The agenda pursued by the United States in this case has been consistently different from that of the Turkish authorities with their intermittent investigations. The USA is not interested in uncovering corruption amongst Erdogan's cronies, but in Turkey's undermining of the sanctions against Iran.

Atilla and Zarrab have been charged and convicted with violating the Iran sanctions imposed by the U.S. Congress. Sentencing is scheduled for April. This case is meant to set a precedent. The U.S. justice system has never before brought a criminal case like this one against a businessman from a third country.

Up to now, the USA has in fact been content to take lenient action for any breaches of the Iran embargo. U.S. authorities have for example demanded that foreign banks dismiss certain employees, as in the case of the Commerzbank and HypoVereinsbank. Or people who fell out of favour have been put on a Treasury blacklist, making it impossible for them to take part in international financial transactions, as happened to a German businessman from Bonn.

″The worst deal ever″

The U.S. authorities have imposed fines in the billions of dollars against banks found guilty of circumventing the sanctions. The Halkbank in Turkey can now expect the same.

The hard-line approach taken to Zarrab and Atilla stands in remarkable contrast to the international nuclear agreement with Iran, of which the United States is one of the signatories. On the basis of this agreement, the international sanctions against Iran were relaxed considerably in 2016. It is likely therefore that Zarrab and Atilla thought nothing would happen to them upon entering the USA.

Recep Tayyip Erdogan (photo: picture-alliance/dpa/AP)
Erdogan on the defensive: during the trial, the Turkish-Iranian businessman Reza Zarrab testified that the Turkish president knew about the gold-for-gas dealings with Iran and instructed Vakif and Ziraat banks to get involved. For his part, Erdogan has been outspoken in his criticism of the legal proceedings. The trial is a ″plot against Turkey″ and has ″nothing to do with the law, justice or business″. Ankara called on Zarrab to correct his ″error″

In the United States, however, there is now substantial political resistance to any compromise with Iran. This is not merely the stance taken by President Trump, who never misses an opportunity to refer to the nuclear treaty as the "worst deal ever". Large parts of the military and intelligence establishment as well as many members of Congress likewise oppose the agreement and are calling for tougher economic sanctions against Iran.

This reflex is as old as the revolution against the Shah 40 years ago. And the policy gained additional momentum after 9/11 (which Iran had nothing to do with). In the years after the attacks on New York and Washington, the U.S. administration placed a new emphasis on fighting terrorist financing, a pursuit referred to these days simply as "financial intelligence".

This discipline was soon directed more against Iran than al-Qaida. Starting in 2007, Treasury officials increasingly managed to cut Iranian banks off from international payment transactions. Some observers say that only the pressure of the sanctions caused the Iranian regime to suspend uranium enrichment under the nuclear agreement of 2015.

There may be some truth in that observation. But the problem is the ambivalence of the American policy. The U.S. sanctions are namely aimed not only against Iran's nuclear programme but have another underlying target: the weakening of the Iranian economy as a whole and thus of the regime.

Sanctions logic integral to U.S. policy

"Regime change" is always implied in the logic of the American sanctions policy. Now that economic hardship has in recent weeks driven Iranians out onto the streets proclaiming "Death to the dictator", the endorsers of this logic think they are close to achieving their goal.

The sanctions logic is firmly anchored in U.S. policy on the Middle East. It is also applied to Lebanon. U.S. officials have been threatening since 2016 to cut off Lebanese banks from dollar transactions if they continue to hold accounts for members or sub-organisations of the pro-Iranian Hezbollah. Lebanese Prime Minister Saad al-Hariri, an opponent of Hezbollah, is thus trying to tread cautiously. In this respect, his forced temporary resignation last November has a lot to do with U.S. sanctions policy.

Nowhere are the unwanted side effects of the American sanctions as plain as in Turkey. The U.S. authorities got wind of the Turkish business dealings by the Iranian gold dealer Reza Zarrab back in 2011 and tried hard to persuade their Turkish counterparts to take action against the network.

This triggered fierce tensions in Turkish domestic politics, contributing to the rift between Erdogan and the Gulenists. The Americans surely didn't intend for their policies to anger their long-time ally Erdogan and ultimately cause them to lose him. The trial in New York has shown that Erdogan's turning against the USA is actually an inadvertent consequence of the policy of sanctions against Iran. It is but cold consolation for the USA that it can now score another blow against its newfound enemy Erdogan with maximally aggressive prosecution.

Stefan Buchen

© 2018

The author works as a television journalist for the ARD political magazine "Panorama".

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