Assad deals banking blow to Turkish firms in Syria

The government of Syria has ordered the encashment of bank guarantees given to Turkish firms in the country.

Assad deals banking blow to Turkish firms in Syria

In an apparent attempt to restrain Turkish investments in Syria amid an ongoing feud with Ankara, the government of Syrian President Bashar al-Assad has ordered the encashment of bank guarantees given to Turkish firms in the country, Turkish press have learned.

This will mean that the Syrian government will confiscate funds Turkish companies have deposited in Syrian banks as collateral for operations and investments inside the civil war-torn country.

It also means the termination of all contracts.

The Syrian government cites the fact that Turkish firms were unable to finalize projects – such as construction and energy projects –- as a reason for its order for the encashment of bank guarantees.

Under international laws, encashment of bank guarantees requires a common clause in contracts, referred to as force majeure. The same clause says the contracts can only be terminated in case an extraordinary event or circumstance beyond the control of the investor and the customer prevents one or both parties from fulfilling their obligations under the contract.

Another critical problem is that Syrian parties refuse to pay the Turkish companies for the projects they have successfully finalized in the country. One of them is Turkey's Akfel Mühendislik, an energy and engineering firm.

Akfel says it has not received $3 million in progress payment from the Syrian parties to a deal. The company also faces the encashment of its bank guarantees for investments in Syria. The company says they have contacted the Turkish Economy Ministry for help preventing the Syrian government from collecting their bank guarantees.

The company's representatives fear that if Syria terminates their contract, this will serve as an example for the Assad government to apply the same “injustice” to other Turkish firms. Akfel is calling on the Turkish government to take the issue seriously and address it with urgent measures.

Cihan

Last Mod: 16 Mayıs 2013, 21:08
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