Payam Javan: In face of intensifying international sanctions against both countries, Iran and Russia are connecting their banking networks. The Central Banks of Iran and Russia secured a deal on Sunday to link their respective national interbank communication and transfer systems, easing trade between the two nations.

Since beginning its extensive invasion of Ukraine last year, Russia has been subjected to an increasing number of penalties, including having some of its banks cut off from SWIFT. Russian President Vladimir Putin and his family, as well as officials and businessmen with ties to Putin and the Russian government, have all been sanctioned by the United States and its Western allies. In an effort to further cut off Russia from the world economy following its invasion of Ukraine, the United States and its allies have also moved to impose import restrictions on Russian oil.

Following the exclusion of a few Russian banks from the Society for Worldwide Interbank Financial Telecommunication, a system for facilitating transactions between banks around the world, by the United States, the European Union, and other Western allies, the decision to further connect the two countries’ banking systems was made. In reaction for Russia’s invasion of Ukraine, the Western allies cut off communication with Russian banks in February 2022.