US Denies Iran-Related Sanctions for Turkish Banks

EghtesadOnline: US Treasury Secretary Steven Mnuchin squashed speculation that he has warned Turkish officials of possible sanctions targeting the nation in violation of Iran sanctions.

News ID: ۷۴۴۲۴۱

30 October 2017

“I did have conversations with them; I did not have specific conversations on sanctions,” Mnuchin told reporters, referring to talks with Turkey during an International Monetary Fund meeting in Washington earlier this month. “There is no truth to those rumors.”

Mnuchin's comments, made during a four-country trip of the Middle East, come in the wake of a volatile week for Turkish assets. Stocks, bonds and the lira fell after a report in a local newspaper earlier this month said six Turkish banks may face penalties resulting from a US investigation into their dealings with Iran, even after regulators denied the news and the publisher pulled the story, Bloomberg reported.

Earlier, Turkey’s banking regulator had urged the public to ignore rumors about financial institutions, dismissing reports that some Turkish banks face billions of dollars of US fines over alleged violations of Iran sanctions, Financial Tribune reported.

In an effort to address some of the concerns, Turkish Economy Minister Nihat Zeybekci said Halkbank, a state lender that acted as a medium of payments for imports from Iran, did nothing in violation of US sanctions against Tehran.

Three executives from Halkbank, Turkey’s second-largest state bank, have been charged in the US for violating sanctions on Iran and banking fraud. Halkbank itself has not been charged with any crime and repeatedly denied any wrongdoing, though the developments have curtailed the share price performance this year.

Mnuchin is on a six-day visit to the region to discuss the US administration’s new Iran strategy and efforts to combat terrorist financing. He has visited Saudi Arabia and Israel, and will spend Saturday in Abu Dhabi, the UAE, before heading for Qatar.