Ex-Turkish minister charged with helping Iran against sanctions

File photo shows Turkey's outgoing Economy Minister Zafer Caglayan waving to his supporters at a handover ceremony in Ankara. (Reuters)
Updated 07 September 2017

Ex-Turkish minister charged with helping Iran against sanctions

ISTANBUL: US prosecutors have charged a former Turkish economy minister and the ex-head of one of its state banks with conspiring to evade sanctions and to use the US financial system to conduct hundreds of millions of dollars of transactions to benefit Iran.
The indictment marks the first time an ex-government member with close ties to Turkish President Tayyip Erdogan has been charged in an investigation that has strained ties between Washington and Ankara. Ex-Minister Zafer Caglayan was also charged with taking bribes in cash and jewelry worth tens of millions of dollars.
The case stems from an inquiry into Reza Zarrab, a wealthy Turkish-Iranian gold trader who was arrested in the US over sanctions evasion last year. Erdogan has said US authorities had “ulterior motives” in charging Zarrab, who has pleaded not guilty.
Prosecutors have now charged Caglayan and former Halkbank General Manager Suleyman Aslan and two others, according to the US Attorney’s Office for the Southern District of New York.
They were charged with “conspiring to use the US financial system to conduct hundreds of millions of dollars’ worth of transactions on behalf of the government of Iran and other Iranian entities, which were barred by US sanctions,” US prosecutors said in a statement dated Wednesday.
They were also accused of lying to US government officials about the transactions, laundering funds and defrauding several financial institutions by concealing the true nature of the transactions, prosecutors said.
Reuters was not immediately able to reach Caglayan or Aslan for comment. Halkbank said all of its transactions have always fully complied with national and international regulations, adding that news regarding the US case “misleads” the public and investors.
Relations between Washington and NATO ally Turkey, a key ally in tackling the Syrian conflict, have been strained, especially since a failed coup against Erdogan in July last year. Ankara is seeking, so far without success, extradition of a US-based Muslim cleric it accuses of backing the attempt.
Economy Minister Nihat Zeybekci defended his predecessor and said US prosecutors had yet to prove their accusations.
“Caglayan did not do anything against Turkey’s interests,” Zeybekci told reporters. “It is no concern to Turkey if Caglayan acted against interests of other countries.”
Both Caglayan and Aslan are also accused of taking bribes, according to the indictment.
“Caglayan, who was serving as Minister of the Economy... received tens of millions of dollars’ worth of bribes in cash and jewelry from the proceeds of the scheme to provide services to the government of Iran and conceal those services from US government officials,” prosecutors said.
As a result of the scheme, US banks unknowingly processed international financial transactions in violation of sanctions, prosecutors said.
Caglayan, Aslan and others indicted in the case on Wednesday remain at large, prosecutors said.
The US indictment echoes charges set out in a leaked 2014 Turkish police document, reported by Reuters, which set out allegations that a “crime organization” had helped Iran exploit a loophole in Western sanctions that allowed it to purchase gold with oil and gas revenues.
When the West prohibited the gold trade in 2013 as a sanctions violation, the police report alleged the network concocted records of shipments of food at preposterous volumes and prices to continue giving Iran access to foreign currency.
Zarrab and a Halkbank deputy general manager, Mehmet Hakan Atilla, were both arrested while in the US in March 2016 and are scheduled to appear for trial in October.
Zarrab has hired former New York City Mayor Rudolph Giuliani and former US Attorney General Michael Mukasey to defend him against the charges.
Giuliani has said that both US and Turkish officials remained “receptive” to a diplomatic solution due to the nature of the charges against Zarrab and the importance of Turkey as an ally.
A decree issued two weeks ago gave Erdogan authority to approve the exchange of foreigners detained or convicted in Turkey with people held in other countries “in situations required by national security or national interests.”
Shares of Halkbank were down 3 percent at 13.86 lira as of 1013 GMT, underperforming the benchmark BIST 100 index, which was up 0.3 percent.


Pope backs Iraqi call for its sovereignty to be respected

Updated 37 min 11 sec ago

Pope backs Iraqi call for its sovereignty to be respected

  • President Barham Salih held private talks for about 30 minutes with the pope and then met the Vatican’s two top diplomats
  • The recent tensions in Iraq could make it impossible for Francis to visit the country, which he has said he would like to do this year

VATICAN CITY: Pope Francis met Iraq’s president on Saturday and the two agreed that the country’s sovereignty must be respected, following attacks on Iraqi territory this month by the United States and Iran.
President Barham Salih held private talks for about 30 minutes with the pope and then met the Vatican’s two top diplomats, Secretary of State Cardinal Pietro Parolin and Archbishop Paul Gallagher, its foreign minister.
The talks “focused on the challenges the country currently faces and on the importance of promoting stability and the reconstruction process, encouraging the path of dialogue and the search for suitable solutions in favor of citizens and with respect for national sovereignty,” a Vatican statement said.
On Jan. 8, Iranian forces fired missiles at two military bases in Iraq housing US troops in retaliation for Washington’s killing of Iranian General Qassem Soleimani in a drone strike a Baghdad airport on Jan. 3.
The Iraqi parliament has passed a resolution ordering the 5,000 US troops stationed in Iraq to leave the country.
Soon after the Iranian attack, Francis urged the United States and Iran to avoid escalation and pursue “dialogue and self-restraint” to avert a wider conflict in the Middle East.
The pope discussed the Middle East with US Vice President Mike Pence on Friday.
The recent tensions in Iraq could make it impossible for Francis to visit the country, which he has said he would like to do this year.
The Vatican said the pope and Salih also discussed “the importance of preserving the historical presence of Christians in the country.”
The Christian presence in Iraq and some other countries in the Middle East has been depleted by wars and conflicts.
Iraq’s several hundred thousand Christians suffered particular hardships when Daesh controlled large parts of the country, but have recovered.