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Russia Tried to Create an Offshore Dollar Reserve in Turkey to Evade Sanctions
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![Vlad Litnarovych]( "Vlad Litnarovych")
In the months following its full-scale invasion of Ukraine, Russia secretly funneled billions of dollars through US banks into Turkey, using a nuclear power plant project as cover to bypass Western sanctions, according to The Wall Street Journal on February 2.
The scheme, which involved JPMorgan Chase and Citigroup as intermediaries, allowed Russia to move more than $5 billion through the US financial system to Turkey in 2022. The funds were officially designated for the Akkuyu nuclear power plant, a long-planned project spearheaded by Russia’s state nuclear conglomerate, Rosatom, and backed by Turkish President Recep Tayyip Erdoğan.
However, US officials believe the money served a dual purpose: financing the nuclear plant while also creating an offshore reserve to fund Russian state initiatives without triggering sanctions restrictions.
While JPMorgan and Citigroup were not targets of the investigation, their involvement in processing the transactions led to scrutiny from US authorities. The Justice Department halted $2 billion of Russian funds at JPMorgan before they could reach Turkey, citing concerns over sanctions evasion, money laundering, and bank fraud.
By 2024, US prosecutors were preparing to seize the frozen funds, but the Biden administration blocked the move, fearing it could strain relations with Turkey—a NATO ally involved in critical diplomatic negotiations, including prisoner swaps and counterterrorism efforts.
After the US and its allies froze Russia’s central bank reserves in early 2022, Russian officials, including Bank of Russia Governor Elvira Nabiullina, arranged a workaround by using Gazprombank to issue a $9 billion loan to Rosatom for the Akkuyu nuclear project.
Since neither Gazprombank nor Rosatom were under direct sanctions, the money could legally flow through JPMorgan and Citigroup to Turkey’s state-owned Ziraat Bank, which then distributed the funds to Russian firms.
For Turkey, the deal boosted its dollar reserves at a time when its economy was under pressure from soaring inflation. The lira was plummeting, and the Turkish government needed to shore up its financial system without raising interest rates.
The Justice Department believes the scheme was orchestrated at the highest levels of the Kremlin, with Turkish intelligence chief İbrahim Kalın—then a close adviser to President Erdoğan—playing a pivotal role in the transactions. Former Turkish finance minister Nureddin Nebati is also reportedly implicated.
Unlike many other NATO members, Turkey did not impose sanctions on Russia following the invasion of Ukraine. Instead, it expanded economic ties with Moscow, even while providing Ukraine with military aid and facilitating diplomatic negotiations.
Rosatom’s Akkuyu project is just one of more than a dozen reactors Russia is financing globally, allowing Moscow to wield influence through nuclear energy investments. These high-cost, long-term infrastructure projects create covert channels for moving large sums of money beyond the direct reach of US sanctions.
Earlier, EU High Representative for Foreign Affairs and Security Policy Kaja Kallas said that The European Union and the United States agreed that ending Russia’s war against Ukraine requires continued pressure on Moscow.
