Wednesday , 24 October 2018

Iranian Officials Revisit ‘Oil For Goods’ Scheme As Way Around U.S. Sanctions

Radiofarda – Following Russia’s lead, EU leaders are exploring the possibility of circumventing U.S. sanctions on Iranian oil sales by trading oil for goods instead of purchasing it, according to Iranian officials.

The deputy chairman of Iran’s Chamber of Commerce, Industries, Mines, and Agriculture, Pedram Soltani, said on July 17 that exchanging oil for goods could be one way of getting around the U.S. sanctions re-imposed after the United States pulled out of the nuclear deal in May.

Such a tactic was employed during Mahmud Ahmadinejad’s presidency, when Iran struggled with international sanctions. Instead of directly paying for Iranian oil, special bank accounts were set up where oil buyers deposited money that could only be used to buy certain commodities.

The chairman of Tehran’s Chamber of Commerce, Yahya Al-e Eshaq, disclosed in 2015, however, that nearly $100 billion of Iran’s assets had been frozen in different countries, including China, India, and Japan, despite the special nature of the accounts.

It is not clear how the same thing would be prevented were the scheme tried again.

Furthermore, Iran’s hesitation to join the International Anti-Money Laundering (AML) and Financial Task Force (FATF) had already begun adding to Tehran’s economic woes weeks ahead of the re-imposition of U.S. sanctions.

Reportedly, banks in China have already tightened restrictions on Iranian clients.

“Chinese financial institutions are apparently adhering more strictly to anti-money laundering regulations and measures to combat terrorism financing set by the intergovernmental FATF, following renewed pressure from the U.S. government,” Soltani wrote on his website.

In a message written on his Telegram channel, he said, “Iranian traders have resorted to their Chinese staff and are establishing new companies in their names and are entrusting their assets to them.”

With accounts blocked, Iran has had to resort to using third countries for payments, and the Chinese government has stopped issuing foreign investment permits.

Iran’s Guardian Council has rejected two bills aiming to pave the way for Tehran to join the United Nations Convention against Transnational Organized Crime (UNTOC).

UNTOC is the UN-sponsored multilateral treaty against transnational organized crime, including money laundering and human trafficking.

Iran, along with Bhutan, Republic of Congo, Palau, Papua New Guinee, Solomon Islands, Somalia, South Sudan, and Tuvalu, is not a signatory to the convention.

On June 20, Supreme Leader Ayatollah Ali Khamenei called the bills unacceptable, saying UNTOC had been “cooked up” by foreign powers and that the parliament should shelve it.

“It is not necessary to join conventions the depths of which we are unaware of,” he said, proposing instead that the parliament create its own laws to combat money laundering and terrorism funding rather than join an international convention.

In the meantime, several MPs, including Alireza Beigi, have cited Deputy Foreign Minister Abbas Araqchi as saying that continuing to shun these international treaties on financial transparency might have a negative impact on European cooperation with Iran. FATF has given Iran until October to implement financial regulations or be blacklisted by the body, a move that would further deter international investors.