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US Accuses Turkey's Halkbank of Scheme to Evade Iran Sanctions

A street vendor sells roasted chestnuts in front of a branch of Halkbank in central Istanbul, Turkey, January 10, 2018. REUTERS/Murad Sezer
A street vendor sells roasted chestnuts in front of a branch of Halkbank in central Istanbul, Turkey, January 10, 2018. REUTERS/Murad Sezer
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US Accuses Turkey's Halkbank of Scheme to Evade Iran Sanctions

A street vendor sells roasted chestnuts in front of a branch of Halkbank in central Istanbul, Turkey, January 10, 2018. REUTERS/Murad Sezer
A street vendor sells roasted chestnuts in front of a branch of Halkbank in central Istanbul, Turkey, January 10, 2018. REUTERS/Murad Sezer

US prosecutors on Tuesday charged Turkey’s majority state-owned Halkbank (HALKB.IS) with taking part in a multibillion-dollar scheme to evade US sanctions against Iran - an indictment that may complicate tension between NATO allies Washington and Ankara.

The charges unsealed in federal court in Manhattan mirror those against one of Halkbank’s former executives, Mehmet Hakan Atilla, who was found guilty and sentenced to prison after a trial in the same court last year.

The United States and Turkey are at odds over Turkey’s military offensive into northeastern Syria against Kurdish-led militia. US President Donald Trump announced a set of sanctions on Monday to punish Ankara for the invasion.

US Vice President Mike Pence will meet with Turkish President Tayyip Erdogan in Ankara on Thursday to urge a ceasefire and emphasize the Trump administration’s commitment to sanctions until a resolution is reached, the White House said.

“This indictment constitutes an additional step that does not contribute positively to the current situation of US- Turkey relations,” an official at the Turkish embassy in Washington told Reuters.

Turkey began its cross-border operation just days after Erdogan told Trump in a phone call on Oct. 6 that he would go ahead with a long-planned move against US-allied Kurds in the region, opening a fresh front in Syria’s eight-year civil war.

Trump moved US forces out of the way, an abrupt policy change after years of American troops fighting alongside the Kurd-led Syrian Democratic Forces against Islamic State.

Tuesday’s indictment is the latest development in a US criminal case that first became public in 2016 with the arrest in Miami of Reza Zarrab, a Turkish-Iranian gold trader accused of playing a central role in the sanctions evasion scheme. Atilla, a Halkbank deputy general manager, was arrested in New York the following year.

Zarrab pleaded guilty and testified for US prosecutors at Atilla’s trial. Zarrab said that Iran, with the help of Halkbank and Turkish government officials including Erdogan, used a complex web of shell companies and sham transactions in gold, food, and medicine to get around US sanctions.

US prosecutors said some officials took bribes as part of the scheme.

The prosecutors are seeking to compel Halkbank to forfeit money and property, though they did not give a specific amount.

Atilla was sentenced to 32 months in prison following his conviction. He was released and returned to Turkey earlier this year. At the time of Atilla’s conviction, Erdogan condemned the case as a political attack on his government.

Gold trader Zarrab, before pleading guilty, hired Rudy Giuliani, a longtime associate of Trump, to try to negotiate a deal between the US and Turkish governments to secure his release.

Giuliani has more recently attracted attention as Trump’s personal lawyer. Federal prosecutors are examining Giuliani’s interactions with two men he worked with in Ukraine who were arrested last week on campaign finance charges.

Giuliani also said on Tuesday that he would not cooperate with the Democratic-led US House of Representatives impeachment inquiry into Republican Trump’s efforts to pressure Ukraine to investigate Democratic political rival Joe Biden.

As a result of the US charge, shares of Halkbank fell on Wednesday more than 7% at the opening of trade.

In early trade, the banking index .XBANK dropped 3.21%, and the main share index BIST100 .XU100 was down 1.93%. Turkish authorities banned short-selling of seven large banks' stocks.

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Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.