Officials from the Export Guarantee Fund of Iran (EGFI) and the Russian Export Center signed a deal to facilitate trade exchange.
According to Reza Alikhani, the EGFI head, "The deal should help promote trade between the two countries, enhance use of export guarantees as an alternative to LCs and lower trade risks," the EGFI website quoted him as saying on the sidelines of the signing ceremony in Moscow on Thursday.
"Iranian businesses wanting to work with the Russians can approach the EGFI to check the creditworthiness and credit cap of their [potential] partners," he said.
According to the official, the same services are also available for Russian firms planning to export to Iran to make sure about their customers' credit rating and use trade finance facilities.
"As per the contract signed with the Russia Export Center, the two sides can issue guarantees worth up to $1 billion," he added.
Russian Export Center JSC (REC) is a state-owned development institute established by the government to support the development of non-commodity exports. REC offers a wide range of financial and non-financial support tools to benefit Russian exporters, explore foreign markets and build capacity in global trade.
Established first in 1973, the EGFI was recreated in 1994 as a legally and financially independent entity fully owned by the state and affiliated to the Ministry of Industries, Mining and Trade.
The fund promotes Iran’s non-oil export by covering political and commercial risks and issues credit guarantees to help companies meet their financial commitments.
Iran Trade Center
The deal was signed on the sidelines of the opening ceremony of Iran Trade Center in Moscow. The center has been established with the support of Iran’s government to pave the way for increasing bilateral trade to $8 billion by 2024.
Alireza Peymanpak, head of the Trade Promotion Organization of Iran, who was present at the event, said organizing and coordinating joint events and exhibitions, planning visits by trade and business delegations and linking Iranian businesses to Russian companies are the main tasks of the center.
A 125-member business delegation from 78 Russian companies is to visit Tehran from Sept. 19-21 to meet Iranian traders and discuss prospects for expanding economic cooperation.
The visit is part of an agreement between the Tehran Chamber of Commerce and REC and is said to be the biggest of its kind to visit Iran.
Other Measures
Trade between Russia and Iran in January-July amounted to $2.7 billion. The two sides have been working on a wide range of measures to boost this amount by next year.
After the sanctions were announced on Russia for invading Ukraine in February that cut off Russian bank access to SWIFT, Tehran and Moscow decided to create a rival to SWIFT for cross-border payments.
The Iran Currency Exchange (ICE) listed the ruble-rial trading pair in July, following a visit last month to Moscow by the governor of the Central Bank of Iran, Ali Salehabadi.
The arrangement means that the two countries can now settle trade payments in each other’s currencies. The first such trade was on July 19 with a 3 million rubles ($48,000) exchange.
That was the day Russia’s President Vladimir Putin arrived in Tehran and met the Leader Seyed Ali Khamenei and President Ebrahim Raisi.
Iranian media reported that the new system could reduce the demand for dollars by $3 billion a year. Bilateral trade between Iran and Russia was worth $4 billion in 2021. But finding common cause in their approach to the West, the two countries say they are hoping to ramp up bilateral trade to $8 billion in the short-term.
