Saturday 3 December 2016

Frozen-out Turkish businesses flood out of Russia as Syria plane sanctions bite

Alexander Winning

Published 04/04/2016 | 02:30

Vladimir Putin speaks during his end-of-year news conference, with a Turkish flag seen in the foreground, last December. Photo: Reuters
Vladimir Putin speaks during his end-of-year news conference, with a Turkish flag seen in the foreground, last December. Photo: Reuters

Four months after President Vladimir Putin accused Ankara of a "stab in the back", Turkish business executives in Russia are getting used to saying hasty goodbyes.

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"Every week another friend calls to say he's leaving," said one Turkish businessman based in Moscow. "It's become very difficult for Turks to do business here."

The row erupted in November when Turkish military jets shot down a Russian war plane near the Syrian border, and is still weighing on what had been close economic ties.

Putin has imposed sanctions on Turkey and trade between the two countries - which support opposing sides in the five-year Syrian conflict - has taken a dive because of the combined effects of the measures and the collapse in global oil prices.

Expatriate members of the Turkish business community accuse Russian authorities of creating obstacles for their firms that go beyond the measures set out in the official sanctions.

Before the plane was brought down, about 1,500 Turkish firms operated in Russia in businesses ranging from construction and tourism to imports of Turkish fruit, vegetables and textiles.

While no numbers are available, one of the expatriates estimated that around 200 Turkish firms have since left.

Many Turkish executives say they have had difficulties in getting visas, and some have had to rearrange their affairs.

Of four businessmen interviewed in Moscow, two said they had registered their companies in the names of Russian relatives or trusted Russian friends to try to avoid additional checks from police. All said it was difficult to stay as their country was demonised in Russian media. The Komsomolskaya Pravda mass-market tabloid ran a report this month headlined "Turkey never was and never will be a friend of Russia".

Russia's Interior Ministry did not respond to a request for comment. The Economy Ministry said the problems outlined did not fall within its remit.

Ikbal Durre, a Moscow-based commentator on Russian-Turkish affairs, hoped the row would eventually blow over.

"The situation is moving towards stabilisation, just not particularly quickly. The first shockwave has passed," he said.

But the cost has been high. Turkish exports to Russia fell to around $108m (€94.7m) in January, according to the Turkish statistics service, down two-thirds on the previous year. Russian exports to Turkey, mainly of energy, were 30pc lower at $1.3bn (€1.14bn), reflecting weak oil prices.

The sanctions include a ban on Russian firms importing many Turkish foodstuffs as well as cancelling a visa-free regime and restricting Turkish firms from working in certain Russian sectors, including tourism.

Dagir Khasavov, managing partner of Moscow-based legal firm Drakonta, which has Turkish clients, described the current attitude of Russian law enforcement agencies towards Turkish citizens as "hostile".

A Russian employee at a Russian-Turkish business group in Moscow said all joint investment projects had been frozen.

"For the moment there is a lockdown," he said. "Informal contacts continue, but it looks like projects will be frozen for this year at least."

Reuters

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