Turkish banks refuse to cooperate with Russian ones
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Trade ties between the Russian Federation and Turkey, which until now remained one of the friendly partners, were under threat. Turkish banks universally refuse to work with Russian ones. The situation, according to Kommersant’s sources, began to become complicated in the summer, and sharply worsened after the US President issued a decree on secondary sanctions on December 22 – as a result, Turkish banks severed correspondent relations with almost all Russian credit institutions. Market participants argue that similar problems, although on a smaller scale, have already begun to arise with Chinese banks.
Turkish banks refuse to work with Russian ones, fearing sanctions, sources told Kommersant in the financial market and confirmed by participants in foreign trade. We are talking about both the severance of correspondent relations and the suspension of payment processing without formal closure of contracts. One of Kommersant’s sources clarifies that “there are exceptions – for example, in relation to subsidiary foreign banks in Russia.”
One of Kommersant’s interlocutors says that difficulties arose a long time ago, but at the end of December the situation escalated sharply, spreading to almost all Turkish banks. Among the major participants in settlements with the Russian Federation, Kommersant’s sources name Nurol Bank, with which about 40 domestic credit institutions worked, and Emlak Bank. Correspondent accounts of Russian banks in Turkey were opened in lira, dollars and other currencies – some banks accepted payments in rubles.
“Banks are breaking off relations due to pressure from the United States. And not only in Turkey, but also, for example, in China,” emphasizes one of Kommersant’s interlocutors. Credit institutions in the Russian Federation and Turkey did not respond to Kommersant’s requests.
The head of Optimalog, Georgiy Vlastopulo, notes that “problems with Turkey began in the summer,” and in relations with China, “these are still spotty stories.” According to the president of the customs and logistics broker KBT, Yulia Shlenskaya, serious problems began to arise at the end of December. In particular, “banks in Turkey have taken a break and do not carry out money transfers from Russia and to the country. Managers report that now not a single payment from Russia will be accepted: lira, rubles – it doesn’t matter.”
As Dmitry Sukhoversha, head of multimodal transportation at FM Logistic in Russia, explains, Turkish banks, which tightened control after the introduction of the 12th EU sanctions package, began to require more data and documents when making payments in lira to confirm the absence of sanctions against all participants in the chain; imported goods are not must be on sanctions lists.
SOTA Logistic Business Development Director Igor Chernyshev notes that “even payment for services does not go through.” According to him, all banks require indication of the final recipients and a declaration of goods with HS codes: “Currently, only one of the Turkish banks allows payments as a correspondent. But if the number of payments is more than 50 per day, the application takes several days to complete.”
Problems in settlements with China, clarifies the general director of the transport company Delko Sanjar Ashuraliev, began to arise in November, and in December such cases became more frequent: “Payment for cargo transportation, if the payer is not a resident of the country, takes a long time. According to the latest data, the deadline for receiving funds is up to a week.”
Meanwhile, Dmitry Sukhoversha claims that payments to Turkish banks in Russian rubles are “possible, but the currency is not in great demand.” SLK co-founder Dmitry Arzhanykh notes that the company has a small volume of payments to Turkey (in lira) and a fairly large volume to China, but so far there have been no problems with either.
Nikolai Olshansky, CEO of ModernWay, says the same thing: “We make all payments to Chinese counterparties in yuan. We haven’t encountered any problems yet.”
The version of the refusal to cooperate with Russia under US pressure was also confirmed by the Chairman of the Turkish Exporters Assembly (TIM) Mustafa Gültepe. “Since the release of the decree of US President Joe Biden on the application of secondary sanctions against banks assisting Russian ones (signed on December 22, 2023.— “Kommersant”), Turkey became one of the first countries whose banks began to close correspondent relations with the Russian Federation… not a single bank wants to be cut off from dollar payments,” admits one of the Russian bankers.
This is a rather tough lever, says Viktor Dostov, chairman of the Electronic Money Association, because “getting a Turkish bank on the US sanctions list means that local clients in Turkey will also flee from it.” The expert emphasizes that until now the country “has been one of the few windows, although not so wide, but they were not afraid to work with Russia.” The development of SPFS (the Russian analogue of SWIFT) does not completely solve the problem, since payments on it are carried out within the framework of correspondent relations, Mr. Dostov clarified.
“At the same time, decisions on correspondent relations, acceptance and processing of payments are made by each specific bank, based on its own understanding of the situation, risk policy and compliance,” emphasizes Managing Director of Expert RA Yuri Belikov.
These are not the first problems in the relationship between Russian organizations and the Turkish market and financial organizations. So far, alarming situations have not turned into disasters. Thus, in March 2023, Turkey seriously limited the transit of sanctioned goods to Russia: customs began to reject transit declarations for sanctioned goods (see Kommersant of March 9, 2023). However, then transit was restored with some reservations (see “Kommersant” dated March 21, 2023).
The head of the board of the Financial Innovations association, Roman Prokhorov, believes that Turkey is still “interested in fulfilling the role of a commodity and transport hub between the Russian Federation and Europe, plus its own exports.” According to the expert, behind the current settlement crisis is “some kind of another game.” Mustafa Gültepe also hinted that the situation “should improve in the near future.” Yulia Shlenskaya, referring to the words of her counterparties, says that “there will be some kind of decision by the end of January.”
If the risks turn out to be too great for Turkish banks, the only effective option, according to financial market participants, will be to establish settlements with Turkey through banks of third countries, including the CIS.
Roman Prokhorov explains that “there are quite a few ways to make payments through friendly jurisdictions in Armenia, Kyrgyzstan, etc.” In this case, companies from other countries can be used as payment agents in order to “remove the Russian trace.” “This, of course, makes the calculations somewhat more expensive, but allows them to be carried out,” he believes. Mr. Belikov agrees that a complete stop of trade between countries will not happen, since the supply of goods that are not under sanctions and do not have dual purposes is not limited.
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