Turkey, -Turkish banks have initiated a widespread blockage of payments from Russia, disrupting trade transactions across various industries. This move comes as Turkey has emerged as a major hub for evading sanctions, doubling its supply of goods to the Russian Federation since the onset of the war in Ukraine. The payment blockade, which began in January 2024, has impacted the trade of goods ranging from fruits and electronics to clothing and auto components.
Sources indicate that Turkish banks are rejecting payments in both lira and rubles from Russian entities, and some banks are even canceling previously approved transactions, citing the involvement of “prohibited goods.” This comprehensive payment halt affects crucial sectors such as chemical companies, auto parts factories, and clothing and footwear manufacturers.
The controversy surrounding this issue intensified following discussions between US Secretary of State Antony Blinken and Turkish Foreign Minister Hakan Fidan during Blinken’s recent visit to Turkey. Topics included sanctions, export controls, and potential circumvention strategies. Furthermore, US Deputy Treasury Secretary Wally Adeyemo issued a “final warning” to Turkish companies in November, threatening financial sanctions, including the deprivation of access to the Western banking system, for violations against Russia-related measures.
The Turkish banking industry attributes the payment disruptions to new regulatory measures by the US Treasury Department’s Office of Foreign Assets Control (OFAC), issued on December 22. These measures broadly suggest that foreign banks supporting Russia’s military efforts may face sanctions.
As Turkey finds itself at the center of this controversy, questions arise about the country’s role in facilitating the circumvention of sanctions and the potential consequences for its businesses involved in supplying goods to the Russian Federation. This article delves into the intricacies of the situation, examining the geopolitical implications and the impact on Turkish-Russian trade relations.
