February 14-2014
Turkey says it has no plans to resume banking links with Iran, despite frequent statements made in the Turkish media by officials proclaiming that Turkey doesn’t recognize US sanctions on Iran and won’t abide by them.
Speaking to Business Line of India during a recent visit to India, Turkish Trade Minister Nihat Zeybekci said while there has been some relaxation in the sanctions, Turkey is not considering resuming banking links with Iran yet.
“Turkey is a country that acts in line with the embargoes and decisions of the UN,” he said, sidestepping the fact that the banking restrictions have been imposed by the US and EU, not the UN.
India is concerned about Turkey’s banking policy because India used to pay for Iranian oil through Turkey’s Halkbank when Halkbank was one of the few banks in the world still doing business with Iran. Halkbank stopped that in June 2012 when the US tightened sanctions.
Turkey and Iran last week had talks aimed at boosting trade and will need more banking ties to do that.
India has now put in place a rupee payment mechanism for buying Iranian oil. The rupee payment has its limitations. Since India’s exports to Iran are much lower than its oil imports, Iran is not able to use up all the rupees accumulating in its account. But that’s a problem for Iran, not India.
From being the second largest supplier to India, Iran has today slipped to the seventh position.