Turkey and China are helping Iran to evade UN sanctions by providing them with secret banking facilities to purchase goods, according to Western security officials.

In an attempt to escape the effects of the wide-ranging sanctions imposed over Iran´s illegal nuclear programme, Iran´s central bank is using a number of financial institutions in China and Turkey to fund the purchase of vital goods to keep the Iranian economy afloat.

According to Western security officials China, which is Iran´s largest oil trading partner, is playing a major role in helping Iran to avoid the sanctions.

Instead of transferring payments to Iran owed from oil purchases, Chinese banks are using the money to buy goods on behalf of the Iranians and then shipping them to Iran.

"It is like an old-fashioned barter mechanism," explained a senior security official. "The money Iran earns from oil sales goes into banks in China and is then used for Iranian purchases of other goods and materials. It is a very good way of getting round the sanctions." Security officials have also identified a number of financial institutions in Turkey that are helping Iran to evade sanctions.

Turkey, which maintains good diplomatic relations with Tehran, is particularly useful to Tehran because of its close trading ties with Europe.

Investigators claim they have found evidence of Turkish businesses trying to purchase financial institutions in Europe on behalf of Iran which can then be used by Tehran to purchase much-needed goods and materials for its stricken economy.

According to security officials responsible for monitoring the effectiveness of the sanctions, the sanctions-busting operation is being masterminded by Iran´s Revolutionary Guards, who are said to own more than 50 percent of the Iranian economy.

They are taking an increasingly influential role in the running of the Central Bank of Iran, which is itself the subject of international sanctions. "Today the Central Bank of Iran is being run like an intelligence operation," said one investigator.

Iran is particularly keen to have access to banks in Germany, which is one of the world´s leading handlers of euros. U.S. Treasury department officials have identified a number of transactions passing through German banks that appear to have come from Turkey, but in fact are being controlled by Tehran. In addition to the eurozone Iran is also trying to transfer funds through Ukraine and Belorussia.

The visit takes place amid warnings from diplomats based in Vienna, the headquarters of the International Atomic Energy Agency, that Iran may be preparing to expand its nuclear programme to an underground site near the city of Qom, enabling it to speed up the production of enriched uranium, a vital component for nuclear weapons.

Reports said Tehran has put finishing touches for the installation of thousands of new-generation centrifuges at the facility - machines that can produce enriched uranium much more quickly and efficiently than its present machines. (© Copyright of Telegraph Media Group Limited 2012. 02/20/12)