Erdogan will discuss Russian Mir payments and possible sanctions

• Turkish banks stopped using Russian payment system Mir after US put sanctions on Russia for invading Ukraine.
• Diplomats say that economic ties between Turkey and Russia are growing stronger, which worries the West.
• This is especially true after Erdogan and Putin met several times, including last week in Uzbekistan.

Turkish President Tayyip Erdogan will hold a top-level meeting about the economy On Friday, Two sources with knowledge of the situation told Reuters that the Russian payment system Mir and possible Western sanctions will be talked about at the meeting.

At the meeting, government officials and others will talk about agreements with Russia, the recent high volatility on the Istanbul stock exchange, and the economy as a whole, said sources who asked not to be named.

This week, two private Turkish banks, Denizbank and Isbank, stopped using Mir after the United States put more sanctions on Russia for invading Ukraine. One of the new sanctions was aimed at the head of the organisation that runs the payments system.

NATO member Ankara is against Western sanctions on Russia on principle, and it has good relationships with both Moscow and Kyiv, which are close to it on the Black Sea. As part of its diplomatic balance, it also spoke out against Russia’s invasion and sent armed drones to Ukraine.

Diplomats say that economic ties between Turkey and Russia are growing stronger, which worries the West. This is especially true after Erdogan and President Vladimir Putin met several times, including last week in Uzbekistan.

The US and EU “will keep an eye on compliance developments with Turkish banks, large groups that do business in Russia, and of course banks using Mir,” said Hakan Akbas, managing director of Strategic Advisory Services, an Istanbul-based political and sanctions compliance advisory.

“We could see secondary sanctions from the EU this time toward Turkish individuals and companies… and the U.S. will continue to distance itself from Ankara before the upcoming existential elections,” as was evident at the United Nations meetings this week in New York.

The head of Russia’s National Card Payments System said earlier on Thursday that Mir bank cards still worked in Turkey, even though two banks had stopped using them.

Last week, Russia’s central bank promised to move forward with plans to make more countries accept Mir cards.

People and businesses are being punished by the U.S. because they are accused of helping Moscow get around financial sanctions. Last month, the U.S. Treasury sent a letter to big Turkish businesses warning them that if they kept doing business with Russians who were on the sanctions list, they could be fined.

This week, a senior U.S. administration official said that Washington expects more banks to stop doing business with Mir because of the risk of sanctions. The official also said that the decisions by Isbank and Denizbank to stop doing business with Mir made a lot of sense.

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