Turkey uneasy with mushrooming Iranian firms, fears clash with allies

[RayKalm]

The rapid increase of Iranian-funded foreign companies in Turkey at an unprecedented rate has raised alarm bells for Turkish authorities, who suspect some of these may be front companies set up to circumvent UN-sponsored sanctions.
Turkey is also concerned that some of the activities of Iranian companies may risk an unwanted confrontation between Ankara and its Western allies because of what is considered a violation of the US and EU-imposed unilateral sanctions, albeit not running afoul of UN Security Council resolutions.

“We are carefully watching the operations of these [Iranian-funded] foreign companies to see if they are in breach of Turkish law as well as international laws to which Turkey is a party,” one government official told Sunday’s Zaman. The official spoke under the customary condition of anonymity because of the sensitivity of the issue on the bilateral relations between the two countries. “We won’t allow any of these companies to jeopardize our national interests,” he added.

According to the Turkish Union of Chambers and Commodity Exchanges (TOBB), foreign companies financed by Iran in 2011 totaled 590, an increase of 41 percent compared to the previous year. That puts Iran on the top of the chart of new foreign companies established in 2011 not only in nominal numbers but percentage-wise as well. As of Dec. 31, 2011, the number of companies funded by Iran totaled 2,140, with a quarter having launched operation in the last year alone.

TOBB also reported for January 2012 that Iran topped the list for a month with 63 new companies, all limited company types with the exception of one. This is not commensurate with the level of current trade volume Iran maintains with Turkey. As of last year, the trade volume recorded $16 billion, mostly from Iranian natural gas and oil proceeds. Turkey imports some 30 percent of its oil needs from Iran, or 200,000 barrels per day, which represents over 7 percent of Iranian oil exports. Iran also meets one-third of Turkey’s natural gas demand as well. In contrast, Germany, Turkey’s largest commercial partner with $37 billion in non-energy trade, had only 36 companies established in January 2012. “It is obvious that some of these companies were established to procure goods and merchandise for the Iranian economy in clear violation of the sanctions.

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