The correspondent banking system is used by countries, companies and consumers to send trillions of dollars in payments around the world.
Sunday 18, August 2019
Ziraat Bank, Turkey’s largest bank by assets, has stopped offering services to Venezuela’s Central Bank in wake of tougher US sanctions that raise the stakes for companies that do business with the Caribbean nation.
The state lender confirmed the closing of its account without providing further details. Venezuela’s Central Bank was relying on Ziraat to pay contractors, move money and import products in Turkish liras.
The US sanctions, which were strengthened this month, threaten institutions that do business with Venezuela with exile from the global financial system. Still, Ziraat’s decision came as a surprise to staff inside Venezuela’s Central Bank, as Turkish President Recep Tayyip Erdogan has repeatedly expressed his support for President Nicolas Maduro and visited the country as recently as December.
In some instances, correspondent banks enhance due diligence when dealing with countries under financial sanctions or flagged as money-laundering risks.
Fearing continued reprisals from sanctions, Venezuela’s government has been considering the possibility of switching to a Russian-operated international payment messaging system as an alternative to SWIFT.
While firms including most big North American and European air carriers have ended service to Venezuela, Turkish Airlines flies to Caracas several times a week.