Kremlin's billion-dollar scheme in Turkey to dodge sanctions
The Wall Street Journal reported that Russia wanted to create a "dollar reserve" in Turkey to finance the construction of a nuclear power plant. This was a strategy by the Kremlin to circumvent sanctions imposed by the United States. The funds were intended to support military operations.
The WSJ described the scheme by which Russia intended to bypass the sanctions with Turkey's assistance. According to the newspaper's findings, representatives from the two countries agreed that Gazprombank, which was not sanctioned then, would provide a loan of about nine billion dollars for constructing the Akkuyu nuclear power plant. This project involves Rosatom, a Russian state agency that coordinates the cooperation of research centers and institutions for the civilian use of atomic energy.
The money was to be transferred to the account of Turkey's largest state-owned bank, Ziraat. From there, it would be sent to Russian companies that also held accounts in this bank. The Bank of Russia was covertly expected to ensure the financing of this loan. This operation aimed to avoid moving funds through American banks. In doing so, Turkey increased the supply of dollars in its financial system.
Russia aimed to bypass sanctions. Reports mention Erdogan's colleague
The WSJ reports that the Russians eventually succeeded in transferring money through two American banks. Gazprombank sent three billion dollars to nuclear power plant accounts in Turkey's Ziraat via Citigroup, while another two billion were transferred through JPMorgan. The next installment, amounting to two billion dollars, was blocked, and the funds were frozen.
The U.S. wanted to seize this money, but according to an American newspaper, Joe Biden's administration did not agree to this step. The U.S. did not want to provoke Ankara and damage its relations, as Turkey still plays an important role in Middle East policy and security, which is significant for the United States. The funds mentioned remain frozen.
After the Central Bank's currency reserves were frozen in February 2022, its head, Elvira Nabiullina, and state corporations received direct orders from the Kremlin to find ways to utilize these funds. The scheme—suspected by the U.S.—may have involved other high-ranking Russian officials and one of President Recep Tayyip Erdoğan's key advisors, National Intelligence Chief İbrahim Kalın.
Sanctions against Gazprombank were imposed in November 2024. These restrictions also covered six of its foreign subsidiaries. Until that time, it was the only bank enabling settlements with buyers of Russian gas from so-called "unfriendly" countries. Sanctions against Rosatom in the U.S. have still not been introduced. The latter assures that the funds allocated for the nuclear power plant were used to finance the project and pay contractors and other obligations.
