Arrest of Turkish banker in US for violating Iran sanctions adds to Turkey-US diplomatic woes

The Turkish government is planning to discuss the recent arrest of banker Mehmet Hakan Atilla in New York when US Secretary of State Rex Tillerson visits the NATO ally later this week.

Foreign Minister Mevlut Cavusoglu told state broadcaster TRT he will also demand a transparent process regarding the banker's arrest when he meets his American counterpart in Ankara.

Hakan Atilla, a deputy general manager of Turkish state bank Halkbank, was arrested upon arrival at JFK airport on 28 March and was charged with conspiring to violate US sanctions against Iran and banking fraud, which respectively carry a 20-year and 30-year maximum sentence.

The banker is accused of conspiring with Turkish-Iranian gold trader Reza Zarrab – between 2010 and 2015 – to illegally transfer hundreds of millions of dollars through American banks on behalf of the Iranian government and other entities in the sanctioned country, Reuters said.

According to a criminal complaint, the banker and the tycoon allegedly faked invoices to process transactions as if they involved food products, which are exempted from the sanctions, instead of the currency and gold supplied to Iran through a Turkish bank.

Zarrab was arrested in Miami in March last year on his way to Disney World with his wife and daughter. He was accused of conspiring to evade US sanctions against Iran, money laundering and bank fraud, facing up to 30 years in prison.

Zarrab, who is facing trial in New York and denies the charges, recently added former NY Mayor Rudolf Giuliani and former federal judge and attorney general Michael B. Mukasey to his legal team. The move that prompted the Manhattan court judge who hears Zarrab's case to demand court papers to explain their precise roles in the defence. According to the New York Times, Giuliani and Mukasey travelled to Turkey in February to meet with Turkish president Recep Tayyip Erdogan to discuss the gold trader's case.

Court papers in Zarrab's case mention a 2013 corruption investigation in Turkey implicating the gold trader, cabinet ministers and members of Erdogan's family which was subsequently dropped. After a visit of then vice-president Joe Biden to Turkey in September, Erdogan told the press he discussed Zarrab's case and added he believed US authorities had "ulterior motives" in their investigation.

The detention of the Turkish national adds to a list of thorny issues on Tillerson's plate, including Turkey's requests for extradition of dissident Fethullah Gülen, who is accused of orchestrating the failed 15 July coup and the fight against Isis in Syria, in which Turkey wants the US to stop supporting Kurdish-led Syrian Defence Forces in liberating the militants stronghold of Raqqa.