Tag: Sanctions against Iran

Iran Sanctions Put Wrinkle in Turkish Trade Deals

By JOE PARKINSON

ISTANBUL—When Yasar Kapiyoldas landed hundreds of orders worth tens of thousands of dollars in Iran, he thought his clothing company could offset losses from its slowing Europe and Middle East markets.

Just two months later, with fresh sanctions causing a run on the currency and soaring inflation in Iran, every one of Mr. Kapiyoldas’ orders has been canceled. Some clients have defaulted on their payments. Thousands of garments made for the conservative Iranian market are now gathering dust in his company’s depot.

A worker in Istanbul’s Osmanbey textile district, where businesses that previously profited from Iranian trade are now coping with overstock.

“We thought Iran would be the solution after the revolutions killed our business in Libya, Tunisia and Egypt,” says Mr. Kapiyoldas from his smoke-filled office above a clothing store in Istanbul’s Osmanbey district, where more than 4,000 textile retailers jostle for space—and market share—in an area of about one square mile. The businesses had also attracted Iran’s youthful population, which lapped up more-contemporary designs from established producers in Turkey, a regional textile hub.

“We have thousands of long ladies’ overcoats that were ready to ship to Tehran that we can’t sell anywhere else,” he said. “Now what am I going to do with them?”

The fresh wave of sanctions feeding panic in Iran’s economy are hitting businesses in North Atlantic Treaty Organization-member Turkey, upending a boom in bilateral trade that was underpinned by improving diplomatic ties. Turkish exports to Iran, which surged 12-fold in the past decade to top $3.5 billion last year, plunged 25% in January from December, as sanctions pushed the real value of Iran’s currency, the rial, as much as 55% lower against the dollar.

[TURKIRAN]

All Turkish banks but one have stopped processing payments for Iranian customers, while higher costs have seen the number of Iranians visiting Turkey tumble.

Turkey has refused to adopt tougher unilateral sanctions against Iran from the U.S. and the European Union, instead stressing its commitment to the weaker United Nations measures passed in 2010, and to buying Iranian oil and gas, albeit at a declining rate. But the deteriorating trade business removes a major tie between Ankara and Tehran, which are increasingly splitting along sectarian lines over Middle East conflicts.

“A trade relationship that has grown rapidly in recent years is now being pressured by politics,” said Arzu Celalifer, a professor of international relations at USAK, the International Strategic Research Organization, in Ankara. “That trade decline is one component of how Turkey and Iran increasingly have differences on Middle Eastern issues. They’re now just trying to preserve the minimal mutual interest,”

Last year, the pressure being levied on Iranian traders’ rials by sanctions was offset by a sharp decline in the Turkish lira, which fell almost 20% against the dollar as investors became nervous about Turkey’s overheating economy.

But when new U.S. sanctions targeting Iran’s central bank in January sent Iran’s currency plunging, the lira began to surge, making the relative cost of some Turkish products almost double in price in the space of a few days, traders say.

The rapid price increase was aggravated by the refusal of Turkish banks—except for state-owned Halkbank—to process trade deals involving Iranian customers for fear of being frozen out of international markets by the new sanctions regime. Iranian businessmen now pay for orders with cash carried across the border in suitcases

As a result, businesses across Turkey that had expected sales to surge in the run up to the Persian New Year festival this week, are now bracing for a sustained slump and, in some cases, mothballing stock.

Travel agents report that tourist numbers and hotel bookings fell as much as 80% from last year, and tourist spending has fallen sharply.

“Sanctions have hammered their currency, so Iranian companies are now terrified because our business is done in dollars,” said Ali Ulvi Orhan, head of Osmanbey textile traders association. “Our members are badly affected because the Iranians have basically disappeared. Even if they’re here, many can’t pay.”

Turkey’s trade with Iran has been lopsided—Iranian exports of natural gas to Turkey made up more than 70% of the $12.5 billion total last year. But that ratio has declined in recent years as strengthening diplomatic ties and visa-free travel boosted trade in everything from textiles to flat-screen televisions.

Data published Thursday show that trend accelerating, as Turkish imports of crude oil from Iran plunged 40% on the month in December, partially offset by an 86% rise in purchases from Saudi Arabia.

Traders say pockets of bilateral business continue on a small scale, but at much lower volumes. For some Turkish merchants, the dramatic collapse of a trade relationship that Ankara actively cultivated until late last year has prompted anger and frustration, as politics trump traders’ livelihoods.

“This year we were expecting two million Iranians for New Year for the first time ever, but we won’t have anywhere near that many,” said Esadullah Renjber, owner of Tehran Tour, a tour operator based in Laleli, a district popular with Iranian tourists. “I’ve worked here for 30 years and I’ve never seen anything like this and it has all to do with politics.”

—Ayla Albayrak contributed to this article.

via Iran Sanctions Put Wrinkle in Turkish Trade Deals – WSJ.com.

March 20, 2012
‘West won`t punish Turkey over Iran sanctions’

Ankara: The West is angered about Turkey’s refusal to go along with it on Iran sanctions, but unlikely to try to punish Ankara as it needs help with neighbouring Syria, say analysts.

While Washington and Brussels are ardent supporters of sanctions to force Iran to abandon its contested nuclear programme, Turkey believes tough measures will backfire and instead backs the policy of engagement and diplomacy.

Turkish officials have refused to join the latest US and EU sanctions against Iran, which include a ban on oil imports, and are only bound by UN Security Council measures.

But analysts said that while Turkey has come pressure from Washington, it will be protected from its wrath largely because of the Syrian crisis on its doorstep.

“First of all, the Obama administration needs Turkey’s help in contending with the Arab political uprisings, especially the difficult situation in Syria,” said Barbara Slavin, senior fellow at the Atlantic Council of the United States.

Since the outbreak of the uprisings in mid-March last year, Ankara and Washington have been coordinating policies on how to respond to President Bashar al-Assad’s deadly crackdown on dissent which has claimed over 7,600 lives according to UN estimates.

Both have called on Assad to step down, and also worry the unrest could deepen in a region already jolted by last year’s Arab Spring uprisings.

Indeed, the Turkish government “is taking the opposite side from Iran on the Syrian crisis,” said Slavin. As Syria’s closest ally in the region, Iran has stood behind the regime in Damascus while Turkey accused it of “mercilessly murdering” its own people.

The unrest in Syria is not the only divergence in Turkish-Iranian ties.

Ankara’s decision to allow a early radar system to be stationed on its soil as part of a NATO missile defense scheme is another source of tension in the two neighbours’ relationship.

Turkey, a member of NATO since 1952, has insisted that Iran is not target of the radar but Turkish pleas fell on deaf ears in Tehran which warned that Ankara’s consent would create tension and lead to “complicated consequences.”

Turkish willingness to get tough with Syria’s brutal crackdown and to host NATO radar system on its soil have proved Turkey is still anchored to the West.

Only two years ago, a Turkish veto of a UN Security Council resolution calling for tougher sanctions against Iran shocked Washington, rekindling debates over EU hopeful Turkey’s East-West orientation.

PTI

via ‘West won`t punish Turkey over Iran sanctions’.

March 13, 2012
Turkey and China ‘helping Iran evade UN sanctions’

Turkey and China are helping Iran to evade UN sanctions by providing them with secret banking facilities to purchase goods, according to Western security officials.

Iran's President Mahmoud Ahmadinejad Photo: REUTERS

By Con Coughlin

8:00PM GMT 19 Feb 2012

In an attempt to escape the effects of the wide-ranging sanctions imposed over Iran’s illegal nuclear programme, Iran’s central bank is using a number of financial institutions in China and Turkey to fund the purchase of vital goods to keep the Iranian economy afloat.

According to Western security officials China, which is Iran’s largest oil trading partner, is playing a major role in helping Iran to avoid the sanctions.

Instead of transferring payments to Iran owed from oil purchases, Chinese banks are using the money to buy goods on behalf of the Iranians and then shipping them to Iran.

“It is like an old-fashioned barter mechanism,” explained a senior security official. “The money Iran earns from oil sales goes into banks in China and is then used for Iranian purchases of other goods and materials. It is a very good way of getting round the sanctions.” Security officials have also identified a number of financial institutions in Turkey that are helping Iran to evade sanctions.

Turkey, which maintains good diplomatic relations with Tehran, is particularly useful to Tehran because of its close trading ties with Europe.

Investigators claim they have found evidence of Turkish businesses trying to purchase financial institutions in Europe on behalf of Iran which can then be used by Tehran to purchase much-needed goods and materials for its stricken economy.

According to security officials responsible for monitoring the effectiveness of the sanctions, the sanctions-busting operation is being masterminded by Iran’s Revolutionary Guards, who are said to own more than 50 percent of the Iranian economy.

They are taking an increasingly influential role in the running of the Central Bank of Iran, which is itself the subject of international sanctions. “Today the Central Bank of Iran is being run like an intelligence operation,” said one investigator.

Iran is particularly keen to have access to banks in Germany, which is one of the world’s leading handlers of euros. U.S. Treasury department officials have identified a number of transactions passing through German banks that appear to have come from Turkey, but in fact are being controlled by Tehran. In addition to the eurozone Iran is also trying to transfer funds through Ukraine and Belorussia.

The visit takes place amid warnings from diplomats based in Vienna, the headquarters of the International Atomic Energy Agency, that Iran may be preparing to expand its nuclear programme to an underground site near the city of Qom, enabling it to speed up the production of enriched uranium, a vital component for nuclear weapons.

Reports said Tehran has put finishing touches for the installation of thousands of new-generation centrifuges at the facility – machines that can produce enriched uranium much more quickly and efficiently than its present machines.

via Turkey and China ‘helping Iran evade UN sanctions’ – Telegraph.

February 20, 2012
Turkey rejects West’s anti-Iran energy sanctions

Turkey’s Energy Minister Taner Yildiz says Ankara will not abide by the Western sanctions imposed against Tehran’s energy sector, stressing that Ankara will maintain its strong energy ties with Tehran.

“Turkey is not a member of the European Union (EU). Therefore, its decisions are not binding for us. Likewise, the decisions made by the US will not be binding,” Yildiz said at a Thursday news conference with South African Trade and Industry Minister Rob Davies in the Turkish capital city of Ankara.

Davies, for his part, voiced South Africa’s concern about the impact of the sanctions on the global oil prices and the global oil supply.

On the New Year’s Eve, the United States imposed new sanctions against Iran, aimed at preventing other countries from importing Iran’s oil and doing transactions with its central bank.

EU foreign ministers also approved sanctions against Iran on January 23, including a ban on Iranian oil imports, a freeze on the assets of the country’s Central Bank within EU states and a ban on selling diamonds, gold, and other precious metals to Tehran.

The United States, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear program and have used this pretext to push for four rounds of UN sanctions and a series of unilateral sanctions against the Islamic Republic.

Iran has refuted the allegations, arguing that as a committed signatory to the nuclear Non-Proliferation Treaty and member of the International Atomic Energy Agency, it has the right to use nuclear technology for peaceful use.

via Turkey rejects West’s anti-Iran energy sanctions – Tehran Times.

February 18, 2012
Turkey to ignore Western sanctions on Iran

Turkey has no plans to cut its imports of Iranian oil despite rising pressure from Western powers and initial signals it would buy more Saudi oil, Turkish and Saudi sources have told Reuters.

Ankara’s intentions became clear after a high level delegation traveled to Riyadh over the weekend and decided against requesting additional supplies from top oil exporter Saudi Arabia, the sources said.

The Kingdom is the only producer in the world that has spare volumes to offer to replace Iranian oil.

The development will help Iran avoid extra pain from reduced sales of crude as the European Union seeks to ban Iranian oil imports from July 1.

US sanctions against Iran over its nuclear program have sought to curtail oil exports by targeting its central bank and preventing countries from paying for Iranian oil.

A Saudi oil ministry official said Turkish energy officials had not asked for additional oil when visiting Riyadh last week. “Turkey did not ask for more oil, and has no plans to ban imports from Iran,” he said.

An Ankara-based energy official said: “Turkey will continue to buy from Iran unless the United Nations supports/endorses the EU and US oil embargo.”

A UN embargo against Iran now seems very unlikely after Russia and China, the biggest buyer of Iranian crude, blocked UN sanctions against Syria.

Turkey imports around 200,000 barrels per day of oil from Iran, covering 30 percent of daily domestic consumption and representing over 7 percent of Iranian oil exports, and had renewed its annual purchase agreement for 2012.

Turkey follows China, India and Russia in suggesting they might ignore the sanctions and continue to trade with Tehran.

Without Asian cooperation, Western sanctions on Iran will have little effect as Iran’s top oil export destinations are Asia’s energy-hungry economies.

South Korea and Japan have indicated they are seeking to cut purchases to win waivers from US sanctions.

Last week, Sri Lanka announced it was seeking to avoid the sanctions by purchasing Iranian crude oil in a currency other than dollars.

US officials are said to be primarily concerned with transactions in dollars and this option may prove popular for countries seeking to avoid the sanctions.

NATO member Turkey has deepened economic and financial ties with Iran in recent years, despite Western efforts to isolate the country.

On a diplomatic level, Ankara often presents itself as a mediator in talks with the Islamic republic, which it sees as a balancing force in the region against Israel – the only nuclear power in the Middle East.

(Reuters, Al-Akhbar)

via Turkey to ignore Western sanctions on Iran | Al Akhbar English.

February 15, 2012
Is Europe setting up clash between Muslims and the West?

Editor’s note: Mohammed Ayoob is University Distinguished Professor of International Relations at Michigan State University and adjunct scholar at the Institute for Social Policy and Understanding

Turkish people demonstrate in France against a voting session for a bill criminalizing the denial of the Armenian genocide

(CNN) — Europe and the Muslim world seem to be on a collision course that could have major political, economic and ideological ramifications. January 23, 2012, may well come to be remembered as the crucial date when Samuel Huntington’s “clash of civilizations” thesis, which many of us believed discredited beyond repair, was reaffirmed.

Political scientist Huntington wrote in 1993 that cultural divisions preclude a defining global civilization, and the West and the Muslim world would never share the same values.

Last month, Europe took two different actions that nonetheless sent the same message to the Muslim world: You are not our equals and are doomed to be judged by standards different from those by which we judge ourselves. Future historians might call January 23 the day when Europe irreversibly alienated not one, but both, pivotal powers — Iran and Turkey — that in all probability will dominate the political landscape of the Middle East for several decades.

One action was the European Union’s decision to ban oil purchases from Iran, including imports of crude oil, petroleum products and petrochemical products, to force Tehran to negotiate away its uranium enrichment program, which Tehran insists is for civilian use only. This is the latest in a series of increasingly stringent sanctions that Western powers have unilaterally imposed on Iran. These sanctions go well beyond those required by the U.N. Security Council.

Mohammed Ayoob

Mohammed Ayoob

The EU sanctions attempt to hit the Iranian economy where it hurts most: Europe imports about a fifth of Iranian oil. When combined with a ban on transactions with Iran’s Central Bank, this action is aimed at paralyzing the Iranian economy.

At the same time, the French Senate passed a law making it a crime to deny genocides that are officially recognized by France. The two genocides in this category are the Holocaust and the killing of 1.5 million Armenians in Anatolia during the last years of the Ottoman Empire. Because the denial of the Holocaust is already a crime under French law, the obvious objective of the bill is to criminalize the denial of the 1915 Armenian genocide.

Sanctions hurting Iran economy

France passes Armenian genocide bill

The issue of Armenian genocide touches a very raw nerve in Turkey, which denies the scale of the killings — Turkey maintains that roughly 500,000 Armenians were killed — as well as the claim that it was planned. According to Turkey, the killings happened in the midst of the disarray accompanying World War I and the disintegration of the Ottoman Empire. Turkey says a nearly equivalent number of Turks and Kurds were also killed in inter-ethnic strife with the Armenians, who were allied with the Ottoman’s Russian adversaries.

It’s not the accuracy of the opposing claims that is at issue; it’s Muslim perceptions. Iran may well be trying to develop nuclear weapons, and what amounts to an Armenian genocide may well have taken place. What roils Muslim opinion worldwide is the perception that the West uses blatant double standards to pass judgment.

Harsh sanctions on Iran are seen as an attempt to prevent a Muslim country from developing deterrents to attacks from Israel and the United States, both nuclear powers hostile to the Islamic Republic. Most Western discussions of the Iranian bomb do not make even passing reference to the well-documented Israeli nuclear capability, even as Israel threatens to militarily strike Iran’s nuclear facilities. This omission is seen as hypocritical, dishonest and self-serving.

For many in the Muslim world, double standards explain why France singled out Turkey, and didn’t criminalize the denial of other nations’ crimes against humanity. Although denying Germany’s crimes is a crime, the Holocaust is universally accepted as genocide, while Turkey’s is not.

Many ask why disputing European massacres of non-European people is not criminalized — such as the French actions in Algeria, as Turkish Prime Minister Erdogan has said. These would include the near-total extermination of native populations by European settlers in Australia, New Zealand, and North America.

They would include the killings of millions of people by the Belgian administration of the Congo Free State, whose population was halved during the early decades of Belgian rule. Most pertinent of all, Muslims ask, why not criminalize the denial of the genocidal Spanish Inquisition that led to the extermination, expulsion or conversion of the entire Muslim and Jewish populations of the Iberian peninsula?

Many Muslims perceive these moves as the West targeting Iran and Turkey in an attempt to prevent important Muslim countries from achieving the military capacity — Iran — and the political stature — Turkey — they deserve. Many see behind these moves the not-so-hidden hand of an ideology based on Huntington’s theory of the clash of civilizations. Although these perceptions may not fully conform with reality, it is well established that perceptions count much more than reality in the conduct of international relations.

via Is Europe setting up clash between Muslims and the West? – CNN.com.

February 5, 2012