Turks Pack Gold in Armored Cars
To Bypass Sanctions on Iran

Turkey would normally pay for 8 million tons of crude oil and 8 billion cubic meters of natural gas imported from Iran by transferring money to the Central Bank of Iran. However, after SWIFT, the world’s leading money transfer company, stopped money transfers to Iran in March, Turkey has been paying for oil imports with gold.

About This Article

Summary : Turkey is driving armored cars packed with gold to the Iranian border to pay for oil and gas shipments, circumventing sanctions that have made the usual method of transferring money to Iran’s central bank impossible, Milliyet reports. Turkish exports to Iran soared in the first five months of the year, new data show. Publisher: Milliyet (Turkey) Original Title: Secret of 60 Tons Gold Sent to Iran First Published: July 8, 2012 Posted on: July 10 2012 Translated by: Timur Goksel Categories : Turkey   Iran

Ufuk Sanli of the daily newspaper Vatan reported that Turkey’s gold exports to Iran peaked in the last three months, reaching 60 tons. It turned out that the secret surrounding this exported gold, which has perplexed world markets, is that Turkey used it to pay for crude oil.

Turkish-Iranian relations are going through their “golden” days. According to data released by the Turkish Statistical Agency [TUIK], Turkey's exports to Iran in the first five months of this year rose significantly, reaching more than $4 billion through May. Turkey's total exports to Iran totaled $3.6 billion for all of 2011. This is not a usual occurrence in Turkish-Iranian trade relations, and it is obvious that something unusual has been taking place. Even more mysterious was the increase in Turkish exports, which was due to its increased demand for gold so that it could pay Iran.

According to calculations by economist Ugur Gurses from TUIK and Central Bank data, Turkey sold Iran $3 billion worth of gold [roughly 58 tons] in the first five months of 2012. Thus far, there has been no explanation from official sources regarding this unprecedented increase in the demand for gold since March. This led us to conduct our own investigations.

SWIFT halted all money transfers to Iran in March, a move that pushed Tehran and countries importing crude oil and natural gas from Iran to search for new ways of making payments.

China, the biggest buyer of Iranian oil, said it will make its payments in Chinese currency. India said it can pay with gold. Japan and South Korea have not said anything, but Turkey, which is Iran’s fifth largest buyer, soon began work on several formulas to overcome the problem.

Turkey imports about 8 million tons of crude oil through the company Tupras, and 8 billion cubic meters of natural gas via the Botas pipeline. It deposits its payments to Iran into an account at the Turkish Halk Bank. These funds were then normally transferred to the Iranian Central Bank in monthly installments. According to what we heard in Ankara, Turkey began to pay for its purchases in gold bullion at the Iranian government's request.

A banker who did not want to be identified said: “The president of the Iranian Central Bank, Mahmoud Bahmani, announced that Tehran was ready to accept national currencies and gold from the importing countries. The Turkish Central Bank doesn’t have a swap deal with the Iranian Central Bank. That rules out payments in local currency, and this is why payments can be made in gold.”

According to statistics from the Energy Market Regulatory Agency, Tupras imported 5.9 million tons of crude oil in the January-April period. Of that total, 58% percent, or 3.5 million tons, came from Iran. Sources from the Turkish Ministry of Energy say that more oil than usual was imported from Iran in March and April. This corresponds to the period in which Turkey’s gold exports soared.

How is the gold sent? Payments for oil and natural gas bought from Iran are held in a Halk Bank account. The bank converts the money into gold and delivers the gold in armored vehicles to Iranian Central Bank officials at the border. Sometimes, the gold is delivered using air cargo shipments.