Turkey PM hopes trader backtracks on sanctions testimony 'mistake'

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Istanbul (AFP)

Turkish Prime Minister Binali Yildirim said Friday he hoped a gold trader would backtrack after testifying against a Turkish banker accused of violating US sanctions against Iran.

"God willing, he will turn back from this mistake," said Yildirim after Turkish-Iranian mogul Reza Zarrab implied in New York testimony Thursday that President Recep Tayyip Erdogan knew how he and defendant Mehmet Hakan Atilla, deputy chief executive of Turkish lender Halkbank, circumvented sanctions on Iran and laundered money from Iranian petroleum sales.

"He says it himself anyway that the easiest way out of prison is to swing the other way," Yildirim said in a speech in Istanbul.

Zarrab, 34, was arrested in March 2016 before agreeing to be a witness for the prosecution in a potentially explosive trial of a Turkish banker accused of violating US sanctions in a multi-million gold-for-oil scheme.

He said on Wednesday that he pleaded guilty in the hope of being released from prison as soon as possible.

Zarrab said he was told that in 2012, Erdogan, prime minister at the time, and then treasury minister Ali Babacan had given "instructions" for two other Turkish public banks, Vakif and Ziraat, to take part in the scheme.

On Wednesday, Zarrab admitted he bribed former economy minister Zafer Caglayan in order to facilitate illegal gold transactions with Iran.

Ankara has repeatedly hit out at the trial being a "conspiracy" against Turkey while Erdogan on Thursday denied Turkey had violated any sanctions.

Yildirim said the trial was "no longer legal" and had become "completely political".

The premier claimed the aim of the trial was to corner Turkey. "The aim is to squeeze Turkey's economy, to put the Turkish economy into difficulty," Yildirim thundered.

Analysts say that if one or more Turkish banks are found guilty of breaching the sanctions and find themselves fined, the Turkish economy could take a hit.

Yildirim again said the US judiciary was being exploited by followers of the US-based preacher Fethullah Gulen who he said wanted to tarnish Turkey and Erdogan's image.

Turkey accuses Gulen, who has lived in self-imposed exile in Pennsylvania since 1999, of masterminding the July 15, 2016 attempted overthrow of Erdogan. He denies the claim.