China-Iran Trade Mechanism Bypasses US Sanctions, Worth Billions
A secretive trade mechanism has allowed Iran to buy billions of dollars' worth of goods from China, including military gear, while bypassing US sanctions on its oil sales.
The arrangement, in which Iranian oil is exchanged for credits for Chinese imports, has provided a financial lifeline for Tehran as the US stepped up economic and military pressure over its nuclear program.
Iran's central bank and China's commerce ministry have been involved in managing funds allocated to infrastructure projects and companies that supply goods to Iran through a special purpose vehicle (SPV).
The SPV, which has not previously been reported, is managed by two entities: a firm acting on behalf of China's Ministry of Commerce and one linked to Iran's central bank.
The US has imposed sanctions on some smaller Chinese entities that buy or facilitate shipments of Iranian oil but has stopped short of the most punishing measures that could have repercussions on the global economy.