Is Turkey Abetting Iran?

Ankara sometimes acts as if it's hardly worried by its neighbor.

David Ignatius of the Washington Post dropped a bomb last month, citing unnamed sources claiming Turkey “disclosed to Iranian intelligence the identities of up to ten Iranians who had been meeting inside Turkey with their Mossad case officers.”

U.S. officials reportedly regarded the exposure as an “unfortunate intelligence loss.” This is an understatement. “Years of Israeli espionage have been undone,” said John Schindler, a former officer at the National Security Agency, noting the impact could be “devastating.”

It’s no secret that Turkey under Prime Minister Recep Tayyip Erdoğan has little love for the Israelis, particularly after the clash between Israeli commandos and Turkish activists seeking to break the blockade of Gaza in 2010. But would a NATO ally abet Iran getting closer to a nuclear weapon just to spite a foe?

Turkey may be more invested in Iran’s advances than previously believed.

In 2012, press reports indicated that Turkey's state-owned bank, Halkbank, was executing “gas-for-gold” transactions with Iran, which helped Tehran circumvent sanctions designed to halt its illicit nuclear program. As Reuters reported, Turkey purchased Iranian natural gas in Turkish lira, and transferred the proceeds to Halkbank accounts. Iranian gold traders then took those funds and bought gold, which was subsequently shipped off to Dubai and sold for cash.

Cash, of course, has been scant for the sanctions-struck Iranians. And gold helped to make up the shortfall.

At the time, Turkey's Deputy Prime Minister Ali Babacan unabashedly admitted, Turkey's "gold exports [to Iran] end up like payments for our natural gas purchases." And there was no reason to hide it: The sale of gold was technically legal, but it was a crafty work-around that was designed to exploit a loophole in the sanctions regime by allowing the Iranians to use private buyers to buy gold on behalf of the government of Iran.

In January 2013, the Obama administration moved to plug this loophole, placing a prohibition on all gold sales to Iran. Inexplicably, the administration did not make the sanctions effective right away. Rather, the prohibition was delayed for six months, effective July 1, 2013, which gave Turkey and Iran one last bite at the apple.

By all accounts, it was a rather big bite, too. According to the Turkish newspaper Hurriyet, Turkey's gold exports to Iran rose twofold in March, totaling some $381 million. Iran's state-owned Press TV reported in April that Turkey and Iran had inked a gold deal worth $120 million. A May report by Foundation for Defense of Democracies and Roubini Global Economics estimates that "Iran's golden loophole" yielded a windfall of $6 billion since July 30, 2012.

Meanwhile, Iran in recent years has established a number of Iranian companies on Turkish soil that help it circumvent sanctions and acquire material for the nuclear program.