Trade finance retaliation warning as concerns mount over Turkey’s deepening ties with Russia

Trade finance for transactions with Turkey could be restricted amidst mounting alarm in western capitals over Ankara’s deepening ties with Moscow forged last week when Turkish President Recep Tayyip Erdogan met his Russian counterpart, Vladimir Putin.

The leaders agreed to boost cooperation in trade and energy as well as in the financial, transport, agriculture and construction sectors, they said in a joint statement after a four-hour meeting in the Russian resort city of Sochi last week. They also agreed to switch part of Turkey’s payments for Russian gas to roubles, Russian Deputy Prime Minister Alexander Novak told reporters after the talks.

Trade finance retaliation

Western governments are increasingly alarmed about deepening economic ties between Ankara and Moscow, with western officials warning of mounting risks that Turkey could be hit by punitive retaliation if it helps Russia avoid sanctions, the Financial Times has reported.

One EU official told the paper that some individual member states could “ask for restrictions on trade finance or ask the large financial companies to reduce finance to Turkish companies.”

Banking cooperation

Closer banking cooperation between the two countries has already been seen with five Turkish banks adopting Russia’s Mir card payments system, according to a Bloomberg report citing Erdogan after his Sochi meeting with Putin.

Mastercard and Visa both pulled out of Russia in the wake of its invasion of Ukraine. Mir card payments will allow Russian tourists to pay by card for their purchases in Turkey.


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