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Turkish Bank Ziraat Closes Door on Venezuela Amid U.S. Sanctions

Turkish Bank Ziraat Closes Door on Venezuela Amid U.S. Sanctions

(Bloomberg) -- Ziraat Bank, Turkey’s largest bank by assets, has stopped offering services to Venezuela’s Central Bank in wake of tougher U.S. sanctions that raise the stakes for companies that do business with the Caribbean nation.

The Ankara-based state bank confirmed the closing of its account without providing further details. Venezuela’s Central Bank was relying on Ziraat to pay contractors, move money and import products in Turkish liras. A Venezuela Central Bank press official didn’t respond to requests for comment.

U.S. sanctions, which were strengthened this month, threaten institutions that do business with Venezuela with exile from the global financial system. Still, Ziraat’s decision came as a surprise to staff inside Venezuela’s Central Bank, as Turkish President Recep Tayyip Erdogan has repeatedly expressed his support for President Nicolas Maduro and visited the country as recently as December.

Turkish Bank Ziraat Closes Door on Venezuela Amid U.S. Sanctions

The correspondent banking system is used by countries, companies and consumers to send trillions of dollars in payments around the world. In some instances, correspondent banks enhance due diligence when dealing with countries under financial sanctions or flagged as money-laundering risks.

Fearing continued reprisals from sanctions, Venezuela’s government has been considering the possibility of switching to a Russian-operated international payments messaging system as an alternative to SWIFT.

While firms including most big North American and European air carriers have ended service to Venezuela, Turkish Airlines flies to Caracas several times a week.

To contact the reporters on this story: Patricia Laya in Caracas at playa2@bloomberg.net;Cagan Koc in Istanbul at ckoc2@bloomberg.net

To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, ;Walter Brandimarte at wbrandimarte@bloomberg.net, Matthew Malinowski

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