TURKEY EXTENDS CUSTOMS UNION TREATMENT TO CYPRUS

UNCLAS ANKARA 005816

SIPDIS

STATE FOR EUR/SE, EUR/ERA
DEPT PLEASE PASS USTR FOR LERRION
USDOC FOR ITA/MAC/DDEFALCO

E.O. 12958: N/A
TAGS: PREL ETRD TU CY
SUBJECT: TURKEY EXTENDS CUSTOMS UNION TREATMENT TO CYPRUS



1. The GOT Cabinet on September 30 approved an amendment to
the customs union agreement with the European Union to
include new EU member states, including the Republic of
Cyprus. Note: The decision refers to "Cyprus" rather than
the "Republic of Cyprus". End Note. President Sezer
approved the decision and it was published in the State
Gazette on October 2 - several days prior to publication of
the European Commission report on Turkish accession. The
same day, MFA issued an announcement on this subject, which
is reproduced below. The customs union is limited to trade
in industrial goods. See septel for further details.


2. Begin text MFA announcement:

October 2, 2004 PRESS RELEASE

Article 3 of Decision 1/95 of the Turkey-EC Association
Council taken on 22 December 1995 on the completion of the
Customs Union stipulates that the Customs Union be applied
on Turkey's territory on the one hand, and on the Community
customs territory on the other.

In view of the accession of 10 new Member States (Cyprus,
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta,
Poland, Slovakia, Slovenia) to the EU on 1 May 2004, The
Turkish Government has decided to include all new EU members
in the scope of the Council of Ministers Decree No.
2002/4616 of 3 September 2002 which specifies, as far as
Turkey's internal legislation is concerned, the countries to
which the Turkey-EU Customs Union applies. This decision
makes it possible for goods imported to Turkey from the new
Member States to be treated under the Customs Union regime.

This decision is an administrative act emanating from our
relations with the EU as well as reciprocal legal
obligations under the Customs Union. Our views and position
as outlined in our press statement issued on 1 May 2004 and
forwarded through official channels to the EU and its member
states remain valid. The amendment of our internal
legislation as such does not imply in any way the
recognition of the Greek Cypriot administration by Turkey.

In the same vein, the Greek Cypriot administration is
equally obliged according to its Treaty of Accession with
the EU to provide Customs Union treatment to goods coming
from Turkey. In essence, the Greek Cypriot administration
has abrogated all restrictions against goods from Turkey
through a decree published on 11 December 1998. The EU
Commission has given written confirmation that the Greek
Cypriot administration is accepting the free circulation
under the Customs Union of goods from Turkey as of 1 May

2004.

Turkey remains committed to its special relationship with
the Turkish Republic of Northern Cyprus, and its obligations
emanating from this special relationship.

Unfortunately however, the EU is yet to fulfil its
commitments with a view to ending the isolation of the
Turkish Cypriots. The EU Commission has carried out its
responsibility by proposing the two draft Regulations on
financial assistance and direct trade on 7 July 2004. Turkey
appreciates the Commission's efforts. However, the Member
States could not yet finalize these positive but first
steps. It is expected that the political decision taken on
26 April 2004 by the EU-15 foreign ministers be put into
effect by the EU-25.

Turkey wishes to stress once more that it is due time to
stop imposing on the Turkish side, which has demonstrated
clearly its will for a solution, restrictions it does not in
any way deserve.

End text MFA announcement.
Edelman#