Turkey, Iran, Oil, Gold

Trade with Iran is one of the underlying themes of the corruption scandal which is engulfing Turkey. Sanctions on Iran led to it being excluded from the SWIFT network in March 2012, making it hard to send payment to Iran. But Turkey wanted to buy Iranian oil. So they figured out a dodge. Oil purchasers would deposit money at Turkey’s Halkbank, now at the centre of investigation. Iran would use this money to buy physical gold, which could be transported to Iran.

The entire deal infuriated the USA and others. While it was an open secret, the practitioners went to some lengths to conceal it — apparently involving Chinese front companies. Still, it’s plainly in the trade statistics:

We see a huge rise from March 2012 — when SWIFT blocked Iran — before a sudden collapse in August that year. The numbers are huge — the peak is over $1.8 billion dollars.

What happened in August 2012? Perhaps it’s linked to Obama’s Executive Order 13622, which brought gold under US national sanctions on Iran. This did not directly affect Turkey, but could have been twinned with similar pressure by American diplomats in Turkey.

What seems to have happened, in part, is another level of indirection. The gold, according to media reports, started being routed through UAE. Here’s how it looks in the trade statistics — a perfect match for the chart above.

[for more detail on this story, you could do worse than look at this report from May]

Why has this open secret turned into a corruption scandal now? Foreign Policy

While the gas-for-gold scheme may have been technically legal before Congress finally shut it down in July, it appears to have exposed the Turkish political elite to a vast Iranian underworld

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