Turkey's Terror Finance Problem
Meanwhile, the aforementioned state-owned bank, Halkbank, has reportedly played a role in facilitating several important deals with Iran. In February 2012, the Wall Street Journal reported that Halkbank was one of the only Turkish banks still doing business with Iran, processing “payments from third parties for Iranian goods.” Among other things, Halkbank “processed payments for Indian refiners unable to pay Tehran for imported oil through their own banking system for fear of retribution from Washington.” In November 2012, a Turkish banking watchdog announced Halkbank’s transactions with Iran had met regulations. But the bank’s website indicates that it still maintains a representative office in Tehran.
Against the backdrop of this troubling track record, Turkey is now laboring to issue laws that would avert an FATF blacklisting. The laws are easy to write. Enforcing them in Erdoğan’s Turkey is another issue entirely.
Jonathan Schanzer, a former terrorism finance analyst at the U.S Department of the Treasury, is vice president for research at Foundation for Defense of Democracies.