full article: http://edition.cnn.com/2012/11/29/world ... ?hpt=hp_c2
Istanbul (CNN) -- Over the last six months, Iran has evaded U.S. sanctions by importing Turkish gold to pay for billions of dollars worth of energy sales to Turkey.
Turkey's deputy prime minister has described what amounts to a gold-for-oil barter system.
"Why did, all of the sudden, Turkey's gold exports, especially gold bullion, go up?" Ali Babacan asked while speaking before a parliamentary budget commission this month. The official transcript of his statements was published by a Turkish government website Wednesday.
"An important part of that is Iran," he said. "When Turkey buys Iranian oil, we pay for it in Turkish lira. ... However, it is not possible for Iran to take that money as dollars into its own country due to international restrictions, the U.S.A.'s sanctions. Therefore, when Iran cannot take this money back as currency, they withdraw Turkish lira and buy gold from our market. They take the gold back to their own country."
According to Turkish government statistics, Iran has imported billions of dollars worth of gold from Turkey since it was ejected from the SWIFT international electronic banking system in March.
Babacan's rhetorical question and answer resolved suspicions that Turkish economists have had for months, after they noticed an enormous spike in Turkey's gold exports to Iran in April.
"Our gold has always been there, the Iranians never paid any attention to it up until the last year when they were kicked out of the SWIFT banking system," said Atilla Yesilada, an economic analyst with Global Source Turkey.
The Turkish government reported that Iran leapt to first place among Turkey's export markets in April. That month, Turkey exported $1.2 billion in gold to Iran, a 438.2% jump from the previous year.
"Turkey is the big hole, the big gap in the wall of sanctions," Yesilada said.
He was pointing to the U.S.-led campaign to impose an economic blockade on Iran. Many economists say Washington has effectively declared economic war on Iran because of disagreements over its controversial nuclear program. The U.S. accuses Iran of secretly trying to develop nuclear weapons, charges that Tehran has long denied.
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Since the sanctions have been unilaterally imposed by Washington, Turkey is not breaking any international law by trading oil for gold with Iran. But in doing so, the Turks risk incurring the wrath of the U.S. government, an important military and political ally.
