VZCZCXRO1314
PP RUEHIK
DE RUEHAH #1428/01 3101414
ZNR UUUUU ZZH
P 061414Z NOV 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3721
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 5866
RUEHBJ/AMEMBASSY BEIJING 3574
RUEHKO/AMEMBASSY TOKYO 3433
RUEHIT/AMCONSUL ISTANBUL 4108
RUCNDT/USMISSION USUN NEW YORK 1241
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 4070
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 001428 
 
STATE FOR SCE/CEN; EEB; NEA/IR 
COMMERCE FOR EHOUSE 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: EFIN EINV ECON EAID PGOV TX
SUBJECT:  THE FEW FOREIGN BANKS IN TURKMENISTAN 
 
ASHGABAT 00001428  001.2 OF 002 
 
 
¶1. (U) Sensitive but Unclassified. Not for Public Internet. 
 
¶2. (SBU) SUMMARY.  Five foreign banks currently operate in 
Turkmenistan: Turkmen-Turkish Bank, National Bank of Pakistan, 
Saderat (Export) Bank of Iran, Deutsche Bank and Commerz Bank 
of Germany.  Besides the two German banks, these banks mostly 
offer simple banking services to local and foreign customers. 
The German banks only offer banking insurance to foreign 
companies.  To date, foreign banks in Turkmenistan are under 
strict national regulation and are often unable to offer 
services and products available in most countries.  If 
Turkmenistan truly intends to portray itself as a player in 
global markets, it must reconsider its current policy toward 
foreign banks.  END SUMMARY. 
 
¶3. (SBU) The Turkmen Central Bank requires any new foreign 
bank to first provide evidence of five million USD in a basic 
capital fund before the bank can be registered by the 
government.  All five foreign banks in the country have 
reportedly met this requirement.  German Deutsche Bank and 
Commerz Bank are category "A" European banks, and both provide 
banking insurance to foreign companies operating in 
Turkmenistan; they do not currently provide traditional 
banking services.  Turkmenistan limits operations of Iranian 
Saderat Bank as a non-compliant bank.  The Saderat branch 
operates despite U.S. warnings of its involvement in providing 
support to terrorist activity. 
 
¶4. (SBU) Recently, foreign banks were allowed to open 
corresponding accounts with non-Turkmen foreign banks 
directly; in the past foreign banks were required to complete 
all overseas transactions through a correspondent account with 
the Turkmen Central Bank operated by Deutsche Bank in Germany. 
Local foreign bank representatives stated this simple change 
has helped foreign banks immensely in Turkmenistan, but 
cautioned that the amount of effort and time required to have 
this one policy implemented does not bode well for future 
policy changes. 
 
TURKMEN-TURKISH BANK 
 
¶5. (SBU) The Turkmen-Turkish Bank is a joint venture 
established in 1993 by the Turkish Zeerat (Agricultural) Bank 
and Turkmen Dayhan (Agricultural) Bank, to facilitate 
bilateral trade between Turkey and Turkmenistan.  According to 
bank representatives, the Turkmen Central Bank appreciates the 
Turkmen-Turkish bank's strict obedience to local banking 
regulations and stressed that the bank operates in a 
"corruption free" environment, with rigorous compliance with 
Turkmen laws.  The bank provides customary banking services 
and opens and holds corporate and private accounts in local 
and hard currency.  The bank also owns and operates several 
currency exchange offices throughout the country.  The bank's 
Turkish General Manager Gurbuz Gunduz added, however, that 
Zeerat bank might try to move independently into the Turkmen 
banking sector in the future. 
 
NATIONAL BANK OF PAKISTAN BRANCH 
 
¶6. (SBU) A branch of the National Bank of Pakistan (NBP) 
opened in Ashgabat in 1996.  Bank officials stated the branch 
meets all local and national regulations in order to provide 
credit to private citizens and businesses, while offering 
foreign and local currency accounts.  Due to the bank's 
relatively long period of operation in Turkmenistan, bank 
representatives boasted that most foreign companies prefer to 
have their accounts in NBP versus any of the other foreign 
banks in Ashgabat. 
 
IRANIAN EXPORT BANK (SADERAT) 
 
ASHGABAT 00001428  002.2 OF 002 
 
 
 
¶7. (SBU) A branch of the Iranian Saderat (Export) Bank of Iran 
opened in 1993.  Saderat Bank's operations are reportedly 
restricted by Turkmen authorities because Saderat did not 
provide the mandatory $5 million basic capital fund. 
Nevertheless, the Bank serves multiple Iranian businesses in 
Turkmenistan.  The Turkmen branch of Saderat Bank currently 
only works with its five branches in Dubai (UAE) and its 
branches in Iran.  Sederat bank representatives acknowledged 
that global sanctions had stymied the Bank's plans for 
expansion. 
 
DEUTSCHE BANK AND COMMERZ BANK 
 
¶8. (SBU) The German banks Deutsche Bank and Commerz Bank both 
began operations in Turkmenistan in 2008.  As the only 
European class "A" banks in Turkmenistan,  Deutsche and 
Commerz offices mostly issue "European class A bank" 
guarantees to the foreign companies working with the Turkmen 
government.  This lucrative activity reportedly earns them 
more than 10% of the secured amounts.  The General Manager of 
the Turkmen-Turkish Bank explained that the German banks 
secure foreign projects with Turkmenistan through collateral 
and deposit accounts. 
 
¶9. (SBU) COMMENT:  Foreign bank representatives were careful 
to describe the Turkmen government's often intrusive banking 
regulations as necessary for combating corruption, while being 
careful not to hint at any criticism of Turkmen government 
policy.  Although the three foreign banks that offer regular 
banking services stated business in Turkmenistan was going 
well, the market does not seem to be attracting additional 
competitors, due to the GOTX's tight control and ability to 
close any bank at any time for virtually any reason.  In 
addition, the existence of few foreign banks in Turkmenistan 
reflects the GOTX's well-known policy of limiting the 
influence of foreign entities on Turkmenistan.  END COMMENT. 
 
CURRAN