The Gold Scandal in Turkey that had been brewing for the past two years finally blew up, revealing – surprise, surprise – Iranian footprints all over the place.
For those who’ve been on vacation, Iran sold oil and natural gas to Turkey for cash payments that were deposited in an account held at Halkbank. In order to circumvent international money-transfer sanctions on Iran, the cash deposits were then allegedly converted into gold that Turkey exported to Tehran, often via Dubai.
The middle man, Riza Saraff (AKA Reza Zarab), an Iranian businessman is reported to have coordinated $120 billion in financial transactions from Iran. In order to do so, he fostered relationships with several ministers and their sons. Sixty politicians and bank officials have been implicated, and three ministers resigned.
In February 2013, new sanctions kicked in to stem the flow of gold from Turkey to Iran – but there was too much at stake, and that’s why the flow of bribes kicked in as well.
Tehran’s Golden Diplomacy
It seems that the gold-gas deals are only the visible parts of the ties between Tehran and Ankarra: Iran is investing heavily in Turkey in the hope that the money flowing into Turkish coffers will strengthen diplomatic relations.
Turns out that Iranian money backed one in six investments in Turkey last year, with 2,072 Iranian firms operating in Turkey as of 2011 (41% leap from the year before).
Why the interest in Turkey? According to an expert,
“Iran views Turkey as a valuable partner for neutralizing the international economic sanctions and reducing her international isolation; and by deepening its economic interdependency with Turkey, Iran is also trying to discourage Turkey from supporting the sanctions”.
So Iranian diplomacy is spotlighted once again in an illegal scheme involving money, corruption and underhanded manipulations. But this time the feeling is definitely mutual. As Vali R. Nasr from John Hopkins recently warned in the New York Times, Turkey “will have to show that it is not simply an advocate for Iran, but has used its influence to shift Iran’s foreign policy and facilitate a permanent nuclear deal.”
Not if Iranian diplomacy can help it.
- Contributing Op-Ed Writer: Iran, Turkey’s New Ally? (nytimes.com)
- Iranian gold stars in Turkish corruption scandal (al-monitor.com)
- Turkey’s Halkbank on US hitlist since 2009 (worldbulletin.net)
- Turkey-Iran gold trade will resume once sanctions eased (yalibnan.com)
- A Look At How Iran Corrupted Turkey To Circumvent Sanctions (warnewsupdates.blogspot.com)