Russia used the construction of a nuclear power plant in Turkey to bypass US sanctions - WSJ.

In 2022, Russia attempted to circumvent US financial sanctions by creating an 'offshore reserve' through the construction of a nuclear power plant in Turkey.

The Wall Street Journal published details of this scheme.

The agreement between Russia and Turkey stipulated that Gazprombank would provide $9 billion in loans for the construction of the nuclear power plant in Turkey, which was implemented by Rosatom. At the same Time, the Bank of Russia secretly financed this loan.

The goal of this scheme was to increase the amount of dollars in Turkey's financial system and create an offshore reserve to finance Russian interests while avoiding US scrutiny.

'According to Moscow's plan, the nuclear station could transfer dollars to Russian companies that also had accounts in Turkey's largest bank, the state-owned Ziraat Bank. This would avoid the need to move money in and out of the US, which could be detected,' WSJ writes.

Initially, the scheme was successful. In the summer of 2022, Gazprombank transferred $3 billion through American Citigroup to the accounts of the nuclear power plant at Ziraat. Another $2 billion passed through JPMorgan.

However, according to WSJ, the US Department of Justice discovered that Russia and Turkey were using the nuclear project to bypass US financial sanctions. This led to the blocking of $2 billion of Russian funds in JPMorgan accounts.

In 2024, the US planned to confiscate this money, considering it proceeds from sanction evasion, money laundering, and bank fraud. However, the US government backed off from these actions to avoid straining relations with Turkey.

Authorities feared that this could worsen cooperation with Erdogan's government on all issues, from prisoner exchanges and counter-terrorism to stabilizing the situation in Syria and ending the war in Gaza. But according to some sources, the Department of Justice also suspected the involvement of one of Erdogan's key aides - intelligence chief Ibrahim Kalin - in the payments in 2022.

This situation highlights the limitations of sanctions as a tool of economic warfare and the need for compromises that the US faces in trying to protect the financial system from abuse while maintaining diplomatic relations.