News / Europe

Iran's Foreign Minister to Make Key Turkish Visit

FILE - Iran's Foreign Minister Mohammad Javad Zarif attends a working luncheon in Kuwait.
FILE - Iran's Foreign Minister Mohammad Javad Zarif attends a working luncheon in Kuwait.
Dorian Jones
The Iranian foreign minister visits Turkey Saturday as the Turkish government continues to be mired in a deepening crisis involving a Turkish state bank that allegedly laundered money sent to Iran.

The allegation is putting Ankara and its state banks under increasing international scrutiny and is raising questions about Turkey's ability to obtain future international financing and investment.

Iranian foreign minister's Mohammad Javad Zarif's one-day visit is part of ongoing efforts to improve bilateral relations between the two countries.

But the visit comes at a potentially awkward time for Ankara, with one of its most prominent state banks at the center of a graft investigation involving Iran.

Suleyman Aslan, the CEO of Halkbank, was detained after a large amount of cash was found at his home, much of it stored in shoe boxes. Prosecutors claim it is part of a conspiracy to launder billions of dollars for Tehran to avoid international sanctions.
Analyst Atilla Yesilada of Global Source Partners said the investigation has cast a shadow over the Turkish finance industry.

“The accusations against Halkbank suggest that the Turkish banking system is not well defended or well monitored against money laundering and terror financing," he said. "I really need to see whether the loans to Turkey will be renewed."

Trade increases

Iranian-Turkish trade has markedly increased in recent years, despite ever-tightening international sanctions against Tehran for its controversial nuclear program.
Much of that trade has been energy imports. Ankara is the biggest customer of Iranian gas. But international sanctions have made such trade increasingly difficult.
Halkbank has been at the center of a “gas-for-gold” plan that allowed Tehran to buy gold with Turkish lira in exchange for Iranian natural gas and oil. Western sanctions over Iran's nuclear program prevented the country from getting paid in euros or dollars, so Halkbank used the gold to get around the restrictions.

Washington, which is in forefront of pursuing sanctions against Tehran, had voiced concern over Ankara’s trade dealings with Iran

But Asli Aydintasbas, a political columnist for the Turkish newspaper Milliyet, said the latest allegations may only cause limited adverse effects on Ankara’s relations with Washington.

“I don’t think this going to be that damaging if it just stays at this," he said. "Turkey had significantly curtailed gold trade with Iran and the Americans were willing to overlook whatever remains. And Washington itself is trying to mend fences with Iran.”

High cost

Although the diplomatic fall out may be limited, the financial consequences could be costly.  Experts point out that there are severe penalties for any institution breaching the sanctions.

Inan Demir, chief economist for the Istanbul-based Finans Bank, said the controversy comes at a bad time for Turkey.

“There has been a lot of negative publicity around the Turkish banking system - and the state banks in particular - and even more specifically Halkbank," he said.

"At a time of tighter global liquidity conditions, this negative publicity could lead to further tightening of financing conditions," he said. "And over the next 12 months Turkey is looking to refinance $164 billion of external debt."
Turkey’s economic minister, Ali Babacan, has been dismissing the allegations against Halkbank, claiming it is part of a conspiracy against the bank and Turkey. He also defended Halkbank’s relations with Iran, describing it as natural and the envy of its competitors.
But analyst Yesilada said that a worrying uncertainty hangs over the country’s financial industry.

“Suddenly, there is this huge cloud of suspicion over Turkey in terms whether it is legitimate country to do business in,” he said.

Despite the government removing hundreds of senior police officers and prosecutors linked to the graft investigation, the probe continues.

Observers warn the prospect of further revelations would only add to feelings of uncertainty towards Turkey among international bankers and investors.

You May Like

Video Americans, Tourists, Reflect on Meaning of Thanksgiving

VOA garnered opinions from several people soon after November 13 Paris attacks, which colored many of their thoughts

Video Thais Send Security Concerns Down the River

In northern Thailand, the annual tradition of constructing floating baskets to carry away the year’s bad spirits highlights the Loy Krathong festival

Video Tree Houses - A Branch of American Dream

Workshops aimed at teaching people how to build tree houses have become widely popular in America in recent years

This forum has been closed.
Comment Sorting
by: Rome from: USA
January 05, 2014 1:49 AM
The Turkish government , Is cheating , lying , circumventing each and all international laws to profit from weak Obama administration ad well as weak EU Catrine Ashton . The purpose being gaining financial strength , laying the foundation of another Sharie state like Iran with further goal to spread Islamist anarchy and terrorism through out the free world .once his dream of Ottoman Empire is in place they reveal the true back warded nature . They must be punished and stopped.

by: Godwin from: Nigeria
January 04, 2014 7:21 AM
This is more than just mere diplomatic visit, it is a thank you visit to commiserate with Ankara for its solid support to Tehran in the heat of the sanctions. It also goes beyond the support during the hard sanctions, it is to thank Turkey for revealing the spy ring whose modus operandi was graphically exposed by Ankara to Tehran around August 2013. Often times I have written here that Turkey is more or less an islamist regime and there is nothing in it that is civilized, European or NATO. Erdogan has always wished to take Turkey back to the Ottoman Empire days, rule like the Ayatollahs and make Turkey like Iran ruled with sharia laws. The sympathy is what is translated to the money laundering, and I bet the PM will do everything he is known for, including lying, to cover up for Iran.
Even though the Prime Minister may be instituting investigations into these issues of money laundering et al, he is privy to every arrangement to cushion Iran against the effects of the sanctions imposed because of its nuclear program. Thus Erdogan has voiced his support for Iran's nuclear program, but being not able to further his position, resorted to illicit, illegal and unconventional approach to helping Iran beat the sanctions. This is cheating. It lands Turkey where Iran is - axis of evil and terror, after all it has openly identified with the Muslim Brotherhood of Egypt, Hamas in Gaza which are terrorist organizations, and now with Iran which is a state sponsor of terrorism worldwide and chief axis of terror. The world is waiting to see the outcome of this investigation sweep Turkey out of the EU to which it is a disgrace - if all the above allegations prove true.

by: Davis K. Thanjan from: New York
January 03, 2014 10:01 PM
Why the US and the EU are hesitant to take punitive action against the Turkish bank Halkbank and Turkey for money laundering in favor of Iran circumventing economic sanctions against Iran? Is it because of the membership of Turkey in the NATO?

by: Jacob Avi Cohen
January 03, 2014 7:25 PM
As an American, I can't believe how sneaky the Turkish government is. Turkey houses an American Air Force base and is a member of NATO. Why is Turkey money laundering dirty Iranian money. Iran is an axis of evil. Iran is a state sponsor of terrorism. Iran is a rogue state. The United States of America must question its relationship with Turkey. Turkey must not act outside international law. Iran has 1,001 world economic sanctions against it. Iran is an outlaw. Iran must be punished. Co-operating with Iran is injustice. Injustice anywhere is a threat to justice everywhere.
In Response

by: ll cool j from: sydney
January 04, 2014 12:02 AM
Only something a redneck trailer trash from the american south would say haha! The United States is a state sponsor of terror you stupid yank! I guess this is an example of how poor your education is lol! Which country has iran invaded or attacked in the last 100 years?? Can you name one yankee boy? Or is your brain too far up your rear to think straight? The united states secretly funds factions so wars continue to brew. You donkey shagging yanks blew your own buildings up just to invade iraq and afghanistan and kill thousands of innocent people for no reason. You losers have no credibility. Bush babies. Lol

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Islamic State Unfazed by Losses in Iraq, Syriai
November 26, 2015 5:21 AM
Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs