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How Sanctions Impact Russian and Iranian Relations

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As the world approaches the one year anniversary of the Ukraine and Russian War, Russia is indicating they have no intention to step back any time soon. In light of the extensive sanctions against Russian interests, people, and their ability to conduct international banking, President Vladimir V. Putin has linked Russia’s banking system to the same banking institutions as Iran.

The sanctions placed on Iran and Russia have prevented their access to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) which links more than 11,000 financial institutions around the world. This system grants international payments and televised communication that facilitate transactions throughout the world. As of Sunday, Iran and Russia have decided to connect their interbank communication and transfer system–actions that replace SWIFT for their own benefits. This new cooperation will support Russia’s goal of increasing their trade with Iran to $10 billion a year. Although Iran and Russia’s access to international communication has been altered, communication between these two countries should serve as a cautionary warning flag to the rest of the world about the extent of the current restrictions against Russia, and the alliances those restrictions are forging now and into the future.

The sanctions against Iran were implemented to curtail their interest in seeking and developing tactical nuclear weapons. President Trump removed the United States from the 2015 nuclear agreement and initiated financial sanctions to isolate Iran from the global banking infrastructure. President Biden urged the need for additional sanctions after Iran’s nationwide demonstrations during the World Cup in Qatar. The sanctions against Russia began in response to their invasion and ongoing war against Ukraine.

Iran has struggled with rampant inflation and rising unemployment since the sanctions were imposed in 2018. In fact, inflation has increased over 50%, pushing Iranians further and further under the poverty line. The national demonstrations opposing the increasing inequality of women and their opportunities for education further compromises broad government solutions to multiple challenges that puts added pressure on their citizens. The shared grievances and financial conditions brought on by Western sanctions have brought on an unusual and mutually beneficial alliance between Russia and Iran.

The mutually cooperative partnership is symbolic of the growing network of countries and former republics that have enabled Russia to successfully navigate crippling sanctions for over a year. Countries such as Turkey, China, India, Belarus, Kazakhstan and Kyrgyzstan “are stepping in to provide Russia with many of the products that Western Countries have tried to cut off.” According to Ana Swanson, a New York Times journalist, believes that the Russian economy has been able to improve to what it was before the war. Therefore, the question rests, are these sanctions, imposed by Russia’s adversary, enough?

Not only are Russia and Iran teaming up with each other for economic means, but their cooperation has only increased as their military alliance has provided Russia with drones that have dive-bombed infrastructure and other civilian targets in Ukraine. As their alliance increases, the war will unfortunately last longer than the world would like to see.

Iran and Russia have created new dynamics that challenge United States Foreign Policy and the international community since the Cold War. In fact, as of January 31st, 2023, Russia is deciding to no longer comply with the nuclear arms control treaty, New START, the only agreement that is binding the US and Russia together under a nuclear treaty. Russia's actions towards the US and the international community have foreshadowed Putin’s perspective that the West’s campaign against Russia will no longer be tolerated. Deciding how to control and restrain their actions have questioned political scientists and elected officials all over the world. Michael Parker, a former US federal prosecutor, states, “When you push state actors away from the core into the periphery, it’s only logical that they will find each other.” Taking these words from Parker reenact the important question of “are we doing enough?” or even, “are we doing this correctly?”

As Russia slowly removes themselves from the nuclear treaties and develops new alliances, the emerging cooperation and alignment has a close resemblance to the principal players of the most recent Cold War. During the Cold War, Iran was a crucial territory for the United States to contain the Soviet Union from spreading their communist ideology. However, as the Iranian Hostage Crisis occurred and the Iranian protests challenged Washington’s involvement in the government, the trust between the leaders of Iran and the United States began to crumble; the interest from the Kremlin to strengthen their relationship with Iran began. Since then, Washington questions on what, or who, they need to contain–the government of these countries, or the leaders, themselves.

The growing polarity between Russia and the United States, the growing threats of nuclear conflict, the rapid engagement with Iran for financial and military support is contributing to new geo-political developments in Central Asia that threatens the Western status quo.