US-designated Iran sanctions buster operating freely in Turkey

 

Süleyman Sakan, a Turkish national who was sanctioned by the United States Treasury for violating Iran sanctions, has extensive business dealings that go far beyond his currency exchange company, which was also designated under the US sanctions.

According to a Nordic Monitor investigation, Sakan has shares in five companies in Istanbul alone, serves as a board member in many and may have more business interests in other parts of Turkey as well as in other countries. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on March 26, 2019 sanctioned Sakan and his currency exchange company Atlas Döviz Ticaret A.Ş. along with two dozen other individuals and entities for having transferred over a billion dollars and euros to the Islamic Revolutionary Guard Corps (IRGC) and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL).

According to an OFAC statement, Sakan is an associate of Reza Sakan and the UAE-based Sakan General Trading. Since at least 2017, Suleyman worked with Reza to expand their business activities to Oman using the Omani financial sector.

The Nordic Monitor probe found trade registry data indicating that Süleyman is the majority shareholder and a former board member of Atlas Döviz Ticaret A.Ş. The company is currently represented by Aliriza Eczacıoğlu and Murat Savasçıoğlu. On February 22, 2019 the company changed its name to Atlas Döviz ve Altin Yetkili Muessese A.Ş., suggesting that the firm also started dealing in gold in addition to foreign currency. The company is authorized to transport both Turkish lira and foreign currency across Turkish borders.

 

Companies owned by Süleyman Sakan in Turkey.

 

Süleyman joinedAtlas Döviz on October 22, 2009 by buying shares from existing partner Ahmet Çetiz, a move that was approved by the Turkish Treasury. On February 2, 2011 Süleyman’s relative Asiye Sakan also became a partner in the firm by a transfer of shares, while Süleyman increased his shares to become the majority stakeholder, effectively taking control of the firm. Since then, fresh capital has been injected into the firm practically every year.

The company was subject to two separate investigations on alleged links to terrorist groups and drug smuggling networks. The Ankara 1st High Criminal Court judge who was overseeing the terrorism cases imposed a lien on the firm’s property on November 26, 2012, and the Ankara 2nd High Criminal Court judge extended the measure on May 10, 2013 and appointed Professor Ömer Özkan as a trustee to oversee the board members’ decisions. At a board meeting held by the trustee on December 25, 2013, Süleyman was fully authorized to represent the company and conduct all business on its behalf with a sweeping mandate, while more capital was injected into the firm.

 

Atlas faced a terrorism investigation and was subjected to a temporary seizure, with the court appointing a trustee to oversee the firm.

 

Atlas’s name was also mentioned in 2013 corruption investigations in Turkey. A whistleblower sent an anonymous email to the Istanbul Police Department on July 18, 2012 stating that Reza Zarrab, an Iranian sanctions buster, had been working with Abdullah Happani in laundering money brought from Iran and northern Iraq. They were using currency exchange houses including Atlas and were connected to terrorist groups and drug networks. The tip prompted prosecutors to launch an investigation into allegations that turned out to be true and uncovered a major graft scheme that extended to then-prime minister and current president Recep Tayyip Erdoğan.

Erdoğan was implicated in another probe that became public knowledge on December 17, 2013, with a vast corruption network involving him and his ministers exposing how his government helped violate US sanctions and break a number of Turkish laws. In order to save himself from legal troubles, Erdoğan orchestrated the removal of the police investigators, prosecutors and judges who were overseeing the corruption case. Their replacements, personally selected by Erdoğan, derailed the probe, and lead suspect Iranian-Turkish national Zarrab was released from pre-trial detention. Zarrab was later arrested in the US, indicted and turned into a government witness after a plea bargain with federal prosecutors.

As in the December 17 probe, Erdoğan’s associates also helped Süleyman escape from legal troubles. On January 30, 2014 a judge in Ankara removed the lien on Atlas Döviz Ticaret A.Ş, lifted all restrictions and terminated the trustee’s mandate. The company at the same time moved to another location in Istanbul. It is still operating as of the present day.

 

Süleyman Sakan

 

Other companies in which Süleyman has shares and/or positions as chairman or member of the board are as follows: Aspava Turizm Ticaret Ve Sanayi Anonim Şirketi, a tourism, oil and trading firm controlled by Süleyman as chairman of the board and with Turkish national Maruf Karaman a board member; Rayol Diş Ticaret Limited Şirketi, a foreign trade firm owned by Süleyman and Asiye Sakan; Ekor Gayrimenkul Emlak Danişmanlik Hizmetleri Ticaret Limited Şirketi, a real estate and consulting firm owned by partners Ekrem Karaduman and Süleyman Sakan, who is the majority shareholder; Sakan İnşaat Mimarlik Ve Kiymetli Metal Sanayi Ve Ticaret Anonim Şirketi, a construction and precious metals trade firm whose chairman of the board is listed as Süleyman; and Sakan Gida Sanayi Ve Ticaret Anonim Şirketi, a food industry and trading firm owned by Süleyman.

 

US Treasury OFAC chart describing Ansar Bank’s sanctions evasion scheme.

 

It appears that companies which operate in Turkey under the permissive environment provided by the Erdoğan government have come under increased pressure by the United States. A Turkish logistics, supply and shipping company was implicated in a US federal indictment filed in November 2018 in which a US-based Pentagon contractor was charged with illegal Iran trade and fraud in billions of dollars of contracts. Nordic Monitor has identified Turkish company T.R Ader İthalat, İhracat, Taşımacılık, Gıda Sanayi ve Ticaret Limited Şirketi, which played a key role in a scheme to defraud the United States through contracts in Afghanistan, engaged in illegal commerce in Iran and laundered money internationally. The federal indictment did not list the Turkish company by name but rather referred to it as “Transhipper # 2,” a transportation company headquartered in Mersin, Turkey.

On February 7, 2019 Evren Kayakıran, a Turkish businessman, was named by OFAC as a sanctions buster in a case that marked the first time OFAC had designated an individual  in a civil enforcement action. He was designated for directing the foreign subsidiary of an American company to violate US sanctions against Iran and attempting to conceal those violations, while the company he had worked for was offered a civil settlement.

 

 

“We are targeting a vast network of front companies and individuals located in Iran, Turkey, and the UAE to disrupt a scheme the Iranian regime has used to illicitly move more than a billion dollars in funds,” said Treasury Secretary Steven T. Mnuchin in a statement issued on March 26, 2019. “The IRGC, MODAFL, and other malign actors in Iran continue to exploit the international financial system to evade sanctions, while the regime funds terrorism and other destabilizing activities across the region.”

“Central to this network and sanctioned today pursuant to our counterterrorism authority is Iran’s IRGC-controlled Ansar Bank and its currency exchange arm, Ansar Exchange, both of which used layers of intermediary entities to exchange devalued Iranian rial ultimately for dollars and euros to line the pockets of the IRGC and MODAFL. This vast network is just the latest example of the Iranian regime’s use of deceptive practices to exploit the global financial system and divert resources to sanctioned entities,” said Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker. “This once again exposes to the international community the dangerous risks of operating in an Iranian economy that is deliberately opaque.”

The statement added that “[t]hrough the IRGC-controlled Ansar Bank, the Iranian regime established a layered network of front companies based in Iran, Turkey and the UAE to bypass sanctions, gain access to the international financial system and exchange the devalued Iranian rial for dollars and euros. Ansar Bank also used international free zones to establish front companies.”

“As part of this scheme, Ansar Bank used its Iran-based foreign currency arm, Ansar Exchange and its network, to convert Iranian rial ultimately to hundreds of millions of dollars and euros. To provide this funding to Ansar Bank, MODAFL and the IRGC, Ansar Exchange relied on a network of front companies and agents in Turkey and the UAE. In just the last year-and-a-half, four front companies — the UAE-based Sakan General Trading, Lebra Moon General Trading and Naria General Trading as well as the Iran-based Hital Exchange,  all designated today — provided the equivalent of approximately $800 million in funds to Ansar Exchange. Additionally, the Turkey-based Atlas Döviz acted as a secondary foreign currency provider for Ansar Exchange.”

“These front companies are witting to Iran’s sanctions evasion. For example, as of 2019 Ansar Exchange Managing Director Alierza Atabaki worked closely with one central procurement agent, Reza Sakan, to avoid the scrutiny of Emirati authorities regarding Ansar Exchange’s financial dealings with UAE-based Sakan General Trading and other previously identified Ansar Exchange intermediaries,” the statement posted on the OFAC website noted.

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