Syrian businesspeople, who have taken refuge in Turkey since the outbreak of the eight-year-old war in their homeland in 2011, have established various enterprises in their new home. Currently, more than 7,200 businesses founded by Syrians operate in various industries including but not limited to textiles, manufacturing, trade, gastronomy, construction, real estate and tourism. But establishing a thriving business has not been a smooth process. Since they are considered "citizens" of a high-risk and sanctioned country, their access to the international financial system to conduct foreign trade by using foreign currency in transactions has been iteratively hampered; some of them shared their stories exclusively with Daily Sabah.

"I established my company in April and tried to open a corporate bank account for my firm in big private banks. Several of them refused to provide banking services for my firm, so I went along with a participation bank. But I would like to work with bigger banks because I want to expand my business," Ahmad Ajaj said on the phone, explaining the troubles he has encountered in his endeavors to access the banking system as a Syrian entrepreneur who took refuge in Turkey after the eight-year ongoing war in his country.


Ahmad Ajaj, the Syrian computer engineer and owner of Emarka, in his office.

A mid-30s computer engineer, Ajaj came to Turkey from Damascus five years ago and worked his way through to get by in a foreign country, home to more than 3.5 million like him. Around eight months ago, he embarked on a venture to launch his startup Emarka, where he and his team provide e-marketing solutions.

Ambitious to expand the overseas operations of his company, Ajaj wants to take advantage of the benefits the Turkish business environment offers him. He stressed that the government is striving to provide all the support for Syrian entrepreneurs like him, but for some, flexible accession to the banking system and making transactions is a challenging business. He cited a couple of instances when the money he expected from customers abroad did not come as the transaction was halted. After these instances, Ajaj said he had to look for other ways to deal with overseas customers.


A falafel restaurant in Aksaray whose owner and staff came to Turkey, escaping the war in Syria. (Photos by Elif Erşen)

The problems Ajaj encounters are not unique among Syrian businesspeople or Syrian refugees around the world. But what makes Ajaj's case particular is that he shares his name with one other person: Ahmad Ajaj, who was convicted of participating in the 1993 World Trade Center bombing and is currently serving a 240-year sentence in a U.S. prison. But why is that so?

Banks around the world use a general watch list including individuals, corporations, and institutions that are sanctioned by the U.S. Treasury, United Nations Security Council (UNSC), the European Union External Action Service and many others for various causes. The primary reason for being sanctioned is by and large terror financing. Therefore, sharing a common name with someone on the list would be a perfect match, a plausible reason to deny access to any banking system for compliance concerns. This, however, still constitutes no justification to block people like Ajaj, the Syrian engineer and businessperson, from accessing the financial ecosystem.

"Banks must run de-risking operations on residents/nationals of high-risk countries or sanctioned countries and take into consideration the work permit and residential status of the individuals who come to open accounts, requesting cross-border transactions or loans," Tahir Cem Berik, a bank veteran and now independent compliance consultant, told Daily Sabah in an exclusive exchange.

"When banks encounter individuals coming from high-risk or sanctioned countries like Syria and Iran, they generally refrain from onboarding the persons in question. So, some of the Syrians who want to set up businesses and integrate well into the Turkish economy may encounter such problems," Berik remarked.

In such cases, he suggested, banks should engage in enhanced due diligence. This process generally includes interviews with the potential customers or obtaining additional documents or detailed information to confirm the legitimacy of the transactions and businesses, he explained.

"In case the customers fail to provide a clear account of his business, banks might decide to decline providing services for them," Berik added.

Officials at the banks must be cleared of all the suspicion because they never want to risk losing correspondent banking relations, which can be very costly for any bank around the world.

Berik's remarks as to the banks' disposition mirror former U.S. Deputy Attorney General Paul McNulty who said, "If you think compliance is expensive, try noncompliance."

A correspondent bank is a bank in one country that is authorized to provide services for another bank or financial institution in a foreign country. The most common services a correspondent bank offers are currency exchange, handling business transactions and trade documentation, and money transfers. For instance, if a bank in the U.S. receives requests to wire money to a bank in Turkey, it cannot do so without a working relationship with the receiving bank. The correspondent bank is a third party used by the sending bank to facilitate international transfers and settlements of funds in the absence of such a relationship.

A rocky road to a thriving business

Escaping the horrors of war and taking refuge in a neighboring country with the hope of starting a new life and new business has sometimes been a rocky road for Syrians as the international sanctions on the Syrian regime did not stop chasing them in their new homes.

Run by two Syrian businesspeople who are now Turkish citizens, the Gaziantep branch of Nosor Baladna, a large manufacturer and trader of various foodstuff, has so far had some difficulties in accessing the banking system via private banks in Turkey. The company's accountant, Murat Gür, told Daily Sabah over the phone that the company was founded five years ago with a capital of TL 5.2 million ($980,000).

"When we first opened an account at a private bank, we were able to make transactions in foreign currencies since we import and export goods, but later our account was closed without any given explanation. We had to start work with a participation bank," Gür claimed.

When asked about the access to credit lines, Gür explained that it is difficult for Syrian businesspeople to get loans since they fail to provide collateral.

"The private banks naturally ask for collateral, which could be a real estate. But even if the owner has real estate, its value does not match the amount of the requested loan," Nosor Baladna's accountant said.

The Gaziantep-based food trading company is, however, entitled to receive a loan via the Credit Guarantee Fund (CGF), a Turkish Treasury-backed credit system that does not ask for collateral as the aim is to support the growth of small- and medium-sized enterprises.

The Gaziantep head of the Syrian Businessmen Association (SİAD), Abdulhamid Fattouh, who is also the general manager of Gaziantep-based Panda Triko, expressed that they have experienced difficulty when they wanted to receive money from customers abroad for exporting products.

Founded five years ago, the textile factory exports goods to several European countries, Arab countries, Russia and Ukraine, Fattouh said. Since the payments for exports are done in foreign currency, the transactions take too long to reach the company's account. These belated transactions, he fretted, disable the timely production of orders and disrupt the smooth flow of operations.

When asked about the reasons for the late transactions, he replied that he has not been informed but assumed that it has something to do with the international money transfer system.

In another phone call with Mohamed Faez Abbadi, a Syrian engineer and entrepreneur running a business in the Aegean province of Aydın with two other fellow Syrians, told Daily Sabah that he had not encountered any problems in receiving money transacted from abroad except for arbitrary lateness.

Running FKF Group, a company that exports dried figs and other dried fruits to Saudi Arabia, United Arab Emirates (UAE) and Iraq, Abbadi said the transfer of foreign exchange transactions on some occasions takes longer than usual, up to 15 days.

The prolonged transactions stem from various possible alerts raised during the transfer process, which are followed by an alert review on the transfer's beneficiary and sender, the compliance experts explained. The work of diligence, during which the transfer is kept on hold, is conducted by compliance analysts at correspondent banks.

An Istanbul-based Syrian businessman Bassam Jeniat owns Sana İnşaat, which was established in 2014 and has grown to include real estate, tourism and food business.

During a visit to his office in Istanbul's industrial zone Başakşehir, he explained that although his company exports products to overseas markets, he does not trade in foreign currency. The payment for the exported goods, he said, generally comes through Turkish branches of his customers.

"It is the same for the goods I bought from abroad. I usually pay suppliers in Turkish lira. As long as we trade in lira, there is no problem," Jeniat said.

In order to expand his business, Jeniat relied on company equity since he already knew that it is nearly impossible for many Syrians to get loans from banks due to lack of enough collateral.

These examples of Syrian entrepreneurs and others spoken with during visits with restaurant and shop owners in the Aksaray neighborhood of Istanbul all share a common financial address. They prefer – or are obliged to prefer – to conduct financial processes with a mid-size bank in Turkey for easy procedures as this bank in question does not have a complex customer onboarding process.

This particular bank, which most of the Syrians deal with, has a list of frequently asked questions on its website. In replies to receiving from and sending money abroad, the bank makes a side note for "Syrian citizens" and states that their cross-border money transfers are subject to the approval of the negotiating bank. "Since the transactions of Syrian citizens are subject to the approval of the negotiating bank, they cannot transfer foreign currency overseas," the bank says on the website.

Despite the fact that the mid-size bank is more lenient toward Syrians, money transactions from and to abroad can still be problematic. This is indeed the general disposition toward any citizen of an internationally sanctioned country riddled with terrorism. Out of fear of losing international reputation and correspondent relations as well as exposure to large sums of punitive fines, banks may remain hesitant with these customers. However, the banks should cooperate both with their international partners and potential customers without causing any impediment to businesses, as Berik underscored.

Turkish agencies, NGOs guiding Syrian entrepreneurs

As much as ensuring social integration, boosting Syrians' participation in economic life has been a primary concern for the refugee policy in Turkey. Since the government was well aware that refugees cannot exclusively rely on social assistance, it passed a regulation in January 2016 to allow Syrian refugees to obtain formal work permits. The legal framework also enabled Syrian refugees to establish businesses in construction, retail, trade, information technologies, real estate and others.

According to the data of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), around 7,200 businesses with Syrian capital were operating in the country by May 2018.

According a recent report by the Economic Policy Research Foundation of Turkey (TEPAV), Syrian entrepreneurs established 151 firms with a capital of TL 34 million in October alone.

According to the information obtained from the Istanbul Chamber of Commerce (İTO), more than 2,000 Syrian businesses are registered at the chamber. Other data provided by the Gaziantep Chamber of Commerce (GTO) revealed that 1,725 businesses established by Syrian entrepreneurs operate in the city. To a general extent, these Syrian enterprises operate in trade, manufacturing, real estate, tourism, textile, and shoe-making sectors.

Silkroad Development Agency Investment Support Office Coordinator Vakkas Koca stressed that the investment support office harnesses all consultancy experience for the Syrian entrepreneurs who resorted to the office. He also noted the instances that he and his team witnessed when dealing with the problems of the Syrian businesspeople.

Speaking of access to loans, Koca said, "They [Syrian businesspeople] have a tendency to think any denial of loans on personalized terms. They claim that the banks see them as potential terror financiers. But accessing to the loan pool has systemic rules. Loan means collateral."

He also underscored that it may be difficult for Syrians to provide collateral for loans.

"The Syrian businesses that import goods from abroad, say China, have to pay their suppliers in dollars or euros. When they tried to make transactions, the international system does not on some occasions approve the requests," an official at the Gaziantep Chamber of Commerce told Daily Sabah, on the condition of anonymity.

As the chamber, the official stressed, he and his team have so far held many meetings with banks.

"Banks also want to solve these money transfer problems of Syrian entrepreneurs, and they want to properly serve their customers. But they are obliged to abide by the international compliance rules and they cannot receive approval from the international system," the official said.

The journey of Syrian businesspeople who started to take refuge in Turkey in 2011, when their country was stricken by the bloody civil war, which later transformed into an international war, has so far been eventful. While some of them have relatively easier access to the financial ecosystem, others have sometimes been denied bank accounts, money transfers in foreign exchange or loans. If they run financials smoothly, they, by and large, restricted themselves into dealing with Turkish lira.

The reason for their troubles, of course, has everything to do with the rules of the global financial system, which requires banks all around the world to be meticulous when serving citizens of certain sanctioned countries that are considered a den of terror groups, sometimes hard to track down.

No one can argue the cruelty of the regimes like the one in Syria or the terror groups that have taken sway over the country, victimizing millions of people. But those people who have to leave their homes behind and want to thrive in a new life in a new country would certainly like to seize the opportunity to start over. At this point, as long as they are ready to cooperate with banks and other relevant local and international parties, they must be given that chance. This, however, means a lot more work and responsibility for bankers and compliance experts.