The fact that Iran topped the list of foreign-financed companies established in Turkey last year gives credence to claims that Iran has chosen Turkey as a gateway to procure goods and merchandise for its economy battered under the UN and Western sanctions. This renewed focus, apparently favored by the mullah regime in Tehran, comes after a crackdown on Iranian business interests in the United Arab Emirates, a country that used to be a vital link for Iranian companies to connect with the world market.
In Turkey, the Turkish Union of Chambers and Commodity Exchanges (TOBB) is authorized to track the number of new and closed businesses and to announce figures publicly on a monthly basis. According to TOBB data, foreign companies financed by Iran in 2011 totaled 590, an increase of 41 percent compared to the previous year. That puts Iran on the top of the chart of new foreign companies established in 2011 not only in nominal numbers but in percentage increase as well. As of Dec. 31, 2011, the number of companies funded by Iran totaled 2,140. It is kind of a mystery to see that one-fourth of this total actually happened just last year.
The fast-paced trend continued in January 2012 as well. TOBB reported that Iranian funds were used in setting up 63 companies, all limited company types with the exception of one, in just one month. The total capital reported for these companies in the same month was about TL 9 million ($5.1 million) with the bulk coming from Iran (close to TL 7 million, or almost $4 million). The face value capital of the limited stock company shares does not reflect the actual trade volume these companies are involved in. Again in January, Iran was the leading country in setting up new foreign businesses in Turkey, followed by Germany with 36 companies. Something is definitely not right here given that while Iran had a $16 billion trade volume with Turkey in 2011-- mostly from Iranian natural gas and oil proceeds -- Germany, the largest export market for Turkey, had a volume of $37 billion.
Then the question becomes what Iran is after. Intelligence analysts, speaking to the author of this column, raised two threats directed against Turkey with the multiplication of Iranian firms. One is apparently to circumvent sanctions imposed on Iran, and the other is to fund operations that will cause domestic turbulence in Turkey. To bypass the sanctions regime, Iran has been using third countries like Iraq and Pakistan to re-route merchandise from Turkey, using these front companies so that the merchandise can be safely delivered to a final destination in Iran. Another route is to use the loosely controlled Esendere border crossing in Yüksekova in the southeastern Turkish province of Hakkari, which connects to Sero, Orumeyeh, on the Iranian side. It seems the Turkish government has already abandoned this border gate to the terrorist Kurdistan Workers' Party (PKK), which smuggles anything at the right price. Zaman reporters on the ground verify this.
The Iranians use Turkish partners in setting up front companies, to further complicate matters for Turkish authorities. The worry is that some of these serve as a conduit to finance rallies, for example, against the government decision to host the US radar installation as part of the NATO missile shield system. Others use schemes like charity events and fund-raising drives -- using mostly the Palestinian cause laced with anti-Semitic rhetoric -- to mobilize people in Turkey. In recent months, Syria has also been thrown into the mix under the classic imperial appetite of the West to interfere in the Middle East.
To ease the movement of these companies, Iran has been intensively lobbying the ruling Justice and Development Party (AK Party) government for months now to have increased access to the financial system in Turkey. This carries a huge risk of confrontation between Turkey and Western powers that are keen to squeeze Iran with sanctions over its controversial nuclear program. The US has already warned its ally Turkey that banks that do business with Iranian entities run the risk of being frozen out of the US financial system. The warning came after the US Congress approved a fresh set of sanctions targeting financial institutions that deal with Iran's central bank to stem the flow of oil revenues.
When I inquired, Turkish officials told me that they are in close contact with the US authorities on how to navigate through sanctions -- be they multilateral ones like the UN-approved sanctions or unilateral ones that were approved by the West. For example, Tüpraş, Turkey's biggest crude oil importer, consulted with the US when it renewed the contract earlier this year, while Turkish state bank Halkbank continues to handle financial transactions with Iran with the consent of Washington. Publicly however, Ankara maintains the official position that it is not under any obligation to enforce tougher unilateral sanctions.
Considering how Iranians are good at the Persian game of diplomacy-and-dialogue to buy time and how the twisted Shiite ideology of “taqiyya” (so called religiously sanctioned deception) is the paramount principle guiding the mullah regime in Iran, Turkey should be extra vigilant in its dealings with Iran lest it risks an unnecessary confrontation with the West. With ostensibly innocent business deals, Iran may push Turkey to run afoul of a host of US laws prohibiting the sale or transfer of American technology to Iran, not to mention possible violations of the UN Security Council resolutions.
We know that Americans have already warned Turkey on the activities of some Turkish companies that might have violated the terms of the Arms Export Control Act (AECA) and the Iran, North Korea, and Syria Nonproliferation Act as well as the 1996-dated Wassenaar Arrangement, an export control regime for conventional arms and dual-use goods and technologies. Some of these violations require the administration to report to Congress, which may lead to possible sanctions on entities and individuals involved. Ankara may eventually be shunned in the matter of acquiring or leasing high-tech US military hardware.
The Turkish government's increased contacts with Iran in various fields have given ample opportunities for Iranians to penetrate into Turkey. For example, Recep Akdağ, the health minister, signed a Memorandum of Understanding (MoU) in the Field of Health during his visit to Iran on June 23-27, 2010. The agreement is currently on the agenda in Parliament. When the Parliament Foreign Relations Commission reviewed the agreement on Jan. 25, 2012, before approving it, members of the main opposition Republican People's Party (CHP) objected to two clauses in the MoU, which said in Article 2 and 3 that both countries may cooperate “in areas deemed necessary” in addition to health. CHP members Oktay Ekşi and Aytuğ Atıcı argued that the statement is very vague and gives a blank check to the government to commit Turkey on issues that might bring irreparable damage to the country. They may be right.
Take this MoU with Turkish daily Habertürk's report last month that Iran was planning to send nurses trained in espionage to spy on Turkey, based on information sent to the Interior Ministry by an unidentified source, who claimed to be an Azeri Iranian. Though the Iranian Embassy in Ankara officially denied the story, the Turkish Interior Ministry has since begun investigating Iranians who have applied to work in Turkey. It has also asked the Foreign Ministry to aid in the investigation. It is no secret that Iran has trained secret networks of agents across the Gulf states and Middle East to attack Western interests including Turkey's and incite civil unrest in the event of a military strike against its nuclear program.
It looks as if the ruling AK Party government has not fully grasped the nature and seriousness of the Iranian threat directed against Turkey. I sincerely hope recent indications that Ankara is recalibrating its engagement with Iran will lead to a real policy change with respect to Tehran.
