Iran Evades Sanctions with Barter-Like Trade Deal with China

Iran has found a way to circumvent US sanctions and continue buying billions of dollars' worth of goods from China, including military equipment. The country uses a barter-like arrangement where Iranian oil is exchanged for credits that can be used to import Chinese goods.

This mechanism has provided a financial lifeline for Tehran as the US stepped up economic and military pressure over its nuclear program. It has also helped China retain access to discounted Iranian oil while shielding banks and companies from international scrutiny or penalties.

The arrangement is one of several mechanisms through which Iran purchases goods and services from China without paying Chinese companies directly through international banking channels. It's estimated that between $2 billion and $2.5 billion flowed through a special purpose vehicle (SPV) over the last year.