Western capitals to step up pressure on Turkish banks over sanctions against Russia

Western capitals to step up pressure on Turkish banks over sanctions against Russia
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An EU delegation will head to Turkey next month and the US will focus on Turkish banks doing business in the frame of Russia’s Mir payment system

The US and EU will increase pressure on Turkey to avoid Russian evasion from the sanctions due to the Ukraine War, amid concerns that Turkey's banking sector is a potential backdoor for illicit finance, Financial Times reported.

As western capitals seek tighter implementation of sanctions against Russia, an EU delegation will head to Turkey to express its concerns to Turkish officials directly while the US will focus attention on Turkish banks that have integrated into Russia’s domestic payments system Mir, the FT said, citing anonymous Western officials. 

The FT claimed Turkey’s President Erdogan’s  refusal to sign up to sanctions against Russia and a recent pledge to deepen economic co-operation with Moscow have alarmed his western allies. 

Turkey’s exports to Russia have been breaking records since the War in Ukraine began in February and mystery capital attributed by some experts to Russian funds have reached new highs, allowing Turkish policymakers to boost foreign reserves despite a growing trade deficit.

Five of Turkey’s largest banks are members of the Mir payment system, which was developed by Russia’s central bank as an alternative when Visa and Mastercard ceased business with Russia.

FT said that the EU’s financial services commissioner Mairead McGuinness is aiming to visit Turkey next montha s part of efforts to strengthen enforcement. 

US Deputy Secretary of the Treasury Wally Adeyemo last month  warned Turkish companies against working with sanctioned Russian institutions and individuals in a letter he sent to TUSIAD (Turkish Industry and Business Association).