July 1, 2015 | Quoted by Barin Kayaoğlu - Al Monitor

Turkish Corruption Suspect Awarded Business Prize

Iranian-born Turkish businessman Reza Zarrab received his country’s top exporter award June 21 from the Turkish Exporters Assembly (TIM), a pro-government business group. Zarrab received the award in the field of jewelry on behalf of his company, Volgam Gida. In the general exporters’ list, Volgam stood 13th — no mean feat for a company that started only a few years ago.

The award and Zarrab’s case have interesting implications for domestic Turkish politics, Turkish-Iranian relations and the talks over Tehran’s nuclear program.

Until late 2013, Turks knew Zarrab (identified as “Riza Sarraf” in Turkey) simply as a businessman and the husband of famous singer Ebru Gundes. Few people cared about his gold export business from Turkey to Iran and its critical role in undermining Western sanctions against Tehran’s nuclear program. The Justice and Development Party (AKP) government and Recep Tayyip Erdogan were only too happy to boost export figures and purchase cheap oil and natural gas from Iran.

Then came the Fethullah Gulen-AKP fight and the “17-25 December corruption probe.” Pro-Gulen policemen and prosecutors who ran the investigation accused Zarrab of bribing prominent members of the ruling AKP government. Zarrab found himself in police custody — along with the sons of three Cabinet ministers. “Gas for gold” trade between Turkey and Iran, which one Al-Monitor article placed at $10 billion, became public knowledge. Another $14 billion allegedly got “lost” in transaction. Some Turkish media outlets put the total “undocumented trade” between Turkey and Iran at $90 billion in 2010-2013.

But as the AKP government gained the upper hand against Gulen in 2014, it killed the corruption probe and released Zarrab. Since then, AKP and its supporters in the media and business circles have tried to recast Zarrab as both hero and victim. For example, Sabah newspaper interviewed Zarrab after his release and prominently featured his allegations against Gulen-affiliated networks. The Iranian-born Turkish businessman claimed that police and prosecutors who handled his case promised to “sign his release papers” if he would confess that Erdogan had known about the bribes and “gas for gold.” Other media outlets hailed Zarrab for exporting goods and decreasing Turkey’s foreign trade deficit.

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Jonathan Schanzer, a former terrorism finance analyst at the US Treasury Department and now a vice president for research at the Washington-based Foundation for Defense of Democracies, said there has been a “slight uptick in the gold trade [between Turkey and Iran], but nothing to indicate that ‘gas for gold’ would resume at previous levels.” Schanzer said the top exporter award to Zarrab raises concern “that the business and governmental ties between Iran and Turkey that paved the way for sanctions busting are still intact.”

But if there's a deal in Vienna, Ankara could get away with the “gas for gold” scheme and, as Schanzer conceded, “there will be a great economic benefit for [Turkey and Iran].” According to one estimate cited by Al-Monitor in April, the volume of trade between the two countries could climb from $13.7 billion in 2014 to $30 billion within two years if international sanctions against Iran are lifted.

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Read the full article here

Issues:

Turkey