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Secondary Sanctions Risk for Turkey, China: Sanctions Update

International sanctions targeting banks, companies, and oligarchs have crippled Russia’s economy. But as Russia’s military invasion into Ukraine enters a second month, the United States and other nations may look to impose secondary sanctions on countries that may be serving as a “safe haven” for Russia’s business interests.

Reuters reports Turkey may be the most prominent at-risk country to secondary sanctions. Over 14,000 individuals have fled to Turkey since the war began and the country has announced it will not, for now, impose any sanctions on Russia.

"If the humanitarian tragedy persists and Putin has no intention of backing down, I think secondary sanctions are inevitable," Hakan Akbas, founding partner of Istanbul-based Strategic Advisory Services, which deals with sanctions, said in an interview with Reuters.

"The West will pay more attention to any potential loop-hole countries so they don't become safe havens," he said. "Ankara's hands would be tied... and it would inevitably have to take a tougher stance against Russia."

Turkey has previously been the subject of secondary sanctions. In 2020, the U.S. Treasury applied sanctions on Turkey's Defense Industry Directorate, its chief and others over Ankara's purchase of Russian S-400 missiles. And according to Reuters, last year “international watchdog, the Financial Action Task Force, downgraded Turkey to a so-called grey list for failing to head off money laundering and terrorist financing.”

Meanwhile, on Friday U.S. Treasury Secretary Janet Yellen said on CNBC’s "Squawk Box" that she does not believe it will be necessary to place sanctions on China unless it assists Russia.

“I don’t think that that’s necessary or appropriate at this point. We as senior administration officials are talking privately and quietly with China to make sure that they understand our position,” Yellen said.


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