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What to Expect from the New US Turkey-Related Sanctions

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On 14 December, the US imposed sanctions on Turkey’s Presidency of Defense Industries (SSB) pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) over purchase of Russian S-400 surface-to-air missile system.

Presidency of Defense Industries is a key body in Turkey that oversees practically all of the country’s major defense projects. It is also a shareholder in a number of high stake local firms and international joint ventures such as Defence Industry Technologies (SSTEK), Airport Management and Aviation Industries Inc ( HEAŞ), STM Defense Technologies, Kazakhstan Aselsan Engineering.

The good news for Turkey is that Halkbank, suspected in the USA for Money Laundering and Iran sanction evasion has not been targeted by the recent wave of sanctions. Just the next day, the shares of Halkbank in Istanbul Stock Exchange were up by 4.67%.

Much remains to be seen whether this year’s sanctions will have the fate of those of last year that lived roughly ten days, when OFAC imposed sanctions on Turkish government agencies and officials in response to Turkey’s incursion into Syria.

One would expect the situation last until Joe Biden’s new administration takes office and see the trade off against lifting them.