Nicosia: Although Turkey in the past six months has tried to present itself as an honest and neutral power broker that mediates between Russia and Ukraine – and actually scored a big success in brokering a deal for the export of Ukrainian grain through its ports — in fact, it is seen by many western governments as facilitating others to evade the Western sanctions imposed on Russia for its invasion of Ukraine.
This stand is not surprising because Turkey has long experience in busting sanctions and violating UN Security Council and US sanctions on Iran and jihadist groups and President Recep Tayyip Erdogan has no qualms to exploit the opportunities presented by the war in Ukraine to shore up his country’s tottering economy and help Moscow and rich Russians avoid the sanctions.
The fact that Turkey has expertise in busting sanctions is evident from the case of the state-owned Halkbank, which illicitly transferred approximately USD 20 billion worth of restricted Iranian funds.
Halkbank was indicted in the Manhattan Federal Court for allowing the proceeds of the sale of Iranian energy deposited in the bank to be used to buy gold for the benefit of the government in Tehran and facilitating transactions fraudulently designed to appear to be purchases of food and medicine by Iranian customers, when in fact no purchases of food or medicine occurred.
President Erdogan has repeatedly stated that he would not implement the Western sanctions on Russia, while Turkey is the only NATO country that has not closed its airspace to Russian aircraft and has allowed Russians to open accounts with Turkish banks to stash their cash.
Obviously, Erdogan sees the war in Ukraine as an opportunity to shoring up the economy of his country and has even spelt this out clearly on March 21, speaking to his party faithful, when he said:
“With the Ukraine crisis, our country has become a rising star in sectors such as finance and tourism. By God’s will, we will fulfil our promise to make our country one of the world’s top 10 economies by making the best use of opportunities. We will continue to march towards our goals.”
Ankara’s refusal to implement the US and EU sanctions prompted four Russian oligarchs with links to Russian President Vladimir Putin to dock their super-luxury yachts in Turkish ports and thus avoid, at least temporarily, international efforts to freeze their assets in superyachts.
Two of these superyachts – the USD 700 million “Eclipse” and the USD 600 million “Solaris” belong to Chelsea Football Club Owner Roman Abramovich, while the “Flying Fox” superyacht belongs to Dmitry Kamenshchik, Chairman of Moscow’s Domodedovo Airport. The USD 100 million super yacht “Titan” is owned by Alexander Abramov, while the “Ragnar” is a USD 85 million yacht, by former KGB agent Vladimir Strzhalkovsky.
According to press reports, Washington is concerned because Turkey, its NATO ally, instead of applying the Western sanctions, is continuously increasing its trade relations with Russia, while the Russian businesses are using Ankara to avoid sanctions and trade restrictions.
Also, Moscow is funding Turkey’s first nuclear plant costing USD 20 billion, which Russian companies construct in Akkuyu, in southern Turkey.
President Erdogan and Russian President Vladimir Putin, during their meeting in Sochi early in August, agreed to increase the economic cooperation between the two countries. Erdogan declared that Turkey would switch part of its payments for Russian gas to rubles and that it planned to deepen relations with Moscow by extending the use of Russia’s Mir payment system.
Official data show that Turkish exports to Russia have increased by almost 60 per cent in dollar terms, compared with the previous year. This happens at a time when many countries have cut exports to Russia.
Furthermore, according to press reports Ankara, by acting as a go-between, assists Western firms, constrained by sanctions, to make exports to Russia.
Last month, the US Treasury in a letter warned TUSIAD – Turkish largest business group- not to bypass Western sanctions, saying that “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.”
According to Reuter, Turkish Finance Minister Nureddin Nebati dismissed as “meaningless” concerns among Turkish businesses over the US Treasury warning that they risked being penalized if they maintained commercial ties with Russians under sanctions.
Meanwhile, Turkey’s tourism industry has managed to attract about 2.2 million Russian tourists, who due to the various restrictions and the closure of airspace to Russian aircraft can visit only a few countries and Turkey is probably their first choice. About 80 daily flights are carried out from Russia to Antalya.
Russians also buy thousands of properties in Turkey, taking advantage of the huge devaluation of the Turkish Lira. Wealthy Russians are pouring money into real estate in Turkey and top the list of foreign buyers of homes in the country.
Economists point out that Ankara must be very careful about expanding its trade transactions with Moscow, as Turkey has USD 178.6 billion in trade with the European Union, and only USD 35 billion with Russia.
President Erdogan, emboldened by his success in brokering the grain deal between Russia and Ukraine, probably feels that Ankara can afford to bypass Western sanctions, as it appears to be the only mediator available between the warring sides.
Erdogan on Saturday went a step further and told President Putin “that Turkey can play a facilitator role in the Russian occupied Zaporizhzhia nuclear power plant, as it did in the grain deal.”
So far, Erdogan seems to be winning the game of busting sanctions and benefiting from the war, on the one hand, and appears to be the only mediator acceptable to all sides, on the other hand. However, as the Financial Times pointed out on March 24 European countries remain reluctant to publicly criticize Turkey’s stance on Russia, but behind the scenes, there are growing concerns about the long-term implications.
Follow on Twitter | Posted by Sameer Khan | 
