Skip to main content

Iran, Russia sign bank messaging agreement to override SWIFT

Both countries are banned from the SWIFT financial messaging system due to US and European sanctions.

Iran and Russia signed a financial messaging agreement on Sunday that would allow their banks to transfer funds between one another, and evade sanctions mechanism that blocks most of their entities from SWIFT. 

The memorandum of understanding will allow Iranian and Russian banks to exchange standard financial messages. Officials from both countries held a ceremony in Tehran for the occasion. A Russian official, Vladislav Gridchin, said Western sanctions will not be able to impede the bilateral messaging, the official Islamic Republic News Agency reported. 

The two countries had been discussing such an agreement for a year. The Iranian business website Tehran Bazaar said Iran’s Shahr Bank and Russia’s VTB Bank will be involved in a pilot program.

What it means: Financial messaging allows banks to transfer funds between one another. It involves a system of codes that refer to specific banks. 

The Belgium-based Society for Worldwide Interbank Financial Telecommunications, aka SWIFT, is the dominant financial messaging system in the world. Banks do not need SWIFT to conduct transfers, but executing such actions without SWIFT means using slower systems and sometimes conducting transactions manually, according to Investopedia. 

Why it matters: SWIFT banned nearly all Iranian banks from using its service in 2019 under pressure from the United States. Iranian banks were first banned from SWIFT in 2012, but were allowed to return in 2016 after the Iran nuclear deal was signed the year prior. In 2018, US President Donald Trump removed the United States from the agreement and SWIFT ultimately banned Iranian banks again. 

In March of last year, SWIFT banned several Russian banks from the service in response to the invasion of Ukraine, among them VTB Bank. 

Establishing their own financial messaging system will enable Iranian and Russian banks to conduct fast financial transactions on their own without the need for SWIFT. 

This is not the first action Iran and Russia have taken to help one another defy Western sanctions. Last year, Iran and Russia started trading in their own currencies in order to reduce dependence on the US dollar. 

Know more: The United States and Iran were negotiating a return to the nuclear agreement last year, but talks stalled after the anti-government protests began in Iran. Even if the sanctions are lifted again, Iranian banks will face several difficulties reconnecting to the global financial system, Bijan Khajehpour wrote for Al-Monitor last October. 

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in

Business & Tech Briefing Business & Tech Briefing

Business & Tech Briefing

Middle East venture, M&A and economics in your inbox

Trend Reports

Saudi Crown Prince Mohammed bin Salman (4th R) attends a meeting with Chinese President Xi Jinping (3rd L) at the Great Hall of the People in Beijing on February 22, 2019. (Photo by HOW HWEE YOUNG / POOL / AFP) (Photo credit should read HOW HWEE YOUNG/AFP via Getty Images)

From roads to routers: The future of China-Middle East connectivity

A general view shows the solar plant in Uyayna, north of Riyadh, on March 29, 2018. - On March 27, Saudi announced a deal with Japan's SoftBank to build the world's biggest solar plant. (Photo by FAYEZ NURELDINE / AFP) (Photo credit should read FAYEZ NURELDINE/AFP via Getty Images)

Regulations on Middle East renewable energy industry starting to take shape

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial