Turkish state bank ceases trade with Venezuelan central bank after U.S. tightens sanctions

Turkey’s largest bank by assets has called a halt to its dealings with Venezuela’s central bank after Washington intensified its sanctions on entities dealing with the Latin American state, Bloomberg reported.

The state-run Ziraat Bank closed its account with the Venezuelan central bank without providing further details, Bloomberg’s Patricia Laya and Çağan Koç reported on Thursday.

Turkey has become a staunch supporter of Venezuelan strongman Nicolas Maduro, with Turkish President Recep Tayyip Erdoğan among the first statesmen to deliver a message support when opposition leader Juan Guaido declared himself interim president in January.

Erdoğan’s statements of support have been backed up by trade deals that have helped secure vital supplies of food for the Maduro regime, which has also moved its gold trade to Turkey.

When the United States imposed new sanctions on Venezuela last week, also threatening to extend them to “anyone who supports” Maduro’s government, the Turkish Foreign Ministry published a statement expressing its disapproval of the U.S. measures.

Yet the strengthened sanctions were enough to deter Ziraat Bank from continuing its trade with the Venezuelan central bank, an action that would see it risk being frozen out of the global finance system.

“Venezuela’s Central Bank was relying on Ziraat to pay contractors, move money and import products in Turkish liras”, Bloomberg’s report said.

Last month, the U.S. Treasury placed sanctions on a network of businesses, including one Turkish company, which it said had been run by Colombian businessman Alex Saab to profit from food imports in Venezuela.

Another Turkish state-owned bank, Halkbank, has already risked being hit with massive fines after participating in a scheme to break sanctions on Iran. An executive at the bank, Mehmet Hakan Atilla, was sentenced for the scheme last year.