Two Turkish banks suspend Russian Mir payments after U.S. sanctions

ISTANBUL, Sept 19 (Reuters) – Turkish lenders Isbank and Denizbank have suspended use of Russian fee system Mir, the banks stated on Monday, following a U.S. crackdown on these accused of serving to Moscow skirt sanctions over the struggle in Ukraine.

The strikes, introduced individually, got here after Washington expanded its sanctions final week to incorporate the top of the entity working Mir, which is widespread with the tens of 1000’s of Russian vacationers who arrived in Turkey this yr.

The suspensions by two of the 5 Turkish banks that had been utilizing Mir mirror their effort to keep away from the monetary cross-fire between the West and Russia, because the Turkish authorities takes a balanced diplomatic stance.

Isbank (ISCTR.IS), whose shares tumbled 10% on Monday, stated it halted Mir funds and is evaluating the U.S. Treasury’s new sanctions. Isbank additionally stated it was eager to adjust to nationwide and worldwide legal guidelines, laws and industrial enterprise ideas.

Requested for remark, Denizbank stated: “We’re presently unable to supply service” in Mir. The financial institution “acts in accordance with worldwide sanction laws,” it had stated earlier on Monday.

NATO member Ankara opposes Western sanctions on Russia on principal and has shut ties with each Moscow and Kyiv, its Black Sea neighbours. It additionally condemned Russia’s invasion and despatched armed drones to Ukraine as a part of its diplomatic stability.

But Western nations are rising involved over elevated financial ties between Turkey and Russia, diplomats say, notably after a number of conferences between leaders Tayyip Erdogan and Vladimir Putin, together with final week in Uzbekistan.

Final month the U.S. Treasury despatched a letter to huge Turkish companies warning they risked penalties in the event that they maintained industrial ties with sanctioned Russians.

Turkey’s Finance Minister Nureddin Nebati on the time known as considerations over the letter “meaningless.” In April, he stated Russian vacationers – essential to Turkey’s beleaguered financial system – may simply make funds because the Mir system was rising amongst Turkey’s banks. learn extra

Many Russians have gone to Turkey because the February invasion left them few different journey choices, and sanctions reduce off their use of main U.S. bank cards.

Russia calls its actions in Ukraine “a particular army operation.”

After the 2 non-public lenders suspended Mir, it’s nonetheless operated by state lenders Halkbank (HALKB.IS), Vakifbank (VAKBN.IS) and Ziraat.

Istanbul’s banking index tumbled sharply final week and shed greater than 9% Monday, triggering circuit breakers halting buying and selling. One banker stated worries that so-called secondary sanctions may goal Turkish banks or corporations affected markets.

The expanded U.S. sanctions final week focused the chief government of the Financial institution of Russia’s Nationwide Card Fee System (NSPK), which runs Mir.

Reporting by Ebru Tuncay and Jonathan Spicer;
Extra reporting by Ece Toksabay; Modifying by Josie Kao

: .