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Bankers: U.S. sanctions killing off Turkey's gold-for-gas trade with Iran
February 15, 2013 - 17:10 AMT
PanARMENIAN.Net - Tighter U.S. sanctions are killing off Turkey's
gold-for-gas trade with Iran and have stopped state-owned lender
Halkbank from processing other nations' energy payments to the OPEC
oil producer, bankers said on Friday, Feb 15, according to Reuters.
U.S. officials have sought to prevent Turkish gold exports, which
indirectly pay Iran for its natural gas, from providing a financial
lifeline to Tehran, largely frozen out of the global banking system by
Western sanctions over its nuclear program.
Turkey, Iran's biggest natural gas customer, has been paying Iran for
its imports with Turkish lira, because sanctions prevent it from
paying in dollars or euros.
Iranians then use those lira, held in Halkbank accounts, to buy gold
in Turkey, and couriers carry bullion worth millions of dollars in
hand luggage to Dubai, where it can be sold for foreign currency or
shipped to Iran.
Halkbank had also been processing a portion of India's payments for Iranian oil.
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.
Turkish Economy Minister Zafer Cağlayan signaled a decline in the
trade last week when he said that, while Turkey would not be swayed by
U.S. pressure to halt gold exports to Iran, Tehran's demand for the
metal was expected to fall.
"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.
"The gold trade may switch to countries that support Iran politically
but Russian banks, for example, would be very cautious because they
are very much in the global banking system," the second banker said.
"China may be another option. But I can say that the gold trade is
over for Turkey."
Turkey, which is not a major gold producer, was a net gold, jewelry
and precious metals importer in 2011 but swung to being a net exporter
last year. Analysts said Iranian demand had prompted both the high
imports two years ago - which were largely sold on to Iran - and the
surge in exports last year.
Gold exports to Iran rose to $6.5 billion in 2012, more than ten times
the level of 2011, while exports to the United Arab Emirates - much of
it for onward shipment to Iran or conversion to hard currency - rose
to $4.6 billion from $280 million.
Overall Turkish bullion exports fell to 10.5 tons in December from
15.2 tons in November.
From: Emil Lazarian | Ararat NewsPress
February 15, 2013 - 17:10 AMT
PanARMENIAN.Net - Tighter U.S. sanctions are killing off Turkey's
gold-for-gas trade with Iran and have stopped state-owned lender
Halkbank from processing other nations' energy payments to the OPEC
oil producer, bankers said on Friday, Feb 15, according to Reuters.
U.S. officials have sought to prevent Turkish gold exports, which
indirectly pay Iran for its natural gas, from providing a financial
lifeline to Tehran, largely frozen out of the global banking system by
Western sanctions over its nuclear program.
Turkey, Iran's biggest natural gas customer, has been paying Iran for
its imports with Turkish lira, because sanctions prevent it from
paying in dollars or euros.
Iranians then use those lira, held in Halkbank accounts, to buy gold
in Turkey, and couriers carry bullion worth millions of dollars in
hand luggage to Dubai, where it can be sold for foreign currency or
shipped to Iran.
Halkbank had also been processing a portion of India's payments for Iranian oil.
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.
Turkish Economy Minister Zafer Cağlayan signaled a decline in the
trade last week when he said that, while Turkey would not be swayed by
U.S. pressure to halt gold exports to Iran, Tehran's demand for the
metal was expected to fall.
"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.
"The gold trade may switch to countries that support Iran politically
but Russian banks, for example, would be very cautious because they
are very much in the global banking system," the second banker said.
"China may be another option. But I can say that the gold trade is
over for Turkey."
Turkey, which is not a major gold producer, was a net gold, jewelry
and precious metals importer in 2011 but swung to being a net exporter
last year. Analysts said Iranian demand had prompted both the high
imports two years ago - which were largely sold on to Iran - and the
surge in exports last year.
Gold exports to Iran rose to $6.5 billion in 2012, more than ten times
the level of 2011, while exports to the United Arab Emirates - much of
it for onward shipment to Iran or conversion to hard currency - rose
to $4.6 billion from $280 million.
Overall Turkish bullion exports fell to 10.5 tons in December from
15.2 tons in November.
From: Emil Lazarian | Ararat NewsPress