Turkish bank money laundering suspicions pose risks to Turkish gov.

Turkish bank money laundering suspicions pose risks to Turkish gov.(HD).

A money laundering document that Turkey's state-run bank Ziraat Bankası is expected to provide to the US Federal Reserve (Fed) will reveal if firms blacklisted by the US used Turkish banks for illegal money transfers to countries such as Iran, with a possible finding of such transfers threatening to dent Turkish banks' credibility in international markets, observers argued on Monday.

Market sources also stressed that allegations of helping firms circumvent US sanctions may put the Turkish government in serious trouble.

The Fed made public a deal with Ziraat earlier this month, saying that it had asked Ziraat to provide “an acceptable written plan” regarding suspected money laundering within 60 days. That the Fed has released a copy of the deal on its website is something that market experts have said showcases how seriously the US authorities take the issue. Others have said that possible revelations of money laundering may dent the credibility of the Turkish banking system in international markets.

The Fed could be seeking to uncover alleged money transfers by Iranian businessman Reza Zarrab from Turkey to Iran in those given dates [July 1, 2012 to Dec. 31, 2012], opposition True Path Party (DYP) Deputy Chairman Kemal Abdullahoğlu said on Monday in Ankara.

The final five months of 2012 also mark the period in which Turkish gold exports to Iran peaked, with more than $3 billion in sales. Ankara's preference of paying for Iranian natural gas in gold was considered “suspicious” by some US critics back then. Recalling that Prime Minister Recep Tayyip Erdoğan defended Zarrab as a “charitable person” despite serious allegations, the DYP official said that the next two months will show if the government can escape the scrutiny of the US authorities. Read the full story here.