Turkey repeating Iran sanction-busting scheme with Venezuela – ex-diplomat

The Turkish government is reviving a scheme to bust sanctions by trading gold with Venezuela, a country on the U.S. sanctions list, three years after being caught doing the same with Iran, said İmdat Öner, a scholar and former political officer at the Turkish embassy in the Venezuelan capital of Caracas, in an article for the Miama Herald.

Venezuela’s relations with Turkey have been increasingly friendly in recent years, and the country’s government has chosen to move gold refining from Switzerland to Turkey, where it believes there is less chance of the gold being seized as a result of U.S. sanctions, said Öner.

However, Turkish reports show that gold that had been set to return to Venezuela has not been shipped back over, and a spike in Turkey’s gold trades with the United Arab Emirates has aroused suspicion that Turkey is “sending the gold to UAE that they imported from Venezuela and turning it into liquidity.”

“Moreover, Turkey has recently started to supply the basic products for Venezuela’s government-subsidized food program CLAP, appearing to create a gold-for-food mechanism between Ankara and Caracas,” Öner said.

The set up echoes a mechanism previously set up through the Turkish state-run Halkbank, which used gold and fictitious food trades to move billions of dollars past U.S. sanctions for Iran.

Mehmet Hakan Atilla, an executive at the bank, is currently seeing out the 32-month sentence he received last year from a U.S. court for his part in setting up the mechanism.

He was found guilty in January 2018 after a high-profile trial in which Reza Zarrab, a Turkish-Iranian gold trader and former favourite of Turkey’s Justice and Development Party (AKP) government agreed to testify as the prosecution’s star witness, alleging bribery on a massive scale at the top of the Turkish government.

“Suffice it to say, a vast bribery and corruption mechanism that would benefit government officials of the two countries (Venezuela and Turkey) may play an important role as it was witnessed in the case of Iran,” Öner said.

“Given the existence of expanded pro-government networks and state-sponsored patronage in both countries, it would not be wrong to claim that the personal gains of individuals within the Turkish and Venezuelan governments may be pushing this gold trade,” he said.

If a similar sanctions-busting scheme is discovered with Venezuela then the costs, warned the Turkish former diplomat, could be extremely heavy for Ankara.

Halkbank is still awaiting the fine expected to be levied against it by the U.S. judiciary for its part in breaking sanctions on Iran.