Friday, 11 January 2013
Iran Finding Ways to Evade Sanctions, Treasury Department Warns
Despite onerous sanctions that have basically shut Iran out of the global financial system, the country is still finding some ways to bypass them, the Treasury Department said Thursday, describing what it called a small but “emerging threat” to the effectiveness of the sanctions effort.
Adam Szubin, director of the Treasury’s Office of Foreign Assets Control, which supervises American enforcement of the sanctions, said the Iranians were using private exchange houses and trading companies in other countries, masking transactions with fake identities and relying on the paperless practice known as hawala, common in parts of the Middle East and Asia, in which money is transferred informally and often illegally through trustworthy couriers.
On Wednesday, Iran’s Central Bank said the annual inflation rate reached 27.4 percent at the end of 2012, one of the highest rates ever quoted. But private economists say even that figure vastly understates the real inflation rate and fails to fully account for a plunge in the value of Iran’s currency, the rial, which lost about 50 percent of its worth against the dollar in the past year.
Steve H. Hanke, a Johns Hopkins University economics professor and senior fellow at the Cato Institute, a conservative Washington research group, who has been following Iran’s case, said the official inflation rate reflected what he called the Central Bank’s “habit of failing to release useful economic data, and what it does release often has what I would describe as an ‘Alice in Wonderland’ quality.”
By Mr. Hanke’s calculations, Iran’s inflation rate last year was 110 percent.
Posted by Nicolaas Smith at 12:55