Turkey Sanctions: Cold Loss After US Slap – Erdogan’s “Diamond” Strike



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The long-awaited sanctions against you Turkey In retaliation for the decision to buy the Russian S-400 missile system, the United States struck a blow to the Turkish economy and strained relations between Ankara and Washington, just a month before Joe Biden took office.

The sanctions are purely on the military side of the Turkish Defense Industry (SSB) and target key Turkish figures (including Ismail Demir, the Turkish chairman of the country’s defense industry and space program).

According to the sanctions, the presidency of the defense industry in Turkey cannot access:

  • Financing of US and international banks and financial institutions
  • US Export Licenses
  • Your assets are frozen

“The United States has made it clear to Turkey, at the highest possible level and on many occasions, that the purchase of the S-400 system would jeopardize the safety of US military personnel and technology and provide significant capital to the sector. of Russian defense “. “In addition to Russia’s access to the Turkish armed forces and defense industry,” said outgoing Foreign Minister Mike Pompeo, justifying Washington’s decision.

“The sanctions show that the United States will fully implement CAATSA.” “We will not tolerate significant trade with Russia’s defense sector,” he said, but called on Turkey to resolve the S-400 issue immediately in coordination with the United States, calling Ankara a valuable ally and an important regional partner. .

Donald Trump was required to impose sanctions on those who “deliberately engaged” in trade with Russia’s defense and intelligence sectors under the United States Enemy Sanctions Act, but the US president has repeatedly delayed against Turkey.

US lawmakers have increased pressure on Trump, including on a defense budget clause to impose sanctions on Turkey for the purchase of the S-400, a bill passed by the House and Senate last week by a large majority.

The “flourishing” of the defense industry

The sanctions target a key pillar of the Turkish economy, the country’s defense industry. Starting in the 1990s, the neighbor began to implement a strategic development plan to become as autonomous as possible and be able to meet most of the needs of the Turkish Armed Forces, the industry being its “crown diamond”. Erdogan’s regime.

After assuming the post of Prime Minister in 2004, this effort intensified and acquired an export character. It is noted that the main importers of weapons systems from Turkey in 2019, according to the Turkey Exporters Assembly, are the following countries (in millions of dollars): USA (600), Germany (190), Oman (180 ), Qatar (175), United Arab Emirates (100), Netherlands (60), United Kingdom (40), India (40), Poland (30) and France (20).

Turkey’s exports in the period 2015-2019 accounted for 0.8% of world exports, an increase of 80.0% compared to the previous five years (2010-2014), while the long-term plan of the Presidency is at least unrealistic: until 2053 absolute self-sufficiency in arms systems and exports worth $ 50 billion.

In addition, by strengthening the defense industry, Erdogan seeks to save money abroad and boost the growth of the Turkish economy, which is undergoing severe shocks. An important factor is the diplomatic part, where exports of defense equipment are also connected with the effort to influence countries and their integration into Turkish influence.

Between … acquaintances and friends

SSB-as-a-Service controls the entire defense industry in the country and is responsible for more than 600 programs covering a wide range, from aircraft engine development to munitions production.

The service was created in 1985 and was under the umbrella of the Ministry of Defense, but in 2017 it came under the control of President Erdogan, with the aim of modernizing the Turkish Armed Forces. It is led by the aeronaut Ismail Demir since 2014, while the president of the Executive Committee (SSIK), which is the main decision-making body, is the Turkish president himself, with members such as the vice president, YPAM, YPES, YPOIK, AGEETHA and of course, the secretary himself.

It is essentially a group of companies that includes a total of 14 subsidiaries and other collaborating companies.

Three large companies are emerging: Baykar Makina belonging to the family of Erdogan’s son-in-law, Selcuk Bayraktar, BMC belonging to the Ozturk family and Ethem Sancak, a member of the Executive Council of the Justice and Development Party (AKP), and Tumosan belongs to the Albayrak Group. Of these, the most ambitious seems to be BMC, which in 2019 managed to enter the list of the 100 best companies in the world in terms of sales (85th place, with 554.18 million sales).

In the same list, in 2019, there are already four more Turkish defense companies: Aselsan (52nd), Turkish Aerospace Industries (69th), STM Savunma Teknolojileri Muhendislik ve Ticaret AS (85th) and Roketsan AS (89th).

A blow to the Turkish industry

Analysts point to mild sanctions on the Turkish war industry that cannot bring Turkey to its knees, but which do deal a severe blow and at the same time send a negative signal to financial markets about the vulnerability of the fragile Turkish economy.

According to an anonymous source, the sanctions were imposed in order to avoid more serious ones that would affect the Turkish army. The decision could affect NATO’s second-largest army and Turkey’s emerging defense industry, given the SSB’s role as a key hub for Turkish defense supplies and production.

Although the measures are relatively lenient, the US decision to impose sanctions on a NATO member reflects the extent of the tensions between Turkey and its traditional Western allies.

“Now these four people and the organization are in the spotlight,” Arda Mevlutoglu, an Ankara-based defense consultancy, told the Financial Times. “European countries and companies may be reluctant to work with them. This is bad news.”

When asked about the timing of the sanctions, US officials said that because Turkey is a NATO ally, the US had gone through a consultation process before pulling out the sanctions scandal.

“Precisely because Turkey is a NATO ally, and in many ways a very close friend and long-term partner, it took a long time,” said a US State Department official. “It just came to our notice then.” We hope they will allow us to maintain a very good and constructive relationship with our ally, while continuing to send the signal that we cannot accept this behavior. “

In any case, the sanctions add to the already numerous problems, mainly structural, that exist in the Turkish defense industry, which do not allow any positive course despite the vociferous declarations of the Erdogan regime.

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