Russia and Iran are creating a SWIFT analogue

Iran and Russia established direct financial communication channels between Iranian banks and hundreds of Russian banks on January 29, the American Enterprise Institute’s Critical Threats Project reported on Monday.

Central Bank of Iran Deputy Governor Mohsen Karami announced that Iranian and Russian banks had signed a Memorandum of Understanding (MoU) on financial messaging, effective immediately.

Karami added that Iranian banks abroad were also included in the MoU and would be able to exchange standard banking messages with Russian banks.

Iranian officials and state-affiliated media outlets framed the MoU as a means to circumvent Western sanctions on Iran and Russia and compared the messaging system to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which serves as the world’s largest financial messaging system, according to the report.

Russia’s central bank declined to comment on the deal signed on Sunday, according to Reuters, but Karami said “about 700 Russian banks and 106 non-Russian banks from 13 different countries will be connected to this system,” without elaborating on the names of the foreign banks.

Iran was disconnected from the Belgium-based SWIFT service, a key international banking access point, in 2018 after the reimposition of U.S. sanctions on the Islamic Republic. Similar limitations have been slapped on some Russian banks since Moscow invaded Ukraine last year, according to Reuters.