Turkey Evades Western Sanctions By Welcoming Russian Oligarchs

Okuma Süresi: 4 Dakika

By Harut SassounianPublisher, The California Courier www.TheCaliforniaCourier.com

The dispute continues between those who want to reward Turkey and those who want to condemn it, because of its contradictory positions on the Russia-Ukraine war.

The Wall Street Journal (WSJ) published on April 7 a detailed article by Jared Malsin and Elvan Kivilcim, titled: “Superyachts, Seaside Apartments and Suitcases Full of Cash: Russians Pour Money Into Turkey.”

As a result of the sanctions imposed by the West on Russian banks and businesses, tens of thousands of Russians have fled to Turkey with suitcases full of money, superyachts, private jets and other assets. “Many left carrying hundreds or thousands of dollars in cash because of capital controls that the Russian government imposed,” reported the WSJ. The Russians are buying houses and other properties in Turkey taking advantage of the law that allows foreigners to become Turkish citizens if they invest at least $250,000. Many Russians are able to circumvent Western sanctions by transferring their money from Russian to Turkish banks and converting their Rubles to Turkish Liras or other currencies. All NATO member countries, with the exception Turkey, have imposed strict sanctions on Russia, preventing its citizens from wiring their money out of the country, blocking Russian Airlines from flying to Western countries, and confiscating the oligarchs’ superyachts and private jets. Refusing to impose sanctions on Russia, Turkey is trying to revive its bankrupt economy by generating desperately-needed funds.

Fleeing Russians are able to avoid Western sanctions and capital controls imposed by Russia on its citizens through “Russian cash transfer companies that operate in Turkey, cryptocurrencies and simply carrying thousands of dollars in cash through airports,” according to the WSJ. The Turkish government has come up with the lame excuse that it will allow the transfer of Russian funds to Turkey as long as “the money is legal.” Such scrutiny, if it ever existed, very quickly disappeared, ignoring the requirement that foreigners obtain a residency permit before being allowed to open a bank account. According to the WSJ, “at a single branch of one state-owned bank in Istanbul, Russians have opened more than 600 accounts in recent weeks.”

The WSJ reported that “Turkey’s central bank took in about $3 billion in just two days in mid-March…. That money was likely largely composed of deposits from Russians, said Omer Gencal, an economist and former executive at HSBC Turkey and other major Turkish banks.”

Gül Gül, the chief executive of Istanbul real-estate company Golden Sign, told the WSJ: “the newly arrived Russians are buying as many as four apartments at a time, usually with cash, in order to invest the $250,000 required for citizenship. ‘Currently, out of 10 flats [apartments] we sell, six or seven are bought by Russians, said Ms. Gül. They are mostly businesspeople, wealthy ones, some of them oligarchs.’”

Russian oligarch Roman Abramovich moved two of his superyachts to Turkish ports in recent weeks. Former Russian President Dmitry Medvedev docked his 74-meter-long (249 ft.) vessel called Universe in Istanbul last week, according to the WSJ.

Furthermore, the WSJ reported that the “search-engine company Yandex, classified-ad site Avito, commercial bank Tinkoff and software firm DataArt collectively had more than 1,000 workers fly to Turkey. About 900 Yandex workers flew to Turkey shortly after the beginning of the war, though around 300 of them have since left.”

Visa and Mastercard’s decisions to shut down operations in Russia have prompted Russians to use “the Russian Mir payment system, which works at certain locations in Turkey. ‘We accept Mir’ signs have begun cropping up in grocery stores around Istanbul,” the WSJ wrote.

“Middle-class Russians have mostly brought a few thousand dollars at a time, either in cash or by using Russian wire-transfer companies that continue to operate in Turkey. One popular service is KoronaPay, which allows people to wire money out of Russia and withdraw money in Turkey and a range of other countries. The company allows transfers worth more than 15,000 euros, equivalent to $16,400, as long as customers verify their source of income, according to the company’s website,” reported the WSJ. “Volkan Celikyurek, a money changer in Istanbul’s Laleli neighborhood, which is frequented by Russian traders and one of the only areas where exchange offices buy and sell Rubles,” told the WSJ, “I bought at most 100,000 Rubles at a time. But there are those who bought millions.”

In the meantime, Turkey’s economy is benefiting from the flow of Russian money, while its hypocritical condemnation of Russia is winning dividends from Western countries. The UK government just lifted the restrictions it had imposed on exporting weapons to Turkey. Turkish Foreign Minister Mevlut Cavusoglu announced on April 7 that Turkey is interested in “cooperating with the UK in important defense projects, including warplanes, warships and aircraft carriers.” Cavusoglu also announced that Turkey is discussing with Canada the resumption of the purchase of camera systems for the Turkish Bayraktar armed drones, suspended after the 2020 Artsakh war.

Amazingly, the Biden Administration, instead of punishing Turkey for its sanction-busting schemes, wants to reward it by indicating that selling Turkey F-16 fighters is in the best interest of the United States and NATO. Nevertheless, Congress is opposed to the sale. Over 50 Members of Congress signed a letter in February urging the Biden Administration to reject the Turkish request to buy 40 F-16 jets and upgrade 80 other jets already in Turkey’s possession. The Congressmen cited Turkey’s purchase of the Russian S-400 missile systems and the wholesale violation of human rights as the reasons for opposing the sale. Selling F-16 jets to Turkey would “more likely lead to further death and destruction in the region at the hands of Erdogan’s military,” the lawmakers wrote.

It remains to be seen how long Turkey can play its deceptive game on both sides of the fence in the Russia-Ukraine war.


“Turkey Evades Western Sanctions By Welcoming Russian Oligarchs” için 3 cevap

  1. Harut Sassounian should read the 10 March 2022 article in Eurasianet titled “Armenia anticipates influx of Russian businesses, capital” by Arshaluis Mgdesyan:

    “Armenia’s government is actively encouraging the relocations.

    The Ministry of Economy published a guide for Russian businesses seeking to relocate to Armenia, explaining everything from how to register a business to renting an apartment to bringing pets across the border. It also has set up a working group to answer queries from businesses interested in relocating. …

    A Telegram channel associated with the ministry, Economy of Armenia, recently published advice on how to transfer money into Armenia using cryptocurrency; Russia has recently introduced strict limits on how much money can be transferred abroad.”

    “Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye.” – Matthew 7:5, King James Version of the Bible.

  2. Thank you for letting me know something I knew long before you. You must be kidding when you ridiculously try to compare what Turkey is doing with what Armenia is doing. I know you don’t like it when I expose Turkey’s two-faced approach to the Russia-Ukraine war.
    Do not compare to Armenia what Turkey, a NATO member, is doing by refusing to sanction Russia and keeping its airspace open. All other NATO members have taken these actions except Turkey. No matter what you say, you cannot cover up Turkey’s duplicity. And do not compare the hypocritical behavior of NATO member Turkey with Armenia which is not a NATO member.

  3. Sassounian, we can agree on one point. Turkey has been a member of NATO along with the U.S. since 1952 for 70 years and has shed its blood alongside American soldiers in Korea. Meanwhile, Armenia has been a founding member of Russia’s Commonwealth of Independent States, Collective Security Treaty (CST) starting in 1992, then a full member since 1994 of its successor, Russia’s current Collective Security Treaty Organization (CSTO) military alliance. Armenia also currently houses two Russian military bases; the 3,000-troops-strong Russian 102nd Military Base in Armenia’s second-largest city of Gyumri and Russia’s 3624th air base, stationed at Yerevan’s Erebuni military airport. Meanwhile, Armenian apologists such as yourself go cap in hand to Congress begging for American aid while your brethren kiss Russia’s backside. And you have the arrogance to point fingers? Perhaps nobody told you that people who live in glass houses shouldn’t throw stones. To quote Boston lawyer Joseph Welch’s statement to Sen. Joseph R. McCarthy during the 1954 Army-McCarthy hearings, “Have you no sense of decency?” But then we already know the answer to that.

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