Turkey seeking to avoid worst-case scenario over U.S. sanctions trial - academic

The high-profile U.S. conviction of a Turkish banker for breaking sanctions on Iran has produced a loud reaction from Turkey, but a “worst-case scenario” in which the bank refuses to pay a fine and gets cut off from the international banking system is unlikely, academic and analyst Nicholas Danforth said.

A New York court on Wednesday convicted Mehmet Hakan Atilla, the former deputy general manager of Turkish state-run Halkbank, of aiding a scheme to help Iran evade sanctions imposed over its nuclear programme. Witnesses told the court that Turkish ministers and officials not only allowed the scheme, but also profited from bribes to cover it up, charges the officials strongly deny.

“From a diplomatic perspective, the most positive development following the trial is that Ankara appears open to negotiating the fine that Halkbank, where Atilla worked, agrees to pay,” Danforth wrote.

“This would avoid a worst-case scenario that some analysts had speculated about, where Turkey simply refused to pay, thereby creating an unprecedented crisis where it would potentially be cut off from the global financial system.”

The reluctance to confront U.S. authorities comes despite Turkish leaders accusing the United States of deliberate conspiracy against them, Danforth said.

“Yet viewed in a broader context, the case itself serves as a reminder of the deep and structural challenges that will continue to bedevil the U.S.-Turkish relationship,” he said.

“Ankara’s initial willingness to prioritise its trade relations with Iran over the security interests of NATO as a whole, coupled with the deep conviction Atilla’s trial itself was part of a politically motivated attempt to bring down the Turkish government, suggest that whatever happens in the case at hand, the tensions between the United States and Turkey will continue to grow further apart in the coming year.”