A Russian Mil Mi-17 military helicopter flies over a joint Russian-Turkish military patrol convoy in northeastern Syria, November 30, 2020. AFP
A Russian Mil Mi-17 military helicopter flies over a joint Russian-Turkish military patrol convoy in northeastern Syria, November 30, 2020. AFP
A Russian Mil Mi-17 military helicopter flies over a joint Russian-Turkish military patrol convoy in northeastern Syria, November 30, 2020. AFP
A Russian Mil Mi-17 military helicopter flies over a joint Russian-Turkish military patrol convoy in northeastern Syria, November 30, 2020. AFP

US Congress unites over Turkey sanctions legislation


Bryant Harris
  • English
  • Arabic

The US on Thursday moved closer to placing sanctions on Turkey over its purchase of the Russian S-400 missile defence system, with a bipartisan bill that Congress is set to vote on next week.

A Senate summary notes that the legislation “establishes mandatory sanctions on Turkey for its acquisition of the Russian S-400 air missile defence system as required by the Countering America’s Adversaries through Sanctions Act".

Under the original sanctions law, which Congress passed in 2017, the president is required to impose sanctions on any country that engages in a “significant transaction” with the Russian defence sector.

American officials and politicians worry that Turkey’s acquisition and use of the system could allow Russia to spy on US-made military hardware.

Despite immense pressure from both Democrats and some of his closest Republican allies in Congress, President Donald Trump has resisted placing the sanctions on Turkey, even after Ankara tested the system over the Black Sea in October.

In response to Mr Trump’s inaction, the House of Representatives unanimously added an amendment to the defence bill in July further clarifying that the president must put sanctions on Turkey over the S-400 purchase.

But the House legislation also gives Turkey an out by authorising the president to remove the sanctions if Ankara gets rid of the S-400 system.

As the Senate is on board with the Turkey sanctions provision, president-elect Joe Biden will have little choice but to deal with the issue soon after he takes office next month.

Mr Biden could take a leaf out of Mr Trump’s book and ignore the law, at the risk of bipartisan anger in Congress, or apply the sanctions.

Mr Trump has threatened to veto the defence bill unless Congress uses it to repeal a law that provides legal immunity to online companies for content that users posts online.

But both chambers passed their respective versions of the bill with a veto-proof majority: 295 to 125 votes in the House and 86 to 14 in the Senate.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The biog

Hometown: Birchgrove, Sydney Australia
Age: 59
Favourite TV series: Outlander Netflix series
Favourite place in the UAE: Sheikh Zayed Grand Mosque / desert / Louvre Abu Dhabi
Favourite book: Father of our Nation: Collected Quotes of Sheikh Zayed bin Sultan Al Nahyan
Thing you will miss most about the UAE: My friends and family, Formula 1, having Friday's off, desert adventures, and Arabic culture and people