Page 19 - TURKRptOct22

2.4 Turkish banks suspend use of Russian Mir cards due to sanction threats by US
On September 19, Isbank (ISCTR) and Denizbank (a unit of Emirates NBD) told news services that they suspended clients’ use of Mir cards, saying they were seeking clarity on the sanctions.
On September 13, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the chairman of Mir and served a warning on the heightened risk of facilitating Russia’s efforts to evade Ukraine war sanctions through the expanded use of the National Payment Card System (NSPK) or the Mir National Payment System.
Isbank told Bloomberg that it had seen the US Treasury’s statement on the issue and was evaluating it.
Prior to the war sanctions imposed on Russia, Isbank and its two government-run local peers, Ziraat Bank and Vakifbank (VAKBN), were already integrated with Mir.
Following the imposition of the sanctions, Denizbank and state-run Halkbank (HALKB) also established connections to the Mir system.
On September 27, Halkbank, Vakifbank and Ziraat Bank also halted use of Mir.
Government-run Halkbank, meanwhile, remains accused by New York prosecutors of, starting from 2012, involvement in an Iran sanctions-busting scheme. As yet, the prosecutors, given process appeals, have not managed to have their case against Halkbank heard by a court. Only a former deputy general manager at the bank, Hakan Atilla, has been convicted. He spent two years and four months in jail in the US.
The court where Atilla was tried—after star prosecution witness Reza Zarrab, head of the sanctions-busting scheme, was persuaded by prosecutors to confess—heard that Atilla did not personally receive money from the scam. He was, even Zarrab maintained, simply carrying out his duties under the scope of his post at the state-controlled bank.
The Turkish Airlines (THYAO) Flight Training Center, which operates under the approval of the European Union Aviation Safety Agency (EASA), has stopped training Russian pilots. The decision was taken by EASA and it is not related to Turkey.
The US Supreme Court on October 3 agreed to hear a bid from Turkish state-owned Halkbank to avoid criminal charges of money laundering, bank fraud and conspiracy stemming from the scheme in which it allegedly assisted Iran in dodging US sanctions.
As a bank that is majority-owned by the Turkish state, Halkbank is contending that it is immune from US prosecution under a 1976 law, the Foreign Sovereign Immunities Act.
A date was not provided for the US Supreme Court’s hearing. If the court rules in favour of Halkbank, the charges will be dropped. Otherwise, the court process will be launched.
19 TURKEY Country Report October 2022 www.intellinews.com