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Title: Banks continue Turkey gold trade despite Iran link
Source:
Al Arabiya News
URL Source: http://english.alarabiya.net/articles/2013/01/08/259348.html
Published: Jan 9, 2013
Author: Asli Kandemir
Post Date: 2013-01-09 11:39:59 by noone222
Keywords: None
Views: 16
By Asli Kandemir Reuters Banks are continuing to exchange gold in Turkey, despite U.S. pressure over the country’s booming gold-for-gas trade with Tehran, which helps Iran cope with international sanctions, bankers said on Tuesday. Gold exports from Turkey to Iran jumped to $6.5 billion in the first 11 months of 2012 from just $54 million for all of 2011, as the United States tightened sanctions over Iran’s disputed nuclear program. Turkey is Iran’s biggest natural gas customer, but Western sanctions prevent it from paying Tehran in dollars or euros. Iran is instead paid in Turkish lira - of limited value on the international market but ideal for buying gold in Turkey. While the shipments are not in breach of existing Western sanctions, they have helped Tehran to manage its finances despite being largely frozen out of the global banking system. The U.S. State Department said in December that U.S. diplomats were in talks with Ankara over the flow of gold to Iran after the U.S. Senate approved expanded sanctions on global trade with Iran’s energy and shipping sectors in November that would also restrict trade in precious metals. One senior U.S. official said at the time that the new sanctions, which have yet to take effect, would end “Turkey’s game of gold for natural gas.” “We continue our business as usual,” a senior foreign banker said of his bank’s gold trading activities in Turkey, declining to be named because of the sensitivity of the issue. “We’re always careful in transactions if we have doubts about the source of the money or the identity of the customer; however, we have not faced any extra ban with regard to gold transactions,” he said. Washington says Tehran is enriching uranium to levels that could, with further enrichment, be used in nuclear weapons and believes gold sales to Iran have provided a financial lifeline to a government under the choke of sanctions. Iran says its nuclear program is for peaceful purposes. Private deals Turkish Economy Minister Zafer Caglayan said last week that the gold sales to Tehran would continue, saying the trade was carried out entirely by the private sector rather than between states and was not subject to sanctions. Couriers carrying millions of dollars worth of gold bullion in their luggage have been flying from Istanbul to Dubai, where the gold is shipped to Iran, industry sources with knowledge of the business told Reuters last year. Turkish bankers also said the trade with Iran was not being handled through them and that it was business as usual for their gold trading desks. “Iran is not carrying out its gold trade via the Turkish banking system; it is the private sector selling gold to Iran. We do not face any pressure regarding this issue,” said a senior banker from a Turkish bank. Interbank gold trading is not particularly common among Turkish banks, though lenders usually swap dollars for gold as the central bank allows them to keep a portion of their forex reserve requirements in gold. Turkey is heavily dependent on imported energy and is Iran’s biggest natural gas customer, buying more than 90 percent of Tehran's gas exports - about 10 billion cubic meters a year - under a 25-year supply deal. Turkish officials say they have repeatedly made clear to Washington how dependent their rapidly growing economy is on imported energy and that it cannot simply stop importing from Iran, its second-largest gas supplier after Russia. Turkey’s Deputy Prime Minister Ali Babacan said in November that the lira Iran received from Turkey for its gas was being converted into gold because sanctions meant that it could not transfer cash into Iran. Poster Comment: Turkey defies sanctions !
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