Turkish banks start closing Russian accounts to avoid US sanctions

Banks of Turkey started closing accounts of Russian companies and tightened requirements for individuals willing to obtain a Turkish bank card, The Vedomosti newspaper said with reference to business owners trading with Turkey.

Turkey's financial institutions started aborting payments from Russia in early 2024. Many settlements remain frozen. Turkish banks started closing accounts of Russian companies back in 2022, but the trend began to deteriorate at the end of 2023 after Biden's December 22 decree. The decree authorised the US Treasury to introduce measures against foreign banks that help carry out transactions with sanctioned persons from Russia.

Turkey explains the trend with pressure from US

A source in the banking sector of Turkey said that such measures were related to US sanctions.

"There are such examples. This is due to US pressure, unprecedented pressure," the anonymous said, RIA Novosti reports.

Turkey's banks have already stopped servicing corporate clients from Russia regardless of the country of their registration, Iskander Mirgalimov, a consultant for Russian business in terms of structuring international payments said.

Russian companies were recommended to complete their transactions with Turkish banks and close accounts. This applies primarily to businesses that used Turkey as a transit country for payments and deliveries, as well as for oil and gas traders.

Money transfers between Russia and Turkey virtually stopped since January 1.

Turkish banks began to refuse to work with Russian banks to avoid US sanctions. They sever correspondent relations and suspend payment processing without terminating contracts.

According to Ekonomim, remittances between Russia and Turkey have practically stopped since January 1. Turkish exporters are waiting for urgent decisions to continue trading, the publication said.

To avoid risks of US sanctions, Chinese state-owned banks also tightened their rules of working with Russian clients. It goes about at least two financial organisations in China.

Chinese banks reportedly want to sever ties with clients on the sanctions list. In addition, Chinese banks refuse to provide any services to the Russian defence industry, not only in dollars, but also in other currencies. Chinese banks took this step after the US Treasury announced its intention to use secondary sanctions against organisations that facilitate Russia's military procurement.