Halkbank denounces Iran sanctions evasion claims, says operations compliant with national, int'l regulations

Halkbank denounces Iran sanctions evasion claims, says operations compliant with national, int’l regulations

Turkish lender Halkbank said its operations and transactions are in full compliance with national and international regulations.

In a statement to the Borsa Istanbul late on Thursday, the bank said that it did not use “any mechanisms, methods or systems other than regulations and foreign trade practices known and followed by all other banks,” it said.

Thursday’s statement came four days after the bank’s deputy general manager, Mehmet Hakan Atilla, was detained in New York’s JFK Airport on charges of conspiring to evade trade sanctions on Iran.

Halkbank also underscored that its activities, including operations and transactions, were regularly audited.

The Turkish state lender stressed it had not intermediated in any transaction in which a prohibited party, person or goods or services had been involved. As required by regulations, the bank did not use the U.S. financial system or the country’s currency for the trade transactions mentioned in the allegations.

“It is obvious that the situation of our bank, which has not been subject to any sanction due to any transaction until today, should be appreciated,” it added.

The statement emphasized that all of the bank’s foreign trade transactions – including those with Iran – were “open,” “transparent,” and “observable.”

The statement said news “discrediting” its operations and misleading the public had been circulating since the arrest of one of its senior executives in the U.S. earlier this week.

Halkbank also announced that it will carry out the necessary legal procedures on the speculative news or statements both in written and social media, which could be inimical to the bank’s commercial operations.

Halkbank said the allegations consisted of claims filed between Dec. 17 and 25, 2013, which were a “treasonous” plot by the Gülenist Terrorist Group (FETÖ) against Turkish government ministers and businesspeople.

These had “nothing to do with our bank,” the lender said.

Halkbank said Mehmet Hakan Atilla had made seven business trips to the U.S. between 2014 and 2017.

“Atilla held talks with a host of international financial institutions and senior executive officials. At this juncture, his detention at the airport while he was returning from his last travel is meaningful,” it said.

As was previously reported, Atilla was arrested after a first trial on March 28, and the prosecution was given time for the preparation of an indictment and the second trial will be held on April 10.

“[The] judicial process on the arrest of our deputy general manager in charge of International Banking has been followed closely by both our bank and the relevant authorities of our state,” Halkbank said.

Halkbank will continue its operations in accordance with national and international regulations without any exceptions both today and in the future as it has done in the past, the statement added.

A formidable state lender with a capital adequacy ratio of 13.08 percent as of Dec. 31, 2016, the assets of Halkbank grew by 23.3 percent in 2016 and the bank secured a net profit of over TL 2 billion ($550 million). Moreover, the bank’s corporate governance rating in compliance with the principles set forth by the Capital Markets’ Board has been revised up to 9.30.

Atilla was charged on Tuesday with participating in a multi-year scheme to violate sanctions against Iran and conspiring with Turkish-Iranian gold trader Reza Zarrab, who is already on trial in a case which has caused tensions between Turkey and the United States. He is accused of conspiring with Zarrab to conduct hundreds of millions of dollars of illegal transactions through U.S. banks on behalf of Iran’s government and other entities in that country.

Turkey’s foreign and justice ministers on Thursday described the arrest of Atilla as a “political” move. President Recep Tayyip Erdoğan has said he believed U.S. authorities had “ulterior motives” in prosecuting Zarrab, who was arrested in March 2016 in Miami.

Shares of Halkbank, Turkey’s fifth-largest listed bank by assets, endured their biggest one-day fall on Wednesday, falling 14 percent after news of the arrest emerged.

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