Reuters: "Golden loophole" enabled Iran to circumvent Western sanctions regime


Reuters on Tuesday described the emergence and effects of a "golden loophole" in what had been Western efforts to impose sanctions on Iran, with the outlet conveying the contents of a 299-page Turkish police report outlining how Turkish channels were used to implement 'an audacious, multi-billion-dollar scheme involving bribery and suspect food shipments to Iran.' The report specifically quoted the police allegation that a "crime organization" had helped Tehran purchase gold with revenues gained via oil and gas purchases, thereby bypassing efforts by the United States and its allies to among other things limit Iran's access to foreign currency. The slowly unwinding plot - details of the investigation began to leak months ago in the context of a political war between Prime Minister Recep Tayyip Erdogan and political rivals linked to U.S.-based cleric Fethullah Gulen - has rebounded into policy debates regarding the continuing robustness of the international sanctions regime targeting Iran. Western diplomats agreed in the interim Joint Place of Action (JPA) to erode that regime in exchange for a partial Iranian freeze on various parts of its atomic program. Critics were quick to worry that the initial decrease in sanctions would trigger a downward spiral as entities scrambled not to get left behind as Iran reopened its markets to the international community, the upshot being that the West would lack sufficient leverage to convince Iran to put its nuclear program beyond use for weaponization. The Obama administration leaned heavily on the argument that it could sharply control how much revenue Iran received. The Turkish-Iranian gas-for-gold scheme - in which billions of dollars managed to slip through the sanctions net at the height of Western efforts to impose restrictions - has been variously taken as evidence that the Obama administration is either unwilling or unable to rigorously enforce financial restrictions on the Islamic republic.


Israeli daily Yedioth Ahronoth on Wednesday reported on what the outlet described as a "massive show of force" by Hamas in the Ramallah stronghold of the rival Palestinian Fatah faction, a development likely to deepen emerging analyst concerns that a recently announced unity agreement between the two organizations may end up functioning as a lifeline for the Iran-backed terror group. Yedioth described the demonstration as "one of the largest gatherings by Hamas in the West Bank since the two parties came to blows in 2007," and assessed that it would end up "testing" the unity pact. Hamas had until very recently been widely perceived as trapped in an economic and diplomatic spiral, after a series of bad geopolitical gambles - most dramatically its assistance to Egypt's eventually ousted Muslim Brotherhood-linked government - had left it isolated and subject to Egyptian hostility. Cairo subsequently undertook a systematic campaign to destroy the smuggling tunnels between the Hamas-controlled Gaza Strip and the Egypt-controlled Sinai Peninsula, functionally cutting off the Palestinian territory from the outside world. A top Hamas official had last October already described the result as a "death sentence" for the organization. Veteran Israeli journalist Avi Issacharoff assessed Monday that Hamas was aiming to use political concessions in the context of a unity agreement to boost its status and reputation, and that the group had crafted a "sophisticated strategic move involving quite a large gamble, taken with an understanding of the new reality of the Middle East... to win over Palestinian public opinion" and eventually to rise to controlling the West Bank and the Gaza Strip. Turkey and Qatar - two of Hamas's most significant foreign supporters, Iran being the third - hailed the deal. Some analysts had hoped that the organization, coming into unity negotiations from a position of weakness, would be forced to accommodate Fatah's less rejectionist approach to Israel. Statements by top Hamas leaders - Mahmoud Al-Zahar on Tuesday and Khaled Mashaal on Wednesday - were explicit in emphasizing that the group would remain committed to the eradication of Israel.


Egyptian outlets on Tuesday carried reports that Saudi Arabia would - per a writeup in the English-language Egypt Independent - "announce a large aid package to Egypt if former Defense Minister Abdel Fattah al-Sisi wins the elections," a scenario that analysts broadly if not universally anticipate will play out. Saudi officials reportedly indicated that Sisi's mere election would however be inadequate, and that they would only release resources to Cairo if the rest of Egypt's political institutions visibly supported him. The news emerges amid several other moves by the Saudis to bolster both the conventional and potentially nonconventional deterrents of the Arab world in response to what they perceive to be inadequate American concerns over Shiite expansionism. Simon Henderson - the Washington Institute's Baker fellow and the director of its Gulf and Energy Policy Program - outlined on Tuesday how Riyadh's move to include long-range Chinese missiles in a recent military parade was "likely a diplomatic signal to Iran and the United States" of the Kingdom's "determination to counter Tehran's growing strength, as well as its readiness to act independently of the United States." The Saudis have also sought to lead Gulf States in forging military alliances with Jordan and Morocco, which would bring additional troops into the fold of the Gulf Cooperation Council (GCC). Last week Prince Turki al-Faisal, a former intelligence chief and still a top figure in the Kingdom's royal family, suggested that the GCC would have to acquire "nuclear knowhow" to counter Tehran's progress in weaponizing its atomic program. Some observers have criticized the Obama administration for being insufficiently clear in its support for Washington's traditional Arab allies.


A diplomatic spat between Turkey and Germany over the human rights policies of Turkish Prime Minister Recep Tayyip Erdogan's government escalated on Wednesday, as Turkish outlets conveyed critical remarks directed at Erdogan by German President Joachim Gauck regarding the behavior of the ruling Justice and Development Party (AKP). Gauck had had described himself as "horrified" at a range of recent crackdowns conducted by Ankara, from a massive purge of political opponents from the police and judiciary to ongoing calls and efforts aimed at blocking access to Twitter and YouTube to violent anti-demonstrator crackdowns. Erdogan had responded by mocking Gauck's former role as a former East German Lutheran pastor and doubling down on Ankara's policies, which had already generated suggestions from Berlin that Turkey was not yet ready to ascend to the European Union. Gauck responded Wednesday by declaring that he had actually "restrained himself" in offering his true views. Meanwhile U.S. officials piled on at Wednesday's State Department daily press briefing, with Deputy Spokesperson Marie Harf describing conspiracy theories aired by Erdogan - in which the Islamist leader linked the U.S. to unrest in Egypt, Ukraine, and Turkey - as "ridiculous." Independent of controversies regarding human rights and civil liberties, Turkey's defense acquisition policies have also in recent months generated significant tension between Ankara and its traditional allies in Europe. The Turks have since the fall progressively inched forward on a deal that would see them purchase and integrate missile defense assets from China. One top NATO official described putting those systems online as the equivalent of introducing a virus into the alliance's command and control infrastructure. Separately, a speech given last week by Science, Industry and Technology Minister Fikri Isik - in which Isik said that Turkey was bolstering its indigenous production capabilities in order to avoid complications from the Missile Technology Control Regime (MTCR) - triggered concerns in the West that Ankara was seeking to circumvent binding non-proliferation treats.

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