Turkey, country of refuge for Russian companies in the face of European sanctions

Western sanctions against Moscow short-circuited by investments in the direction of Turkey? The question arises because four times moreRussian-funded companies were created in Turkey between January and August, compared to the whole of 2021. Something to worry Westerners.

>>War in Ukraine: “Russia is forced to review all the logistics of its foreign trade and for this Turkey has an important role”, explains a specialist

Over the first eight months of the current year, 729 companies with Russian capital were created in Turkey, mostly in the wholesale and retail sector. As a reminder, Ankara refuses for the moment to join the sanctions put in place by the West. As one European diplomat put it, “it’s one thing not to impose sanctions on Russia, it’s another thing to help it circumvent them“.

According to Mitat Celikpala, a specialist in Russian-Turkish relations, there is no doubt: Western sanctions are perceived in Turkey as so many opportunities:
“In the first six months of the year alone, the volume of Russian-Turkish trade had reached the total volume of 2021. There are several factors. Turkish logistics companies are replacing American and European companies which are facing the penalties.”

“Russians are setting up export companies in Turkey, investing in real estate and obtaining Turkish citizenship. All this is seen as a kind of ‘lifeline’ for the Turkish economy in crisis.”

Mitat Celikpala, specialist in Russian-Turkish relations

France Info

By thus becoming the main transit point for goods to Russia, Turkey is however playing a risky game, in particular exposing its financial institutions to so-called “secondary” sanctions. At the end of September, Ankara gave in to American pressure and renounced the Mir payment system, which allowed Russians to continue withdrawing money in Turkey.

For Mitat Celikpala, the development of Russian-Turkish trade has its limits:”If Russia becomes an even more aggressive actor, if it expands and escalates its attacks on Ukraine and prolongs the war, and if the West increases the sanctions, then Turkey will have to choose. And she will choose the West, not Russia, so as not to end up on the losing side.“

For its part, the Turkish government denies helping Moscow escape sanctions. He argues that his so-called position “balanced” enabled several mediations between kyiv and Moscow, in particular on the resumption of deliveries of Ukrainian cereals.