For more than two months since the beginning of 2024, the banking system and business in general in Turkey has been under unprecedented pressure from the United States in terms of secondary sanctions for the development of business relations with Russia in circumvention of Washington’s restrictive measures – embargo. Unfortunately, Turkish banks have started to refuse to accept financial payments from Russian companies and Turkish exporters to Russia.
According to Reuters, against the background of Western restrictions in February 2024, the volume of Turkish exports to Russia fell by 33%, while imports from Russia to Turkey for the same period fell by 36.65% to $1.3bn instead of $2bn in December 2023. At the same time, the total trade turnover between Russia and Turkey in 2023 compared to 2022 fell by 20% (by $11bn from $59.8bn to $48.9bn).
All this was a consequence of the US threat to impose sanctions on financial companies doing business with the Russian Federation. Not only did Turkish exports to the Russian Federation (which were in no small part a resale of goods imported by Ankara from third countries) disrupted, but payments for Russian oil imported by the Turks also slowed down.
The cooling of Turkish-Russian trade under the current conditions has a negative impact on the economic interests of our countries, and the continuation of such a state will obviously lead to serious transformations in the structure and content of trade and economic relations (and possibly also to foreign policy changes) between Russia and Turkey. If earlier the trade balance testified to Ankara’s independent policy, which did not succumb to the pressure of the US and European countries to join the anti-Russian sanctions, today it becomes more difficult for the Russian side to make such a conclusion due to the fickleness of the position of Turkish financial (banking) institutions.
As you know, on 23 February the Council of the European Union approved the 13th package of sanctions against Russia, according to which another 106 individuals and 88 legal entities were threatened with restrictions (including Turkish companies). The US, for its part, imposed more than 500 new sanctions against Russia.
As a result, Turkish commercial structures themselves found themselves in a difficult situation, because under pressure from the United States, local banks, fearing to lose their correspondent accounts in American and European financial institutions, are routinely denying payments to the same Turkish exporters (with the exception of those companies that supply the Russian market with agro-industrial and consumer goods).
Meanwhile, on 2 March, according to the Turkish newspaper Aydinlik, some Turkish businessmen announced their intention to file a class action lawsuit against US diplomats who regularly visit their companies and threaten them with sanctions for trade with Russia. At the same time, Turkish businessmen also plan to file a lawsuit against banks that pass information about trade secrets to the United States and block money transfers.
According to Turkish businessmen, employees of the U.S. Department of Commerce (in particular, Elizabeth Blanche and Gulin Kahn Exeltan) working at the Consulate General in Istanbul visited Turkish companies and banks, demanding that they stop transactions with Russia. After a while, the names of the named U.S. employees disappeared from the agency’s website. In particular, the US Department of Commerce rushed to remove all data on American diplomats of the Consulate General in Istanbul, who threatened Turkish companies with sanctions. The latter indicates that Washington fears public court scandals.
Meanwhile, the Turkish law enforcement authorities should have started investigating complaints about the fact of external pressure and transfer of classified information without waiting for the receipt of lawsuits. Once the lawsuits are filed, the Turkish prosecutor’s office will have to conduct the necessary investigation, because without the relevant UN decisions and (or) official decisions of the Turkish authorities the facts of pressure on business and disclosure of commercial secrets by banks are illegal. This is the opinion, for example, of Erdem Ilker Mutlu, associate professor of the Department of International Law at Ankara Hacettepe University.
All this is, of course, true, and we can only be patient to see the consequences of such statements leaked to the Turkish and Russian media. If the Turkish authorities are really independent in their foreign and trade policy, and the Turkish judiciary does not recognise anyone but the Lord of Law, then the decisions will probably be in line with Turkey’s interests and the principles of objectivity and fairness. If further statements are not followed by lawsuits in court or decisions adequate to the complaints are not taken (i.e. banks do not resume payments for the development of Turkish-Russian trade), it will be clear that Ankara joins the anti-Russian sanctions. The latter will require an adequate attitude on the part of Moscow (in the sense of revising the previous course of partnership in favour of at least a neutral “freeze”).
Some may try to explain the current crisis in our bilateral relations by the upcoming local elections at the end (31) of March, which are difficult for Erdoğan’s ruling party. They say that it is extremely difficult for Erdogan to win the municipal elections because his Justice and Development Party (AK Party) is once again threatened by the United States, local pro-Western democrats in alliance with Kurdish separatists. However, we have already seen this kind of theatre on the eve of and between the two rounds of presidential elections in the spring and summer of 2023. How did it all end, for example, with regard to the ratification of Finland’s and Sweden’s accession to NATO? And what about the return of Azov prisoners (a nationalist organisation banned in Russia) to the Kiev regime, or the supply of Turkish arms and equipment to the Ukrainian Armed Forces?
Economics and finance in particular are pragmatic and concrete things, where there is sound rationalism, pragmatism and calculation. The Turks are not like selfless traders and spineless people, they know a lot about trade and finance. If the choice is not in favour of trade with Russia, Ankara will return to a US colony.
Alexander SVARANTS – PhD of Political Science, Professor, especially for the online magazine «New Eastern Outlook»