Iran, Russia Integrate Banking Systems To Bypass Sanctions

Via The Cradle,

A top Iranian official announced this week that Iran and Russia had integrated their interbank communication and transfer systems to help enhance trade and financial operations in an effort to bypass strict economic sanctions on their financial infrastructure.

With the signing of the agreement, 52 Iranian and 106 Russian banks are connected through the Russian Financial Message Transfer System, which will facilitate economic relations between the two countries, said Deputy Governor of the Central Bank of Iran Mohsen Karimi.

“This system is immune to sanctions as it is based on the infrastructures of both countries,” Karimi said, according to Iran’s Mehr news agency.

The global consortium SWIFT, the world leader in secure financial messaging services, excluded Iranian banks from its system following the reimposition of economic sanctions by the United States on Iran in 2018.

As a result of that suspension of services, the Iranian banking system is disconnected from the international one, making banking transactions with other countries difficult. Russia was partially excluded from SWIFT last year due to its invasion of Ukraine.

While economic relations between the two countries have grown to 4 billion in recent years, Tehran has sold drones to Russia, which it has used in its invasion of Ukraine.

Official trips between the two countries have also multiplied in recent months, with Iranian President Ebrahim Raisi visiting Russia in January 2022 and Iranian Foreign Minister Hosein Amir Abdolahian making two trips to the Russian capital in less than a year.

“In today’s world, a country’s status is largely related to its economic power … We need economic growth to maintain our regional and global position,” Iran’s top authority, Supreme Leader Ali Khamenei, said in a televised speech.

Additionally, deputy governor of Iran’s Central Bank, Mohsen Karimi, announced: “Iranian banks no longer need to use SWIFT… with Russian banks, which can be for the opening of Letters of Credit and transfers or warranties.”