Turkey's banks shutter accounts of Russian corporations

RUSSIA / FSU POLITICS - In Brief 02 Feb 2024 by Alex Teddy

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On February 1 the Russian business newspaper Vedomosti reported the news and cited sources such as business owners. Ankara has caved in to pressure from the US. Affluent Russians often have citizenship of other countries such as Israel or Cyprus, which makes it easy to get around sanctions. Middle class Russians have sometimes managed to open bank accounts in countries such as Kazakhstan despite not living there. This has enabled them to make international payments and use bank cards when they are abroad. In December 2023 Biden signed an executive order for secondary sanctions on banks that the US suspects have facilitated Russia's invasion of Ukraine. Therefore Turkish banks stopped transactions for most Russian customers. Those transactions that are put through are subject to long delays while the banks verify that the individual or entity concerned is unlikely to be connected to Russia's war effort. Individual accounts are only permitted by the banks if the bank balance remains above a certain level. Only then is it worth the bank's running the risk of allowing the account to remain active. The banks usually tell account holders that the account will be closed in 30 days. Turkish banks have proved incredibly useful to Russia as a means to receive payments for oil and gas, as well as to enable purchases. Turkish banks still allow payments for medicines and comestibles so long as USD is not used.  The Russian government made a statement on February 1 denouncing the way that the US has twisted Turkey's arm. Turkey and Russia are discussing solutions, according to the Kremlin's statement.  Until now sanctions on Russia have been very leaky. The West has been disappointe...