Reza Zarrab Explains Whom He Worked with to By-Pass US Sanctions on Iran

Click to read the article in Turkish / Kurdish

Business person Reza Zarrab has appeared before jury in the case in Federal District Court in Manhattan in which then Deputy General Director Halkbank, which is a largely state-owned bank, Mehmet Hakan Atilla has been tried. Atilla is charged with evading US sanctions on Iran.

Zarrab said that he was born in Iran, has been living in Turkey since 1.5 years old, lived two years in Dubai and is a citizen of Turkey, FYRON (Macedonia) and Iran.

He explained that he is still in FBI custody and doesn’t stay in a hotel.

Pleading guilty and cooperation with the prosecution, Zarrab said “Cooperation was the fastest way to accept responsibility and to get out of jail at once”.

Zarrab came to the witness stand in jail clothes handcuffed at 6:40 p.m. in Turkey local time.

Then Minister of EU Bağış was mentioned

According to Reuters, Zarrab said that then Minister of the European Union (EU) Egemen Bağış helped him open an account at Aktif Bank.

Zarrab explained Bağış’s position in money transfer as follows:

Zarrab: “I tried to open an account in Aktif Bank. My initial attempt failed.”

Prosecutor: “Why?”

Zarrab: “In my initial attempt, Aktif Bank told me that the customers who will do business with Iran need to have a special permission to open an account”.

…

Zarrab: “Aktif Bank was working directly with Iran. They disintermediated me”.

Prosecutor: “Was the major part of your income coming from Aktif Bank?”

Zarrab: “Definitely”.

Zarrab added that then-Minister of EU Egemen Bağış helped with arranging this meeting.

Then Minister of Economy Çağlayan was mentioned

Then-Minister of Economy Zafer Çağlayan was also mentioned in the case.

Zarrab said that he asked for Zafer Çağlayan’s help when he had troubles with the banks.

Stating that Halkbank General Director Süleyman Aslan didn’t want to work with him in gold trade, Zarrab said that he then went to then-Minister of Economy Zafer Çağlayan.

Question: “Why did you go to Zafer Çağlayan after Aslan turned you down?”

Answer: “Because he was the minister of economy of Turkey”.

“I paid Çağlayan 45-50 million Euros in bribe”

Zarrab explained the relation with Çağlayan after he sought his help and said that he bribed Zafer Çağlayan to be able to work with Halkbank.

“I believe I paid Çağlayan 45-50 million Euros in bribe”.

Zarrab noted that this figure is just the one paid in euros and doesn’t involve the other payments he made to Çağlayan.

He also added that Çağlayan wanted to have half of the share of profits in trade with Iran.

Question: In what valuables did Çağlayan receive this paymen?

Answer: In cash, valuable articles and banks transfer.

Question: Was this payment made to Çağlayan’s family as well?

Answer: Yes.

Bank receipt of the payment made to Çağlayan

The prosecutor wanted to present the bank receipt of 2.4 million TL (520 thousand Euros) allegedly paid to Çağlayan’s brother as his share of the profit made through the trade with Iran. Judge Berman allowed the document to be presented despite the defense’s objection.

The document was then included in the case file.

He explained the system by drawing a diagram

After the recess, Zarrab explained how the gold trade works by drawing diagrams.

Daily Beast correspondent Katie Zavadski explained Zarrab's testimony as follows:

"The transaction would primarily begin with Iran selling crude oil and gas to Turkey.

The National Iran Oil Company (NIOC) would make the sale of oil to TÜPRAŞ (Turkish Petroleum Refineries Corporation), and gas to BOTAŞ (Petroleum Pipeline Cooperation). They would owe money to NIOC.

"TÜPRAŞ, BOTAŞ, and NIOC have accounts at Halkbank.

"By moving this money around within Halkbank, we're getting this close to a point where it could leave Halkbank. In fact, one of the methods that was designed is this, bc NIOC would not be able to do this directly.

"These couriers would physically transport the gold to Dubai. But from the customs document that's made in Turkey, the document would show the final destination is Iran, transiting through Dubai.

“The gold would never go to Iran.

"Now we would be at a point where this gold would be sold, and would be converted back into cash.

“Halkbank chief told him for a while Turkish regulations said they had to put Iran as final gold destination”, Pointing finger at Atilla.

“This whole scheme is designed to get Iranian money that's stuck in Halkbank out into the general sphere, so it can be used to pay off debts around the world.

The trial will continue with Zarrab’s testimony today (November 30).

(HK/TK)