US sanctions Russian payment system A7 over Iran allegations; company denies
In short
The US Treasury's OFAC added the Russian payment system A7 to its Iran-related sanctions list on 1 October, describing it as a Russia-linked “shadow banking network” used to circumvent restrictions and conduct operations for Iran. A7 said the sanctions will not affect its work, called them recognition of the effectiveness of its alternative settlement system, and said it “categorically refutes” accusations of working with Iran or terrorist organisations. Kommersant noted the measures block A7 assets in US jurisdiction and bar US persons from business with its subagents, but do not amount to an automatic halt of all its operations.
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The US Treasury's Office of Foreign Assets Control added the Russian payment system A7 to its Iran-related sanctions list on 1 October, Vedomosti reported. OFAC described A7 as a “Russia-linked shadow banking network” and says its infrastructure was used to circumvent restrictions and to conduct operations in Iran's interests, according to Vedomosti. Vc.ru reported that OFAC also calls A7 a “transnational criminal organization”, and that accusations of evading sanctions against Iran were the stated grounds for the designation. [ 1 , 2 ]
A7 said the new US sanctions will not affect the work of its international settlement system, its press service told Vedomosti. The company said it regards the restrictions as confirmation of the effectiveness of the alternative international settlement system it has built in recent years: “Sanctions against us are recognition of that effectiveness,” it said. A7 said its system lets business conduct settlements independently of the geopolitical situation. [ 2 ]
The company rejected the allegations behind the designation. Kommersant reported that A7 “categorically refutes any accusations of working with Iran or terrorist organisations”, calling statements to the contrary slander. A7 said it “never conducted transactions in their interests and never serviced structures linked to them”, and that a multi-level compliance system is used to screen clients. Vedomosti reported the same denial. [ 2 , 3 ]
Kommersant reported that the US restrictions affect A7's assets in American jurisdiction and bar US citizens from doing business with the company's subagents. That means the measures do not equal an automatic halt of all A7 operations, but create direct restrictions for US participants and counterparties connected to them, the outlet said. Kommersant added that the international payments platform A7 belongs to the company “A7-agent”, allows transfers to any country and offers a ruble stablecoin, A7A5, so A7's stated ability to keep working depends on the payment channels still available to it, while the ban for US persons and the asset freeze in the US remain in place. [ 3 ]
The documents place A7 in the context of Russia's move away from traditional banking channels. Vedomosti reported that on 3 September, A7 first deputy CEO Igor Gorin put the share of Russia's cross-border settlements passing through alternative channels at 50–80%, saying a significant part of foreign economic payments already goes outside traditional banking infrastructure. On 10 August, PSB head Pyotr Fradkov linked the creation of A7 to the need for alternative instruments for international settlements, saying payment infrastructure had become a tool of political pressure, which raised demand for independent settlement channels. [ 2 ]
Why it matters
The designation targets one of the alternative cross-border payment channels that Russian business has come to rely on, and the documents show the company publicly positioning itself as able to keep working. Kommersant's reading of the measures suggests the practical effect falls mainly on US-jurisdiction assets and US-linked counterparties rather than a full stop of A7's operations. The documents give no indication of how much payment volume actually runs through A7, so the operational impact outside those points is not established.
Key facts
- OFAC added the Russian payment system A7 to its Iran-related sanctions list on 1 October, according to Vedomosti, and called it a “Russia-linked shadow banking network” [ 1 , 2 ]
- A7 said the new US sanctions will not affect the work of its international settlement system [ 2 , 3 ]
- A7 said it “categorically refutes any accusations of working with Iran or terrorist organisations” and called such claims slander [ 3 ]
- A7 said it never conducted transactions in the interests of Iran or terrorist organisations and never serviced structures linked to them [ 2 , 3 ]
- A7 called the sanctions “recognition” of the effectiveness of the alternative settlement system it built [ 2 , 3 ]
- The US measures block A7 assets in US jurisdiction and bar US citizens from doing business with the company's subagents, but do not amount to an automatic halt of all A7 operations [ 3 ]
- The A7 international payments platform belongs to the company “A7-agent”, allows transfers to any country and offers a ruble stablecoin, A7A5 [ 3 ]
- On 3 September, A7 first deputy CEO Igor Gorin estimated the share of Russia's cross-border settlements passing through alternative channels at 50–80% [ 2 ]
Confirmed by several sources
- The US Treasury's OFAC placed A7 on its Iran-related sanctions list [ 1 , 2 , 3 ]
- A7 rejected accusations that it works with Iran or terrorist organisations [ 2 , 3 ]
- A7 stated that the sanctions will not affect its operations [ 2 , 3 ]
- A7 described the sanctions as recognition of the effectiveness of its alternative settlement system [ 2 , 3 ]
Still unclear
- Whether A7 conducted transactions for Iran or for structures linked to terrorist organisations The US Treasury says its infrastructure was used for operations in Iran's interests, while A7 denies this; the documents provide no independent evidence either way, and the company's denial rests on its own statement about its compliance system.
- Whether the sanctions stop A7's operations in practice Kommersant says the measures do not equal an automatic halt of all A7 operations but create restrictions for US participants and counterparties, and that A7's ability to keep working depends on the payment channels still available to it; A7 does not say which channels remain open.
- OFAC's characterisation of A7 as a “transnational criminal organization” Only vc.ru reports this wording, attributing it to OFAC, while the other documents describe the designation in terms of a shadow banking network, so the description is single-sourced.
What local media are saying
Timeline, local time
- Vc.ru reports that OFAC has sanctioned A7 over accusations of evading sanctions against Iran, citing the regulator's description of the company as a shadow banking network and a transnational criminal organisation [ 1 ]
- A7 tells Vedomosti that the new US sanctions will not affect its work, rejects the Iran accusations and says the restrictions confirm the effectiveness of its settlement system [ 2 ]
- A7 tells Kommersant it “categorically refutes any accusations of working with Iran or terrorist organisations”, and Kommersant details the scope of the US measures [ 3 ]