Turkey Affirms Iran’s Economic Importance Amid US Sanctions

EghtesadOnline: Iran is an important neighbor of Turkey, Turkish diplomatic sources said on Friday during a meeting with American officials to defend their country’s interests against the looming reimposition of US sanctions on Iran.

News ID: ۷۴۵۶۸۱

22 July 2018

A delegation of US officials led by Deputy Treasury Secretary Marshall Billingslea met with Turkish representatives with the aim of seeking to avoid losing out from the sanctions, according to diplomatic sources as reported by Ahvalnews.com.

"Iran is an important neighbor of Turkey, in view of both our bilateral economic and commercial relations as well as our energy imports," said Foreign Ministry sources, who asked not to be named due to restrictions on speaking to the media, according to Financial Tribune.

"Therefore, we will continue to monitor US sanctions within this framework."

On US President Donald Trump's announcement that the US would withdraw from the Joint Comprehensive Plan of Action—the Iran deal’s official name —and that sanctions on Iran would be reimposed, the sources said, "Following the US decision to withdraw from the JCPOA, the upcoming sanctions on Iran carry importance for Turkey," Turkey's state-run news agency Anadolu reported.

Importing more than half of its oil supplies from neighboring Iran, Turkey had earlier suggested that it did not intend to cut off trade with Iran, saying it was not obliged to abide by "unilateral" US decisions.

Turkey imported 3 million tons of crude oil from Iran in the first four months of 2018, making up 55% of crude supplies and 27% of its total energy imports.

In July 2015, the P5+1 group of countries—the US, UK, France, China and Russia, plus Germany—signed the JCPOA with Iran. Under the deal, world powers agreed to lift economic sanctions on Iran in return for the latter agreeing to limit the scope of its nuclear program. But on May 8, Trump announced that the US was unilaterally withdrawing.

"Our relevant authorities are carrying out necessary work for Turkey to avoid any negative impact from the upcoming sanctions. In this regard, we are holding consultations with our American counterparts," said the source.

"Within this framework, we had discussions with a US delegation visiting Turkey on July 20."

> Scaring Off Turkish Businessmen

The American officials also reportedly met with Turkish businessmen during the visit and warned private business owners that if they do business with Iran, they cannot do business with the American firms and they will be isolated from US markets.

One of Turkish businessmen who participated in the meeting told VOA that the US officials sternly warned Turkish private business owners about the Iran embargo during the meeting.

The Turkish businessman said, "I also participated [in] similar meetings during previous sanction periods on Iran. However, this is the first time I have ever heard [them speaking] so forcefully. [The] American side informed that those countries and companies [who] import oil and gas from Iran after November 4 will be sanctioned."

Halkbank made international headlines last December with the trial in New York of Mehmet Hakan Atilla, an executive at the bank, who was convicted for helping Iran evade sanctions.

The trial included testimony from Reza Zarrab, a Turkish-Iranian gold trader at the center of the sanction-busting scheme, that implicated top Turkish officials, including Erdogan and government ministers.

The chief defendant in the case, Zarrab, pleaded guilty before trial and cooperated with the prosecution, testifying against Atilla.

Turkey has slammed the sentencing. In a statement issued last month, the Turkish Foreign Ministry called the trial against Turkish state-run Halkbank employee “an entirely feigned process which is inconsistent with the principle of a fair trial”.

The ministry alleged that the US court relied on “forged evidence and false statements” from members of the network of a US-based cleric accused of attempting to overthrow the Turkish government.

Now US prosecutors plan to appeal the length of the prison term for Atilla, as they had sought at least 15 years. Atilla has been in US custody since his arrest in March 2017 and received credit for time already served. He could be released by the middle of next year.

> US Sensitive to Effect of Iran Sanctions on Turkey

Washington is sensitive to the consequences of the US withdrawal from the Iran nuclear deal on the Turkish economy, a senior US Treasury official said on Friday.

Billingslea briefed reporters in Ankara on discussions between his delegation and officials in Turkey.

On the US pulling out of the Iran nuclear deal, Billingslea said, "We are very sensitive to the effects that could be had on the Turkish economy. That’s what we’re discussing, the very specific matters of concern for both countries."

He, however, warned that the treasury sanctions will be enforced "very, very aggressively and very comprehensively".

Billingslea said they are also tracking gold trade with Iran.

"It would certainly be a very bad idea to think that when somebody is going to trade with Iran in gold and avoid the US sanctions if that occurs."

"We’re not in a position to signal flexibility on oil trade at this stage but we need a lot more information and a lot more details before we could make such a signal," he added.

Billingslea also advised Turkish companies to make an informed business decision if they want to continue to do business with Iran in the areas prohibited under US sanctions.

Turkey's overall trade with Iran has been decreasing since 2013 following the sanctions. While bilateral trade between the countries exceeded $20 billion in 2012, it saw a dramatic fall to $14 billion. Recorded at $9 billion in 2016, bilateral trade with Iran gained momentum in 2017 and rose to $10.7.