{"id":68809,"date":"2013-03-28T22:34:41","date_gmt":"2013-03-28T20:34:41","guid":{"rendered":"http:\/\/www.turkishnews.com\/en\/content\/?p=68809"},"modified":"2014-01-08T02:13:29","modified_gmt":"2014-01-08T00:13:29","slug":"now-obama-needs-to-pressure-turkey","status":"publish","type":"post","link":"https:\/\/www.turkishnews.com\/en\/content\/2013\/03\/28\/now-obama-needs-to-pressure-turkey\/","title":{"rendered":"Now Obama needs to pressure Turkey"},"content":{"rendered":"

By\u00a0<\/span>Jonathan Schanzer<\/b>\u00a0and\u00a0<\/span>Emanuele Ottolenghi<\/b>, Special to CNN<\/span><\/h1>\n
\n

\"t1larg.erdogan.afp.gi\"<\/em><\/p>\n

Editor\u2019s note: Jonathan Schanzer, a former terrorism finance analyst at the U.S Department of the Treasury, is vice president for research at the Foundation for Defense of Democracies, where Emanuele Ottolenghi, author of \u2018The Pasdaran: Inside Iran\u2019s Islamic Revolutionary Guard Corps,\u2019 is a senior fellow. The views expressed are their own.<\/em><\/i><\/p>\n

In a surprise development on Friday, Israeli Prime Minister Benjamin Netanyahuissued an apology\u00a0to Turkish Prime Minister Yayyip Erdo\u011fan over the ill-fatedMay 2010 flotilla\u00a0conflict on the high seas between Israeli commandos and Turkish-backed activists seeking to break the Israeli blockade of Gaza.<\/p>\n

The clashes left nine Turks dead. Erdo\u011fan has been demanding an apology ever since, while ramping up his anti-Israel rhetoric \u2013 most recently, comparing Zionism with fascism. With relations at their nadir, the Israelis had nothing to lose by issuing this apology \u2013 Netanyahu’s apology was clearly a concession to U.S. President Barack Obama, who just garnered a great deal of goodwill during his much-heralded trip to Israel.<\/p>\n

But if Obama plays his cards right, he should make demands of Erdo\u011fan, too. The relationship between the two men is already warm. According to the\u00a0Los Angeles Times<\/i>, \u201cObama has logged more phone calls to Erdogan than to any world leader except British Prime Minister David Cameron.\u201d But the president has ignored the fact that Turkey has also become one of the more troubling epicenters of illicit financial activity.<\/p>\n

After delivering the Israeli apology to Turkey, Obama has an opportunity to demand that Erdo\u011fan cease this activity.<\/p>\n

For one, Turkey is believed to have emerged in recent years as one of the primary patrons of the Palestinian terrorist group Hamas. In December 2011, Erdo\u011fan\u00a0reportedly\u00a0\u201cinstructed the Ministry of Finance to allocate $300 million to be sent to Hamas\u2019 government in Gaza.\u201d Since then, Turkey has reportedly provided Hamas with funds for\u00a0hospitals,\u00a0mosques, and\u00a0schools\u00a0in the Gaza Strip, with other resources to help rebuild the territory, particularly after the Hamas war with Israel in November 2012.<\/b><\/p>\n

Turkey is not Hamas\u2019 only sponsor, of course.\u00a0 There is Qatar, which has been on a regional spending spree. And there is also Iran, which has had a difficult time meeting its sponsorship obligations, thanks to Western sanctions designed to derail its nuclear program.<\/p>\n

Sanctions won\u2019t work, however, if Turkey has its way.<\/p>\n

Iran has apparently been benefiting handsomely from Turkey\u2019s Halkbank. According to Turkey\u2019s\u00a0Deputy Prime Minister Ali Babacan, \u201cIn essence, gold exports [to Iran] end up like payments for our natural gas purchases.\u201d \u00a0In August 2012, according to\u00a0Reuters, \u201cnearly $2 billion worth of gold was sent to Dubai on behalf of Iranian buyers.\u201d Halkbank acknowledged that it was responsible for processing the payments. Despite increased scrutiny, the Turkish newspaperZaman<\/em>\u00a0noted in January that the Iranian \u201cgas-for-gold\u201d was still going.<\/p>\n

Halkbank, meanwhile, has reportedly helped Iran on other scores. In February 2012, the\u00a0Wall Street Journal<\/em>\u00a0reported that Halkbank was processing \u201cpayments from third parties for Iranian goods.\u201d This included \u201cpayments for Indian refiners unable to pay Tehran for imported oil through their own banking system for fear of retribution from Washington.\u201d<\/p>\n

In November 2012, a\u00a0Turkish banking watchdog announced\u00a0Halkbank had curbed its illicit dealings. But the bank\u2019s website clearly boasts of arepresentative office in Tehran.<\/p>\n

To be fair, Halkbank is almost certainly not the only Turkish institution to have dabbled in sanctions busting schemes. In November 2012, the Turkish newspaper\u00a0Zaman noted<\/i>\u00a0that there are currently over 2,000 Iranian companies registered in Turkey. How many of these companies have ties to the Iranian government? How many of them throw off cash to the regime? More importantly, how many of them help Tehran procure dual-use materials that brings the Iranian nuclear bomb one step closer to reality?<\/p>\n

As it turns out, at least one does.\u00a0German police recently exposed a networkthat supplied Iran with nuclear industry components through Turkey. But the announcement came only after hundreds of components for Iran\u2019s Arak heavy water nuclear reactor made their way to Iran undetected.<\/p>\n

Turkey can, in this case, claim that it had no knowledge of this network. But that won\u2019t fly when it comes to the\u00a0Turkish branches of Bank Mellat, an Iranian bank sanctioned by the U.S. and the EU. Turkey continues to allow the bank to\u00a0operate on its soil\u00a0because the United Nations has yet to designate it. According toZaman<\/i>, as recently as April 2012, other Iranian banks have also applied to operate in Turkey\u2019s financial market.<\/p>\n

Part of the problem is Turkey\u2019s legal regime. For more than five years, the Financial Action Task Force (the U.N. of terrorism finance) warned that Ankara had neither adequately criminalized terrorism finance nor established sufficient infrastructure to identify and freeze terrorist assets. FATF first flagged the problem, via a\u00a0mutual evaluation, in 2007. Ankara did nothing for five years, until FATF threatened to\u00a0add Turkey to the black list, which currently only includes Iran and North Korea. Erdogan and the Turkish parliament eeked out legislation and averted the blacklisting just shy of the February 22 deadline.<\/p>\n

The result of this five year blackout and cavalier attitude to sanctioned Iranian financial institutions: Turkey was not bound to any laws, despite international pressure to fight terrorism or illicit nuclear proliferation. With over 2,000 Iranian companies involved in anything from energy to commodities, real estate to finance to the automotive sector, the potential for mischief is enormous. Had Turkey put its house in order, it might have been able to prevent significant embarrassment.<\/p>\n

Turkey watchers quietly concede that more embarrassment is likely on the horizon. From Hezbollah assets to money-changers and gold dealers who do Iran\u2019s bidding to government backing of jihadists in Syria, Turkey will remain an illicit finance problem for the foreseeable future.<\/p>\n

Thanks to his ability to deliver Israel’s apology, Obama has increased leverage to reverse this trend.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Jonathan Schanzer\u00a0and\u00a0Emanuele Ottolenghi, Special to CNN Editor\u2019s note: Jonathan Schanzer, a former terrorism finance analyst at the U.S Department of the Treasury, is vice president for research at the Foundation for Defense of Democracies, where Emanuele Ottolenghi, author of \u2018The Pasdaran: Inside Iran\u2019s Islamic Revolutionary Guard Corps,\u2019 is a senior fellow. The views expressed are […]<\/p>\n","protected":false},"author":83,"featured_media":68810,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148,34],"tags":[145,3803],"class_list":["post-68809","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-israel","category-usa","tag-barack-obama","tag-netanyahu"],"_links":{"self":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts\/68809","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/users\/83"}],"replies":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/comments?post=68809"}],"version-history":[{"count":0,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/posts\/68809\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/media\/68810"}],"wp:attachment":[{"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/media?parent=68809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/categories?post=68809"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.turkishnews.com\/en\/content\/wp-json\/wp\/v2\/tags?post=68809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}