Turkey’s rocky relationship with the United States has hit fresh turbulence over Ankara’s gold exports to Venezuela. Washington has aired worries that the flourishing trade may be in violation of US sanctions against President Nicolas Maduro’s embattled regime and is threatening to take action against its NATO ally. The Donald Trump administration has instructed US Assistant Treasury Secretary for Terrorist Financing Marshall Billingslea to broach the subject with Turkish authorities during a previously planned trip to Ankara to discuss US sanctions on another Washington bugbear, Iran.
Billingslea has previously voiced concerns about Venezuela’s gold imports to Turkey. “We are looking at the nature of Turkish-Venezuelan commercial activity,” a senior US official told Reuters, “and if we assess a violation of our sanctions, we will obviously take action.” Venezuela exported more than 20 metric tons of gold to Turkey last year and there are suspicions that some of it may have wound up in Iran’s hands.
Why it matters: Last year, Venezuela exported 23.6 tons of gold worth $900 million to Turkey, compared to zero the previous year. Critics say Turkey’s facilitation of Venezuelan gold exports, which have thrown a lifeline to Maduro’s collapsing regime, is not unlike the help Ankara extended to Tehran in an oil-for-gold scheme that the FBI described as the biggest sanctions-busting scam the agency had ever uncovered. That investigation led to the sensational March 2016 arrest of Turkish-Iranian gold trader Reza Zarrab, who became a key witness for the prosecution in the federal government’s case against Mehmet Hakan Atilla, a senior executive for Turkish state lender Halkbank. The bank was allegedly at the nexus of the money laundering operation.
Turkey has been pushing back against a potential multibillion-dollar fine being mulled by the Treasury Department. Ankara allegedly linked the release of detained US pastor Andrew Brunson to ongoing negotiations with Washington on the issue. Brunson was released in October after the Trump administration slapped sanctions on Turkey’s interior and justice ministers and raised tariffs on Turkish aluminum and steel imports, sending the lira into a tailspin.
What’s next: Should Turkey resist US pressure over its gold trade with Venezuela, it may well face a fresh set of sanctions. It would likely put further pressure on Turkey’s wobbly economy ahead of critical municipal elections scheduled for March. It would also make the Trump administration less amenable to leniency on Halkbank.
Turkish President Recep Tayyip Erdogan has emerged as one of Maduro’s most passionate defenders after the United States backed opposition leader Juan Guaido as interim head of the country. Erdogan’s alliance with Maduro is part of a broader pattern of cooperation with fellow authoritarian leaders, most notably his bromance with Russia’s Vladimir Putin. Fittingly, the pair will meet on Feb. 14, Valentine’s Day, to discuss Syria. Turkey's plans to ram through the acquisition of Russian-made S-400 missiles despite Washington's fierce objections has elicited a separate flurry of sanctions threats from both Congress and the administration.
Turkish Airlines is one of the few Western carriers to fly to Caracas and Turkish aid helps keep the Latin American giant afloat. But it’s unlikely that Ankara can sustain its magnanimity should Washington turn up the pressure.
Know more: Turkey Pulse columnist Semih Idiz lays out the backstory driving Ankara's affection for Maduro.
Continue reading this article by registering at no cost and get unlimited access to:
- The award-winning Middle East Lobbying - The Influence Game
- Archived articles
- Exclusive events
- The Week in Review
- Lobbying newsletter delivered weekly