Threat of U.S. Sanctions On Turkey For Russian Connections

Adam_Butler · Aug 25, 2022

ANKARA, TURKEY - The United States Treasury Department has issued a letter that contains a threat of possible sanctions for Turkey's leading business organization on the grounds of Russian Collaboration.

There has been increasing concern, not only in the U.S. but around the world, of Turkey being a safe haven for Russian financial and trade transactions, since the beginning of Russia's special military operation in Ukraine, according to Arab News.

Russia and Turkey's relations have always been strong. In fact, it was Turkey who stepped in to negotiate the release of Ukrainian grain amid the growing global food crisis, in Sochi earlier this month, according to Defcon Level and The Standeford Journal.

Turkey's exports to Russia have risen by half from May to July, according to export data. Turkey's imports from Russia have also risen drastically, largely due to the agreement of Turkey to pay for Gazprom natural gas in Roubles.

Gazprom is the state-run natural gas company in Russia, that has been in the spotlight throughout the special military operation in Ukraine, as Europe sanctions Russia for the war, and Russia demands payment of gas in Russian currency. Gazprom was Europe's largest provider through the NordStream pipeline.

In June, Wally Adeyemo, United States Deputy Secretary of the Treasury, went to Turkey in protest and to elaborate on concerns from Washington that Turkey was being utilized as a route to avoid western sanctions for Russian oligarchs and businesses.

This meeting was followed by a letter from Adeyemo to the TUSIAD business association in Turkey with a warning of potential sanctions on banks and companies for Russian collaboration. The letter has been passed on to the foreign and financial ministries in Turkey.

Here are some excerpts from that letter:

"Any individuals or entities providing material support to US-designated persons are themselves at risk of US sanctions,... Turkish banks cannot expect to establish corresponding relationships with sanctioned Russian banks and retain their corresponding relationships with major global banks as well as access to the US dollar and other major currencies."

Turkey, thus far, has maintained complete neutrality between the west and the east over Ukraine and has refused to join in western sanctions against the Russian Federation. President Erdogan has stated that due to Turkey's dependence on Russia's natural gas imports and Russian oil, it cannot join in western sanctions against the country over Ukraine.

There has not been a formal response to the letter by Turkish ministry officials. As Turkey's economy continues to suffer, approaching next year's elections, cooperation with Russia is viewed as support rather than a hindrance, although there is a current dispute over the building of the Akkuyu Nuclear Power Plant.

According to Defcon Level and a further expanded report in The Standeford Journal, Russia has been financing the building of the Akkuyu Nuclear Power Plant, which is set to have 2 reactors online in 2023, which is a collaboration being closely monitored by the United Nations IAEA nuclear watchdog.

According to the Daily Sabah, Akkuyu Nükleer, a subsidiary of Russia's state-run Rosatom, on August 3rd, signed an agreement with TSM Enerji to assume responsibilities for building the remainder of the nuclear power plant in Akkuyu. Up til now, the Turkish firm IC Içtaş was performing the construction that is financed by Russia.

IC Içtaş has filed an arbitrary lawsuit, which will be held in London, concerning this takeover, and it has stated that Russia is taking over the power plant, which was told to Bloomberg News and stated in Nuclear Engineering International.