Iran’s ministry of economy and finance is drafting regulation to set up companies for doing barter trade with foreign partners as a way of circumventing U.S. sanctions.
Mahmoud Lahouti a member of Iran’s chamber of commerce board in an interview with Mehr news agency on Tuesday explained that the barter system will preclude the use of the international banking system. When Iran exports oil to a country, the receivable money stays in that country in local currency. Then, Iranian companies that wish to import from that country will receive allowances that will enable them to buy merchandise and ship it to Iran.
A similar system worked intermittently with China and India during the last round of nuclear sanctions, when oil was exported but Iran could only get merchandise, not cash money. At the time, Iranian critics of government policies maintained that bartering partners were selling useless merchandise to Iran.
Iran’s ministry of industry will approve a list of existing companies allowed to engage in the barter trade and also determine with which countries to do the trading. New companies designed for barter trade will also be set up.