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2 Feb, 2024 05:30

Turkish banks closing Russian accounts – Vedomosti

The moves reportedly follow warnings of secondary sanctions by Washington
Turkish banks closing Russian accounts – Vedomosti

Turkish banks have started closing Russian corporate accounts and tightening policies for individuals following threats of secondary sanctions from the US, business daily Vedomosti reported on Thursday, citing financial consultants and business owners.

The sources said that the situation had worsened after US President Joe Biden signed an executive order in December announcing that secondary sanctions could be placed on foreign banks suspected of supporting Russia.

Media reports emerged earlier this month that Turkish financial institutions had cut ties and suspended processing payments with almost all Russian banks to avoid the risk of sanctions.

According to the Vedomosti report, at least two Turkish banks have begun closing the accounts of a significant number of Russian companies and banks after Washington threatened to add them to its blacklist. Two other Turkish banks started issuing 30-day closure notices to Russian corporate clients that opened accounts following the start of Moscow’s military operation in Ukraine.

“This mainly applies to businesses that used Türkiye as a transit jurisdiction for settlements and deliveries, as well as oil and gas traders,” Iskander Mirgalimov, an international payment consultant for Russian businesses, told Vedomosti. He specified that individual clients also face tighter restrictions when opening accounts, including the requirement to maintain a high balance.

Aleksey Yegarmin, who heads the Russian-Turkish Business Council, told the newspaper that Moscow and Ankara are currently in talks “to find a solution.”

Kremlin spokesperson Dmitry Peskov said on Thursday that the Russian authorities were aware of the situation and confirmed that negotiations were underway, blaming “unprecedented, blatant and aggressive US pressure on Türkiye and Turkish companies.” 

The report indicated that Turkish state banks are still processing payments in national currencies for goods such as food and drugs. Meanwhile, some business owners pointed to the fact that the two countries are long-term trade partners and that mutual trade turnover has been growing in recent years.

US officials have repeatedly highlighted Türkiye as a potential hub of sanctions evasion, with some Western officials raising concerns about allegations of trade between Turkish firms and sanctioned Russian entities.

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