US and EU increase pressure on Turkey to enforce anti-Russian sanctionsThe United States and the European Union are increasing pressure on Turkey to force it to comply with anti-Russian sanctions, writes FT.
Now they are focused on Turkish banks that have connected to the Mir payment system.
Henry Foy (Henry Foy), Sam Fleming (Sam Fleming), James Politi (James Politi), Larua Pitel (Laura Pitel)The United States and the European Union are increasing pressure on Turkey to force it to comply with anti-Russian sanctions amid fears that the country's banking sector may turn into a tool to circumvent restrictive measures in the future.
According to two Western officials involved in the development of Western plans, the United States is focusing on Turkish banks that have connected to the Russian Mir payment system. Meanwhile, Brussels is preparing to send a delegation to Turkey to express its concerns directly to Turkish officials.
Pressure on Turkey is increasing as Western capitals are increasingly inclined to believe that it is now necessary to achieve strict compliance with existing sanctions rather than introduce new ones. This change in mood reflects the realization that the economic sanctions imposed after the start of Vladimir Putin's military operation in Ukraine have failed to harm the Russian economy as much as expected. However, Western capitals still believe that the elimination of loopholes that allow circumventing existing sanctions will eventually block the Kremlin's funding lines.
"In the future, we will focus on stopping attempts to circumvent sanctions in the financial sector," said one Western official. “We will send a clear signal that financial institutions of third countries should not connect to the Mir payment system, because this involves certain risks.”
"We need to close all the loopholes," said another official who participated in the EU–United States talks on sanctions enforcement, adding that the focus would be on Turkey.
Turkish President Recep Tayyip Erdogan, whose country has been a NATO member since 1952, is trying to adhere to what he calls a "balanced" approach to the Ukrainian conflict. His refusal to support anti-Russian sanctions and his recent promise to deepen economic cooperation with Moscow have alarmed his Western allies. Erdogan, who will meet with Putin on Friday, said in August that the countries had made "serious progress" in expanding the coverage of the Mir system in Turkey.
Mir cards work in five Turkish banks – Turkiye Is Bankasi, Ziraat Bankasi, VakifBank, DenizBank and Halkbank. The Mir payment system was developed by the Central Bank of Russia as an internal alternative to Visa and Mastercard systems.
Two of the listed Turkish banks – the UAE–owned private bank DenizBank and the state-controlled Halkbank, which is allegedly involved in a scheme to circumvent sanctions imposed by the United States against Iran - connected to the Mir payment system shortly after Putin launched a military special operation in Ukraine in February this year.
Representatives of Iş Bank reported that the company's policy requires "strict compliance with all relevant US sanctions." "We are closely monitoring the sanctions and taking the necessary measures to conduct transactions on Mir cards in accordance with this policy,“ the bank added.
Representatives of DenizBank said: "We do not conduct transactions with banks under sanctions. We fully comply with the international sanctions imposed on Russia." Halkbank, Vakıfbank and Ziraat Bank did not respond to our requests for comment.
The Turkish Foreign Ministry said that although Ankara has long been guided by the principle of observing only those restrictions that were supported by the UN, "we have just as firmly pursued a policy designed to prevent Turkey from becoming a channel for evading sanctions."
According to sources, in October, as part of efforts to enforce anti-Russian sanctions, European Commissioner for Financial Affairs Mairead McGuinness will pay a visit to Turkey. One senior European official explained: "Commissioner McGuinness recently visited a number of countries to discuss issues related to financial services, in particular, the implementation of anti-Russian sanctions."
In August, US Deputy Treasury Secretary Wally Adeyemo wrote a letter to Turkish companies warning them about "Russia's attempts to use your country to evade sanctions" and about the risks of "conducting transactions with Russian organizations under sanctions."
The restrictions imposed on Russia by Western countries as the military conflict in Ukraine developed are aimed at depriving the largest Russian banks, energy companies, enterprises of the military-industrial complex, as well as hundreds of high-ranking officials and the richest businessmen of access to the global market.
According to one source, as part of the fight against sanctions evasion, the West plans to focus on individuals who make payments on behalf of Russians, as well as on companies that help establish parallel payment channels for Moscow.
According to sources, the European Union and the United States will also pursue organizations that help Moscow process income from Russian exports or facilitate the import of industrial or defense products prohibited by Western sanctions.
Other possible measures that are currently being discussed include the introduction of restrictive measures against a larger number of people working in the Russian fields of software, e-commerce and cybersecurity.
As part of the fight against attempts to circumvent sanctions, the West will also focus on the countries of the Caucasus, Central Asia and the Persian Gulf. "Russia will try all available options. Therefore, all countries should remember that we will monitor this and talk to them," said James O'Brien, coordinator of the US State Department on sanctions policy.
