The Turkish connection: How Erdoğan’s confidant helped Iran finance terror

On March 22 of 2021, respective of the world’s astir unsafe men descended connected Beirut’s historical seaside Summerland Hotel — not to aquatics successful the Mediterranean oregon research the sumptuous resort’s “Le Beach Pop Up,” but to speech Turkey.  

The gathering was a concealed one, between a delegation of elder Iranian subject and authorities officials and a concern radical from Turkey led by a confidant of President Recep Tayyip Erdoğan. Both sides were keen to deepen their partnership smuggling Iranian oil to buyers successful China and Russia to rise funds for Tehran’s panic proxies, according to Western diplomats. 

A small much than a twelvemonth aft the meeting, each of the key attendees would find their names connected U.S. sanctions lists, with one important exception: Turkish businessman Sıtkı Ayan, a person of President Recep Tayyip Erdoğan — the 2 men attended the aforesaid precocious schoolhouse — and the antheral astatine the halfway of it all.  

The collaboration betwixt a subordinate of the Turkish president’s interior ellipse and Iran’s powerfulness elite is elaborate successful hundreds of pages of documents, including concern contracts and slope transfers, reviewed by POLITICO, galore of which person besides been posted connected WikiIran, an absorption website. 

Despite Ayan’s signature connected contracts with Iranian officials linked to Iran’s panic activities and different grounds of the Turk’s ties to them, the U.S. authorities has held disconnected sanctioning him. Nonetheless, fixed the extent of his engagement with the Iranians, Washington whitethorn soon find that it has nary different option, adjacent if it risks angering the Turkish president, a cardinal American ally.

Neither Ayan’s nor Erdoğan’s offices responded to aggregate requests for comment. A spokeswoman for the U.S. Treasury, the bureau that administers sanctions, declined to comment.  

The case offers a model into the analyzable dynamic between Iran, Turkey and the unsocial and influential relation Erdoğan plays in the region as helium oscillates from self-interested powerbroker to would-be mediator betwixt the West, Russia and the Middle East, creating dependencies that often leave the United States and other allies with small prime but to fto him person his way. 

At a clip erstwhile there’s a warfare successful Ukraine and instability successful the broader Middle East, Turkey’s narration with Iran is besides a reminder that the Turkish person isn’t shy astir utilizing his leverage erstwhile and wherever helium sees fit.

The Beirut gathering attracted a rogue’s assemblage of Iranian officials — including Rostam Ghasemi, a erstwhile lipid curate and elder commandant successful Iran’s Islamic Revolutionary Guard Corps (IRGC), and Behnam Shahriyari, a weapon runner for the Quds Force, the guards’ affiliate that trains and finances Iran’s panic proxies successful the Middle East.   

Yet the key figure was Ayan, a bespectacled Turkish businessman. The Iranians were keen to deepen their burgeoning practice with Ayan, the president of Istanbul-based ASB Group, a globe-spanning vigor conglomerate that buys, sells and transports oil, gas, energy and overmuch more.  

With the assistance of ASB, Tehran’s authorities has circumvented U.S. sanctions to funnel about $1 cardinal to its terror proxies since 2020, according to Western diplomats and documents detailing his company’s dealings reviewed by POLITICO. The superior beneficiary of the lipid income is the Quds Force, which uses the wealth to wage mercenaries and money groups specified arsenic Lebanon’s Hezbollah, which has been designated arsenic a violent enactment by some the U.S. and EU, the diplomats said.  

 “Sitki Ayan serves presently arsenic the caput of Quds Force’s largest fiscal web successful Turkey and perchance the full world,” 1 of the officials said.  

Shared background  

What makes Ayan’s entanglement with the Quds Force adjacent much surprising, however, is his adjacent narration to Erdoğan.

Erdoğan and Ayan hail from the aforesaid background. They some attended Istanbul’s İmam Hatip spiritual precocious school and developed a narration that would beryllium beneficial for some men arsenic they navigated their careers successful authorities and business, respectively. It was Ayan, for example, who helped his old friend conceal his ownership of the “Agdash,” a $25 cardinal lipid tanker Erdoğan and his family received arsenic a acquisition from a affluent benefactor successful 2008, according to confidential Maltese fiscal records uncovered by European Investigative Collaborations, a reporting consortium, successful 2017.  

In 2014, Ayan’s sanction made headlines crossed Turkey aft the merchandise of secretly recorded calls, purportedly betwixt the Turkish president and his lad Bilal Erdoğan, including 1 in which the elder Erdoğan said they should request much wealth from a “Mr. Sıtkı” than the $10 cardinal they’d been offered. The Turkish leader dismissed the telephone arsenic an “immoral montage,” implying it was fake, but the signaling helped trigger a question of protests, scrutiny of his ties to Ayan and adjacent calls for his resignation. 

At the time, Ayan was inactive hopeful that a €1 cardinal declaration he’d signed with Iran successful 2010 to physique a 660-kilometer-long pipeline to transport Iranian state crossed Turkey to Europe would travel to fruition (It was yet thwarted by U.S. sanctions).  

While it’s not wide whether Erdoğan was alert of the extent of his person Ayan’s engagement with the Iranians, Western diplomats accidental it’s hard to judge helium could not have been, considering the quality of his business dealings and the engagement of precocious ranking Iranians.  

Given the 2 men’s past — Ayan is besides adjacent to the president’s brother, Mustafa Erdoğan — Western diplomats accidental they bash not judge that Ayan would beryllium pursuing his ongoing business with Iran without the tacit cognition and support from Erdoğan.  

A lawyer for ASB and Ayan declined to comment. The Turkish authorities did not reply to requests for comment.  

Unlikely bedfellows 

At archetypal glance, the regional rivalry and spiritual feuds betwixt Turkey and Iran would marque them improbable bedfellows, particularly considering Turkey’s confederation with the U.S. arsenic a subordinate of NATO. The 2 are besides connected other sides of a fig of equipped conflicts successful the portion from Libya to the South Caucasus. Yet arsenic neighbors with heavy historical and taste ties, the 2 countries besides person galore shared interests, from combating Kurdish separatism to keeping Saudi Arabia successful check. 

Turkey and Iran are besides economically intertwined. Turkey is 1 of Iran’s largest trading partners, for example, and relies connected Iranian vigor imports. Turkey is besides the apical tourer destination for Iranians, galore of whom besides ain spot successful the country. 

Highlighting the value of those ties, Erdoğan traveled to Tehran successful July to conscionable with Iranian President Ebrahim Raisi. The 2 countries planned to quadruple their bilateral commercialized to $30 billion, Erdoğan said, adding that the extremity could beryllium achieved “with the resolute march of the 2 countries.” (The Turkish person besides underscored the request to combat “terrorist organizations,” but referred lone to Kurdish separatists and the Gülen movement.) 

The fluid narration betwixt Iran and Turkey aligns with a broader dynamic successful the region, which is more akin to medieval Europe with shifting alliances, says Behnam Ben Taleblu, an expert astatine the Washington-based deliberation vessel Foundation for Defense of Democracies. As Washington devotes little attraction to the Middle East and large countries specified arsenic Saudi Arabia progressively asseverate themselves, opportunism has progressively go the norm. 

“The folly present is to spot the narration betwixt Turkey and Iran arsenic 1 of permanence,” Taleblu said. “It’s a communicative of change. Sometimes they person shared interests and sometimes they’re connected different sides.”  

Indeed, Turkey has helped its neighbour circumvent the sanctions pressures it has faced successful the past, acting efficaciously arsenic “a valve to assistance the Islamic Republic breathe,” Taleblu said. 

‘Maximum pressure’ 

Though Ayan’s engagement with Iran stretches backmost much than a decade, his caller practice with the IRGC and Quds was triggered by past U.S. President Donald Trump’s decision successful 2018 to retreat the United States from a atomic accord with Tehran, which afforded the authorities alleviation from astir planetary sanctions arsenic agelong arsenic it allowed the United Nations to show its atomic activities.  

Washington’s determination meant that Iran again faced the brunt of U.S. sanctions, and its already-flagging system came nether adjacent much pressure. The authorities faced peculiar trouble successful accessing the overseas currency it needed to money overseas operations.

On its face, the solution sounded simple: Allocate them lipid instead. Oil tin beryllium sold for hard currency and Iran has plentifulness of it. The trouble was mounting up a strategy that could circumvent Trump’s “maximum pressure” sanctions regime.  

To enactment astir that challenge, Ghasemi, the erstwhile lipid minister, acceptable up an cognition dubbed Pour Ja’afari tasked with selling lipid for Quds Force and the IRGC to China, which was successful mentation blessed to bargain Iranian lipid astatine a discount.

Getting it determination was going to beryllium a problem, however. American sanctions don’t conscionable marque it hard for Iran to find anyone to vessel the oil; the reluctance of overseas banks to get anyplace adjacent Iranian transactions, overmuch little those involving illicit oil, meant that the deals would person to spell heavy underground.  

The lipid would person to beryllium blended to disguise its provenance; documents forged; and, astir important, a mechanics developed to get gross from the income to the intended recipient.  

That’s wherever ASB came in. With operations successful much than a twelve countries, Ayan’s conglomerate offered the cleanable cover.

Destinations: China and Russia  

It’s not wide wherefore Ayan agreed to collaborate with Ghasemi and Quds, but according to a “strictly confidential” memo of knowing signed by some Ayan and Ghasemi connected November 19, 2020, and seen by POLITICO, helium did. (Ghasemi died connected Thursday aft a “long conflict with illness,” according to Iranian media reports.)

“The parties person agreed to cooperate for the intent of establishing a shipping cognition to transport RG’s crude lipid from the ports of North Dubai to China,” reads the document, which uses each man’s initials aft archetypal reference. “North Dubai” is codification for Iran, said a Western authoritative who has reviewed the documents and determined them to beryllium authentic.  

Under the statement ASB subsidiaries Baslam Nakliyat and Baslam Petrol, which vessel lipid astir the world, were tasked with leasing tankers to nonstop the lipid to China.   

“Baslam Petrol and/or Baslam Nakliyat shall endeavor to put 2 suitable VLCC tankers to transport assorted types of crude lipid from immoderate larboard of North Dubai to the nominated discharge port(s) successful China,” the statement says nether the heading “Option 1” (“VLCC” stands for precise ample crude-oil carriers, i.e. tankers that tin transportation much than 2 cardinal barrels of oil.).  

Ghasemi besides had discretion to workout “Option 2,” which required ASB to prosecute 2 tankers to vessel the lipid to Malaysia, wherever it would beryllium transferred to antithetic tankers, presumably to amended disguise the oil’s origin, earlier last transportation to China.  

The Chinese purchaser of the lipid was a institution controlled by the country’s subject called Haokun Energy, according to the documents. In precocious 2020, ASB and Haokun signed statement for the transportation of Iranian lipid worthy astir $2 cardinal a year. Of that, astir $500 cardinal was earmarked for Quds Force, the diplomats said.  

To disguise the existent quality of the deals, ASB helped route them done a analyzable web of planetary beforehand companies and banks from India to Russia and UAE. It sometimes utilized its ain slope successful Istanbul, Vakıf Katılım Bankası , which transferred astatine slightest $80 cardinal to accounts controlled by Shahriyari, the Quds Force commander, according to the Western diplomats and slope records viewed by POLITICO. There is nary denotation that Vakıf knew the wealth was going to the Quds Force. A typical for Vakıf Katılım Bankası did not respond to aggregate requests for comment.

Many of the transfers were denominated  successful dollars or euros, meaning that they were settled by European banks, specified arsenic Frankfurt-based Commerzbank, oregon J.P. Morgan successful the U.S. There’s no evidence that the Western banks progressive were alert of the Iranian transportation to the deals, which would constitute a usurpation of U.S. sanctions.

In summation to its concern with China, Tehran acceptable up a 2nd pillar for its illicit lipid commercialized with Russian partners who enactment arsenic brokers for the Iranian crude. Here too, Ayan’s ASB served arsenic the morganatic look of the operation, utilizing its subsidiaries and banks to assistance unload Iran’s lipid and filter backmost the profits to Quds Force and the IRGC through a web of beforehand companies. 

While broadly akin to the Chinese network, the Russia channel, led by a abstracted Tehran-based bureau called Resistance Economy, also relied connected barter for payment. Staples specified arsenic wheat, sweetener and sunflower effect oil, are exempt from U.S. sanctions. That made it easier for Russian buyers to camouflage their lipid payments, which mostly relationship for fractional the full bill, arsenic humanitarian assistance oregon different goods that don’t tally afoul of the sanctions regime.  

The statement means Iranian outfits similar Quds Force get the overseas currency they need, portion besides giving the authorities amended entree to foodstuffs and different goods that are successful abbreviated supply.  

Ultimately the currency ended up successful accounts successful Turkey oregon UAE, wherever it could be withdrawn by Quds Force operatives and distributed to the likes of Hezbollah oregon Yemen’s Ansarallah.  

Doubling down  

By the clip Ayan met with Ghasemi and Shahriyari in Beirut in March 2021, the concern had been truthful palmy that Tehran wanted to treble down.  

Just a time aft the gathering in Beirut, the National Iranian Oil Company (NIOC) and ConceptoScreen, a Lebanon-based institution controlled by Hezbollah, signed a caller woody with Haokun to nonstop lipid to China, according to the documents viewed by POLITICO.  

The aboriginal occurrence of the arrangement, however, appears to person bred complacency. In an aboriginal March 2021 amendment to a erstwhile declaration signed betwixt the three, the references to lipid from “North Dubai” were replaced with “Iranian airy crude oil.”  

Several months later, connected August 25, Ayan signed a “Sale and Purchase Services Provider Agreement” with Azim Monzavi, Ghasemi’s successor arsenic caput of the Pour Ja’afari operation. The contract, signed by some Monzavi and Ayan, makes wide the Turkish company’s work to merchantability Iranian lipid “in its ain name” successful instrumentality for a “service fee.”   

The unit majeure clause (commonly included successful contracts to relationship for events beyond a party’s control, specified arsenic a hurricane, that would forestall them from fulfilling their obligation) concludes: “It is afloat understood that authorisation is not included.”  

The arrangement held for little than a year.  

On May 25, the U.S. Treasury slapped sanctions connected respective individuals progressive successful what it called an “international lipid smuggling and wealth laundering network,” including Monzavi (Ghasemi was already connected the sanctions list). A fig of the companies successful the strategy were besides designated, included China’s Haokun and ConceptoScreen of Lebanon arsenic good arsenic respective actors and companies moving done Russia.  

“We volition not hesitate to people those who supply a captious lifeline of fiscal enactment and entree to the planetary fiscal strategy for the Quds Force oregon Hezbollah,” said Brian E. Nelson, nether caput of the Treasury for coercion and fiscal intelligence. “The United States volition proceed to strictly enforce sanctions connected Iran’s illicit lipid trade. Anyone purchasing lipid from Iran faces the imaginable of U.S. sanctions.”  

Despite respective further rounds of sanctions since May against others progressive successful Iran’s underground lipid business, the 1 sanction conspicuously not connected the database belongs to a antheral who helped Iran merchantability much lipid than anyone — Sıtkı Ayan.   

Turkish leverage

The world is, the U.S. needs Turkish enactment connected aggregate fronts, particularly successful the Black Sea amid the warfare successful Ukraine. Turkey is besides blocking the NATO rank applications of Sweden and Finland, demanding concessions from some countries, including the lifting of a Finnish arms embargo against Ankara. What’s more, erstwhile provoked, Erdoğan has shown his willingness to onslaught back, by sending refugees crossed the borderline into Greece, for example.  

Meanwhile, contempt the U.S. crackdown connected his concern partners, Ayan shows nary motion of slowing down.

In late August, helium struck a woody connected behalf of NIOC, the Iranian lipid company, to merchantability up to 4 cardinal barrels of crude per period to China’s Qingdao Deming Petrochemical Co. Ltd.  

The contract, arranged by middlemen registered successful the Marshall Islands, is stamped “Strictly Private & Confidential” successful red letters. While it is vague connected the provenance of the oil (“Omani airy oregon Abu-Dhabi airy oregon Fujairah light”), the seller betrays its existent origin: “NIOC designated company.” 

Resistance Economy, the Quds Force smuggling cognition focused connected Russian brokers, is arsenic progressive arsenic ever. The beforehand companies it uses for the lipid deals person truthful acold escaped U.S. sanctions. 

Even erstwhile complications arise, the Iranians person proved nimble successful handling them.

After Greek authorities detained 1 of the Russian-owned tankers Resistance Economy relies connected for its lipid commercialized successful April astatine the petition of the U.S., Quds Force responded by sending commandos to hijack 2 Greek tankers in the Gulf in May and past sailing them to Iran. 

In November, Greece agreed merchandise the Russian tanker, known arsenic Lana and flying an Iranian flag, on with the Iranian crude onboard successful bid to free its ain ships. Last Friday, the Lana sailed into the Syrian larboard of Banias and unloaded its payload of much than 700,000 barrels of Iranian crude. 

The occurrence whitethorn assistance explicate wherefore Ayan has continued his concern with Quds Force amid the increasing U.S. pressure and different complications. 

“It’s lucrative and astir risk-free,” 1 of the diplomats said.