After Turkish lenders, US expects more banks to cut Russian Mir payments

Steps taken by Turkish lenders Işbank and DenizBank to suspend use of Russia’s Mir payments system make a lot of sense, a senior US administration official said on Tuesday, adding that the United States expects other banks to suspend Mir switched off because of the risk of sanctions.

Işbank and DenizBank separately announced on Monday that they had suspended the use of Mir after the United States warned it would target individuals and companies if found to be helping Moscow evade financial sanctions .

Washington last week extended its sanctions to the head of the facility that runs the payment system popular with the tens of thousands of Russian tourists who arrived in Turkiye this year.

The suspension by two of the five Turkish banks that had used Mir reflects their efforts to avoid the financial crossfire between the West and Russia as the Turkish government adopts a balanced diplomatic stance.

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“The steps these banks have taken make a lot of sense. Cutting Mir is one of the best ways to protect a bank from the risk of sanctions stemming from doing business with Russia,” the US official said on condition of anonymity. “We expect more banks to take Mir offline because they don’t want to risk being on the wrong side of coalition sanctions.”

The importance of Mir cards for Russians has increased significantly this year after US payment companies Visa and Mastercard ceased operations in Russia and their Russian-issued cards stopped working abroad.

Besides Türkiye, Cuba, South Korea, Vietnam and a handful of former Soviet republics are accepting Mir, which means both “peace” and “world” in Russian, and others like Iran intend to follow suit soon.

Washington and its allies imposed several sanctions on Moscow, including on Russian banks and President Vladimir Putin, following Russia’s February 24 invasion of Ukraine.

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NATO member Türkiye has close ties with both Moscow and Kyiv, its Black Sea neighbors. She has criticized the invasion of Moscow and provided Ukraine with weapons, including drones, which played a significant role in deterring a Russian advance early in the conflict, while refusing to join the West in imposing sanctions on Russia – an attitude that has helped her efforts to mediate results.

Western nations are increasingly concerned about increased economic ties between Türkiye and Russia, diplomats say, particularly after several meetings between leaders Recep Tayyip Erdoğan and Vladimir Putin, including in Uzbekistan last week.

Last month, the US Treasury Department sent a letter to major Turkish companies warning that they risk penalties if they engage in trade relations with sanctioned Russians.

At the time, Turkey’s Finance Minister Nureddin Nebati described concerns about the letter as “meaningless”. In April, he said that Russian tourists – who are vital to Türkiye’s economy – can easily make payments as the Mir scheme grows among Türkiye’s banks.

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Many Russians have gone to Türkiye since the February invasion left them few other travel options and sanctions cut off their use of major US credit cards.

Although the two private lenders have suspended Mir, it is still operated by state lenders Halkbank, VakifBank and Ziraat.

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