China is secretly funneling billions of dollars to Iran through a covert payment system that bypasses US sanctions by swapping oil for infrastructure projects, The Wall Street Journal reported, saying the hidden conduit enabled Tehran to receive up to $8.4 billion last year.
Citing Western officials, the report said the mechanism -- linking state-owned firms, a government insurer, and an unregistered financial intermediary -- has provided a critical lifeline to Iran’s sanctions-hit economy, with state insurer Sinosure and a little-known financial vehicle called “Chuxin” channeling the money to Chinese contractors working in Iran.
Under the system, an Iranian-linked seller books crude sales to a Chinese buyer tied to state trader Zhuhai Zhenrong; the buyer then deposits funds with Chuxin, which pays Chinese firms working on insured projects inside Iran, according to the report.
The crude typically reaches China via ship-to-ship transfers that obscure origin, the officials said.
Beijing’s Foreign Ministry told the WSJ it was “unaware of the arrangement” and “opposes illegal unilateral sanctions.”
Sinosure and Zhuhai Zhenrong did not comment, the paper said, adding neither Sinosure nor Chuxin is under US sanctions.
“Iranian entities rely on shadow banking networks to evade sanctions and move millions,” said John K. Hurley, the US Treasury undersecretary for terrorism and financial intelligence, in a separate statement last month.
Brad Parks of AidData said Sinosure-backed deals typically require that “every creditor and every construction contractor has to come under this umbrella,” likening the Iran setup to documented structures in Iraq.
The conduit has helped sustain Iran’s sanctions-hit economy with US officials estimatingroughly 90% of Iran’s oil exports go to China.
Washington has warned Beijing over such purchases and has tightened measures on the “shadow fleet” moving Iranian crude, the Journal reported.
