Turkey-US relations sour further after NY court convicts Turkish banker in Iran sanctions case

Turkey’s ties with the US were further strained on Thursday after Ankara described a New York court’s decision to convict a Turkish banker over a massive scheme to help Iran evade American sanctions as a "political attack".

Mehmet Hakan Atilla, deputy general manager of state-run Halkbank, was found guilty on Wednesday of five counts of bank fraud and conspiracy to violate US sanctions law.

Atilla, 47, was found to have conspired with a gold trader, Reza Zarrab, and others to help Iran escape sanctions by disguising financial transactions as humanitarian food payments.

Zarrab, a Turkish-Iranian, described a multi-billion dollar scheme that he said was personally authorised by President Recep Tayyip Erdoğan while he was prime minister and involved bribes to other senior Turkish government officials.

He told the court he paid bribes amounting to more than 50m euros (£44m) between 2010-2015 to facilitate deals with Iran.

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The bank has denied any wrongdoing and said its transactions were in line with local and international regulations.

The trial of Atilla, whose testimony also detailed high-level corruption in Turkey, has strained ties between Nato allies Turkey and the US.

Ankara has accused Washington of harbouring the Islamic cleric, Fethullah Gulen, whom it says was behind the 2016 attempted coup.

Bekir Bozdag, Turkey’s deputy prime minister, described the trial as a "political conspiracy" of "no legal value to Turkey."

"Turkey is a full sovereign and fully independent country," he said. "Another country cannot put Turkey’s institutions on trial."

Turkey’s foreign ministry issued a statement saying: "The US court, in a process carried out by relying on so-called ‘evidence’, which is fake and open to political exploitation, … made an unprecedented interference in Turkey’s internal affairs."

Mr Erdogan, who has yet to comment on the decision, has previously dismissed the trial as a politically motivated attack on his government, and has attempted to use it to tap into anti-American sentiment among his supporters.

The court decision is unlikely to damage the president or his government at home, said Wolfango Piccoli of Teneo Intelligence, a London-based consultancy.

"Domestically, I don’t believe it will make any difference at all… The government has managed to cast a huge shadow on it by portraying it as a plot against Turkey and the government," Mr Piccoli said.

"I think it is much more important in terms of the bilateral relations with the United States. This is a relationship that has been difficult for some time."

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