Reuters has a new report out that looks at Iranian financial activity inside Turkey and western concerns that the country, which has booming trade relations with Tehran, could become a safe haven for Iranians seeking to avoid the nuclear sanctions placed on their country. From the article:
Turkey and other U.S. allies have been allowing Iranian
banks with suspected links to Tehran's nuclear program to do business within
their borders, frustrating Western countries trying to put a financial squeeze
on the Islamic Republic, Reuters has learned.
An examination of classified reports and interviews with
Western diplomats, government and intelligence officials underscore that Turkey
and others have resisted international pressure to make it harder for Iran to
finance its uranium enrichment program.
"Turkey's blossoming financial-economic relationship
with Iran provides Iran with a gateway to the entire European financial
system," according to an intelligence report on Turkey and Iran provided
to Reuters by a diplomat. "The fact that Turkey is allowing itself to be
used as a conduit for Iranian activity via Turkish banks and the Turkish lira
is making it possible for Iranian funds in Turkish guise to make their way into
Turkey, a NATO member that looks to join the European Union,
has enjoyed growing economic and financial relations with neighbouring Iran.
Trade between the two nations reached $10 billion in 2008 and could triple in
five years, Turkish Prime Minister Tayyip Erdogan told a group of businessmen
he met together with Iran's First Vice President Mohammad Reza Rahimi last
Much of that trade is legitimate, but if Turkey becomes a
virtual safe haven for Iranian banking activities, it will be easier for Tehran
to dodge sanctions, according to diplomats.
The article comes out only days after Turkish Prime Minister Recep Tayyip Erdogan told a gathering of Turkish and Iranian businessmen in Istanbul that he would like to see the current trade volume of $10 billion between the two countries triple in the next five years. Addressing the same crowd, Iranian First Vice President Mohammad Reza Rahimi said his country his country would be removing any obstacles to trade between Turkey and Iran.
For Turkey, the relationship with Iran follows the "zero problems, maximum trade" formula that Ankara has developed for relations with its neighbors. But, at least based on the concern expressed by western officials in the Reuters article, this policy could also cause increased friction with Ankara's traditional allies -- a chance Ankara, for now, appears to be willing to take.
UPDATE -- Turkish authorities are saying that no local companies or banks are in violation of the UN sanctions on Iran.