A semi-official Iranian news agency has reported that Russia is contemplating breaking ranks with western countries by reintroducing letter of credit (L/C) transactions with Iran.

Sanctions issued by the US and the EU have made L/C transactions with Iran almost impossible for parties that also want to do business in the US or Europe.

Central bank ready

A Russian official has said that his country's central bank is ready to make payments via L/Cs to Iranian parties, according to the Fars News Agency.

The Russian head of the Iran-Russia Joint Trade Council, Yuri Papoyev, reportedly made the remarks on the sidelines of the first meeting of the two countries' regional co-operation workgroup in Iran.

Sanctions circumvention

"After meetings with the Russian Central Bank officials, they agreed to make due payments and open L/Cs for Iran in the least time possible," Papoyev said according to the news agency.

If Russia should make such a move, it would circumvent western sanctions imposed on Iran's financial and banking sector.

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