Turkish banks reportedly cracking down on Russian accounts in response to U.S. secondary sanctions

Some banks in Turkey have begun closing the accounts of Russian companies, the Russian newspaper Vedomosti reported on Thursday, citing company owners, financial consultants, and business association representatives. According to a source from Turkey’s banking sector who spoke to the Russian state outlet RIA Novosti, private banks have done this in response to pressure from the U.S. government.

One source who does business with Turkey told journalists that some banks are closing the accounts of “most” Russian companies and banks, while others are primarily targeting businesses that opened accounts after the start of the full-scale war in Ukraine.

According to financial consultant Iskander Mirgalimov, banks are suspending services for corporate clients with “Russian roots.” He said this applies to oil and gas traders as well as companies that have used Turkey as a transit jurisdiction for payments and deliveries.

The owner of a major trade brokerage firm told Vedomosti that Turkish banks began closing the accounts of Russian companies in 2022, but that the trend has recently intensified, affecting more than just companies that fall under sanctions.

At the same time, according to Iskander Mirgalimov, Turkish banks have made it more difficult for individuals to open accounts, including by requiring them to maintain high account balances. Alexey Egarmin, the director of the Russian-Turkish Business Council, told Vedomosti that the banking restrictions for individuals began earlier than the crackdown on corporate clients. Banks in Turkey have become more cautious about serving Russian citizens, he said, in response to the position of Turkish regulators.

However, Arsen Ayupov, the president of the Russian-Turkish Dialogue Association, said he hasn’t heard about any mass closures of Russian companies’ accounts. “If this process began, it would be a very serious wake-up call,” he said.

All of the sources who spoke to Vedomosti agreed that the overall relationship between Turkish banks and Russian companies worsened immediately after U.S. President Joe Biden signed an executive order threatening secondary sanctions against foreign companies assisting Russia with the war. The order allows U.S. authorities to disconnect foreign banks from the U.S. financial system for violating sanctions against Russia.

After the order was issued, banks in Turkey suspended the processing of payments from Russian companies. According to Vedomosti’s sources, Turkish banks have now begun conducting separate, non-USD payments for goods included on the so-called “green list,” which include food, pharmaceuticals, and textiles.