Garbage discovery shows Turkey held urgent talks with Moscow over connecting to Russian alternative to SWIFT

By bne IntelliNews August 22, 2019

Russia and Turkey held urgent talks in July on connecting Turkish companies and lenders to the Russian central bank’s alternative to the SWIFT financial messaging system, Bloomberg wrote on August 21.

The two sides reportedly met soon after Ankara risked US sanctions by taking delivery of a Russian S-400 air-defence missile system, despite warnings not to from the Trump administration and Congress. Russia has adapted its financial system in response to international sanctions since it annexed Crimea from Ukraine in 2014.

Russian Deputy Finance Minister Alexei Moiseev confirmed the talks took place after details of the meeting emerged from a government document found dumped in a landfill near Moscow. A picture of the Finance Ministry letter detailing the meeting with Turkish Deputy Finance Minister Bulent Aksu was published on the Telegram channel of Russia’s Baza news service on August 19.

“The feasibility of signing a memorandum at these negotiations was discussed, it was decided that we need to work on it and now we are working on it,” Moiseev told Bloomberg by phone. “Depending on what will be in the memorandum, we will proceed.”

The Bank of Russia established the financial messaging system in 2014 with the aim of “reducing external risks” and shielding Moscow against the threat of being cut off from the global SWIFT service. The idea is to ensure uninterrupted services for transferring messages in SWIFT formats, according to a presentation on the central bank’s website. Russia is in talks about connecting China to the network. The central bank also created Russia’s MIR card and the National Payment Card System to process domestic payments in 2015 in response to sanctions risks.

Officials at the talks in Moscow discussed access for Turkey’s banks to the Russian messaging system, as well as extending MIR’s use to more Turkish lenders, according to the letter. They also held talks on payments in national currencies.

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