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Turkish banks forced to drop Mir as US sanctions pressure grows

Turkish banks forced to drop Mir as US sanctions pressure grows

The US has been applying considerable pressure on countries it sees as helping Russia evade the sanctions placed on it due to its invasion of Ukraine.

MIR in Europe

Turkish banks forced to drop Mir

This week, three Turkish state banks have been forced to halt the use of a Mir, the domestic Russian payment system due to the pressure on Ankara not to help Moscow.

Halkbank, VakıfBank and Ziraat Bank suspended payments under the Mir system. The decision to stop use of the system comes a week after its two other operators in Turkey — the private banks İşbank and DenizBank — also announced that they were halting payments via the network.

While Turkey had always insisted Mir was used by Russian tourists to pay for shopping and hotels, western officials had voiced concern that it could be used as a potential backdoor for illicit finance.

Guidance by the US Treasury warned banks outside the US entering into new or expanded agreements with the operator of the payment network would “risk supporting Russia’s efforts to evade US sanctions”.

That warning came against a backdrop of growing alarm in Washington and Brussels about promises by president Recep Tayyip Erdoğan to deepen economic co-operation with Moscow even as he condemned Russia’s invasion of Ukraine.

Erdoğan had previously praised “serious progress” on expanding the use of Mir cards in Turkey.

Two Turkish banks — DenizBank and Halkbank — joined the scheme after Vladimir Putin ordered the military assault on Ukraine in February.

Turkey is the only Nato member state not to have signed up to western sanctions on Moscow, and has said that its banks would continue to deal with entities or individuals under sanctions.

But mounting pressure from Washington — and the risks for Turkish banks deeply integrated into the western financial system — appeared to prompt a rethink.

The decision by the state banks to suspend Mir payments came after concerns about risking their vital foreign banking relationships.


The post Turkish banks forced to drop Mir as US sanctions pressure grows appeared first on Payments Cards & Mobile.

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