Fees Received under the Montreux Convention: An Assessment on the Value of the Golden Frank

Abstract

Montreux Convention signed in 1936 regulates the cruise and voyage passages through İstanbul Strait, Marmara Sea and Çanakkale Strait, known as the Turkish Straits. Within the framework of this convention, there are mutual rights and obligations concerning the navigation through the Turkish Straits and pertain to both the vessels utilizing the straits for passage and the Republic of Türkiye, which holds sovereignty over these straits. While the ships passing through the Turkish Straits benefit from the freedom of navigation, it is stipulated that they make payments to the Republic of Türkiye for the services (sanitary control, lighthouse, life-saving services) included in Annex-1 of the convention. Articles 1 and 4 of this annex refer to these fees. The article examines these issues. Annex-1 states that the amount to be paid will be determined in terms of net ton, service type, and Gold Francs. Taking into consideration the number of ships passing through the straits and their total tonnage, this study makes a mutual comparison between the Golden Francs application in the Montreux Convention and the current applications in determining the fees charged by Türkiye and discusses which of the methods would provide more gains to the Republic of Türkiye. The result of the study clearly shows that the new pricing policy to be applied can provide more income to Türkiye and can be in line with the spirit of the Montreux Convention.