US steps up pressure on Turkish bank dealing with Iran

AIPAC and the US Treasury have stepped up pressure on a Turkish bank that is using gold transfers to purchase oil from Iran.

al-monitor Turkey's Halkbank headquarters are seen in Ankara, Dec. 17, 2013.  Photo by REUTERS/Umit Bektas.

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turkey, sanctions, oil, iran, gold, economy, banks, banking & finance

Dec 22, 2013

An international attack was launched against Turkey’s Halkbank, whose public offering had attracted a record level of local and foreign investors. Halkbank has been under constant attack by the United States and Israel, which were trying to block transfer of payment to Iran, Turkey's main supplier of natural gas. This operation against Halkbank brought to the agenda the schemes of those two countries. The first attack against Halkbank, whose CEO, Suleyman Arslan, was detained yesterday [Dec. 17], came from the United States. A major Jewish lobbying organization, the American Israel Public Affairs Committee (AIPAC), which has strong backing in the US Senate, had called for sanctions against Turkey and its banks.

In a letter sent to senators, AIPAC said: “Some buyers of Iranian natural gas and oil are trying to neutralize the pressure we are trying to put on the Iranian Central Bank with sanctions by paying for their purchases with precious metal and gold." Also, with the accusation that Turkey has been boosting its trade with Iran through Halkbank, an anti-Turkey petition campaign was launched. A letter sent from AIPAC to Secretary of State John Kerry and Secretary of Treasury Jack Lew said: “We want you to investigate the Halkbank transactions of transferring gold to Iran."

US Treasury officials came to Istanbul to threaten Turkish banks not to do business with Iran. Turkey meets 20% of its natural gas needs from Iran and has been continuing to import Iranian oil at a reduced level in compliance with UN and US sanctions. Halkbank was playing a key role in thwarting the sanctions. The US Treasury claimed that, to bypass international sanctions, Iran was making deposits at Halkbank and getting gold in return. Turkey’s Minister of Economy Zafer Caglayan responded, "Halkbank will continue its current transactions with Iran."

The performance of Halkbank in the last 10 years proves the success of the bank's management. Its total assets grew fivefold over the last 10 years. Its credits grew by 500% and its resources by 379%. Halkbank, which was once losing money, now makes 2.6 billion Turkish lira [$1.24 billion] in profits.

By intensifying pressure on Ankara, the US administration wanted to force Halkbank to stop its gold trade with Iran. Halkbank was also accused of playing a part in the transfer of money from third-party countries purchasing Iranian oil. To that, Ankara responded, “Turkey is continuing to pay for the natural gas and oil it's importing from Iran through Halkbank in compliance with UN decisions.” But eventually gold exports to Iran came to a standstill and foreign trade revenue of $6 billion annually was lost.

Many investors yesterday lost money when the news broke out of investigations at Halkbank and detention of its CEO. Halkbank stocks lost 12.34% yesterday, inflicting losses on the bank that has been achieving record profits for its investors.

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