Photo: World Gold Council
It appears that some inside Turkey and Iran are trying to hide a multibillion dollar gold trade between to the two states, according to an exclusive report from Reuters. Apparently, gold traders have been flying the bullion from Turkey to Dubai in their hand luggage and then trading it on to Iran.
Most of the gold has been legally declared in customs. In August, Turkey exported $1.9 billion to the UAE, according to a Reuters analysis of the latest data available from Turkey’s Statistics Office. In July that figure was just $7 million. It is not clear how much of that gold reaches Iran, but experts in Dubai told Reuters they did not notice any “sudden increase” in gold supply in August and they believe almost all went to Tehran.
Turkey’s gold exports to Tehran, which had been “fluctuating between $1.2 billion and about $1.8 billion each month since April,” plummeted to $180 million in August.
Iran appears to be using this method to hide its import of gold from Turkish traders. Sanctions against Iran, mostly stemming from its nuclear ambitions, have isolated it from the global banking industry and have crippled the economy and the value of the Rial. Iranians can use gold, instead of its rapidly declining currency, as a means to transfer their wealth and participate in certain international banking activities that would be prohibited under current sanctions on Iran.
While the trade does not violate sanctions, the Iranians might want to keep the situation under wraps in order avoid attracting the attention from watchful eyes, especially those of the United States and the United Nations. If gold is added to the sanctions list, it would take away key tool which Iran is using to manage its finances.
Business Insider Emails & Alerts
Site highlights each day to your inbox.