Erdogan Says U.S. Sanctions on Iran Weren't Binding for Turkey

(Bloomberg) -- Turkey's president has argued that his country did not break a trade embargo on Iran as it hadn't committed to abide by U.S. sanctions, and there were no United Nations restrictions in place, the Hurriyet newspaper reported on Friday.

The comments at a Thursday meeting of Turkey's ruling party came hours before Erdogan was for the first time implicated in a plot to help Iran evade U.S. sanctions. The Islamic Republic was only released from UN curbs imposed over its nuclear program in January 2016, when a multi-lateral accord struck the year before was implemented.

“We have not broken an embargo,” the president was cited by Hurriyet as saying. “The world does not consist of the U.S. alone.”

Reza Zarrab, who's accused of laundering billions of dollars on behalf of Iran, told a New York jury Thursday that a senior Turkish official said to him that then-prime minister Erdogan personally signed off on a plan to involve two Turkish banks in the scheme. The case began as a corruption investigation in Turkey in 2013, but Erdogan quashed it amid a purge of investigators and prosecutors.

Gulen ‘Games'

Erdogan has increasingly questioned Turkey's alliance with the U.S. since Washington declined to extradite U.S.-based cleric Fethullah Gulen, whom Turkish authorities accuse of masterminding a coup attempt last year, a theme he also alluded to on Thursday.

“There are games played against our economy,” Erdogan was quoted as saying, an apparent reference to the swings in Turkey's currency, interest rates and bank stocks triggered by news about the trial.

A senior adviser continued the attack on Gulen's movement -- known in Turkey as FETO. It's clear the outlawed network “has hijacked the American justice system with the Zarrab case and they are trying to use it to create a smear campaign that they hope will eventually harm Erdogan,” Ilnur Cevik said in an article published by Daily Sabah on Friday.

“Turkish people are not prone to such slander, such plots staged by international groups, and will only rally behind Erdogan even stronger,” he wrote.

Turkiye Halk Bankasi AS and other Turkish banks denied any role in helping Iran evade U.S. sanctions after they were named at the trial on charges including money laundering and funneling Iranian funds through the U.S. financial system.

Cemil Ertem, another leading adviser to Erdogan, on Friday defended the integrity of Turkey's banks in an article also published by Daily Sabah.

“This banking system will not be frustrated by kitschy threats,” said Ertem. “Moreover, those who want to harm such an open and stable system will harm themselves more than Turkey.”

To contact the reporter on this story: Selcan Hacaoglu in Ankara at shacaoglu@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Mark Williams, Benjamin Harvey

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