Zarrab is suspected of having helped the Turkish government bypass United States sanctions on Iranian trade by using gold and other non-monetary goods to pay for Iranian gas. American prosecutors say that Zarrab was helped by Zafer Caglayan, then Turkey’s economy minister, and Suleyman Aslan, at the time the chief executive of a state-owned Turkish bank.
Zafer Caglayan, former Turkish economy minister, has been charged by New York prosecutors with taking millions of dollars in bribes by Reza Zarrab.
In 2006, the United Nations Security Council (UNSC) passed a resolution imposing sanctions after Iran refused to suspend its uranium enrichment program. The UN further decided to free the assets of key individuals and companies related to the nuclear program.
Apart from the UN sanctions, the US decided to impose sanctions on Iran as well. These go a long way back since 1979 and cover a variety of purposes related to the country’s internal and external affairs, ranging from weapons proliferation to human rights abuses within Iran to state sponsorship of terrorism and causing instability abroad. They target broad sectors as well as specific individuals and entities, both Iranian nationals and non-nationals who have dealings with sanctioned Iranians. These sanctions have taken a serious toll on Iran’s economy and people.
These sanctions had political effects as well as effects on oil prices and a humanitarian impact. Over the years, the imposed sanctions brought difficulty to Iran’s oil-dominated economy leaving only China as last and largest remaining trading partner.
Pharmaceuticals and medical equipment do not fall under international sanctions, but Iran is facing shortages of drugs for the treatment of 30 illnesses because it is not allowed to use international payment systems. Deliveries of some agricultural products to Iran have also been affected for the same reasons.
All of the above brings us back to one person: Reza Zarrab. Despite the economic sanctions levied against the Islamic Republic, Tehran is still finding some ways to bypass them through money laundering in Turkey. Because all that laundered money was brought back to Iran, they did not feel the sanctions as meant by the ones imposing those. Besides Zarrab, there are still a few other key figures in this case, all of whom knew Turkish president Recep Tayyip Erdogan personally. Former Iranian president Mahmoud Ahmadinejad and one of Iran’s richest men, Babak Zanjani allegedly all cooperated with Zarrab in laundering about 80 billion US dollars in Turkey through Zarrab’s network inside the Turkish government.
Also under investigation is Erdogan’s son, Bilal Erdogan. In 2013 his name surfaced in the massive graft scandal that hit the AKP and senior Turkish government officials. Turkish prosecutors said it involved an alleged money laundering scheme designed to bypass United States-led sanctions on Iran. They ordered the arrest of 52 people in December 2013 and went on to accuse 14 people – including several family members of cabinet ministers – of bribery, corruption, fraud, money laundering and gold smuggling.
That being said, the upcoming trial is scheduled to take place on 27 of November in New York where many expect that at least one or more defendants might still want to plead guilty and cooperate with the US authorities in hope of winning leniency in sentencing. Under such a scenario, there might be avowals with respect to high-ranking Turkish officials and the massive amount of money laundering that let the US sanctions against Iran failed.