Turkey’s finance minister has put forward a forceful defence of the activities of the country’s troubled banks during a period being investigated by US authorities for violating sanctions against Iran. A probe into executives of state-owned Halk Bank has damaged relations between Turkey and the US and riled President Recep Tayyip Erdogan, who says it is part of a conspiracy against his country. Naci Agbal told the Financial Times that having been undersecretary at Turkey’s Treasury before becoming finance minister he was in a position to vouch for the activities of the country’s lenders.
“I know this personally,” Mr Agbal said in an interview. “We discussed with our American counterparts in the past years about the sanctions against Iran, and all our banks, including Halk Bank, conformed to US requirements.” Mr Agbal’s defence of Halk Bank comes after Steven Mnuchin, US Treasury secretary, last week denied he had warned Ankara that it faced sanctions over the issue. Turkish stocks fell as much 3 per cent on Monday after the banking regulator denied a report in a Turkish newspaper that six banks faced billions of dollars in fines for violating curbs against Iran. The report was later deleted from the newspaper’s website. Mr Erdogan, who the same week vowed that Turkey would survive any sanctions, has personally lobbied for the release of Reza Zarrab, the Iranian-Turkish gold trader now awaiting trial in New York. Mr Zarrab helped Tehran create a flourishing gold trade that used Turkey as a hub to transport billions of dollars in bullion to Iran, according to Mr Zarrab’s confession to authorities in Turkey and US investigators. Senior Halk Bank executives worked with Mr Zarrab to help transport the cash into Iran in the form of gold, fictitious food shipments and other transactions, according to US prosecutors. At the time US sanctions had led Iran to be cut off from the global banking system, and countries such as Turkey and India paid Iran for oil into accounts held at Halk Bank. Hakan Atilla, Halk Bank’s deputy chief executive, was arrested and charged in New York this year after a roadshow for investors. US authorities have also charged Suleyman Aslan, who resigned as the bank’s chief executive after Turkish investigators first unveiled the scheme, and Zafer Caglayan, Turkey’s economy minister at the time and an ally of Mr Erdogan. All have denied the charges, and Halk Bank has said all its activities were legal. Mr Agbal blamed the investigation, in the US and in Turkey, on the influence that Fethullah Gulen, the exiled cleric, has on the judiciary. The Turkish investigation was set aside soon after prosecutors made their first arrests in 2013, with Mr Erdogan blaming prosecutors for fabricating evidence. Mr Erdogan also blames Mr Gulen for orchestrating a failed coup in Turkey last year, and has declared him and his followers to be terrorists. “The important issue is that this terrorist organisation [the Gulen network] wants to use this issue against Turkey by using its relations in the US,” Mr Agbal said. “We are expecting that American officials will not allow this.”