US urges Turkey and UAE to eliminate illicit trade with Russia

The United States is stepping up efforts to persuade partner nations that have not signed on to Western sanctions against Russia to clamp down on business activities in their countries that could help Moscow’s war effort in Ukraine, U.S. officials said .

These efforts include reporting to foreign governments transactions that the United States suspects are helping Russia evade sanctions and threatening further U.S. sanctions against individuals and companies that the United States believes are fueling the machine. war, officials said on Friday.

The new push comes as the first anniversary of Russia’s invasion of Ukraine approaches and as US officials, acknowledging the limited effect of layers of Western sanctions on Russia, seek new ways to damage growing Russian economy and undermining President Vladimir V. Putin’s ability to sustain his forces.

The sting of those sanctions is driving Russia to seek new economic avenues, said a senior U.S. official, who spoke on condition of anonymity because he was not authorized to discuss those efforts publicly.

Despite broad consensus in the United States and Europe on the need to economically punish Russia for its invasion, other major nations – including China, India and Saudi Arabia – have refused to apply sanctions, in many cases to the great benefit of their savings.

New US efforts have focused on Turkey, a NATO ally, and the United Arab Emirates, a close political and security partner of the United States. Both countries have resisted Western pressure to impose sanctions on Russia, instead continuing to trade with it and providing safe havens for wealthy Russians and their capital.

Last week, Brian Nelson, the Treasury Department’s top sanctions official, pressed the US case with officials from both countries, pointing to deals the US suspected could help Russia. to evade sanctions and raising the possibility of further action against the people and companies involved.

The senior US official said the United States had pointed out specific ways in which it had seen certain companies interact with those under sanction.

These activities include agreements with penalized Russian companies, trade with Russia in products made in the United States, and the export to Russia of so-called dual-use goods, such as plastics, rubber and electronics that can be used both for civilian and military purposes, a senior official said.

The Treasury Department said last week that sanctions imposed on companies involved in such activities could prevent them from doing business in some of the world’s wealthiest countries, which could hurt their profits.

In Turkey, Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, met with officials from the central bank and the finance and foreign ministries, as well as representatives of Turkish banks, said Morgan Finkelstein, a Treasury Department. spokesperson.

Since the start of the war in Ukraine last February, Turkey has frustrated other NATO members not only by refusing to impose sanctions on Russia, but also by deepening its trade ties with Moscow. The Turkish government has increased imports of Russian oil and gas at discounted prices, and Turkish companies have boosted their exports to Russia, in many cases filling the gaps left by European companies pulling out of the market.

Tens of thousands of Russians have settled in Turkey, bringing in foreign currency that has helped stabilize the country’s flagging economy. Some have set up companies that U.S. and Western officials say could help Russia import products it struggles to get elsewhere.

Turkish President Recep Tayyip Erdogan condemned the Russian invasion of Ukraine, but he maintained ties with Mr Putin, presenting himself as a necessary intermediary.

Turkish officials have questioned the effectiveness of the sanctions and said their imposition would hurt Turkey’s economy. But they reassured their American counterparts that they did not want Turkey-based companies to participate in the Russian war effort.

Nelson made a similar effort in the Emirates, also underscoring the United States’ willingness to “take additional action against those who avoid or facilitate the evasion of sanctions,” the Treasury Department said in a statement on Thursday.

The Emirates have come under pressure from US officials in the past over their role as a hub for circumventing sanctions against Iran, its neighbor across the Persian Gulf and a historic trading partner.

Since the start of the war in Ukraine, the Emirates has also become a major destination for Russians, including middle-class visitors as well as wealthy oligarchs who have parked their yachts in its marinas and moved into its skyscrapers, leading to a boom in luxury real estate. domain.

Last month, the United States imposed sanctions on an Emirates-based aviation company, Kratol, accusing it of supplying planes to the private military company Wagner close to Mr Putin who it says have been used to move “personnel and equipment” between the Central African Republic, Libya and Mali, the Treasury Department said.

Emirati officials have described their country as a neutral mediator in the conflict, arranging a prisoner swap between the United States and Russia while continuing to engage with Russian officials.

“There are a lot of Russians who are not sanctioned and who are interested in safer havens,” Anwar Gargash, diplomatic adviser to the president of the Emirates, told reporters last year. “These unsanctioned individuals have nothing to do with the war and trying to lump them together with bigger issues is problematic.”

Safak Timour contributed reporting from Istanbul, and Viviane Nereim from Riyadh, Saudi Arabia.