A manufacturing company's legal agenda starts with the raw material coming through the factory gate and extends to the damage a product causes to a user after sale. In between are supply contracts, employee safety, environmental permits, compliance of the product with technical regulations, the dealer network and customs procedures. Although each of these is governed by separate legislation, problems usually arise together.
Supply and sales contracts
In long-term supply and contract manufacturing agreements, price adjustment mechanisms, minimum purchase commitments, quality and acceptance procedures, penalty clauses tied to late delivery and termination are the most negotiated points. Sudden changes in raw material prices may also bring debates on excessive difficulty of performance (TBK Art. 138).
On the sales side, agency is regulated in TTK Art. 102 et seq. When the contract ends, an agent who brought in new customers from whom the principal continues to derive substantial benefit may claim an indemnity (TTK Art. 122). The Code states that this provision also applies to exclusive distribution and similar continuing contractual relationships unless this would be inequitable (Art. 122(5)). The indemnity risk should therefore be calculated separately when terminating a distribution agreement.
Product safety and liability
Law No. 7223 on Product Safety and Technical Regulations, which entered into force in 2021, brings together under one roof the requirement that products placed on the market be safe, the obligations of manufacturers, importers and distributors, and market surveillance and inspection. The Law provides for a system in which the manufacturer or importer is liable for damage caused by the product without the injured party having to prove fault. Conformity assessment, the technical file, CE marking and, where necessary, product recall are the main obligations in this area.
Environment, occupational health and organised industrial zones
A new facility or capacity increase may require an Environmental Impact Assessment (EIA, ÇED) process based on Article 10 of Environment Law No. 2872; once the facility is in operation, environmental permit and waste management obligations apply. Occupational Health and Safety Law No. 6331 imposes obligations for risk assessment, appointment of an occupational safety specialist and workplace physician, training and record keeping. Under Article 13 of Law No. 5510, a workplace accident must be reported to the Social Security Institution within three working days of the accident. For facilities in organised industrial zones, Law No. 4562 and the zone directorate's building and allocation rules also apply.
Competition law
Imposing resale prices on dealers, territorial or customer restrictions and sharing sensitive commercial information with competitors are assessed under Article 4 of Law No. 4054 on the Protection of Competition. The block exemption communiqué for vertical agreements gives a safe harbour to agreements below certain market share thresholds; companies above these thresholds should review their distribution systems separately.
Foreign trade and foreign personnel
For companies manufacturing for export, the inward processing regime, rules of origin and customs valuation practices are important. Additional assessment or penalty decisions of the customs administration may be challenged within fifteen days of notification under Customs Law No. 4458. Work permit procedures for technical personnel coming from abroad for installation or maintenance should also be included in the project timetable.
Our firm's work in this sector
We support manufacturing companies with contract drafting and negotiation, regulatory compliance reviews, employment and workplace accident disputes, customs and tax disputes, and the protection of patents, designs and trade secrets. This work combines Commercial and Corporate Law, Employment and Social Security Law, Tax and Customs Law and Intellectual Property.
Main topics
- Supply, manufacturing and contract manufacturing agreements
- Distribution, agency and indemnity claims (TTK Art. 102 et seq.)
- Product safety and product liability (Law No. 7223)
- Environmental permits and EIA procedures (Law No. 2872)
- Occupational health and safety obligations (Law No. 6331)
- Vertical agreements and competition law compliance
- Exports, imports and the inward processing regime
Frequently asked questions
Can a distributor claim compensation when the distribution agreement ends?
Under Art. 122(5), the indemnity provisions in TTK Art. 122 also apply to exclusive distribution and similar continuing contracts unless this would be inequitable. Conditions such as the distributor having brought in new customers and the manufacturer continuing to derive substantial benefit from them after the contract are examined separately in the specific case.
Are we liable for damage caused by our product even if we are not at fault?
Law No. 7223 does not make the manufacturer's or importer's liability for damage caused by the product dependent on fault; the injured party proves the damage and the causal link between the product's non-conformity and the damage. The limited situations listed in the Law may exclude liability.
Within what period must a workplace accident be reported?
Under Article 13 of Law No. 5510, the employer must report a workplace accident to the police immediately and to the Social Security Institution within three working days of the accident. Late reporting may have consequences in terms of administrative fines and the Institution's recourse claims.
Is sharing price information with our competitors a competition law infringement?
Sharing sensitive data such as future prices, capacity or customer information between competitors may be assessed as an agreement or concerted practice restricting competition under Article 4 of Law No. 4054. Data sharing through sector associations should also be reviewed in this respect.
Can we sell our product without CE marking?
If your product falls within a technical regulation requiring CE marking, it cannot be placed on the market without a conformity assessment and affixing the CE mark. Under Law No. 7223 on Product Safety and Technical Regulations, the market surveillance authority may prohibit non-compliant products from being placed on the market, order a recall and impose administrative fines. Not every product falls within the CE scope; it must therefore first be determined which technical regulation applies to the product.
Legislation and sources
- Law No. 7223 on Product Safety and Technical Regulations (in Turkish)
- Turkish Commercial Code No. 6102 (in Turkish)
- Occupational Health and Safety Law No. 6331 (in Turkish)
- Environment Law No. 2872 (in Turkish)
- Law No. 4054 on the Protection of Competition (in Turkish)
The information on this page is general and does not constitute legal advice. As legislation may change, the current rules must be assessed separately for your particular situation.