ANKARA: Turkiye has found itself under heightened US scrutiny over a rise in the export of potentially sanctions-busting goods to Russia.
US Undersecretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson was this week due in Ankara and Istanbul to follow up on American fears that Turkiye could inadvertently be fueling Moscow’s military campaign in Ukraine.
Nelson, making his second visit to Turkiye this year, will investigate trade activities that may unintentionally be aiding Russia’s war efforts through third-party exports.
He was expected to hold talks with Turkish officials on preventive measures to curb the flow of dual-use goods that could indirectly benefit Russia’s military pursuits.
In a statement on its website, the US Department of the Treasury said: “In Turkiye, a NATO ally, undersecretary Nelson will also discuss efforts to prevent, disrupt, and investigate trade and financial activity that benefit the Russian effort in its war against Ukraine.”
During the first nine months of this year, Turkiye has seen record exports of 45 goods, valued at 158 million euros ($173 million), to Moscow and five ex-Soviet nations — Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan. The figure represents a threefold increase on the same period at the start of the Ukraine conflict.
Among the exported items were microchips classified as “high priority” by Washington.
US officials revealed instances where dual-use parts ostensibly bound for intermediary nations were, in fact, reaching Russia directly. For example, while Kazakhstan reported imports of high-priority goods from Turkiye valued at $6.1 million, Turkish official data revealed exports to Kazakhstan reaching a record $66 million during the same period.
Western assessments have indicated that some high-priority goods from Turkiye have been applied to the production of drones, helicopters, and cruise missiles.
Turkiye has strong trade and diplomatic ties with Moscow, but US Treasury officials have been recently concerned about the country’s export of products to Russia that could serve both commercial and military purposes.
Ankara has not formally joined Western sanctions against Russia for fear of damaging the Turkish economy. However, the US recently imposed sanctions on Turkish electronics supplier, Azint Elektronik, over its alleged shipping of high-priority goods, such as electronic integrated circuits, to Russia.
Rich Outzen, a senior fellow at the Atlantic Council, told Arab News: “Maintaining non-military trade with Russia remains an integral part of Turkish economic diplomacy.”
Five Turkish companies were among firms faced with American sanctions in September for dispatching sensors and measuring tools to Russia, providing repair services to vessels linked to the Russian Defense Ministry, and shipping electronic components of US and European origin to Russian firms.
Outzen noted that private Turkish companies could well fall foul of US sanctions over their exports to Russia while government entities may escape them unless there was clear evidence of a coordinating role.
Sinan Ulgen, a former Turkish diplomat and chairman of the Istanbul-based think tank EDAM, told Arab News: “The visit of Nelson will also be an opportunity for the US to iterate its concerns about the ongoing trade.
“There are a number of product groups that are under the radar of US and EU authorities where Turkiye is expected to do more in terms of curtailing trade with Russia.
“Turkish authorities will indeed take on board these concerns and examine more closely trade with Russia on these products in concern.
“Also, given that ultimately the total affected exports are around $158 million, while some of them are re-exported products, there is little value-added that remains in Turkiye, which is not a reason why Turkish authorities should actually heed the concerns of its partners in the West,” Ulgen said.
Nelson’s visit to Turkiye comes as the country continued its long-standing efforts to procure F-16 fighter jets from the US, or alternatively, source Eurofighters.
“Especially at this moment, when Turkiye tries to normalize its ties, Ankara would not want to be affected by additional sanctions from the West, even though they essentially target companies and individuals that are party to this trade.
“This visit would be an opportunity for both parties to essentially seek a convergence on trade policies with Russia,” Ulgen added.
The trade volume between Turkiye and Russia was this year expected to exceed $65 billion. It surged in 2022 following Russia’s invasion of Ukraine and the heightened sanctions regime of the West against Moscow.
Last year, Russia was Turkiye’s main import partner with goods valued at $58.85 billion, a threefold increase on the same period in 2021.