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Iran and Russia signed an agreement Sunday to integrate their banking systems to help them skirt Western sanctions. 

Mohen Karimi, the Central Bank of Iran’s deputy governor, signed a memorandum of understanding with his Russian counterpart in Tehran Sunday. 

Iran-Russia

FILE: An exchange shop displays rates for various currencies, in downtown Tehran, Iran, Tuesday, Oct. 2, 2018.  (AP Photo/Vahid Salemi, File)

"From now on, the financial messengers of all Iranian banks and all Russian banks are linked to each other," Karimi told Iran’s state-run Mehr news agency

He said the memorandum of understanding includes more than 100 banks in 13 additional countries but did not name them. 

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It was not clear whether those links would allow for the transfer of funds, and services were not yet available to bank customers. 

Western countries banned key Russian banks from the SWIFT financial messaging system after Russia invaded Ukraine in late February 2022. The Belgium-based system daily moves billions of dollars around the world among more than 11,000 banks and financial institutions.

SWIFT financial

SWIFT (Society for Worldwide Interbank Financial Telecommunication) logo displayed on a phone screen and coins are seen in this illustration photo taken in Krakow, Poland on January 23, 2022. (SWIFT (Society for Worldwide Interbank Financial Telecommunication) logo displayed on a phone screen and coins are seen in this illustration photo taken in Krakow, Poland on January 23, 2022.)

Cutting banks off from the SWIFT system severely limits a country's ability to acquire foreign capital and trade internationally and is among the toughest financial sanctions available.

The Trump administration took similar action against Iranian banks as it reimposed crippling sanctions after withdrawing the U.S. from a nuclear agreement with world powers in 2018.

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Iran and Russia have strengthened ties following Russia's invasion, with Iran supplying attack drones that have dive-bombed infrastructure and other civilian targets across Ukraine. After initially denying that it had armed Russia, in November Iran acknowledged the drones transfer, saying it took place before the war began.

Russia's vast oil reserves and trade ties with China and India have thus far largely cushioned it from Western sanctions.

Iran has struggled for years in the face of similar sanctions linked to its disputed nuclear program. Its currency fell to an all-time low late last year, further hobbling the economy, draining people's life savings and adding fuel to nationwide anti-government protests.

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Efforts to revive the 2015 agreement, which lifted sanctions on Iran in return for strict limits and stepped-up surveillance of its nuclear activities, hit an impasse several months ago.

The Associated Press contributed to this report.