Issuing Body: Guozun Cathay Associates – Turkey Office
Date of Conclusion: June 13, 2026
Core Outcomes: Conducted a comprehensive review of the partner’s qualifications and compliance risks, issued a dedicated due diligence report and practical risk response plan, and ensured the safe advancement of cross-border mining procurement cooperation.
This case was jointly handled by the Turkey Office of Guozun Cathay Associates and the Foreign-Related Compliance Team of its Beijing Headquarters. Strictly abiding by the laws of China and Türkiye and the International Bar Association (IBA) Code of Conduct for Cross-Border Due Diligence, and relying on Guozun Cathay’s global localised service network and dual-jurisdiction professional expertise, we provided a full-chain, standardised legal due diligence service for cross-border cooperation to a resource trading enterprise based in China.
This case has been included in Guozun Cathay’s 2026 Typical Case Library for Foreign-Related Compliance and Cross-Border Investment. Its case-handling model of “in-depth local verification + dual-jurisdiction risk validation + practical solution delivery” has been widely applied to cross-border commercial due diligence projects in the Middle East.
I. Case Background and Entrustment Process
Mr. Zhao, the person in charge of a Chinese resource trading enterprise, intended to launch the first business cooperation between his company and a Turkish mining Co., Ltd. as the purchaser of rare mineral soil raw materials. The two parties had reached a preliminary cooperation intention in the early stage, and the client had arranged personnel to conduct on-site inspections in Türkiye. Given the inherent information asymmetry and jurisdictional differences in cross-border transactions, the client decided to entrust a professional legal team to carry out special legal due diligence, in order to comprehensively identify cooperation risks, verify the authenticity of the partner’s qualifications and actual performance capability, and avoid subsequent performance disputes and economic losses.
On March 15, 2026, the client was connected to the Turkey Office through the Beijing Headquarters of Guozun Cathay Associates. In view of the three core difficulties of the case, namely Türkiye’s mining qualification supervision, equity compliance recognition, and adaptation of environmental protection rules, the Turkey Office activated the “China-Türkiye Collaborative Case Handling Mechanism” on the same day, and jointly established a dedicated case team consisting of 4 lawyers with the Beijing Headquarters (including 2 locally practising Turkish lawyers and 2 members of the Foreign-Related Lawyer Talent Pool of the Beijing Lawyers Association), who were fully authorised to handle this cross-border due diligence work.
II. Full Process of China-Türkiye Joint Case Handling
This case adopted a standardised collaborative model where “the Beijing Headquarters is responsible for compliance coordination and risk system building in the Chinese jurisdiction, while the Turkey Office is responsible for local information verification and legal implementation validation”. All links have written records and verifiable deliverables:
A. March 15 – March 18, 2026: Customisation of Dual-Jurisdiction Due Diligence Plan
1.Beijing Headquarters: Sorted out the client’s transaction background, cooperation model and core demands, and issued the List of Cross-Border Due Diligence Requirements and Risk Framework against China’s cross-border trade and investment compliance rules, clarifying the scope of due diligence, delivery standards and time nodes.
2.Turkey Office: Relying on its familiarity with Türkiye’s industrial and commercial registration rules, mining regulatory system and government procedures, combined with local practical experience, finalised four core investigation modules within 3 working days: subject qualification, equity structure, compliance record and performance capability, and designed a localised investigation path covering official database search, on-site verification and upstream and downstream interviews.
B. March 22 – May 28, 2026: Full-Dimensional Information Verification and Cross-Validation
1.Beijing Headquarters: Followed up on China’s cross-border trade compliance requirements simultaneously, conducted risk grading and cross-validation of the verification information returned by the Turkey Office against the Foreign Trade Law and the Guidelines for Compliance Management of Enterprises’ Overseas Operations, and predicted the impact of various defects on the subsequent transactions of Chinese enterprises.
2.Turkey Office: Through official channels such as Türkiye’s industrial and commercial registration system, the qualification database of the Ministry of Energy and Natural Resources, the environmental supervision public platform, and the tax and judicial public systems, comprehensively searched the target company’s subject registration information, mineral mining licences, import and export operation qualifications, environmental penalty records, tax payment status, and litigation and arbitration cases. Meanwhile, on-site verification was carried out: the team visited the target company’s business premises and mining sites, and interviewed its upstream and downstream partners to verify its performance reputation and actual production capacity, forming complete first-hand verification materials.
C. June 2, 2026: Issuance of Draft Due Diligence Report and Special Feedback on Core Risks
1.Beijing Headquarters: Combined with the risk prevention and control standards for cross-border cooperation of Chinese enterprises, conducted legal analysis on two core risk points identified in the investigation: unrecorded equity holding by proxy and unfinished environmental rectification, evaluated their potential impact on transaction validity, export approval and subsequent performance, and formed a preliminary risk rating.
2.Turkey Office: Conducted supplementary in-depth investigations targeting the two risk points, verified the actual arrangement of equity holding by proxy and the background of the proxy holder, followed up the progress of environmental rectification and the regulatory acceptance nodes, provided special feedback to the client as soon as possible, and confirmed the direction of supplementary investigation simultaneously.
D. June 3 – June 12, 2026: Design of Risk Response Plan and Dual-Jurisdiction Validation
The China-Türkiye legal team jointly drafted the Due Diligence Report and the supporting Risk Response Plan, and designed contractual prevention and control clauses for the two core risks respectively, combining the legal provisions of China and Türkiye and practical experience in cross-border transactions.
Turkey Office: Conducted local legal validation of the legality and enforceability of all clauses under Turkish law, ensuring that the response plan complies with the relevant provisions of Türkiye’s Commercial Code, Mining Law and Environmental Law, and that there is no compliance conflict.
E. June 13, 2026: Official Delivery and Case Conclusion
After the client confirmed the content of the report and plan, the joint case team officially delivered the complete Due Diligence Report and List of Risk Response Recommendations, and provided the Compliance Operation Guide for Türkiye Mining Cooperation as a complimentary add-on. It put forward specific practical suggestions for subsequent cooperation signing and performance management, and the project was successfully concluded.
III. Core Case Handling Difficulties and Authoritative Solutions
The difficulties in handling this project are all common problems in China-Türkiye cross-border mining cooperation. Relying on dual-jurisdiction professional expertise and local practical experience, the Guozun Cathay joint team has formed a replicable standardised solution:
A. Regulatory Particularities and Information Barriers in Türkiye’s Mining Sector
1.Professional Basis: Türkiye’s Mining Law, Environmental Law, and the International Bar Association (IBA) Guidelines for Cross-Border Due Diligence
2.Solution: Relying on the regulatory channel resources and practical experience of the local Turkish practice team, we opened up official information inquiry paths across multiple departments including industry and commerce, energy, environmental protection, taxation and justice. We combined official database searches with on-site verification and upstream and downstream interviews to break through cross-border information asymmetry, and comprehensively and accurately verify the validity of the partner’s qualifications and its actual compliance status.
B. Identification and Prevention of Ownership Risks from Unrecorded Equity Holding by Proxy
1.Professional Basis: Türkiye’s Commercial Code, and China’s Guidelines for Compliance Management of Enterprises’ Overseas Operations
2.Solution: Through tracing industrial and commercial registration files and conducting in-depth investigations into shareholders’ backgrounds, we identified unrecorded equity holding by proxy arrangements, and assessed the risks of ownership disputes and transaction invalidity in combination with Turkish commercial registration rules. We designed targeted prevention and control mechanisms such as equity confirmation commitments, third-party performance guarantees, and binding of payment nodes to equity status, to realise closed-loop management of ownership risks at the transaction level.
C. Practical Implementation Adaptation of Due Diligence Outcomes
1.Professional Basis: Provisions on the Administration of Law Firms Engaging in Overseas Legal Business, and China’s Foreign Trade Law
2.Solution: We broke the traditional due diligence model of “only disclosing information without solving problems”. Targeting the identified risk points, and combining the legal frameworks and commercial practices of both China and Türkiye, we designed standardised prevention and control clauses that can be directly embedded in the cooperation contract, clarifying the division of environmental protection responsibilities, qualification maintenance obligations, breach compensation mechanisms and other contents, to directly support the client’s subsequent business negotiations and contract signing.
IV. Authoritative Legal Basis Applicable to This Case
A. Chinese Laws
1.Foreign Trade Law of the People’s Republic of China: Those engaged in import and export trade activities shall abide by the relevant state provisions. Enterprises shall conduct necessary verification of the business qualifications and performance capability of foreign partners to ensure transaction security.
2.Guidelines for Compliance Management of Enterprises’ Overseas Operations: When carrying out overseas business activities, enterprises shall establish a compliance risk identification mechanism, conduct due diligence on partners, and guard against compliance risks and transaction losses.
B. Turkish Laws
1.Türkiye’s Mining Law: Those engaged in mineral mining, processing and export businesses shall obtain corresponding licences issued by the Ministry of Energy and Natural Resources. Enterprises with invalid or missing qualifications shall not carry out relevant business activities.
2.Türkiye’s Environmental Law: Mining production enterprises shall meet environmental protection emission standards and rectification requirements. Enterprises with major environmental violation records will face business restrictions and administrative penalties.
3.Türkiye’s Commercial Code: Company equity changes and proxy holding arrangements shall complete industrial and commercial registration and filing in accordance with the law. Unrecorded proxy holding behaviours carry risks of ownership disputes and transaction invalidity.
C. Cross-Border Practice Norms
1.Provisions on the Administration of Law Firms Engaging in Overseas Legal Business: Lawyers engaged in overseas legal business shall abide by the principle of diligence and due care, and ensure the legality of investigation procedures and the truthfulness and objectivity of verification content.
2.International Bar Association (IBA) Guidelines for Cross-Border Due Diligence: Cross-border due diligence shall cover core dimensions such as subject qualification, compliance records, financial status and performance capability, carefully verify information sources, and fully disclose risks.
V. Authoritative Practical Recommendations Based on This Case’s Experience
Combined with years of experience in China-Türkiye cross-border legal services of Guozun Cathay’s Turkey Office, we put forward the following three authoritative recommendations for Chinese enterprises carrying out Türkiye mining cooperation and Middle East cross-border trade:
A. Front-load Due Diligence
For first-time overseas resource cooperation, enterprises shall not rely solely on business negotiations and on-site inspections. It is imperative to entrust a professional team with dual-jurisdiction service capabilities to carry out special due diligence before formal signing, so as to identify hidden risks such as qualification defects, compliance penalties and equity concerns in advance.
B. Localise Compliance
The regulatory rules in Türkiye’s mining and environmental protection sectors are strict and have strong local particularities. The design of cooperation agreement clauses shall be verified by local practising lawyers to ensure that the agreements comply with local regulatory requirements and avoid compliance traps caused by rule differences.
C. Realise Closed-Loop Risk Management
For the risk points identified in due diligence, corresponding prevention and control mechanisms shall be set up in the contract, to deeply bind payment progress and performance responsibilities with the partner’s qualification status and compliance rectification progress, so as to realise front-end risk control and full-process closed-loop management.