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U.S. to block sale of gold to Iran in sanctions clampdown

Source : Al Arabiya and Reuters | 15 May 2013

The United States is to rigorously enforce a ban on gold sales to Iran from July 1, in a further tightening of sanctions over Tehran's disputed nuclear activities.

David S. Cohen, the U.S. Treasury Department's undersecretary for terrorism and financial intelligence, told lawmakers in testimony there had been an increase in gold sales to Iran in response to the sharp depreciation in Iran's currency, the rial.

The U.S. will enforce "without fear or fail" sanctions starting on July 1 that ban governments or private companies from selling gold to Iran, Cohen said on Wednesday.

The rial has lost two-thirds of its dollar value since late 2011 as a result of Western sanctions targeting the banking system and oil exports over Tehran's disputed nuclear activities, putting many Iranians under financial pressure.

"I can assure you we are looking very carefully at evidence that anyone outside of Iran is selling gold to the government of Iran," Cohen told the House Foreign Affairs Committee in testimony on Iran.

From July 1, the United States will ban the transfer of any precious metals or gold to Iranian state and private institutions, as well as Iranian citizens, as part of its effort to pressure Iran to curb its nuclear program.

Iran denies it is seeking nuclear weapons but has refused, in recent years, to halt its uranium enrichment, a process that can produce fuel for nuclear reactors, or, ultimately, for bombs.

Asked whether he was aware of a rise in gold sales from Turkey to Iran, Cohen acknowledged there was "no question that there is gold going from Turkey to Iran."

He added that "in large measure what we see is Iranian citizens purchasing gold as a way to protect themselves from the decline in value of the rial."

"In some respects this gold trade that we see that is increasing is a reflection of the success of our sanctions in driving down the value of the rial," Cohen said.

He said the United States had made it clear to both governments and the private sector that Washington will "apply our sanctions without fear or fail" against anyone violating the gold ban.

"I can assure you that we are looking very, very carefully at any evidence that anyone outside of Iran is selling gold to the government of Iran," he added.

Gold prices plummeted earlier this year, in the biggest drop seen in 30 years.

Prices fell again this week, closing under $1,400 an ounce for the first time in a month.