U.S., Turkey spar over money laundering, sanctions violations


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AML, Sanctions at center of charges against Turkish bank official, others

U.S. federal prosecutors have charged nine Turkish citizens with conspiring to trade gold for gas in Iran in violation of international sanctions. One of the men charged is a deputy general manager of a top Turkish bank, according to the New York Times.

The alleged sanctions violations and money laundering charges have further strained relations between the U.S. and Turkey, and Turkish president Recep Erdogan has ratcheted up the situation further with his detention of a U.S. embassy employee in Turkey.

Charges are based on evidence from wiretaps that feature conversations about complicated plans to evade sanctions in order to trade gold for gas. The U.S. government alleges that conspirators “facilitated millions of dollars in transactions on behalf of Iran that were designed to evade the sanctions, orchestrating the scheme through a global network of companies in Turkey and elsewhere.”

Benjamin Brafman, one of the attorneys representing Reza Zarrab, told the Times that while Zarrab had used non-U.S. banks for some financial transactions, “the fact that one of the foreign banks caused several transactions to flow through the Federal Reserve was not Reza’s fault, as he never intended for that to happen.”

Various reports note that while this case has received relatively little attention across the U.S., it is big news in Turkey and it remains a thorn in the side of Erdogan. Erdogan was not implicated directly in the allegations of sanctions violations and money laundering, but he was regularly referenced by the accused in the wiretaps as standing to benefit from their gold-for-gas schemes with Iran.

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