Turkish banks leave Russia's Mir payment system after U.S. warning

Three Turkish state banks decided on Tuesday to stop using Russian Mir payment system after a new US sanction forced countries to halt financial transactions with Moscow, Bloomberg reported.

Three Turkish state banks namely Turkiye Halk Bankasi AS, TC Ziraat Bankasi AS and Turkiye Vakiflar Bankasi TAO have stopped using Russia's Mir bank cards, a senior Turkish official told Bloomberg.

Mir is Moscow's alternative to Visa (V.N) and Mastercard (MA.N), which suspended operations in Russia over its actions in Ukraine.

The decision of the Turkish banks have marked a shift in the Turkish stance on sanctions targeting Russia, Bloomberg said.

Turkish President Recep Tayyip Erdoğan has remained reluctant to participate in sanctions against Russia introduced by the US and the European Union since Russia’s invasion of Ukraine that began in February. However, Erdoğan continues to perform a delicate balancing act between Russia and Ukraine. 

A Turkish manufacturer Baykar run by Erdogan’s son-in-law has been delivering drones to Ukraine as it defends itself against the Russian offensive.

In the meantime, Turkey has become a top destination for wealthy or critical Russians who are worried about their country's invasion of Ukraine. Russians topped Turkey’s ranking of monthly home sales to foreigners in April for the first time and have been the leading foreign buyers every month since, Bloomberg said.

In September, The US Treasury’s Office of Foreign Assets Control (OFAC) warned financial institutions about entering new agreements or expanding existing ones with the Russian operator of Mir cards. 

Russia claimed that Turkish state banks that have stopped using Russia's Mir bank cards are clearly under unprecedented U.S. pressure and the threat of secondary sanctions, Reuter reported on Wednesday.

 

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