On Thursday, October 1, 2023, the U.S. Treasury Department imposed new sanctions against Russia's "VTB" Bank and a related network called "A7". This action was taken due to the network's role in circumventing sanctions and settling trade transactions using the national currencies of both countries.
Circumventing Sanctions with New Systems
According to the Treasury Department, individuals associated with the A7 network had created a mechanism for money laundering and circumventing sanctions that was linked to illegal financial activities in Russia. Additionally, the department stated that the Iranian government used this mechanism to transfer money, including revenue from oil sales and financial resources for purchasing weapons.
Read more: The U.S. Response to Iran's Proposal to Reopen the Strait of Hormuz
Trade Share and Claims of the Islamic Republic
The governments of the Islamic Republic and Russia have insisted for years that they do not need the dollar. However, trade realities show that the actual share of trade between the two countries in national currencies, especially the ruble and rial, is less than official claims. An internal document approved in September 2024 set the actual share at 68 percent and targeted it at 71 percent for the year 2026 (current year).
Statistics on bilateral trade in 2023 (mainly corresponding to the Persian year 1402) indicate about four billion dollars, which includes 2.7 billion dollars in exports from Russia and 1.3 billion dollars in exports from Iran. Furthermore, the Central Bank of Russia mentioned issues with currencies like the rial in 2023, describing these currencies as "often non-convertible."
Exchange Agreements and Future Developments
Russia and Iran have also engaged in energy exchange agreements, with the delivery of petroleum products in the form of barter beginning by late 2022 (corresponding to the fall and winter of 1401). This comes as discrepancies between official statistics and trade realities indicate an imbalance in trade between the two countries.
Moreover, Moscow has adopted a barter policy as an official method for trade with Iran. In 2023, the Russian Ministry of Economy published a government directive for barter contracts, which experts say indicates that Iran is the only trading partner of this country that conducts a significant portion of its trade in this manner.
Read more: Challenges of Modernizing Ship Control Systems by McClag Engineering · Discovery of Over 4 Million Liters of Smuggled Fuel in Bushehr
