IRU - 7th Symposium of Lawyers

“Diversity of controls and sanctions in goods road transport: helping your hauliers through the maze of unharmonised applications”

Even though the road transport has a significant importance for the performance of trade in Turkey lying as a breach between Europe and Asia, Turkey could have not enacted a statutory law until 19 July 2003 on the road transport services, and such services had been controlled by the unsatisfactory regulations and directives of the Turkish Ministry of Transport. The main reason for this legislative insufficiency had been the weaknesses of national transport policy in Turkey. The absence of co-operation among various groups of transport interests in reconciling their differences through transport legislation may be considered another reason.

The Turkish Road Transport Act, numbered 4925 (hereinafter to be referred as “the Act”), was eventually accepted by the Turkish Parliament on 10 July 2003 . It comprises four parts: “Introductory Provisions”, “International Carriage”, “Liability and Insurance” and “Miscellaneous Provisions”, and 38 articles.

One of the purposes of the Act is to determine the conditions of access to and exercise of profession for transport operators in line with the national economy (Article 1). Again as a general principle of transport law, the transport services are required to be rendered, considering public interests, in an economic, swift, convenient, secure way with minimum environmental effect in a free competitive atmosphere, and bearing in mind the protection of general health (Articles 4 and 5) . The transport of goods and passengers on public roads by means of motor vehicles falls within the scope of the Act (Article 2). It thus ousts the other modes of transport, such as air, sea, inland water and rail, from its coverage. The operation of international conventions before the Act itself is also secured through the Act.

The Transport by Road Regulation (to be stated hereinafter as “the Regulation) drafted by the Turkish Ministry of Transport pursuant to Article 34 of the Act was also put into effect in 2004. The Regulation, containing 90 articles, deals with the specific issues referred in Article 34 of the Act.

It is not possible, at least for the author, to deal with all aspects of the Act and Regulation, but the transport operators rendering services for international carriage of goods. Consequently neither domestic carriage of goods nor carriage of passengers fall within the scope of the paper. Similarly furniture removal is not dealt with herein.

The purpose of the paper is to study the control over and sanctions under the Act and Regulation against the transport operators, and to examine the conditions for the access to and exercise of the profession by the transport operators as well as the transport operator’s and consignor/principal’s responsibilities. The paper starts with focusing on the transport operators for international carriage under Turkish law.

The Act shall apply to transport operators (Article 2). Transport operators, includes carriers, agents, commissioners of transport, warehouse operators, cargo service operators and others operating similar services (Article 3). All these terms except “others operating similar services” have been defined in the Act (Article 3):

Accordingly, only the real or artificial person who possesses the certificate of authorisation and undertakes the transport in his name and on his behalf against the payment of fee has been deemed to be a “carrier”.

Thus, a person who acts as a commissioner of transport or an agent has been precluded from being a carrier unless he acts on his behalf too.

The “agent” means the professional under a contract continuously acting as an intermediary in the conclusion of the transport contracts with respect to one or more carriers or executing those in their names within the definite place or zone without any personal dependency.

The professional having goods transported in its own name but on behalf of the principal against the payment of fee is defined as “commissioners of transport”.

The “warehouse operator” is the one who is entitled to use an independent business premises and who receives, loads, discharges, stores, stows, tranships, delivers to the consignee, carry or arrange the carriage of the goods under its own custody and undertakes their responsibility. The main difference between the warehouse operator and the “cargo service operator” is the definition of the “cargo” as packed or wrapped goods of less than 100 kg.

The Ministry of Transport has widened the scope of the Act by Article 2 of the Regulation to include logistic firms, transport service organisers (freight forwarders), terminal operators, parcel forwarders and car rental firms as “others operating similar services”:

The “logistic firms” is the real or artificial person who is entitled to use a self-governing business premises and who is, along with transport facilities, obliged to perform wholly or partially loading, discharge, storage, stowage, packing, classification, marking, trading, marketing, order planning, distribution, supply and similar services for the goods under its own custody after their receipt from its customers.

The “transport service organiser” means the artificial person who is deemed a carrier subject to responsibilities under law, who issues a transport invoice for the organisation of the unimodal or multimodal carriage performed by others possessing the certificate of authorisation.

The person who operates premises for the consignment of the goods or cargo becomes the “terminal operator”.

Finally the “parcel forwarder” is identified as a real or artificial person forwarding in his own name and on his own behalf a unit of cargo of less than 5 kg from door to door in a short period.

International carriage has been defined in Article 3 of the Act as: “the carriage from, to or via Turkey on road, or carriage to Turkey by sea, air or rail and then from Turkey to third countries by road.” Article 12 of the Act has subdivided international carriage into following four categories:

Article 13 of the Act grants the right of cabotage only to Turkish licensed vehicles and forbids foreign licensed vehicles to engage in any road carriage between two points within the Turkish jurisdiction.

Otherwise, the owner and the driver of the foreign licensed vehicle shall be fined to 1,000.-YTL (approximately US$800). This provision secures the interests of the carriers who have obtained a certificate of authorisation for national carriage, and is a reaction against the application of cabotage restriction to Turkish licensed vehicles by third countries.

II. POLITICS OF CONTROL OVER AND SANCTIONS AGAINST THE TRANSPORT OPERATORS IN TURKEY

The transport operators in Turkey are under the control of the Ministry of Transport (General Directorate of Road Transport) by Article 10 of the Act for the Organisation and Duties of the Ministry of Transport dated 9 April 1987, no. 3348. This control has been performed through the Act and Regulation in the course of transport operators’ access to and exercise of their profession.

Article 5 of the Act, in order to promote the administration of road transport services, has required a “certificate of authorisation” from the applicants for their access to transport business. The certificate shall be renewed after each five year time for the exercise of profession. Types of certificate of authorisation used for “international carriage of goods / cargo” are as follows:

Any person who operates road transport services without a certificate of authorisation shall be deemed to be in violation of Article 26 and fined to 5,000.- YTL (approximately US$4,000).

Article 5 of the Act, along the lines of Article 3 of the Council Directive 96/26/EC of 29 April 1996 as amended by Council Directive 98/76/EC of 1 October 1998, has made the grant of authorisation subject to the following four conditions which have been detailed in Articles 12 – 13 of the of the Regulation:

The applicant should be of Turkish national and the vehicle used for international carriage should be Turkish licensed according to Articles 12 and 13 of the Regulation. Consequently foreign persons cannot apply for the certificate. They must however satisfy this condition by forming a Turkish artificial person (such as a Turkish company) in Turkey under Turkish law.

For the operation of international carriage by foreign licensed vehicles there is a need for authorisation under an international bilateral or multilateral convention to which Turkey is a party or simply by the Turkish Ministry of Transport. However, in the case of multimodal international carriage to Turkey by rail, sea or air and then from the point of arrival to third countries by road vehicles, an authorisation should be granted directly by the Turkish Council of Ministers after hearing the proposal from the Ministry of Transport.

Article 15 of the Act empowers the Ministry of Transport to apply quantitative restrictions (quotas) on international carriage to or via Turkey by road for the prevention of any disruption in national carriage and on the international carriage from Turkey to keep it swift and orderly pursuant to legislation on the determination of routes and the physical limits of infrastructure. The quota system has been designed to make the entrance of foreign licensed vehicles to Turkey subject to the authorisation by the competent authority .

Any quantitative restriction on foreign licensed vehicles seems to be a restriction on the freedom of work and contract secured by Article 48 of the Turkish Constitution of 1982 not only for the Turkish nationals, but also for foreign nationals. Such limitation on foreign nationals may only be introduced pursuant to international law including international agreements or, otherwise, the principle of reciprocity according to Article 16 of the Constitution.

Article 12 of the Regulation considers such a condition not to have been satisfied if the transport operator has been convicted of serious criminal offences: smuggling, swindling, fraudulent bankruptcy, forgery, terrorist act, human trading, theft, bribery etc. Unlike Article 5(2)(b-c) of the Council Directive 98/76/EC as amended, the Regulation does not clearly forbid the grant of authorisation in cases where the operator has been convicted of offences of a commercial nature, has been declared unfit to pursue the occupation of road transport operator under any rules in force, and has been convicted of serious offences against the rules in force in respect of: the pay and employment conditions in the profession, or road haulage or road passenger transport, as appropriate, in particular the rules relating to drivers’ driving and rest periods, the weights and dimensions of commercial vehicles, road safety and vehicle safety, the protection of the environment and other rules concerning professional liability.

Article 4 of the Regulation defines professional competence as the possession of knowledge and skills with regard to the engagement in the occupation of transport. According to Article 12 of the Regulation, the condition of professional competence shall consist in the possession of knowledge corresponding to training, the details of which have already been provided by the Regulation of the Professional Competence Training on Road Transport Activities 2004, taking the respective EU legislation into account. The Regulation was put into effect as from its promulgation in 2004 .

Financial competence is the most important prerequisite of authorisation. By Article 4 of the Regulation, it means to have sufficient resources available to ensure proper launching and proper administration of an undertaking. Article 13 of the Regulation determines the prerequisites of financial competence for international carriage of goods as:

The financial conditions in the Regulation seem to have been brought with the aim of supporting the policy of promoting financially big and stable enterprises.Modern countries make regulations and take measures to facilitate the establishment and protection of big and stable enterprises which can employ high class labour against high salaries or wages, increase the quality of services, reduce their expenses and undertake big investments and research projects thanks to their strong financial structures and organisations together with good market techniques . The application of such a principle should not, however, allow them abuse their dominant positions in the market .

When the financial requirements in the Regulation are examined one by one, it is self-evident that the Ministry has followed such a policy through discouraging small firms to enter the transport market. These heavy requirements are not so grave to create oligopoly or monopoly, though. If so, such an unwanted situation can be prevented through the application of the Turkish Act on Protection of Competition, 1994. In any case, Article 5 contains a protective measure for customers against small in number, but at the same time strong transport firms, and provides that carriers cannot refuse to conclude a contract with his customers without any reasonable ground . It thus deems each of them as a public carrier. Any carrier who declines any customer’s offer without a reasonable ground shall be fined to 400.-YTL (approximately US$320).

Although in Article 3(3)(b) of the Directive 98/76/EC, it is provided that the competent authority shall have, in general, regard only to annual accounts, assets, working capital and costs of the undertaking for the purposes of assessing financial standing, the Regulation unfortunately requires from the transport operators satisfy the owned-vehicle condition and restricts the number of customers:

According to Article 16 of the Regulation, the holders of C2, L2 and M3 Certificate of Authorisation are entitled to operate their own vehicles and the chartered vehicles in the maximum same amount of their owned vehicles for the European carriage and in the maximum twice amount of their owned vehicles for the other international carriage. By comparison, the holders of E2 Certificate of Authorisation can run only their own vehicles.

Article 1 of the Act has found a person’s undertaking of carriage in his name and on his behalf sufficient to be a carrier regardless of the performance of the carriage by his own vehicle. In comparison, the Regulation, contrary to the Act, requires the carrier to own vehicles to obtain the authorisation. In the policy of big enterprises, the important thing is the large size of the capital to ensure their proper launching and administration, but not the amount of vehicles they have. It is highly possible that financially strong undertakings assign a large part of their capital for investment in vehicles. To compel them to have certain amount of vehicles, however, means to preclude them from adjusting quantity according to market conditions and to interfere in a negative way in the national economy.

The imposition of the same financial burden on logistics firms, which provide extra transport services other than mere transport, is also against the national economy. While they should have been encouraged to invest in other modes of transport, the Regulation has been forcing them to engage in the occupation of road transport .

Article 10 of the Act has forbidden agents and commissioners of transport to undertake carriage in their name, but on their behalf, unless they have obtained the certificate of authorisation for carriage, and consequently obliges them to own vehicles. Any person violating this obligation shall be fined to 3,000.-YTL (approximately US$2,400). Those people in principle act as an intermediary, but they were granted the right to assume carriage in their name too under the Turkish Commercial Code of 1956. This right no longer has any meaning in road transport unlike sea, air and rail transport. This restriction seems to be a victory for road vehicle owners against intermediaries during the preparation of the Regulation.

Article 4 of the Regulation has limited the number of customers with whom the transport agents make contracts: agents who hold G2 certificate of authorisation are allowed to conclude a contract only with ten carriers, and those who have G4 with two cargo service operators. Such restriction obviously contravenes the freedom of contract. Agents should be authorised to work with any customer they wish unless there is a conflict of interest.

The certificate of authorisation may be granted in return for the fee, which has already been fixed by the Regulation as follows:

Any fee determined by any authority in Turkey should be in proportion to the service rendered. The fees required by the Ministry appear to go beyond its service in a way to dissuade entrepreneurs from engaging in the occupation of transport. It may, therefore, be regarded as a financial burden on the applicant, which can only be imposed by a statutory law according to Article 73 of the Turkish Constitution of 1982.

Article 5 of the Act and Article 8 of the Regulation empower the Ministry of Transport to limit the grant of authorisation by determining the number of undertakings, the capacity of goods, the states and routes of vehicles due to security or similar reasons (such as the protection of public interest, the prevention of wasting resources and unfair competition). In comparison, in the EU, all quantitative restrictions (quotas) have already been lifted.

Article 5 of the Act obliges the carrier to obtain, from the Ministry of Transport, a vehicle certificate showing all his vehicles which are used for transport under an authorisation, and a vehicle card to be kept in each vehicle as proof of authorisation.

According to Articles 4 and 18 of the Regulation, each vehicle can be operated under only one authorisation. It means that a carrier who has been authorised to operate both international and national transport is required to use two different vehicles for each transport. Supposing that the carrier performs an international transportation of goods from St Petersburg to Ankara using one vehicle and gets an offer to carry goods from Ankara to Istanbul on his return journey. He either has to refuse the offer or has to use another vehicle duly authorised for national transport. This is harmful to the Turkish economy, as it is a waste of resources .

Article 5 of the Act and Provisional Article 7 of the Regulation oblige carriers to obtain special permission from the competent authority before the carriage of dangerous goods, pursuant to a regulation to be drafted by the Ministry of Transport in accordance with the EU transport of dangerous goods law. Any person carrying dangerous goods without this permission or against the legislation is fined to 500.-YTL (approximately $400).

The Regulation of the Carriage of Dangerous Goods by Road was put into effect as from its promulgation in the Official Gazette dated 31 March 2007, No. 26479 .

According to Article 11 of the Act scheduled carriers of goods shall prepare price tariffs and timetables, comply therewith, and keep them public in their offices and vehicles. The same obligation has been introduced to warehouse operators and cargo service operators only for price tariffs. Otherwise a fine of 500.-YTL (approximately US$400) can be shifted onto them.

The same Article empowers the Ministry of Transport to fix the bottom and top level of transport prices in cases where the application of high or low price has affected the national economy and public interest in a negative way, or has resulted from an abuse of a dominant position in the market by transport service operators. Any abuse of dominant position by requiring that a certain service purchased not be sold below a certain price can also be overruled by the application of the Turkish Act on Protection of Competition of 1994. In the European Union, according to the Council Regulation 4058/89 of 21 December 1989, the Member States are no longer entitled to determine the top level of fees.

In Article 11 of the Act, the freedom of contract is interfered with once again in the provision that the carrier cannot use a different fee schedule for return journey from that used for the single journey, although in practice carriers often cuts their fees for the return journey not to be deprived of any payment. Fortunately, Article 38 of the Regulation grants the carrier the right to apply a %20 reduction in the fee.

The obligations and liabilities of the transport operators and consignors have been written in various articles of the Act: Articles 6, 7, 9 and 17 of the Act as well as in the Turkish Commercial Code of 1956 and the CMR. Because of the poor drafting of the Act, it is not easy to find the reason behind the liability provisions in the Act and to draw a line between the scopes of the different legal regimes in a way to discover which one will be applicable first.

According to Article 2 of the Act and Article 90 of the Turkish Constitution of 1982, the CMR 1956, as an international convention, has given priority over the Act. Coming to the relation between the Act and the Turkish Commercial Code of 1956, the former, as a later and more specialised piece of legislation, should supersede over the latter, despite the fact that the latter provides more precise liability and obligation rules.

Considering that the main purpose of the Act to regulate the administrative law but not the civil law aspects of the road transport, its scope must be delimited to such if appropriate, and liabilities must be deemed to be administrative rather than civil.

Under the Act and the Regulation, the various obligations and liabilities of the transport operators and the fines imposed on the wrongdoer are as follows:

IV. OBLIGATIONS AND LIABILITIES OF THE CONSIGNORS TO THE TRANSPORT OPERATORS

The consignor is obliged under Article 8 of the Act to wholly and accurately inform the carrier of the arrival point, type, amount, nature and other important factors of the goods. All the responsibility arising from any inaccurate and deficient information is shifted onto the consignor. The carrier is entitled to have the goods inspected before the authorities in the case of any suspicion or warning.

It seems from this provision the consignor’s liability is absolute and is not based on the consignor’s fault. The loss resulting from the lack or inaccurate information with respect to the goods is enough to hold the consignor liable. This liability is towards to the transport operator. The transport operator should refrain from commencing the carriage should the information given by consignor has been insufficient.

Turkey finally passed the Act on 10 July 2003. Thus, the regulations and directives of the Ministry in the area of road transport have finally found a statutory ground. The Act and the Regulation have laid down new restrictions, institutions and policies into the Turkish legal transport regime. Now, the transport operators access to and operate their profession under the control of the Turkish Ministry of Transport applying the Act and Regulation.

The Act and Regulation satisfactorily require, in line with the Council Directive 96/26/EC of 29 April 1996 as amended, authorisation for the transport operators fulfilling certain conditions: (1) Turkish nationality and licensed vehicle, (2) good occupational reputation, (3) professional competence, and (4) financial competence. They were the result of the support of the policy which encourages big and stable enterprises in the road transport sector. International carriage has been also bound to an authorisation.

The Act and Regulation lay down the principles for liability of the transport operators as well as consignors.

The Act came into effect following its promulgation in the Official Gazette dated 19 July 2003, no. 25173. It was amended twice as promulgated in the Official Gazette dated 31 July 2004, No. 25539; and 27 April 2005, No. 25798 (See “http://www.kugm.gov.tr”).

See the Official Gazette dated 25 February 2004, No. 25384. The Regulation was amended seven times as promulgated in the Official Gazette dated 8 September 2004, No. 25577; 15 December 2004, No. 25671; 26 February 2005, No. 25739; 9 September 2005, No. 25931; 18 January 2006, No. 26053; 19 November 2006, No. 26351; and 21 February 2008, No. 26794 (See “http://www.kugm.gov.tr”).

S. Arkan, Ders Notu, s. 9.

See the Official Gazette dated 3 September 2004, No. 25572. The Regulation was amended four times as promulgated in the Official Gazette dated 19 March 2005, No. 25760; 29 September 2005, No. 25951; 16 August 2006, No. 26260; and 10 October 2007, No. 26669 (see “http://www.kugm.gov.tr”).

Y. Karayalçın, Büyük İşletme, Ankara 1985.

S. Arkan, Avrupa Topluluğunda Kara ve Demiryolu ile Yapılan Eşya Taşımacılığı, Ders Notu, Ankara 1989, s. 7.

F. Eren, Borçlar Hukuku, C. I., Genel Hükümler, B. 3, Ankara 1989, s. 369; T. Esener, Borç Hukuku, C. I, Ankara 1969, s. 195, A. N. İnan, Borçlar Hukuku, Genel Hükümler, B. 3, Ankara 1984, s. 138.

A. Dölek, “Lojistik Sektörü Teşvik Edilmeli”, http//www.ntvmsnbc.com/news/227496.asp, (05.08.2003); S. Yılmaz, “Karayolunu Seviyoruz Vesselam!”, Milliyet Gazetesi, 13.07.2003.

G. Sürtal, “Karayolu Taşıma Yönetmeliği ile İlgili Görüşlerim”, http://www.utikad.org.tr/surtal.doc, (22.04. 2004), s. 2.

See “http://www.kugm.gov.tr”.

S. Arkan, Ticarî İşletme Hukuku, Ankara 2004, s. 225.

7th Symposium of Lawyers - Hakan Karan