Graft suspect Zarrab's road to 'export glory' paved by sidestepping Iran sanctions

Reza Zarrab?s road to export glory, recently recognized in a controversial award ceremony, was paved by a series of smart maneuvers designed to sidestep U.S.-led sanctions on Iran.  

The June 21 ceremony to mark Turkey?s ?export champions? saw Zarrab, involved in the huge corruption scandal that embroiled a number of prominent figures in December 2013, receiving an award for the performance of one of his companies from two leading government figures. The company, Volgam G?da, was awarded as ?Turkey?s top jewelry exporter in 2014,? marking a rapid rise for Zarrab whose company did not even feature in the top 1,000 exporters list in the previous year.

According to sources, this ?success? story should be examined in four historical periods. 

Zarrab?s rise began when Western sanctions were imposed on Iran due to the country?s nuclear program. The U.S. granted some exemptions to Turkey, which needs to buy gas and oil from Iran to meet its huge energy demand. 

In line with these exemptions, a bank account was opened in Turkey?s Halkbank in the name of Iran and Turkey was expected to pay for Iranian oil and gas through this account. Iran was also expected to withdraw a pre-defined amount of this money annually. 

Analysts say this system worked very well for a while, but problems arose when other countries, including India, started paying Iran for other items through this account. In short, Halkbank mediated the importation of Iranian oil for Turkish oil refinery Tüpra? and a number of Indian companies, with the permission of several international organizations. The U.S. Senate, however, subsequently issued a ruling that allowed sanctions to be extended to financial institutions that do business with the Iranian Central Bank.