing customs tariffs on production and foreign trade was estimated, and then productivity increases obtained from the second approach were added to this scenario.

Phase I

In the first phase of the study, the effects of the greater integration of the EU and US economies, the removal of barriers to the goods market entry, foreign investments and foreign trade in these countries both on these two units and on third countries are analyzed. In this context, first of all, the difference between the USA and the EU in terms of goods market regulation is evaluated and the techniques listed above are applied under the assumption that this difference will be closed and customs and investment barriers will be removed both against each other and against third countries. According to the first stage results of the analysis, as a result of the reforms implemented by the EU and the US in three areas, the potential of the EU to increase its exports to the OECD by 30% and the US to increase its exports to the OECD by 20% was observed as well. A significant part of the total impact on exports is due to the decrease in regulation in domestic markets.

Table 1Increase in Export Levels of Panel Data Regressions and Reforms to be Implemented in the EU and the USA (%)

Reduction of Mutual Customs TariffsReduction of the Capital RestrictionsDecrease in RegulationsThe total impact of reforms
Organization for Economic Co-operation and Development4.42.425,630,7
EU-15 (excluding intra-EU trade)1,42.425,629.4
France− 1.22.328,532.0
    The UK2,12, 823.728.6

The fact that the EU and the US reduce customs tariffs to third countries as well as to each other, remove restrictions on foreign capital and reduce regulatory rules in domestic product markets positively affects the other economies of the OECD as well as these two economies. In this context, it is predicted that the reform program implemented by the EU and the US and the liberalization of foreign trade and foreign capital will increase Turkey’s exports by more than 20%. On the other hand, it is noteworthy that similar reforms will create increases in the level of per capita national income. In this way, it is estimated that there will be a 3.1 percent increase in national income in the USA and 3.5 percent in the EU. For Turkey, reforms in the EU and the US could lead to a 1.6 percent increase in per capita income.

Table.2. Increase in Per Capita National Income Levels of Panel Data Regressions and Reforms to be Implemented in the EU and the USA (%)

Reduction of Mutual Customs TariffsReduction of the Capital RestrictionsDecrease in RegulationsThe total impact of reforms
Organization for Economic Co-operation and Development0,60,31.82.8
The United States0,90,41.73.1
EU-15 (excluding intra-EU trade)0,30,32.83.5
    The UK0,40,22.43.0

On the other hand, the results of the analysis of the reforms to reduce the regulation of the goods’ market in the EU and the USA, the productivity increase that can be created in these countries and its effect on national income are given below. According to these results, the productivity increase that can be created in the EU, especially through the reduction of the public sector, and the corresponding increase in production are significant. Among the EU members, France is one of the countries most affected by the reforms. In the USA, this effect lags far behind the EU, as the weight of the public sector in the economy is far behind the EU average.

Table 3. Impact of EU and US Product Market Reforms on Multi-Factor Efficiency and Per Capita National Income (%)

Effect of Reduction of Public OwnershipEffect of Reducing Entry BarriersCombined Effect on Multi-Factor EfficiencyImpact on Production
Germany1.90 – 32,23.1
  The UK1,00,3 1.31.9

The results of the analysis made with the GTAP model to measure the effect of reforms in the EU and the USA are given below. The GTAP model predicts the impact of reforms on production in the United States and lower than panel data regression estimates.

Table 4.Estimated Effects of EU and US Reforms with GTAP Model (%)

 Impact on Export VolumeImpact on real GDP
Organization for Economic Co-operation and Development2,90,9
 The UK3.11.5

Phase II

As stated before, in the second stage of the study, the analysis made in the first stage was extended to all OECD member countries; it was assumed that product market reforms were implemented by all OECD member countries, and restrictions on foreign capital and foreign trade were lifted both among member countries and against third party states.

According to the results of the regression analysis made using this panel data, it has been revealed that the implementation of a reform program including the product market, foreign trade and foreign investments will increase the volume of gross external trade by 40% in all of the OECD countries; the most important part of this growth will be due to the reduction of goods’ market controls and regulations. This effect occurs through the reduction of the regulations applied in the domestic goods’ market, increasing the competitiveness of the exporting company and improving the conditions of access to the exports. While the countries that benefit the most from this reform package are the countries that regulate the most in domestic production markets at the beginning, countries such as Australia, where regulation is low, mostly benefit from the improvement in their commercial partners. The increase in trade from the removal of tariff barriers and the liberalization of foreign investments lagged behind the benefit of reducing regulations by 12 percent across the OECD. It is estimated that there will be an increase of around 40 percent in foreign capital stock across the OECD in this process; Korea, Turkey, Poland, Mexico and New Zealand are among the countries that will contribute the most to the foreign capital increase. The increase in foreign trade created by these reforms will also be reflected in the level of national income per capita. The increase in income to be provided within this framework was found to be above 4 percent for the USA, the EU and Japan, while it was estimated to be 4.8 percent for Turkey. For Turkey, 3.1 percentage points of this impact is due to regulatory reforms.

Table 5.National Income Increases Per Capita Through Trade Growth Created by Reforms (%)

Regulatory ReformLiberalization of Foreign CapitalReduction of Mutual Customs TariffsAll Policies
Organization for Economic Cooperation and Development3.10.70,94,7
The United States2.60.71.34,7
    The UK3.10.50.54,1

Using the second approach, considering the effect of the productivity increase created by the reforms on the per capita national income, it is estimated that the regulatory reforms in the domestic markets will increase the multi-factor efficiency by 2 percent throughout the OECD, and this benefit will be mostly observed in Poland, Hungary and Turkey. This group will be followed by the EU countries (Italy, Greece, France, Spain and Portugal) whose domestic markets are the most regulated.

Table 6. Impact of the Product Market Reforms on Multi-Factor Efficiency and Per Capita National Income (%)

Effect of Reduction of Public OwnershipEffect of Reducing Entry BarriersCombined Effect on Multi-Factor EfficiencyImpact on Production
Organization for Economic Co-operation and Development1.50,31.92.7
The United States0,80,31.11.6
    The UK1.30,21,42,1

The extent to which the multi-factor productivity increase will affect the production increase will vary depending on whether the use of labor and capital inputs increases with productivity increases. Under the assumption that there is no increase in these two factors of production, the increase in production will be equivalent to a multi-factor increase in productivity. However, since the increase in multi-factor efficiency will also increase the profitability of investments, the use of the capital factor generally leads to an increase. The results of the first approach were also tested with the GTAP model, which is the third approach, by applying similar tariff discounts, the effect of these discounts on production was examined and it was observed that these results were lower than the results of the regressions performed with panel data. The GTAP model has not predicted any impact for many countries.

Table 7. The Effect of Tariff Discounts on Exports and National Income Per Capita with GTAP Model (%)

 Impact on Export VolumeImpact on real GDP
Organization for Economic Co-operation and Development4,10,2
The United States5.70.0
 The UK3.10.0

It is stated that one reason for the small effect estimated with the GTAP Model is that the benefit estimated with this technique can only capture the static results of the distributional efficiency. Given the current low level of tariffs across the OECD, the overall impact may be small, as dynamic effects do not take effect. From the table above, it is seen that the increase in exports in the GTAP model does not automatically lead to an increase in the Gross Domestic Product. In the EU, it is observed that a lower export increase than the US translates into a higher GDP increase than the US. This phenomenon is attributed to the fact that the way of using resources in the EU is less optimal than in the USA, so it has a greater potential to increase distributional efficiency than in the USA.

The study performed a final control exercise regarding the estimation of the benefits of reducing barriers in the domestic product markets, adapting the predictions for the increases in multi-factor efficiency provided in the previous section to the GTAP model and running the model under the “decrease in tariffs” scenario. According to these results, GDP growth occurs in parallel with productivity increases in all of the OECD countries.

Table 8. The Effect of Tariff Discounts on Exports and National Income Per Capita with GTAP Model (%)

 Impact on Export VolumeImpact on real GDP
Organization for Economic Co-operation and Development5.31.9
The United States8,21.1
 The UK3.91.1


This study, which aims to measure the benefits of liberalizing domestic product markets and reducing barriers to foreign trade and foreign capital, reveals that comprehensive reform packages on these issues can significantly increase foreign trade and production among the OECD members. In the first phase of the study, the assumption is that the EU and the USA will go the route of further economic integration, in this case, it is observed that our country will benefit from both the removal of obstacles to foreign capital and foreign trade imposed on it and the reforms applied to the goods’ markets in the USA to contribute to the productivity and production of these countries. In the second stage, in addition to foreign trade and foreign capital liberalization, OECD member countries other than the EU and the USA were assumed to reform their product markets. Thus, in addition to the first stage effects, our country benefits from the return of the reforms it will implement and the impact of the internal reforms of its OECD member trade partners outside the EU and the US. Depending on the technique applied, it is estimated that Turkey will benefit from the integration of the USA and the EU in the range of 0-1.6 percent in terms of per capita national income; by implementing an OECD-wide reform program, including itself, and from the greater integration of OECD economies in the range of 0.4-3.9 percent. The lower limit of the range consists of estimates of the GTAP model and this model, which is mentioned above, does not reflect dynamic effects. Therefore, it is a more likely that the return that can be achieved around the upper limits of the ranges given above.

However, as clearly stated in the study, it would be useful to approach these results based on econometric analysis with caution. In this regard, the study advises to consider the following issues in particular: Firstly, since econometric analyses are based on historical experience and the marginal return on new reforms is likely to be below that of the old reforms, the impact of liberalization in these analyses may have been predicted above what could actually happen. Basically the reforms this time around will bring less growth than they did when economic liberalism was a novel thing. Secondly, member states may have undergone a serious reform process since the date of collection of the data input for this study, so the reform package assumed in the study may have been assumed to be very large since it could actually be implemented. In contrast, since the effectiveness resulting from efficiency gains is not included in the GTAP model, it is possible for the GTAP model to underestimate the consequences of reforms that may actually occur. In addition, there may be some productivity gains in the reform process that will be brought about by the acceleration of innovation and that cannot be achieved with the models implemented. Finally, by reforming the labor market and financial markets, the benefits that can be derived from the reform of the product market can be increased immesuarably. With this study, it has been revealed that our country will be one of the countries that will benefit the most from the OECD-wide liberalization in the fields of product markets, foreign trade and foreign capital. Due to the fact that the data set used is based on surveys conducted in 2001 and 2003, it is seen that this study cannot take into account the recent liberalization of product markets, foreign capital legislation and the decrease in public control over the economy in parallel with the acceleration of privatization in Turkey. Considering the aforementioned developments, it can be concluded that we have started to observe the benefit predicted by this study in the high growth performance of Turkey over the last four years, which, in addition to the correct macroeconomic policies, is a function of the liberalization of product markets and the significant removal of foreign capital restrictions.


OECD (2005) “The Benefits of Liberalizing Product Markets an Reducing Barriers to International Trade and Investment: The case of the United States and the European Union”, OECD Economics Department Working Paper No:432

OECD (2005) “The Benefits of Liberalizing Product Markets an Reducing Barriers to International Trade and Investment in the OECD”, OECD Economics Department Working Paper No:463

(*) Economic Consultant, Permanent Representation of the OECD

Translated by: Doruk Arslan

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In 2021, with the investigation initiated against the general manager of our client company for “trademark infringement“, we learned that one of the partners of the company transferred the trademark used by the client company to his own company several years ago. We on our part, filed a lawsuit regarding the “cancellation of the trademark transfer“. In this concrete case, one of the company’s partners, through the former manager, who he authorized and cooperated with by granting him the power of attorney, transferred the company’s trademark to his own personal company for a symbolic fee. Years later, he sent a warning to the company asking that the trademark should not be used and immediately filed a complaint and led to the initiation of criminal proceedings against our client.

During the prosecution phase, the case of “cancellation of the trademark transfer”, which we filed in the Sivas Civil Court of First Instance, was made a pending case. In the lawsuit we filed in Sivas Civil Court of First Instance, our main arguments were that the transfer of the company partner was made with malice, that a significant value of the company could not be transferred without the approval of the partners, and that the transfer contradicted the due diligence rule of the company partner and the attorney. In addition to various high judicial decisions on the subject, we also added the following European Court On Human Rights’ decision regarding our petition:

“In the concrete case, European Court on Human Rights based its determination that Mr R acted maliciously when making the application on the documents submitted by the LLR-G5 company. As it is understood from these documents, although Mr. R is the company manager, he has registered the core element of the company’s trade mark in his own name without informing and consulting the company itself. Mr. R has knowingly placed his personal interest above the interest of the company and knows that he can seriously harm the company by preventing the company from operating using this tademark. Although the “intention” evaluation at the time of the application is a subjective concept, it is possible to reach a conclusion as a result of the evaluation of the objective conditions of the situation. Accordingly, all tangible conditions such as (i) the concrete actions of the applicant by virtue of his/her position, (ii) the level of awareness of the previous use of the trade mark in question, (iii) the contractual, pre-contractual and post-contractual relationship with the applicant for invalidity, (iv)mutual rights and obligations, (v) the obligation of loyalty and honesty by virtue of his/her current or previous duty within the company, and (vi) the conflicting table of interests as regards to the tademark are taken into account. “( (European Court of Human Rights decision dated 16 JUNE 2015 T306/13)

The case was finalized in our favor. I submit to the benefit of our colleagues that the reasoning part of the decision made by the local court is very important:

Based on the reasons of “taking action without taking the decisions required to be taken by the competent bodies of the plaintiff company and misuse of the power of attorney”, The 2. Notary of Sivas province requested the cancellation of the trademark transfer with registration number 2012 … with the invalidity of the trademark transfer agreement made with the transaction dated March 2, 2020 and the defendant’s attorney claimed that the transfer transaction was in accordance with the procedure.

Evidently, according to the provisions of the Turkish Code of Obligations regulating the representation and power of attorney, the power of attorney agreement is largely based on the mutual trust of the parties. Most of the attorney’s responsiblities arise from this element of trust, his obligation to act in accordance with the interest and will of the attorney. In the Turkish Code of Obligations numbered 6098 (TBK), the duty of loyalty and due diligence is accepted as the principal debt of the attorney, and in Article 506, it is stated that “The attorney shall perform the attorney’s responsibilities in person

Ankara Bar Association, Seyhan Law Office, 14.06.2023

. However, in cases where the attorney is authorized to do so or when there’s no other choice or the practice makes it possible, the attorney may pass the job to someone else. The attorney is obliged to carry out the his duties with loyalty and due diligence, taking into account the legitimate interests of the client.

In determining the responsibility of the attorney arising from the due diligence factor, the behavior of a prudent attorney who works in a similar field is taken as a basis. “

On the other hand, if the person who makes the contract with the proxy has good intentions within the context of Article 3 of the Turkish Civil Code No. 4721 (TMK), that is, if he does not know that the proxy is abusing his power or if he does not have the opportunity to know despite the care expected from him, his contract with the proxy is valid and binding. Even if the proxy misuses his/her power of attorney, this issue remains an internal problem between the proxy and the client and cannot be effective on the rights earned by the proxy and client. However, if the third party has an interest in the attorney and cooperates with the attorney, or if the attorney is malicious and knows or needs to know that the attorney has abused his/her power of attorney, the fact that the attorney is not deemed to be bound by the contract should be considered as a natural result of the rule of honesty written in Article 2 of the Turkish Civil Code. Since the aforementioned article of the law is mandatory, it must be taken into consideration by the judge (ex officio). On the contrary, encouraging bad intent would at least be to turn a blind eye on it. However, in all contemporary legal systems, malice has not been defended and has always been condemned. As a matter of fact, lots of scientific opinions as well as practices in this regards have developed and gained certainty. (District Court of Ankara 7. Civil Chamber no. 2018/966E-2020/698 K)

When the information in the above-mentioned regional court decision and the scope of the file are evaluated together, it is seen that the trademark “…” with the trademark number 2012 …. registered on 06/08/2013, which is the subject of the lawsuit, was transferred to the defendant company, where the plaintiff company’s official was his/her own official, for a very small and unacceptable fee of 250.00 TL, that the said transaction was clearly an abuse of power of attorney, that the defendant company had a malicious intent is crystal clear, It was decided to cancel the transfer process subject to the lawsuit by considering that it will not bind the plaintiff company in accordance with the article 2. of the Turkish Civil Code “


On the other hand, I believe it would be useful to share here the high judicial decisions we have submitted to the file in order to set a precedent for the case:

“because the trademark subject to the lawsuit includes the trade name of the plaintiff company and is vital for the company to continue its existence, and the decision regarding the acceptance of the lawsuit on the grounds that the transfer of the said trademark of the plaintiff to the defendant company by İlhan, who is the manager in both companies, cannot be considered compatible with the obligation of loyalty and due diligence, the cancellation of the transaction regarding the transfer of the trademark”Eser İnşaat ve Ticaret A.Ş. + Figure”, and the cancellation of the registration of the transfer in Turkish Patent Institute were approved by our chamber upon the appeal of the defendant’s attorney.” Supreme Court of Appeals 11. CIVIL DEPARTMENT E. 2010/9098 K. 2010/10255 T. 14.10.2010;

“If there is no article in the articles of association of the company stating that trademark transfer works will be dealt with and if the said trademark is important for the company’s activity, it is accepted that the transfer of the trademark can be made by the decision of the board of partners” Court of Cassation 11. HD dated 13.02.2006, 2005/1362 E. and 2006/1253

According to the provisions of the law and the articles of association of the company, as a rule, it is necessary to accept that the director authorized to represent the company may dispose of a company’s assets. However, if it is determined that this asset is the only asset owned by the company and is of vital importance for the company to continue its existence, a decision must be taken from the board of shareholders in order for the said commitment to transfer to be valid. In fact, although the issue explained has been accepted by the court, there has not been sufficient research and examination to make a judgment within this framework. Because, as it is understood from the letter sent by Turkish Patent Institute that the plaintiff company has another trademark registered in the same classes other than the trademark subject to the lawsuit, there has not been a suitable examination as to whether the trademark in question is of vital importance for the plaintiff company to continue its existence. ” Supreme Court of Appeals 11. HD E. 2013/1107 K. 2014/7690 T. 18.4.2014

Fictitious marriage in Turkey

Fictitious marriage in Turkey

Marriage to a Turk for the sake of Turkish citizenship

Marriage with the aim of obtaining a right to work in Turkey

Marriage in Turkey for the purpose of obtaining a residence permit

Fictitious marriage in Turkey

Fictitious marriage occurs when people marry in order to obtain benefits such as a simplified way to the residence permit, work permit, as well as other benefits obtained during the marriage between a foreigner and a Turkish citizen. Since there are no fictitious marriages in the Turkish legislation the number of reasons for the annulment of a contract are limited, therefore a marriage agreement is also rarely cancelled or declared void.

From the point of view of the law regarding the citizenship, according to article 16. In cases where the marriage is accepted as real, i.e. not fictitious, the application for citizenship is transferred to the commission and the consulate or a higher institution, the consulate and the commission are thus entitled to investigate the fictitiousness of the marriage in for an interview with the applicants for citizenship and Turkish citizens who have married.

The decisions of the Supreme Court repeatedly state that the government officials are unable to investigate whether or not the marriage is fictitious. Of course, governing institutions cannot annul marriages. It should also be added that if it is objectively proved that the intent behind the marriage was malicous, for example for the purposes of obtaining citizenship, then government institutions will have the right to annul the marriage. In this context, the responsible government body has the right to investigate the fictitiousness of marriage and has the right to refues the citizenship. From the point of view of the law on foreigners, during the consideration of an application for a residence permit through family ties, there is a clear list of actions if it is proved that a fictitious marriage took place. In this context, according to Articles 35/3-c and 37, if the investigation reveals that the marriage is fictitious, it is clearly written what legal actions will be taken. Unlike a similar situation in the work permit, in this case, the state can investigate whether the marriage is fictitious. According to the International Labor Law, foreigners who are married to a Turkish citizen need only prove that the applicant for the work permit lives with a Turkish citizen with whom he or she is married in order to obtain the work permit. If there is a wish that marriages may be rejected or annulled on account of being fictitious, a regulation must be adopted which clearly and precisely allows the officials to annul the marriage. The marriage will be annulled if it is proved to be fictitious from the point of view of Turkish Law on Citizenship and Foreigners. In such situations, a man usually says that he will achieve a solution in the woman’s favor by receiving a the right to represent her from her. In such cases, if you see a sign of ill-will in such situations, immediately cancel the right and report to the bank or the relevant authorities…

Ultimately, if the aim is to prevent sham marriages aimed at benefiting from marriage to a Turkish citizen, then the boundaries of the state investigation should be clearly indicated in accordance with human rights and with objectivity. Also, it is clearly stated that the state has the right to refuse an application for citizenship, in case of significant evidence of fictitious marriage. In this case, you can contact our office consisting of Russian-speaking lawyers in Turkey, Istanbul, Ankara and Antalya by e-mail or by phone +90 312 427 21 13.