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Turkish bank regulator dismisses ‘rumours’ of US fines

Updated October 22, 2017

ANKARA: Turkey’s banking regulator urged the public on Saturday to ignore rumours about financial institutions, in an apparent dismissal of a report that some Turkish banks face billions of dollars of US fines over alleged violations of Iran sanctions.

“It has been brought to the public’s attention that stories, that are rumours in nature, about our banks are not based on documents or facts, and should not be heeded,” the BDDK banking regulator said in a statement, adding that Turkey’s banks were functioning well.

The Haberturk newspaper on Saturday reported that six banks potentially face substantial fines, citing senior banking sources. It did not name the banks. One bank faces a penalty in excess of $5 billion, while the rest of the fines will be lower, it said.

Reuters was not able to verify the report.

Two senior Turkish economy officials told Reuters that Turkey has not received any notice from the United States about such penalties, adding that US regulators would normally inform the finance ministry’s financial crimes investigation board.

The report comes as relations between Washington and Ankara have been strained by a series of diplomatic rows, prompting both countries to cut back issuing visas to each other’s citizens.

US authorities have hit global banks with billions of dollars in fines over violations of sanctions with Iran and other countries in recent years.

US prosecutors last month charged a former Turkish economy minister and the ex-head of a state-owned bank with conspiring to violate Iran sanctions by illegally moving hundreds of millions of dollars through the US financial system on Tehran’s behalf. President Tayyip Erd­ogan has dismissed the char­ges as politically motivated, and tantamount to an attack on the Turkish Republic.

The charges stem from the case against Reza Zarrab, a wealthy Turkish-Iranian gold trader who was arrested in the United States over sanctions evasion last year. Erdogan has said US authorities had “ulterior motives” in charging Zarrab, who has pleaded not guilty.

Published in Dawn, October 22nd, 2017