Sun, Dec 29, 2013

http://www.ibtimes.com/turkeys-corruption-scandal-exposes-gas-gold-scheme-iran-1521278

Turkey has some major explaining to do in the wake of the recent corruption scandal that exposed the country's continued financial and energy ties with Iran. The arrests last week of the head of a Turkish state-owned bank and a well-known Iranian gold trader for money laundering and gold smuggling raise questions about U.S.-Turkish relations going forward.

Halkbank CEO Suleyman Aslan and Iranian trader Reza Zarrab are key players in the “gas-for-gold” scheme that allowed Tehran to buy gold with Turkish lira in exchange for Iranian natural gas and oil. Western sanctions over Iran's nuclear pogram prevented the country from getting paid in euros or dollars, so Halkbank used the precious metal to get around the restrictions.

Between March 2012 and July 2013, Turkey was able to export approximately $13 billion worth of gold to Tehran, according to Mark Dubowitz of the Foundation for Defense of Democracies.

“It was puzzling that Ankara allowed this to continue: The Turks -- NATO allies who have assured Washington that they oppose Iran's military-nuclear program -- brazenly conducted these massive gold transactions even after the Obama administration tightened sanctions on Iran's precious metals trade in July 2012,” Dubowitz wrote in "Foreign Policy" Thursday.