The U.S. Treasury Department imposed sanctions yesterday against a Turkey-based company involved in a global corruption and money-laundering network directed by Venezuelan strongman Nicolas Maduro. Turkey’s Islamist President Recep Tayyip Erdogan, who facilitated Iran’s sanctions-evasion schemes at the height of U.S. efforts to thwart Tehran’s nuclear ambitions between 2012 and 2014, has since 2017 also become a key supporter of the Maduro regime, putting Ankara on a crash course with Washington on yet another front.
Treasury’s Office of Foreign Assets Control designated Istanbul-based Mulberry Proje Yatirim for facilitating payments made as part of a “corruption network for the sale of [Venezuelan] gold in Turkey.” Mulberry’s owner is an associate of Colombian national Alex Nain Saab Moran, who has laundered hundreds of millions of dollars for Maduro since 2009 by exploiting Venezuela’s food subsidy program Local Committees for Supply and Production, or CLAP. Treasury also accused Mulberry of purchasing food in Turkey on behalf of Venezuelan clients and marking up prices before selling it back to Venezuela. The department condemned Saab and his associates for “profiting from starvation.”
The designation of a Turkish company as part of Venezuela-related sanctions should come as no surprise. While speaking at a Foundation for Defense of Democracies panel the day before the sanctions were announced, State Department Special Representative for Venezuela Elliott Abrams said, “Venezuela has to go to places willing to trade gold illegally – that’s Turkey and Iran.”
In January, Marshall Billingslea, Treasury’s assistant secretary for terrorist financing, cautioned, “We are looking at the nature of Turkish-Venezuelan commercial activity, and if we assess a violation of our sanctions, we will obviously take action.” His warning came shortly after a visit to Turkey by Tareck El-Aissami, Venezuela’s minister of industries and national production, who is known for his links to Iran and Hezbollah. Treasury sanctioned El-Aissami in 2017 “for playing a significant role in international narcotics trafficking.”
Mulberry is just the tip of the Maduro regime’s illicit network in Turkey. Since 2017, with Erdogan’s encouragement, Venezuelan government associates have established numerous front and shell companies in Turkey. Sardes, an Istanbul-based company with just $1 million in capital, imported $900 million worth of Venezuelan gold in 2018. The Venezuelan government’s gold mining company, Minerven, established a joint gold venture called Mibiturven with the obscure Turkish company Marilyns Proje Yatirim, which shares an address with Mulberry. Similarly, Grupo Iveex Insaat, a tiny Turkish company tied to Maduro that has capital of just $1,775 and no refineries, was responsible for eight percent of Venezuela’s oil exports in April 2019.
Under Erdogan’s rule, Turkey has become a permissive jurisdiction for illicit finance and sanctions evasion. The Turkish president’s solidarity with sanctioned countries such as Venezuela and Iran is part of his overall pivot toward authoritarian and kleptocratic regimes and his challenge to the U.S.-led liberal international order. Unless Washington goes after the remaining elements of the Maduro regime’s network in Turkey, Erdogan will see this inaction as a license for further transgressions involving not only Venezuela but other rogue regimes, as well.
Aykan Erdemir is a former member of the Turkish parliament and a senior fellow at the Foundation for Defense of Democracies, where he also contributes to FDD’s Center on Economic and Financial Power (CEFP). Follow him on Twitter @aykan_erdemir. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.