Two of Turkey’s biggest banks have halted use of Russia’s Mir payment system after warnings from Washington about the risk of falling under US sanctions against Moscow.
A spokesperson for İşbank, a private lender, said the bank has temporarily suspended use of the payment network while it assesses new guidelines from the United States.
DenizBank, another private lender, also suspended Mir’s operations in Turkey, freezing the payment system late last week, according to a person familiar with the matter.
The move comes after warnings, first reported in the Financial Times last week, that Western authorities were planning to step up pressure on Turkey over possible sanctions busting in the country and were considering the system Mir as a potential backdoor for illicit finance.
Guidance later issued by the US Treasury warned that banks outside the US entering into new or expanded agreements with the payment network operator “would risk supporting Russia’s efforts to evade US sanctions”. .
İşbank and DenizBank are among the five Turkish banks, along with state-owned companies VakıfBank, Ziraat Bank and Halkbank, which are members of the Mir payment system developed by the Central Bank of Russia as a national alternative to Visa and Mastercard.
Two of them – DenizBank and UAE-owned Halkbank – registered with Mir after Vladimir Putin launched his full-scale invasion of Ukraine in February.
VakıfBank said it saw the reports of İşbank’s decision to suspend Mir’s operations, but added that there was no immediate change in its policies.
Halkbank and Ziraat Bank did not immediately respond to an after-hours request for comment.
Turkish officials have insisted that although their country has not signed on to Western sanctions aimed at punishing Putin for the invasion, they will not allow their country to become a hub for sanctions evasion.
But President Recep Tayyip Erdoğan has alarmed US and European officials with his promises to deepen economic cooperation with Moscow.
Erdoğan, whose country has been a member of NATO since 1952, has condemned the Russian invasion of his neighbor and a company co-owned by his son-in-law has supplied armed drones to the Ukrainian armed forces. He also acted as a mediator, helping to broker a deal that allowed the export of more than 3.6 million tons of grain from Ukrainian ports that were previously blockaded by the Russian military.
But the Turkish president has also courted closer ties with Russia, which is a crucial supplier of natural gas to his country.
Last week, he was pictured walking arm-in-arm with Putin at a meeting of the Shanghai Cooperation Organization in Uzbekistan. He said Turkey would seek membership in the China-led club – a move that, if successful, would make his country the first NATO member state to join the alliance.