Last week, Mehmet Hakan Atilla, the deputy CEO of Halkbank, a government-owned Turkish bank, was convicted in an American federal court for his role in a sophisticated scheme to launder money for Iran. Atilla was brought down by the testimony of one Reza Zarrab, the key player in the scheme, as Jonathan Schanzer writes:
A dual Iranian-Turkish national, Zarrab was [a] gold trader who had helped Iran evade sanctions with the help of Turkish banks in 2013 and 2014, yielding Iran an estimated $13 billion at the height of the efforts to thwart Tehran’s nuclear ambitions. A leaked report by prosecutors in Istanbul in March 2014 suggested that Zarrab spearheaded a second sanctions-busting scheme involving fake invoices for billions more in fictitious humanitarian shipments to Iran that were processed through Turkish banks. . . .
Despite the headlines generated by the gold trade and the leaked report, the Turkish government insisted that everything was above board. The Obama administration seemed to echo this sentiment, saying that the gold trade had slipped through a legal loophole (a loophole the White House inexplicably left open for an additional six months, even after the problem was flagged). . . . Ankara’s political motivations [were clear]: the gold trade helped boost Turkey’s flagging export numbers at a moment when those numbers might have hurt President Recep Tayyip Erdogan’s chances for reelection. Zarrab, who became fabulously wealthy by taking a percentage from every transaction (he later estimated his take at $150 million), even received a reward for his efforts from a Turkish trade association in 2015, with Erdogan applauding from the audience. . . .
The scheme began in 2010, when Iran began to feel the squeeze from U.S. sanctions. . . . Zarrab said that around 2012 the Iranian government gave him explicit directions to conduct these illegal transactions. Turkish officials were also on the take, Zarrab said, with its economy minister allegedly taking $50 million in bribes to help facilitate the scheme. He said other Turkish officials were on the take, too—many of whom were in Erdogan’s inner circle. According to Zarrab, other Turkish banks may have been involved at the government’s behest. All this might explain why the Turkish government, even after the prosecutor’s report was leaked in 2014, killed all inquiry into the Zarrab scheme.
[But] one troubling question lingers: why did the U.S. government continue to negotiate the nuclear deal with Iran in 2013 and 2014 while Treasury was warning Halkbank about enormous sanctions violations?
Read more on Atlantic: https://www.theatlantic.com/international/archive/2018/01/iran-turkey-gold-sanctions-nuclear-zarrab-atilla/549665/