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Turkish Banks Deny Accusations Voiced in US Iran Sanctions Violation Case

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Turkey's Halkbank and Denizbank denied Thursday the accusations directed by suspect-turned-confessor Reza Zarrab's testimony during the last hearing of a trial in a U.S. federal court on conspiring to evade sanctions against Iran.

Turkish-Iranian gold trader Zarrab on Wednesday told the court that he helped Iran use funds deposited in Turkey's state-owned Halkbank to buy gold, which was smuggled to Dubai and sold for cash. Halkbank has said all of its transactions complied with national and international regulations.

Mehmet Hakan Atilla, a deputy general manager of the bank, is the main defendant in the case. Atilla was detained in the U.S. in March 2017.

In a statement posted in Public Disclosure Platform (KAP) of Borsa Istanbul, Halkbank rejected any wrongdoing, saying that the accusations being associated with the bank in an "incorrect, biased, deficient, disconnected to the contextual unity, inconsistent," way in media reports, harm the bank's confidence and reputation.

"No mechanism, method or system other than those in the existing regulations and those known to and followed by all other banks in foreign trade practices have been used by the bank when offering banking services. The foreign trade transactions and money transfers are carried out in an open and transparent manner which can be monitored by the related authorities on the system," the statement said, adding that the bank's transactions have been regularly supervised by national and international independent auditing firms.

"Our Bank has not been a part to any transaction which is uncertain and illegal relating to any country and has not executed any transfer transaction which is uncertain and unlawful. There is no systematic and conscious violation of transactions subject to sanctions in order to surpass the sanction as it is alleged and it has not been intermediated in the export of prohibited parties and goods," it added.

According to local media reports, Zarrab also testified that he used Denizbank for some transactions.

Denizbank, which is a subsidiary of Russian banking giant Sberbank, disputed the reported allegations on Thursday, saying that it did not have any dealings with the shipping group owned by Zarrab.

"Our transactions only revolved around buying and selling gold domestically, and there were no foreign transactions," it said in a statement. "Our bank... has had no dealings with the Royal Shipping group owned by Reza Zarrab."

Turkey's banking watchdog Banking Regulation and Supervision Agency (BDDK) last month denied a local media report that six Turkish lenders could face substantial fines from the U.S. over alleged violation of Iran sanctions.

 

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