Two seemingly unrelated news stories … or are they?
1. New York Times –Each country [Iran & Argentina] has domestic reasons to reach out to the other. As Argentina’s economic growth slows, it is finding in Iran a robust client for its agricultural commodities, with trade volumes between the two nations surging more than 200 percent over the last five years to more than $1.2 billion. Iran, meanwhile, is seeking to blunt its diplomatic isolation, expanding on the warm ties it has forged with other nations in Latin America, notably Venezuela, Bolivia and Ecuador.
2. Wall Street Journal –Turkey on Friday acknowledged that a surge in its gold exports this year is related to payments for imports of Iranian natural gas, shedding light on Ankara’s role in breaching U.S.-led sanctions against Tehran. The continuing trade deal offers the most striking example of how Iran is using creative ways to sidestep Western sanctions over its disputed nuclear program, which have largely frozen it out of the global banking system … In Turkey, state-run lender Turkiye Halk Bankasi has been responsible for processing the payments, since the U.S. adopted a measure in January to stop dealing with financial institutions working with Iran’s central bank, freezing out private Turkish banks from facilitating payments.
Iran and Argentina have at least one thing in common. As a result of its mishaps in US Circuit Court in New York in the long-running bond default litigation with Elliot Management and Aurelius Capital, Argentina could find itself needing ways to make payments to people (its bondholders who took the restructuring) while bypassing the global payments system. Iran knows how to do that and the Turkey deal shows it can made to work even for multi-billion dollar payments. Could there be some technical information sharing going on between Tehran and Buenos Aires?