If you carefully read my recent article, Malaysia, a Center of Iran Sanctions Activity, you may have noticed that the Iranian businessman, who admitted being a highly successful sanctions evader regarding receiving payments for Iranian oil, utilized legitimate, as well as shell, companies in Turkey to achieve his goals. While the UAE and Malaysia were well-known participants, the inclusion of Turkey had not been seen publicly before.
Turkey has moved closer to Iran recently, in both international trade, as well as inter-governmental cooperation, since the incident involving a vessel attempting to enter restricted waters off the Palestinian Territory of Gaza resulted in the deaths of several Turkish nationals, but there are troubling signs of cooperation, which raise the risks that agencies within the Government of Turkey may be facilitating Iranian sanctions evasion:
(1) Last week, authoritative American media reported that Turkish intelligence services had identified ten Iranian nationals involved in espionage, on behalf of Israel; They had met with their Israeli handlers inside Turkey, and had subsequently been identified by Turkey to Iran. Some have been reportedly executed by hanging, according to published reports.
(2) Classified intelligence on Iran, delivered to Turkey by the United States and by Israel, has reportedly been shared, by Turkey, with Iran.
(3) The chief of a major Turkish intelligence agency is known to have close ties with Iran, and has been accused by some reliable sources of Anti-Semitic sentiments.
Since intelligence services are well-versed in the formation and operation of shell and front companies, and given the obvious pro-Iran leanings of Turkey's intelligence agency, it is reasonable
to assume that Iran has suggested that some officers in the Turkish Government assist it in evading existing global sanctions, and that it has facilitated payments, both on and out of Iran, that violate UN sanctions.
Pay particular attention to transactions where you are receiving payment from those Turkish banks who have branches or subsidiaries in Iraq. I have previously named them on this blog; an adept Tehran purchaser/sanctions evader could easily route the payments as follows:
(A) From an Iranian bank to an Iraqi bank. (No compliance problems from the Iraqis, unfortunately.)
(B) From the Iraqi bank to a Turkish bank's branch in Baghdad.
(C) An intrabank transfer, to the Turkish bank's Ankara or Istanbul headquarters.
(D) Payment to the US or EU bank. The original Iranian payment is three steps removed, and therefore unknown to the recipient, or its bank.
Therefore, compliance officers at international banks whose clients are engaged in the sale of goods to Turkish companies will want to carefully examine those transactions. I know that it is probably too much to expect your customers to get letters, from the Turkish purchasers, that are the functional equivalent of End User certificates, but you can ask for them. Such written assurances might very well be sufficient, should US regulators, or law enforcement agencies, come around later, asking why your customer's entire shipment of goods showed up in Iran.
(1) Are dual-purpose, meaning that they have potential military applications in WMD or ballistic missile programs, and could be used by Iran for that purpose.
(2) Are goods that have not been previously ordered by the client's customer previously, or in such quantities that far exceed the customer's possible short-term needs.
(3) Are ordered from Turkish companies that are not known to your bank client.
(4) Are located in Eastern Turkey, near the Iranian frontier, and the goods purchased are not normally shipped to that area.
(5) Are being sold for a price that exceeds current market pricing, or where your bank client has urgently requested that the payments be transferred, or where you cannot verify the identity of the purchasing corporation.
Given Turkey's drift into the Iranian orbit, you need to be careful with Turkish transactions.