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Halkbank

Halkbank

Industry: 
Banking
Symbol: 
IST:HALKB
Country: 
Turkey
Contact Information: 
Sources: 

“Turkey's state-owned Halkbank is expected to continue processing payments for Iranian oil imports to Turkey, U.S. Treasury Undersecretary David Cohen said on Monday. ’Halkbank has for some time been involved in handling oil payments for importing oil from Iran into Turkey and we expect that to continue,’ David Cohen, Undersecretary for Terrorism and Financial Intelligence told reporters.’ We talked more broadly about sanctions ... on the banking sector so that there is good clarity on the scope of sanctions that remain in effect,’ Cohen said after his meeting with Foreign Ministry Undersecretary Feridun Sinirlioglu.” (Reuters, “Turkey's Halkbank seen continuing to handle Iran oil payments - U.S.,” 1/27/14)

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"Turkey's state-owned Halkbank, whose general manager has been detained as part of a corruption inquiry, will keep processing payments for Turkey's oil and gas imports from Iran, Turkey's Deputy Prime Minister Ali Babacan said on Wednesday. ’The state of Iran has accounts with Halkbank and we deposit the payments for the oil and gas purchased to these accounts ... Halkbank will continue to carry out this function,’ Babacan told Bloomberg HT Television. Halkbank general manager Suleyman Aslan was among dozens of prominent business people, the sons of three cabinet ministers, and state officials questioned as part of a corruption inquiry swirling around Prime Minister Tayyip Erdogan's government…Halkbank has repeatedly said its dealings with Iran are entirely lawful, but its Iranian business ties had drawn Western criticism amid U.S.-led efforts to curb Tehran's disputed nuclear programme. Turkey has bought natural gas and oil from Iran through an indirect system whereby Iranian exporters received payment in Halkbank lira accounts and used that money to buy gold. The bulk of that gold was then been shipped from Turkey to Dubai, where Iran could import it or sell it for foreign currency. Halkbank said last month that the gold sales had stopped on June 10, in line with a July ban. Since then, sources say, Iranians have bought mostly food and medicine with the funds.” (Reuters, “Halkbank to keep processing Iran energy payments for Turkey -Babacan,” 1/8/14)

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“An unfolding corruption scandal in Turkey has uncovered transactions that may have allowed Tehran to circumvent harsh U.S. and E.U. sanctions—a revelation that could destabilize Obama’s nuclear deal and threaten the government of Prime Minister Erdogan. A massive unfolding corruption scandal in Turkey—which has already forced the resignations of three government ministers and threatens to upend the Islamist government of Prime Minister Recep Tayyip Erdogan— is fast acquiring an international dimension amid accusations that Iran is enmeshed in Ankara’s political crisis…The first hint of the Iranian angle in the corruption probes launched by Turkish police in the face of government obstruction came before Christmas when a complicated oil-for-gold deal between Turkey and Iran was unmasked.  The investigators didn’t set out to uncover the sanction-busting oil deal but say they were led to it by following a trail of cash bribes. An Iranian businessman and gold dealer, Reza Sarraf (also known as Reza Zarrab), whom police have accused of bribing the Economic Minister while organizing transactions from Iran worth $120 billion, was arrested last week. So, too, the CEO of the state-owned Turkish financial institution Halkbank, who was reportedly found to have more than $4 million of cash stuffed in shoe-boxes in his home. According to Turkish investigators, both men were at the center of a complex deal in which Iran sold oil and natural gas to Turkey for cash payments that were deposited in an account held at Halkbank. In order to circumvent international money-transfer sanctions on Iran, the cash deposits were then allegedly converted into gold that Turkey exported to Tehran, often via Dubai. Police reports filed with Turkish prosecutors estimate that in the past three years alone, $8 billion in gold was transferred to Iran. American analysts say the number could be higher, to the tune of $13 billion between March 2012 and July 2013 alone. (In July 2013, the U.S. and the European Union tightened loopholes on a ban on gold exports to Iran.) In a statement to the Istanbul bourse, Halkbank stated that all its business transactions with Iran have been transparent and legal, and that it stopped exporting gold to Tehran in June 2013. The broad outlines of the oil-for-gold deal has been known for some time—in April,47 U.S. lawmakers called on Secretary of State John Kerry and Treasury Secretary Jack Lew to sanction Halkbank for its gold trade with Iran.” (The Daily Beast, “Turkey And Iran Accused Of Oil-For-Cash Sanctions Scheme,” 12/28/13)

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"Turkey's state-owned Halkbank, whose chief executive was arrested in connection with a sweeping graft investigation, said on Monday it complied with the law when doing business with sanctions-hit Iran. 'Our bank's business transactions are regularly audited by relevant authorities,' the bank said in a statement. 'The financial intermediation that our bank offers with regard to trade activities with Iran have been conducted in accordance with regulations,' it added. The statement comes after Halkbank chief executive Suleyman Aslan was charged Saturday with taking bribes, while Azerbaijani businessman Reza Zarrab was charged with forming a ring that bribed officials to help disguise illegal gold sales to Iran via Halkbank. Police had also reportedly found $4.5 million in cash stored in shoe boxes in Aslan's home. Twenty-four people have been charged so far in connection with the high-profile investigation including the sons of Interior Minister Muarrem Guler and Economy Minister Zafer Caglayan as well as several top business leaders…Halkbank has come under fire from some quarters in the United States for alleged illegal transactions to Iran. The bank said it stopped transactions to Iran as of June 10 after the United States announced further sanctions against the Islamic republic. Several pro-government media outlets claimed over the weekend that US ambassador to Turkey Francis Ricciardone told some European Union ambassadors that Washington asked the bank to cut its ties with Iran -- the allegations vehemently denied by the ambassador. The reports however infuriated the prime minister who warned he may expel some foreign ambassadors over 'provocative actions,' in remarks considered a veiled threat to Ricciardone." (AFP, "Turkey's Halkbank denies wrongdoing in Iran deals," 12/23/13)

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"Iranian Ambassador to Turkey Ali Reza Bikdeli said in an interview in Ankara yesterday that Halkbank, which handles payments for Iranian energy transactions, would maintain a key role in trade ties. Turkish exports to Iran slumped to $3.4 billion in the first nine months of this year, compared with $9.9 billion in the whole of 2012, as sanctions barred Tehran from accepting gold as payment for oil, according to data from Turkey’s statistics office last month. Precious metals accounted for 66 percent of direct exports to Iran in 2012, the data show." (Bloomberg, "Halkbank CEO, Ministers Sons Said Held in Turkey Graft Probe," 12/17/13)

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"Turkey's state-run Halkbank can only resume processing Indian oil payments to Iran once Western sanctions are officially lifted following an interim deal in Geneva last month, a senior Halkbank official said on Wednesday. 'If the deal signed in Geneva becomes official, we could resume processing Indian oil payments to Iran,' Hakan Aydogan, head of Halkbank's foreign operations department told reporters. 'Despite the breakthrough, the positive developments, there has not been official progress in this,' he said…India started settling 55 percent of its payments for its purchases of Iranian oil in euros through Halkbank in mid-2012. The rest was settled in rupees through India's UCO Bank. But the Halkbank route was halted in February this year when new sanctions prevented Iran from repatriating cash earned from oil it has been able to sell, choking off the biggest revenue stream to its economy." (Reuters, "Halkbank unable to resume processing India payments for Iran oil," 12/11/13)

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"All Turkish banks will be able to make Iranian transactions as sanctions on Iran are eased in the wake of a deal between Tehran and six world powers to curb Tehran's nuclear programme, Turkey's economy minister said on Thursday…State-owned Halkbank, one of Turkey's biggest banks, had continued to process transactions, remaining one of the few to do so in the face of U.S. sanctions targeting financial institutions that dealt with Iran's central bank…Among transactions conducted by Halkbank are payments by Indian refiners to Iran. The refiners used this route until February and these payments could now resume." (Reuters, "Turkish banks to be able to make Iran transactions -minister," 11/28/13)

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"India could step up imports from Iran next month and start transferring billions of dollars owed it for oil as early as next week following a deal to curb Tehran's nuclear programme…Payments could potentially resume through Turkey's state-run Halkbank, a route used until February when it was blocked by sanctions…A government official also said that payments would be expedited once the payment mechanism via Turkey opens up. 'If that Halkbank route opens up ... rather than pushing this to a later date, perhaps this money will go to the Iranians sooner rather than later,' the official with direct knowledge of the matter said." (Reuters, "India ready to start Iran oil cash transfer after deal," 11/25/13)

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"Indian refiners have asked the government to clarify if they can pay Iran for crude in euros after the National Iranian Oil Company (NIOC) requested settlement of some debts through a Turkish bank, Indian officials said on Wednesday…India now owes Iran about $5.3 billion for oil imports, government and refining sources said last week. In mid-October, NIOC informed Indian refiners that Halkbank was ready to restart channelling the payments to Iran, the sources told Reuters, declining to be named due to the sensitivity of the matter. NIOC said it had been informed that Halkbank could be used again by Iran's central bank. It was unclear from the communication from NIOC what had changed that would allow the payments to restart without contravening U.S. sanctions, the sources said…Indian refiners have yet to restart payments via Halkbank and have asked the government for guidance, the sources said." (Reuters, "Indian refiners puzzle over Iran request for euro oil payment-sources," 11/13/13)

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"Several of America’s largest financial institutions are significant shareholders in Turkey’s Halkbank, a majority state-owned lender that has come under fire for enabling so-called 'gold-for-gas' exchanges with Iran that violate U.S. sanctions, according to investment documents obtained by the Washington Free Beacon. Multiple U.S. financial groups currently own shares in the bank, also known as Turkiye Halk Bankasi, which is state-owned and publicly traded. They include the Vanguard Group, Inc., Fidelity Management, J.P. Morgan, T. Rowe Price Associates, Inc., and Principal Management Group, among others... 'It is of great concern that U.S. institutions may be indirectly involved in the sale of Iranian oil for Turkish gold,' said Nathan Carleton, spokesman for United Against Nuclear Iran (UANI), a nonpartisan advocacy group that pressures international companies to cease dealings with Tehran. 'The Iranian regime is conducting these transactions specifically to evade sanctions and fund its nuclear program.' 'The American people don’t want their money going toward Iran business, and once they’re informed of these situations the companies will have to make a choice between U.S. investors or the Iranian regime,' Carleton said. 'Any U.S. entities invested in Halkbank should take immediate action to stop Iranian oil transactions, or divest.' Halkbank has quietly been exchanging large amounts of gold for Iranian crude oil according to multiple reports. These large monetary exchanges have provided Tehran with an economic lifeline while the nation’s energy sector is subjected to international sanctions... Halkbank has also processed monetary deals between Indian oil companies and Tehran, according to Bloomberg. The U.S. has never formally blacklisted Halkbank despite its sanctions-evading practices. While it is legal to own shares in the bank, its behavior directly violates U.S. and U.N. sanctions on Iran. Sanctions experts have speculated the state-controlled Halkbank may have escaped designation due to its political connections... 'The Obama administration relies heavily on Turkey—we have effectively sub-contracted our Syria policy to Ankara. A designation of Halkbank would greatly complicate that relationship,' said Jonathan Schanzer, a former terrorism finance analyst at the U.S. Treasury Department. It is difficult to determine just how much U.S. money is tied up in the Ankara-based bank, though one of the its shareholders, Vanguard, maintains the investments in Halkbank are minimal and not 'political' in nature. At least five Vanguard funds have 'relatively small investments in Turkiye Halk Bankasi as of Dec. 31, 2012,' David Hoffman, a Vanguard spokesman, told the Free Beacon. Halkbank accounted for '0.02 percent to 0.16 percent' of fund assets, according to Hoffman. Vanguard is one of Halbank’s top five Americna investors, owning nearly 2 percent of the lender as of late Friday, according to updated Bloomberg investment information obtained by the Free Beacon. This translates to more than 24 million shares in the bank. Hoffman said Vanguard’s investments in Halkbank are primarily maintained through index funds, or collective investment systems... The other U.S. financial institutions involved in Halkbank either did not respond to a request for comment or declined comment when reached by the Free Beacon last week... Halkbank is listed as one of the top investments in this particular fund... 'Halkbank is one of the worst offenders in the world of U.S. sanctions violations on multiple levels, many of which are not even public,' said a senior Senate aide involved in sanctions legislation... U.S. companies involved in Halkbank have been walking a tightrope, said the Senate source... Carleton said these types of questionable investments are not unusual. 'This sort of thing is sadly rather common, particularly since these deals often have been in place since before Iran sanctions and divestment were as popular as they are now,' he said. 'We regularly find that simply highlighting the issue will result in change.' Recently implemented economic sanctions could make it more difficult for Halkbank to support Iran’s energy sector... 'The Halkbank issue is just one of several for Turkey right now,' Schanzer said. 'Ankara has become one of the top sponsors of the Palestinian terrorist group Hamas.'" (The Washington Free Beacon, "Unsanctioned Investments: U.S. institutions hold shares of Turkish bank engaged in gold-for-oil trades," 2/19/2013)

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"Tighter U.S. sanctions are killing off Turkey's gold-for-gas trade with Iran and have stopped state-owned lender Halkbank from processing other nations' energy payments to the OPEC oil producer, bankers said on Friday. U.S. officials have sought to prevent Turkish gold exports, which indirectly pay Iran for its natural gas, from providing a financial lifeline to Tehran, largely frozen out of the global banking system by Western sanctions over its nuclear program. Turkey, Iran's biggest natural gas customer, has been paying Iran for its imports with Turkish lira, because sanctions prevent it from paying in dollars or euros. Iranians then use those lira, held in Halkbank accounts, to buy gold in Turkey, and couriers carry bullion worth millions of dollars in hand luggage to Dubai, where it can be sold for foreign currency or shipped to Iran. Halkbank had also been processing a portion of India's payments for Iranian oil. A provision of U.S. sanctions, made law last summer and implemented from February 6, effectively tightens control on sales of precious metals to Iran and prevents Halkbank from processing oil payments by other countries back to Tehran, bankers said. 'Halkbank can only accept payments for Turkish oil and gas purchases and Iran is only allowed to buy food, medicine and industrial products with that money,' one senior Turkish banker told Reuters. 'The gas for gold trade is very difficult after the second round of sanctions. Iranians cannot just withdraw the cash and buy whatever they want. They have to prove what they are buying ... so gold exports will definitely fall,' he said." (Reuters, "Exclusive: Turkey to Iran gold trade wiped out by new U.S. sanction," 2/15/13)

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"In Turkey, state-run lender Turkiye Halk Bankasi AS HALKB.IS +1.25% has been responsible for processing the payments, since the U.S. adopted a measure in January to stop dealing with financial institutions working with Iran's central bank, freezing out private Turkish banks from facilitating payments. Halkbank raised 4.5 billion liras ($2.5 billion) Monday in Turkey's biggest offering in a secondary share sale-a 20.8% stake, according to a statement to the Istanbul Stock Exchange." (The Wall Street Journal, "Turkey Swaps Gold for Iranian Gas," 11/23/2012)

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"Indian refiner Bharat Petroleum Corp (BPCL) has not received Iranian oil since February as it could not open an account with Turkey's Halkbank, which is used by other Indian refiners to pay for oil from Tehran in euros." (Reuters, "India's HMEL bought 2 million barrels of Iranian oil: sources," 10/13/2012)

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"India currently uses Turkey's Halkbank to route dollar payments to Iran. The new set of sanctions being contemplated would close that route." (The Times of India, "US barbs may block India's pay path for Iran oil," 10/7/2012)  

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"Turkey's importance as a trade conduit to Iran has widened to include supplying most of its steel as Turkish banks are among the very few still willing to arrange financing for the sanctions-hit country . . . Banks in traditional steel suppliers such as Turkey, Russia, Ukraine and Europe have withdrawn most financing facilities for deals with Iran, making it extremely difficult for producers and traders to do business with the Gulf country. Yet traders said Turkey's banks, among them state-owned Halkbank, are accepting letters of credit from Iranian buyers. 'There is a facility in place which allows Turkish bank Halkbank, to receive funds from Iran,but only for material that is supplied from Turkey,' said one UK-based steel trader. 'Consequently Turkey almost has a monopoly. 'Halkbank general manager Suleyman Aslan, declined to comment on the issue." (Reuters, "Steell is Turkey's latest helping hand to Iran," 8/16/12)

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"State-run Hindustan Petroleum (HPCL) has made its first payment for Iranian oil in rupees to partially settle its bill for a cargo imported in May, company officials said on Friday, a move that will help New Delhi fix its trade imbalance with Tehran . . . India is Iran's second-largest oil buyer, but has struggled to find ways to pay for the oil as Western sanctions curb international financial payments destined for Tehran. The two countries agreed in January to settle 45 percent of the oil trade in rupees. The balance of HPCL's payment, made on Friday, was through Turkey's Halkbank and India's UCO Bank. 'This is the first payment we have made since the gate was opened...we have paid 45 percent in rupees and 55 percent through Halkbank,' B. Mukherjee, head of finance at HPCL, told Reuters. Since July 2011, refiners in India have been using Halkbank to pay their annual oil import bill of more than $10 billion, after a previous payment channel was blocked in December 2010 . . . HPCL has paid 2.75 billion Indian rupees ($49.25 million) to Iran through UCO Bank and $60 million through Halkbank, a company source privy to the matter said." (Reuters, "India HPCL begins rupee payment for Iran oil," 3/8/12)

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"Secretary of State Hillary Clinton said on Monday the U.S. would exempt India, South Korea, Turkey and four other countries from financial sanctions because they have significantly cut purchases of Iranian oil. That means Turkey's Halkbank will be able to make payments to the Iranian Central Bank for oil shipments to Tupras without fear of being blacklisted by the United States." (Reuters, "U.S. presses Turkey to cut more Iranian oil imports," 6/12/12)

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"Turkish lender Halkbank , little known outside Turkey, has gained a reputation in the oil market over the past 18 months for handling transactions that other banks fear to touch - trade deals with Iran... Halkbank's stance toward Iran largely has reflected the attitude of the Turkish government, which owns 75 percent of the bank, towards international sanctions against Tehran over its nuclear programme... Halkbank handles payments to Iran by Tupras, which is owned by the Turkey's largest conglomerate Koc Holding, according to industry sources with knowledge of the transactions. Indian refiners, unable to pay Iran for imported oil through their own banking system for fear of U.S. retribution, turned to Halkbank in mid-2011 to make payments. In December, Halkbank refused to open an account for an additional Indian refiner, BPCL, for that purpose. No reason was given, though there was speculation that Turkey wanted to avoid further antagonising Washington. Halkbank was contacted over the status of the bank's dealings with Iran, but senior officials were unavailable for immediate comment." (Reuters, "Iran dealings put Turkey's Halkbank in spotlight," 1/4/2012)

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"Halkbank, as the bank is popularly called, was revealed to have facilitated payments of $100 million between Indian oil refiners and the National Iranian Oil Company. This fund transfer was a multi-step process coordinated with Union Bank of India, and designed specifically to evade international sanctions." (Bloomberg, "Iran Receives $100 Million in Oil Payments From India, PTI Says," 8/2/2011)

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Conducts business with U.S. banks and Iranian banks. ("Iran's Dirty Banking", Avi Jorisch)