Turkey’s Largest Bank Shuts Maduro’s Accounts to Avoid US Sanctions

Nicolas Maduro, who enjoys a close relationship with the Turkish government, will soon find it much more difficult to operate in Turkey, where banks are feeling the squeeze of US sanctions.

517
Turkey’s largest bank is closing bank accounts affiliated with the Venezuelan dictatorship (Wikimedia).

The Maduro dictatorship has endured another financial blow from Turkey, as it was announced that Ziraat Bank, the largest bank in the nation, decided to close all accounts affiliated with the Venezuela government in order to avoid US sanctions.

According to Bloomberg, the financial institution stopped offering its services to the Central Bank of Venezuela (BCV). This represents a strong blow to Chavismo, because Turkey has been one of the countries that had most supported the Maduro regime.

The state bank, based in Ankara, confirmed the closure of the BCV account, and now it will not be able to make payments to contractors, move money, or import products in Turkish Lira.

“Ziraat’s decision was a surprise to the staff of the Central Bank of Venezuela, as Turkish President Recep Tayyip Erdogan has repeatedly expressed his support for President Nicolás Maduro and visited the country in December,” says Bloomberg.

The reaction of the Turkish bank could be due to the most recent sanctions implemented by the United States, which will penalize companies that maintain business ties with Venezuela. This represents a measure by the Trump administration to cut funding for the dictatorship led by Maduro.

The international banking system, and its SWIFT code system, is used by countries, companies and consumers to send billions of dollars in payments worldwide. Fearing that the sanctions will continue, the Maduro regime has considered the possibility of switching to an international payment messaging system operated by Russia as an alternative to SWIFT, which would allow it to access part of the money it needs to stay afloat.

Maduro has taken economic refuge in Turkey

The Maduro regime moved the refining of gold from Switzerland to Turkey to avoid the risk of Venezuelan assets being seized after possible US sanctions. In this context, Venezuela exported 23.62 tons of gold worth USD $900 million to Turkey in the first nine months of 2018. However, this transaction does not appear in the official Turkish records.

Maduro invited Turkey to invest in the exploitation of a vast mining reserve known as the Orinoco Arch, which is rich in deposits of gold, diamond, and coltan, among others. This represents an action that even further mortgages Venezuela’s future.

Turkey opened a business organization in Caracas in February 2018 called MUSIAD Venezuela (Association of Independent Industrialists and Companies of Venezuela), which aims to serve as a “bridge” between the South American country and Turkish companies.

MUSIAD director Hayri Kucukyavuz, a Turkish businessman who has lived and worked in Caracas for 24 years, told BBC Turkey that “Here, the government tells Turkish companies: ‘I give you the gold mine, create the facilities, 70% of the mine will be yours and 30% will belong to the state. There are several companies that have made these agreements here.”

It is also known that with the precipitous decline of oil production in Venezuela, the Maduro regime has found another way to “self-finance” to stay in power: it is exporting illegal gold to Turkey.

Maduro’s international actions and agreements make it clear that he has turned large chunks of the country’s economy to Russia, China and Turkey, all with the intention of staying in power. However, after the closure of the BCV account, the regime is running out of sources from which it obtains the money it needs to remain on its feet.

Subscribe free to our daily newsletter
Sign up here to get the latest news, updates and special reports delivered directly to your inbox.
You can unsubscribe at any time