Iran and Russia Unite Banking Systems to Thwart Western Sanctions

In an effort to fortify their economic ties and sidestep western sanctions, Iran and Russia have linked their banking systems. This enables transfers between the two nations to occur without relying on the Belgian-based Swift payment system, which typically uses the US as an intermediary. The deputy governor of Iran's central bank, Mohsen Karimi, confirmed that Iranian banks will no longer have to use Swift with Russian banks for opening letters of credit, transfers, or warranties. Iran has been banned from Swift since 2018 when the US reinstated sanctions after Iran withdrew from the Iran nuclear deal. Russia's banks faced similar restrictions following their invasion of Ukraine.

To avoid western interference, the two countries are also developing a new trade route spanning almost 2,000 miles from eastern Europe to the Indian Ocean. Iran's economy has been severely impacted by the recent intensification of sanctions, which were imposed in response to its crackdown on protests and arms supplies to Russia.

The chairman of the Russian parliament's lower house, Vyacheslav Volodin, recently visited Tehran, following a series of talks between Iranian President Ebrahim Raisi and Russian President Vladimir Putin.

Volodin declared that the sanctions against both countries would only bring them closer as they aim for a new world order beyond western dominance. US officials have warned that a full-scale defense partnership between Iran and Russia would pose a risk to both the Middle East and the world. UK Foreign Secretary James Cleverly labeled the Moscow-Tehran partnership as an increasing threat to global security, calling it a "sordid deal."