Two months after Venezuelan President Nicolas Maduro visited his counterpart Recep Tayyip Erdogan in Ankara, a mysterious company called Sardes sprang into existence.
The firm started business with a bang in January of 2018, when it imported about $41 million worth of gold from Venezuela, the first such transaction between the two countries in records that go back 50 years. The next month its volume more than doubled, with Sardes transporting almost $100 million worth to Turkey.
By November, when President Donald Trump signed an executive order authorizing sanctions on Venezuelan gold -- after sending an envoy to warn Turkey off the trade, Sardes had shuttled $900 million of the precious metal out of the country. Not bad for a company with just $1 million in capital, according to regulatory filings in Istanbul.
It’s not the first time that Turkey has positioned itself as a work-around for countries facing U.S. sanctions, potentially undermining Washington’s efforts to isolate governments it considers hostile or corrupt. Ankara has often tested the boundaries of U.S. tolerance, and the alliance between the key NATO members is now essentially broken, according to two senior U.S. officials.
Shifting Alliances
Long one of America’s most valued partners in a region straddling Europe and the Middle East, Turkey has increasingly found common interests with authoritarian countries such as Russia, China, Iran and Venezuela. When National Assembly leader Juan Guaido declared himself Venezuela’s rightful president last month, the U.S. and many other Western countries rushed to declare their support for him. Turkey aligned itself with those behind Maduro.
It’s unclear what underpins Turkey’s support for Maduro beyond a general opposition to U.S. meddling and efforts to overthrow nominally-democratic governments. Erdogan faced a coup attempt in 2016 and has fashioned himself as a champion of elected leaders everywhere, even where votes were widely considered neither free nor fair. Economic ties between the two nations are barely a factor: Venezuela doesn’t rank among the top 20 trading partners for Turkey, according to data compiled by Bloomberg.
Gold Refining
But that doesn’t mean Erdogan can’t use Turkey’s $850 billion economy, the largest in the Middle East, to help friends in need. While Sardes’s gold corridor appears to have closed in November, there are other avenues. A Sardes spokesperson did not respond to a request for comment.
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