UPDATE 1-U.S. says in talks with Turkey over Iran gas-for-gold
WASHINGTON Dec 4 (Reuters) - U.S. diplomats are in talks with Ankara over the flow of gold from Turkey in exchange for Iranian natural gas, the State Department said on Tuesday.
"We continue, obviously, to consult closely with Turkey - as we do with all the countries - on the scope of U.S. sanctions against Iran," State Department spokesman Mark Toner told reporters at a daily briefing.
"Certainly we would pursue any evidence of potentially sanctionable transactions," Toner said.
Turkey relies on natural gas imports from Iran and has been paying for it using Turkish lira. In turn, Tehran has used the lira to buy Turkish gold. Couriers carry the gold to Dubai and from there, it is then shipped to Iran.
Turkey also imports Iranian oil as Washington has granted it exemptions from sanctions for that trade since Ankara has reduced its purchases.
Whether Washington can enforce sanctions on the gas-for-gold trade is murkier, as the fuel is paid for in lira, not dollars. The currency is of limited value for buying goods on international markets, but is ideal for buying gold within Turkey.
Turkish Energy Minister Taner Yildiz said on Tuesday that purchases of Iranian natural gas are not covered by U.S. sanctions, which would mean Tehran will continue to supply and get paid by its biggest gas customer.
Over the summer, U.S. President Barack Obama issued an order that allows Washington to place sanctions on countries that provide precious metals to Iran, in attempt to close loopholes on the sanctions that target the Islamic Republic's nuclear program.
Washington believes Iran is enriching uranium that could be used in nuclear weapons, but Tehran says the program is intended for civilian purposes.
Last week, the U.S. Senate passed a measure that aims to slow the flow of gold from Turkey into Iran. If passed into law, it would be the third round of sanctions on Iran in a year.
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