Iran and Russia Seeking to Establish a 'Joint Bank for Transactions in Rubles and Rials'

Russian news agencies report that Moscow and Tehran are looking to establish a joint bank that would conduct transactions without the use of the dollar, utilizing the national currencies of both countries instead. Both Tehran and Moscow are facing various Western sanctions. The state news agency Sputnik, quoting Bahram Amir-Ahmadian, a member of the 'Iran-Russia Friendship Society', states that the chambers of commerce of the two countries are 'actively working to open a joint bank'. The website of the 'Iran-Russia Chamber of Commerce' reported in July that a delegation from this group traveled to Moscow to 'discuss the trade relations between the two countries'. Asadollah Asgaroladi, the head of the joint chamber, stated at that time that 'the main issue we are currently facing is banking, which we are trying to resolve during this trip'. Anatoly Aksanov, a member of the 'Regional Banks Council' of Russia, also mentioned last week that, due to the absence of Western banks in Iran, 'Russian banks could be the first foreign banks to enter the Iranian financial market'. According to Izvestia, 'Russian banks are at the forefront of entering the Iranian financial market', and 'the central banks of the two countries have recently held meetings at the managerial level to discuss closer monetary cooperation'. Mr. Amir-Ahmadian also told Sputnik that 'this issue is very important'. He noted that joint banking relations between Iran and Russia existed before the revolution but were halted after the 1979 revolution. He stated that both sides are eager to conduct financial exchanges using their national currencies, although 'problems have not yet been resolved'. Bahram Amir-Ahmadian said, 'Currently, all transactions between Iran and Russia are conducted in dollars or euros. This is very inappropriate because all these transactions are under the control of the central banks in the US or the European Union'. Iran and six world powers, including Russia, reached an agreement last year to comply with the 'JCPOA' regarding Tehran's nuclear program. This agreement has limited Iran's nuclear activities while also ending international sanctions in this regard. Nevertheless, separate sanctions from countries like the US regarding issues such as ballistic missile development and human rights violations in Iran, as well as warnings from international groups like the 'FATF', have created obstacles for financial dealings between Tehran and other countries. Iranian officials have repeatedly called for the resolution of financial issues at the international level in recent months. US officials state that they are committed to their obligations under the nuclear agreement and encourage those commercial activities that do not fall under current sanctions to enter the Iranian market. Meanwhile, Russia is also facing some Western sanctions after annexing Crimea and being accused of 'supporting separatists in Eastern Ukraine'. Reports of financial activities between Moscow and Tehran have been published before, including in July when some news agencies reported the start of operations by Gazprom Bank, affiliated with the Russian natural gas company, and several other banks from that country in Iran. Since last winter, the international banking system, SWIFT, announced that sanctions against Iranian banks had been lifted.