US sanctions five Turkey-based firms in broad Russia action on over 100 targets (updated)

Luminor Financial Holdings

14/09/2023 15:52

(Updates with announcement, paragraphs 1-2,8,16-19)
    By Humeyra Pamuk and Daphne Psaledakis
       WASHINGTON, Sept 14 (Reuters) - The Biden administration
on Thursday imposed sanctions on five Turkish companies and a
Turkish national, accusing them of helping Russia evade
sanctions and supporting Moscow in its war against Ukraine.
    The designations, first reported by Reuters, target shipping
and trade companies accused of helping repair sanctioned vessels
tied to Russia's defense ministry and helping the transfer of
"dual-use goods". The move is part of a bigger package of
measures hitting Russia with sanctions on about 150 targets,
including the country's largest carmaker.
    The action comes at a delicate moment for U.S.-Turkey
relations, with Washington hoping Ankara will ratify NATO
membership for Sweden when the Turkish parliament reconvenes in
early October.
    The United States and its allies imposed extensive sanctions
on Russia after its invasion of Ukraine, but supply channels
from Black Sea neighbor Turkey and other trading hubs have
remained open, prompting Washington to issue repeated warnings
about the export of chemicals, microchips and other products
that can be used in Moscow's war effort.
    Multiple senior U.S. officials, including Deputy Treasury
Secretary Wally Adeyemo, have traveled to Turkey since Russia's
February 2022 invasion of Ukraine as part of a pressure campaign
to prevent any Turkish companies from helping Russia circumvent
U.S. curbs.
    "For the past 18 months, we've shared our concerns with the
Turkish government and private sector and informed them of the
significant risks of doing business with those we've sanctioned
who are tied to Russia's war," a senior Treasury official said,
speaking on the condition of anonymity. 
    "These designations reflect our ongoing commitment to target
individuals and entities who provide material support to
sanctioned entities," the official added.
    
    BLOCKING DUAL-USE GOODS
    The U.S. Treasury Department in a statement said it imposed
sanctions on Margiana Insaat Dis Ticaret and Demirci Bilisim
Ticaret Sanayi, saying the Turkey-based companies were among
those that Russia relied on for importing "much-needed dual-use
goods to enable its unprovoked war of aggression on Ukraine." 
    It said the former has made hundreds of shipments to
sanctioned Russian entities that are part of the supply chain
for producing military drones used in the Ukraine war, while the
latter has sent sensors and measuring tools into Russia.
    Reuters could not immediately reach the companies for
comment.
    The U.S. State Department imposed sanctions on Denkar Ship
Construction for providing ship repair services to previously
designated vessels of a company connected to the Russian Defense
Ministry. 
    Denkar did not immediately respond to a request for comment.
    The State Department also targeted Turkey-based shipyard
agency ID Ship Agency and its owner Ilker Dogruyol as well as
CTL Limited, which the State Department said was an intermediary
that ships electronic components of U.S.- and European-origin to
companies in Russia.
    The firms and Dogruyol had no immediate comment.
    The broader sanctions package targets Russia's industrial
base, maritime sector and technology suppliers, as well as
facilities producing and repairing Russian weapons systems.
    Among those targeted was Russia's largest carmaker, Avtovaz,
while Gaz Group - another automotive manufacturer - was hit with
a new round of sanctions. Avtovaz did not immediately respond to
a request for comment.
    The U.S. also imposed sanctions on a major local copper
producer - Russian Copper Company.
    A Finland-based network that specializes in shipping foreign
electronics to Russia-based end-users was also targeted in the
action as Washington cracks down on sanctions evasion. The
Treasury slapped sanctions on Finland-based logistics firms
Siberica Oy and Luminor Oy, accusing them of sending a wide
variety of electronics into Russia.
    Russia's construction sector, revenue streams from
extractive industries and Russia-based banks, wealth management
consulting, auditing and investment firms were also hit in the
action.
    
    NATO MEMBERSHIP
    NATO member Turkey has sought to maintain good relations
with both Moscow and Kyiv amid the war. It opposes the sanctions
on principle but has said they will not be circumvented in
Turkey and that no shipped products can be used by Russia's
military.
    Ties with the U.S. have been strained over Turkey's
reluctance to support the bids of Sweden and Finland to join
NATO after Russia invaded Ukraine. While Finnish membership was
sealed in April, Sweden's application remains held up by Turkey
and Hungary.
    Ankara has accused Sweden of harboring militants hostile to
the Turkish state, mainly members of the outlawed Kurdistan
Workers Party (PKK), deemed a terrorist organization by Turkey,
the European Union and United States.
    After months of objections, Turkish President Tayyip Erdogan
agreed at a NATO summit in July to forward Sweden's NATO bid to
the Turkish parliament for ratification, but the exact timing of
the approval remains unclear.
    The United States has repeatedly said Sweden has done enough
to alleviate Turkey's concerns and that its membership should be
approved now.

 (Reporting by Humeyra Pamuk and Daphne Psaledakis; Additional
reporting by Polina Devitt in London;
Editing by Don Durfee, Alexandra Hudson, William Maclean)
 ((humeyra.pamuk@thomsonreuters.com; +1 202 3105694; Reuters
Messaging: Twitter: @humeyra_pamuk))