May 12, 2013 | Press Release

Roubini-FDD Report Reveals ‘Golden Loophole’ in Iran Sanctions


Washington, DC — A significant new report released today by the Foundation for Defense of Democracies and Roubini Global Economics provides an in-depth assessment of the “golden loophole” in Iran sanctions laws. According to the Roubini-FDD study, Iran is exploiting sanctions loopholes to obtain gold from Turkey, and other trading partners, and replenish its foreign exchange reserves.  These gold payments provide Iran a needed economic lifeline, weakening the international community’s efforts to convince Iran to give up its nuclear weapons program. 

“Iran’s Golden Loophole,” co-authored by Roubini analysts Gary Clark and Rachel Ziemba, and FDD Iran sanctions expert Mark Dubowitz, outlines how Iran benefits from sanctions relief through gold exports to Iran.  These gold exports increase the regime’s access to hard currency, act as an inflation control mechanism, and contribute to stabilizing the Iranian economy.

While U.S. law prohibits gold exports to Iran, there are loopholes:  An executive order issued by the Obama administration in July 2012 prohibits the export of gold only to government of Iran entities.  The Iran Freedom and Counter Proliferation Act (IFCPA) signed into law by President Obama in January 2013 comprehensively blacklists this gold trade to any entity in Iran but is effective only as of July 1, 2013.

At the negotiations with Iran in Almaty, Kazakhstan in April 2013, the P5+1 reportedly offered Iran concessions including the ability to trade in gold in exchange for reciprocal concessions on Iran’s nuclear program.  While Iran did not accept the proposal, the Obama administration has not sanctioned gold exports to Iran.

This lack of enforcement of existing sanctions has led to a pickup in gold sales. Iran received $1.33 billion in gold in Q1 2013 from Turkey directly, and indirectly through the UAE, reaching similar amounts to Q4 2012 when gold sales were $1.47 billion.

Most of these gold transfers appear to have been made to the Central Bank of Iran, in violation of existing U.S. law, according to the Roubini-FDD report. These gold payments will only increase if the Obama administration does not crack down on the Iranian gold trade.

“Iran already has received over $6 billion in gold payments for its energy exports since the Obama administration prohibited this trade in July 2012,” according to Gary Clark, commodities strategist at Roubini.  We estimate that, unless gold sanctions are enforced, Iran could receive up to $20 billion a year, representing around thirty percent of Iran’s projected 2013 energy exports,” said Clark. Roubini Global Economics is an independent global macroeconomic strategy research firm.

Mark Dubowitz, FDD’s executive director said:  “As Iran continues to defy attempts by the international community to reach a negotiated settlement over its nuclear weapons program, this report provides critical information about our sanctions efforts to date. As long as Iran has sufficient foreign exchange reserves, whether in dollars, euros, or gold, to forestall a more severe economic crisis, Iran’s leaders will be in no mood to compromise.  The ‘golden loophole’ needs to be closed before Iran blows a $20 billion hole through the entire sanctions regime.”

For more information about the report or to speak with one of its co-authors, please contact Madeleine Levey Lambert at [email protected] or 202-403-2941.

Download full report here (PDF).


The Foundation for Defense of Democracies is a Washington-based non-profit, non-partisan policy institute dedicated to promoting pluralism, defending democratic values, and fighting the ideologies that drive terrorism.


Iran Iran Sanctions