U.S. investigates Russia-Turkey nuclear deal amid sanctions evasion concerns – Espreso. Global

The Wall Street Journal reported the information.

A few months after invading Ukraine, Russia made a series of large payments to Turkey, swiftly transferring over $5 billion and promising additional funds to follow.

Russia’s payments for Turkey’s first nuclear power plant, a project supported by Putin and Erdoğan, have caught the attention of Justice Department investigators. The focus is on the involvement of two of America’s leading banks, JPMorgan Chase and Citigroup, in handling the substantial transfers.

“The investigators found that Russia and Turkey used the nuclear project in 2022 to dance around U.S. sanctions imposed on Russia’s central bank, according to people familiar with the matter,” the outlet noted.

In 2024, U.S. prosecutors sought to seize the funds for sanctions evasion, money laundering, and bank fraud, but the Biden administration blocked the move to avoid angering Turkey, a key ally.

A Trump administration official stated that the U.S. will continue reviewing its sanctions and act against those attempting to evade them. The Turkish presidency referred inquiries to the energy ministry, which declined comment. Rosatom, Russia’s state-owned atomic entity, said all funds for the nuclear plant were used to finance the project and pay contractors and other commitments in Turkey, adding that they expect the issue of withheld funds to be resolved.

“The cat-and-mouse game shows the limitations of sanctions as an instrument of economic war, and the trade-offs the U.S. encounters as it tries to defend the financial system against suspected misuse, while juggling delicate diplomatic relations,” the WSJ emphasized.

The Justice Department believes the order to sidestep the sanctions came right from the top in Moscow and that the head of the Bank of Russia played an important role, said the people familiar with the matter.

After the U.S. and allies froze Russia’s currency reserves in February 2022, central bank head Elvira Nabiullina vowed to challenge the move. Privately, the Kremlin instructed the bank and state-backed companies to find ways to use the funds.

Russia and Turkey agreed that unsanctioned Gazprombank, the banking arm of Russia’s state gas company, would lend $9 billion to the nuclear plant being built by Rosatom. However, it was not revealed that the Bank of Russia would secretly fund the loan, and the nuclear project wasn’t its sole purpose.

Unlike other NATO allies, Turkey did not impose sanctions on Russia after the Ukraine invasion. Instead, it strengthened its economic ties with Moscow during a period of financial strain. Throughout the war, Turkey balanced relations, sending weapons to Ukraine and using its Kremlin connections to broker the 2024 release of Wall Street Journal reporter Evan Gershkovich.

After alarms at the Justice Department, U.S. officials froze the next $2 billion destined for Turkey. While they sought to seize the funds, the White House and State Department worried it could harm cooperation with Turkey on key issues like prisoner exchanges, counterterrorism, and regional stability.

Bashar al-Assad’s fall in Syria boosted Erdoğan’s influence in the Middle East, leading to U.S. concerns that Turkey might send forces into territory held by American-backed Kurds. The White House then urged the Justice Department to pause, leaving the Trump administration to decide whether to revive the case.