Azernews.Az

By Sara Rajabova

Turkish Economy Minister Zafer Caglayan criticized the EU on Friday over Turkey's gold trade with Iran, saying that the sanctions do not concern Turkey, Todays Zaman newspaper reported.

"The EU has decided on sanctions. I'm selling. Another's sanctions don't concern me," he told reporters in Istanbul. Caglayan's words come as the EU steps up pressure on Turkey's "gas for gold" trade with Iran to which Turkey exported over $10 billion in gold over the past year. The deal has helped Tehran bypass the international sanctions and maintained Ankara's critical natural gas and oil shipments from its second-largest energy supplier.

In comments carried by the Anatolia news agency, Caglayan told reporters at a press conference that pressure on Turkey to halt the trade would fall on deaf ears, telling the EU to "go and look after its own firms," rather than pressure Ankara over the gold trade. Earlier this year, the US agreed to exempt Turkey's oil trade with Tehran after Ankara pledged to reduce its imports from Iran, though pressure has since grown to end the trade.

Turkey is heavily dependent on imported energy and is Iran's biggest natural gas customer, buying more than 90 percent of Tehran's gas exports - or about 10 billion cubic meters annually - under a 25-year supply deal. Around 20 percent of Turkey's total natural gas is from Iran, a quantity that analysts say Ankara could not secure from other exporters in the region.

Besides, the Turkish economy minister said that Turkey's gold exports rose nearly 800 percent last year on the back of soaring sales to Iran and the trade will continue, despite tightening U.S. sanctions on Tehran, Reuters reported.

Caglayan noted in the news conference Turkey will remain loyal to all the international agreements that have signed, but will not be bound by other countries' sanctions.

He said Turkish gold exports rose to $12.7 billion in the first eleven months of 2012 compared to the $1.47 billion exported in the whole of the previous year.

Around half of the exports - $6.5 billion worth - went to Iran, while $4.2 billion went to the United Arab Emirates. Turkey exported just $54 million worth of gold to Iran in 2011.

Turkey is Iran's biggest natural gas customer but Western sanctions prevent it from paying Tehran in dollars or euros. Iran is instead paid in Turkish lira - of limited value on international markets but ideal for buying gold in Turkey.

Earlier in November Turkey's Deputy Prime Minister Ali Babacan said that the lira Iran received from Turkey for its gas was being converted into gold because sanctions meant that it could not transfer cash into Iran.

But Caglayan said the gold trade was carried out entirely by the private sector and was not subject to U.S. sanctions.

The U.S. Senate in November approved expanded sanctions on global trade with Iran's energy and shipping sectors and U.S. officials fear the "gold-for-gas" trade is providing a financial lifeline to Iran.

New sanctions are due to take effect in February and could include measures to try to curb the trade.

Turkish officials say they have repeatedly made clear to Washington how dependent their rapidly-growing economy is on imported energy and that it cannot simply stop importing from Iran, its second-largest gas supplier after Russia.

The U.S. claims Tehran is enriching uranium to levels that could be used in nuclear weapons, but Iran denies the allegation, saying its nuclear program is for peaceful purposes.