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Feb 12 2019

Maduro ally Erdoğan says Turkish town to process Venezuelan gold

President Recep Tayyip Erdoğan said Turkey will make a small Anatolian town the centre for processing Venezuelan gold in what appeared to be a further challenge to U.S. policy towards the government of President Nicolas Maduro.

“We will take Çorum’s gold trade to the next level,” Erdoğan, a close political ally of the embattled Maduro, told a large crowd of supporters in the town on Tuesday in televised comments. Çorum lies some 600 kilometres east of Istanbul.

Late last month, U.S. Senator Marco Rubio, a member of the Foreign Relations Committee, warned Turkey and the United Arab Emirates not be "accomplices" in the "outrageous crime" of shipping gold out of Venezuela. Ankara says its trade is in compliance with international law.

Maduro, a vocal political adversary of the United States, is under intensifying international pressure to call early elections amid allegations of corruption an economic crisis in the country. Washington and most Western governments have recognised opposition leader Juan Guaido as interim president.

The United States is ready to take action against Turkey if its trade with Venezuela violates sanctions, a senior U.S. official told Reuters in early February before visiting Ankara to discuss the issue with Turkish officials and private firms. Erdoğan has described Maduro as his brother and the two leaders have met frequently in recent years.

Turkey is now considered the main concern among the countries engaging in the gold trade, senior Western diplomatic sources told the BBC on Feb. 2. There was growing suspicion that the gold was ending up in Iran in violation of U.S. sanctions, they said.

Gold imports from Venezuela to Turkey surged to almost $1 billion last year. The gold was allegedly to be refined in Turkey and returned to Venezuela, but there is no record of re-exportation.

Erdogan venezuela Maduro
A street and mosque in the Turkish town of Çorum

Turkey is already at the centre of a scandal involving illicit gold and food trade with Iran. A senior official of state-run Turkish bank Halkbank was convicted by a U.S. court in January last year of complicity in a scheme to evade sanctions on Tehran with the use of fictitious transactions.

Reza Zarrab, a Turkish-Iranian gold trader, turned state’s witness in the trial, which was covered by media across the globe. He claimed the scheme had the approval of the most senior Turkish politicians. Turkey's former economy minister was among a list of trial suspects, but failed to appear for the hearings.

Halkbank is now under investigation by the U.S. Treasury for possible sanctions violations which could result in billions of dollars in fines. Erdoğan has characterised the trial and resulting probe as baseless and designed to undermine his government.

A committee of officials from Venezuela visited Çorum in January to discuss a gold refining deal between Ankara and Caracas.

The group was sent by Maduro to conduct bilateral trade talks, including concerning the refining of thousands of tons of the precious metal, Turkey’s pro-government media reported at the time.

Maduro is accused by his political opponents of mining gold in an illegal and environmentally damaging manner, contaminating pits and running organised crime networks to control small miners. He denies the allegations.