World News
Iran and Russia link banks to circumvent Western sanctions
Iran and Russia have taken an important step toward linking their banking systems in a move that further boosts their cooperation in the face of Western sanctions, an Iranian official said.
At a signing ceremony, Mohsen Karami, the central bank’s deputy governor, said banks in the two countries had connected their messaging networks based on agreements reached over the past year, according to the state-run IRNA news agency.
It was not clear whether those links would allow money transfers, and services were not yet available to bank customers.
Karami said 100 banks in 13 other countries were connected to the network, without naming them.
There was no immediate comment from Russia or the United States, which has been working with their allies to isolate both countries.
In response to Russia’s invasion of Ukraine nearly a year ago, Western countries banned major Russian banks from the Belgium-based SWIFT financial messaging system, which moves billions of dollars around the world every day between more than 11,000 banks and financial institutions.
The Trump administration took similar action against Iranian banks when it re-imposed crippling sanctions after the US pulled out of a nuclear deal with world powers in 2018.
Cutting banks off the SWIFT system severely limits a country’s ability to attract foreign capital and conduct international trade, and is one of the harshest financial sanctions available.
Iran and Russia have strengthened ties following the Russian invasion, with Iran providing attack drones that bombed infrastructure and other civilian targets across Ukraine.
After initially denying it had armed Russia, Iran in November acknowledged the transfer of the drones, saying it took place before the war began.
Russia’s vast oil reserves and trade ties with China and India have so far largely shielded the country from Western sanctions.
Iran has been grappling with similar sanctions related to its disputed nuclear program for years.
The currency fell to an all-time low late last year, further hampering the economy, depleting people’s savings and fueling nationwide anti-government protests.
Attempts to revive the 2015 deal, which lifted sanctions against Iran in exchange for strict limits and increased oversight of its nuclear activities, stalled several months ago.
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