Number of Iranian-funded firms tops list for ninth month

(Photo: Reuters)

October 21, 2012, Sunday/ 16:46:00

The number of Iranian-funded foreign companies established in Turkey rose in September for the ninth consecutive month this year, a Turkish Union of Chambers and Commodity Exchanges (TOBB) report revealed on Friday.

According to the TOBB report, which showed the statistics of companies that were established and closed in Turkey in September 2012, 17 percent of the foreign companies that were established in Turkey in September were Iranian-funded. The report comes amidst growing concerns in Ankara that some of these Iranian businesses may be front companies set up to circumvent UN-sponsored sanctions on Iran. It also arrives at a time of intense pressure and economic sanctions from the EU and the US on Tehran over its controversial nuclear program. The number of Iranian-funded foreign companies in Turkey has seen a rapid increase since the beginning of the year, causing the Turkish government to worry that some of the activities of Iranian companies may risk an unwanted confrontation between Ankara and its Western allies because of what is considered a violation of US and EU-imposed unilateral sanctions, albeit not running afoul of UN Security Council resolutions. A government source earlier told Today's Zaman they “carefully watch” the operations of Iranian-funded foreign companies to see if they are in breach of Turkish law as well as international laws to which Turkey is a party. The number of companies funded by Iran totaled 2,140 as of the end of last year, other TOBB data show. This was a 40 percent rise over 2010, and more than half of these firms are located in İstanbul.

Friday's report stated that 44 companies -- out of the 253 that were established with foreign partners last month -- are Iranian-funded. The report also stated that 651 Iranian-funded foreign companies had been established in Turkey in the first nine months of the year. The next two foreign investors on the list were Germans, with 252 companies established this year, and Russians and Azerbaijanis, with 126.

The Iranian firms in Turkey are mainly in the power generation, electronics, communications and construction sectors. According to the registry list for companies provided by the İstanbul Chamber of Commerce (İTO), more than half of the Iranian-funded companies in Turkey -- 1,200 to be exact -- are located in İstanbul. Currently, 25 percent of all foreign companies are based in İstanbul.

TOBB previously announced that 590 foreign companies had been financed by Iran in 2011, which was an increase of 41 percent over the previous year. This puts Iran at the top of the list of new foreign companies established in 2011, not only based on nominal figures but percentage-wise as well. As of Dec. 31, 2011, the number of companies funded by Iran totaled 2,140, with a quarter established in the previous year alone.

“Some of these [Iranian] companies were established to procure goods and merchandise for the Iranian economy in clear violation of the [Western] sanctions [aimed at pressuring Iran to drop its controversial nuclear program]. They use smugglers to get the merchandise across the border to Iran,” a former senior executive of a Turkish company that has a multi-million dollar investment in Iran said.

Along with new businesses, Iranians have also recently shifted their focus to the finance and banking sector in Turkey. Some major Iranian banks reportedly mulled entering Turkey to open branches. It has also been speculated that Iranians have turned to buying Turkish gold as a method of saving as Western sanctions tighten. In the first seven months of this year, Turkey's gold exports to Iran skyrocketed to $6 billion, making up 75 percent of the total value of goods Turkey sold to this country in the given period.

In a move to please Washington and the US's number one ally in the region, Israel, European Union governments imposed sanctions on Tuesday last week against major Iranian state companies in the oil and gas industry and strengthened restrictions on the central bank, cranking up financial pressure over Tehran's nuclear program.

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