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US sanctions hit Turkish textile trade, trigger compliance risk surge

Cotton linters are the short fibres left on cottonseed after ginning. They look ordinary. But at high purity they become the feedstock for nitrocellulose, the propellant inside solid-fuel rockets. Treasury says Emti shipped these linters to Pardisan Rezvan Shargh, an Iranian buyer linked to Parchin Chemical Industries and Iran’s Defence Industries Organisation. Importantly, cotton linters themselves are not on US or EU export-control lists. The legal trigger is the buyer, not the goods. That is the contagion vector. Any Turkish trader that sold to a sanctioned Iranian end-user, even ordinary yarn, fabric or fibre, sits inside the same legal envelope. The Office of Foreign Assets Control’s (OFAC’s) “** Percent Rule” widens the perimeter further: any company that Emti owns ** per cent or more of, alone or jointly, is automatically blocked too.

Turkiye’s textile and clothing sector exported $**.** billion in ****, down *.* per cent year-on-year, according to the Turkish Exporters’ Assembly. Apparel alone fell *.* per cent to $**.** billion. EU buyers are the pressure point. Eurostat data shows that in the first half of ****, EU clothing imports from China rose **.* per cent, from Bangladesh **.* per cent, from Vietnam **.* per cent and from India **.* per cent. Turkiye was the only major supplier whose imports fell, by *.* per cent. According to the Istanbul Textile Exporters’ Association (ITHIB), EU imports of Turkish textile and apparel goods declined *.* per cent in January–May ****. Sector employment has dropped from *.** million at its August **** peak to ***,*** at end-****, which is a ** per cent loss. The lira hit a record low of **.** to the dollar on April **, ****. Turkish industry data showed Iran was Turkiye’s number-one fibre-export destination in ****, sharpening the optics of the Emti case.