(Washington, D.C.) — The Turkish Democracy Project (TDP) has called on Deutsche Bank, the international investment giant, to sever its banking relations with Ziraat Bank, notorious for its corrupt activities which in turn reinforce President Erdogan’s autocratic hold on Turkish society.
In February 2022, TDP initiated a campaign calling on international banks to cease their associations with corrupt Turkish financial sector actors. TDP’s research has found that Deutsche Bank is currently negotiating a $1.1 billion loan with Turkey to finance liquified natural gas purchases. Deutsche Bank also has a correspondent account with Turkey’s second largest bank, Ziraat Bank (Ziraat), which facilitates international investments and cross-border transactions in US Dollars and Euros. Having identified the considerable business risks involved in this transaction, TDP sent a letter to Deutsche Bank Germany’s CEO Christian Sewing.
Deutsche Bank has maintained close ties with the Turkish government since Erdogan’s rise to power. In November 2021, German outlet Die Welt reported that Deutsche Bank had closed the accounts of three opponents of Erdogan who were accused of being supporters of the Gülen movement in Germany. The investment giant has also been a key financial ally to Erdogan and agreed to several loans to Turkey worth hundreds of millions of dollars to cover its natural gas bills.
Deutsche Bank’s partner, Ziraat Bank, has also repeatedly made headlines in the last decade for being implicated in a host of illicit activities, especially the notorious multi-year sanction-evasion scheme that enabled the trade of billions of dollars worth of gold from Turkey to Iran. According to gold dealer Reza Zarrab, who was charged with defrauding the United States, money laundering and bank fraud, Erdogan himself directed Ziraat Bank to participate in the illegal scheme. The US Federal Reserve and the German Federal Financial Supervisory Authority (BaFin) have launched a number of investigations into Ziraat due to concerns about suspicious activities involving Iran and an illicit financial network in Turkey as well as loan transactions and irregularities in the bank’s balance sheet.
Last year, the state-owned Turkish Sovereign Wealth Fund, headed by Erdogan, used Ziraat to bury a $1.6 billion non-performing loan that helped purchase Turkey’s largest mobile phone operator, Turkcell, via an offshore company. This purchase solidified Erdogan’s control over telecommunications in Turkey, adding to his growing control of the country with the help of Ziraat.
Commenting on Deutsche Bank’s lack of response, Ambassador Mark Wallace, CEO of the Turkish Democracy Project, said:
“Deutsche Bank’s ties with the Turkish banking and gas sector go directly against its code of conduct and represent another damaging blow to its already tarnished reputation. Erdogan uses state-owned banks and other public sector institutions to consolidate his political and economic power. These institutions aid Erdogan and the AKP in their continued oppression of the Turkish people, their disregard for international law and destruction of the Turkish economy. Deutsche Bank must take responsibility for its actions and sever its ties with Ziraat Bank and the Turkish government.”