Aug 2, 2010

How goods reach Iran despite the sanctions

BBC reports:

"Iran's isolation could mean new opportunities for our border region," says Osman Celik, the deputy chairman of Van Provincial Chamber of Commerce, as he shows off the commemorative plates from his last trip to Iran. "Turkey voted against the UN sanctions, but she's going to have to abide by them. So formally Turkey will probably give the impression to the world that she's abiding by them. But the illegal trading will probably gain some power, and people in the border will find a way to help their Iranian friends."

An Iranian dealer in Istanbul reveals how serious business is done. On the surface, he says, his business is legal. But just 10% of his goods go to Iran legally. "I export strategic equipment, like aeroplane parts, to Iran. Those companies would never sell their goods to Iran - because they have American investors. How do we do it? We buy the equipment under the name of a Turkish company and the paperwork shows the destination is another country. But in fact the load ends up in Iran. We charge them 80% over the market price, but they need it - so they pay."

1 comment:

Cam said...

seems to me that economic sanctions are like capital controls - the goods (or capital) always find a way to get around them. They just get more expensive as someone finds a way to extract some rents at some point in the process.