July 2, 2013 | Quote
New Sanctions Imposed on Iran to Halt Gold Trading
The first American sanctions on Iran since a moderate cleric won the presidential election there on June 14 went into effect on Monday, expanding the number of penalized industries and imposing rules that theoretically could halt all gold and currency trade by the country.
Proponents of the latest round of sanctions said they could deprive the Iranians of billions of dollars of income that had evaded earlier rounds — particularly with the new prohibition on gold trade. Bullion dealers in other countries who flout the prohibition risk severe American penalties, including expulsion from the United States precious metals market.
Iran has increasingly traded its oil and gas for gold with countries like Turkey because of earlier financial sanctions that have prevented the Iranians from using conventional bank payment methods. The Iranian authorities are then able to use the gold to buy dollars and euros needed to purchase other needed imports, or to support the faltering value of Iran’s own currency, the rial.
“This shuts off a major workaround,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington group that advocates tougher sanctions on Iran. “As of today, it’s prohibited for anyone to sell or transfer gold to Iran, at all.”
Others agreed that the gold prohibition would at least create new problems for Iran, which has shown a resilient ability to defy efforts by the United States and the European Union to pressure it economically.