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Monday, February 18, 2013

Turkey-Iran gold trade shut down

A new round of US sanctions, which went into effect on February 6, has finally shut down the lucrative oil for gold trade between Turkey and Iran.

A provision of U.S. sanctions, made law last summer and implemented from February 6, effectively tightens control on sales of precious metals to Iran and prevents Halkbank from processing oil payments by other countries back to Tehran, bankers said.
"Halkbank can only accept payments for Turkish oil and gas purchases and Iran is only allowed to buy food, medicine and industrial products with that money," one senior Turkish banker told Reuters.
"The gas for gold trade is very difficult after the second round of sanctions. Iranians cannot just withdraw the cash and buy whatever they want. They have to prove what they are buying ... so gold exports will definitely fall," he said.
Trade in Turkish gold bars to Iran via Dubai was already drying up as banks and dealers declined to buy the bullion to avoid sanctions risks associated with the trade.


Turkish ministers had acknowledged the "gold-for-gas" trade but said it was carried out entirely by the private sector and was not subject to U.S. sanctions.
Turkey, like China, India and Japan, is heavily dependent on imported energy and, while it has cut back on oil from Iran, has made clear it cannot simply stop buying Iranian oil and gas.
"With so many restrictions, Iran's cash may accumulate in Halkbank accounts... they may have difficulty getting some of that money out of Turkey," another senior Turkish banker said.
That could mean Tehran will look elsewhere for allies willing to try to get round the U.S. sanctions, although it may struggle to continue to receive gold as a payment method.

So why weren't these sanctions implemented months ago, before another $6.5 billion of gold (more than ten times the 2011 levels) went to Iran? Because Congress toned down the sanctions to try to avoid an Obama veto. Yeah, he's got our back alright....

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At 5:22 AM, Blogger Nikephoros said...

Thanks for this update. I incorporated it into an article on my blog with a linkback to Israel Matzav:
Turkey, the North Korea of the Mideast blog: Cracks in AKP's El Dorado economy, no gold

I also included info you didn't blog about like news about the revelation of 100,000 homeless in Turkey, a surge in Turks selling their organs due to debt and other economic trouble, all despite the alleged AKP economic boom. It seems with this news that the AKP economic model is deflating.


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