Iran is one step closer to becoming a permanent member of the Shanghai Cooperation Organization (SCO) after signing a Memorandum of Obligations on Thursday.

SCO is a central Asian security body dominated by Russia and China. It is the successor of the Shanghai Five, established in 1996 when the two countries, alongside Kazakhstan, Kyrgyzstan, and Tajikistan, signed a mutual security agreement. Uzbekistan joined in 2001, transforming the body into Shanghai Six and subsequently renaming it SCO. By 2017, it expanded to eight states with the admission of India and Pakistan. The Eurasian organization also tackles political and economic cooperation and counterbalancing the Western influence in the region.

After 15 years of being an observer, Iran—through its then-newly elected president—bid to become a full member in September last year, aiming to overcome the economic isolation imposed by the West over its disputed nuclear program. This also means that Tehran now has access to a new stage of various economic, commercial, transit, and energy cooperation.

“By signing the document for full membership of the SCO, now Iran has entered a new stage of various economic, commercial, transit and energy cooperation,” Hossein Amirabdollahian wrote on his Instagram page.

Moreover, it can now participate in the body’s annual meetings, although, according to news reports, the full membership is expected to become effective in April next year.

Common Ground Between Iran and Russia

President Vladimir Putin met with Iranian President Ebrahim Raisi on the sidelines after the latter signed the memorandum at the SCO summit held in Samarkand, Uzbekistan. Putin said he fully supports Iran’s application to become an SCO member as the two countries continue to develop a positive relationship.

Meanwhile, Raisi told his Russian counterpart how sanctions by the US have brought them closer, saying, “[t]he relationship between countries that are sanctioned by the US, such as Iran, Russia or other countries, can overcome many problems and issues and make them stronger.”

“The Americans think whichever country they impose sanctions on, it will be stopped, their perception is a wrong one,” Raisi added.

Besides security and strengthening cultural ties, Iran’s primary objective in seeking SCO membership is to boost its deteriorating economy and regional standing, which has been dramatically affected by unilateral punishments from the West. It further sunk in 2018 when then-president Donald Trump “unilaterally abandoned” the Iran nuclear deal.

Despite Iran’s indirect negotiations with the new administration, they eventually came to a standstill due to “several obstacles to reviving the nuclear pact.” Concerns about the US-backed Gulf Arab-Israeli bloc, which threatens the Middle East power balance, have also influenced Tehran’s decision to pursue economic and strategic relations with Russia, a country that can relate to the impacts of US sanctions over its invasion of Ukraine.

“Iran is determined to boost its ties with Russia, from economic to aerospace and political fields,” Raisi said, adding that the cooperation between the two countries has the potential to significantly mitigate the constraints imposed by US sanctions.

Likewise, Putin said a delegation of 80 large companies would visit Iran next week.

‘Shanghai Nine’

Iran’s full-fledged membership in the SCO marks the country’s first cooperation in a major regional coalition since the 1979 revolution. Furthermore, allowing it to join despite unilateral sanctions meant that SCO members did not recognize the international sanctions imposed. As a result, Iran’s ties with the East will now contribute to its economic progress—whether or not the US revives the nuclear deal.

Mongolia was the first country to bear observer status since 2004, while Afghanistan and Belarus were granted observers in the 2010s. Like Iran, Belarus initially applied for partner status in 2008 but was rejected over the fact that it was a “purely European country.” Instead, it received a dialogue partner status in 2010, followed by observer status in 2015. Nonetheless, the country has made progress in its bid for membership once more. At the recent SCO summit, Belarus signed documents to initiate its membership process, Reuters reported. On the other hand, Egypt, Saudi Arabia, and Qatar were granted the dialogue partners status in 2021.

In contrast to the European Union or NATO, which emphasize alliance, the SCO is merely a venue for discussion and engagement where high-level dignitaries from across the region can gather and confer to pursue economic integration. However, if necessary, member states could still seek bilateral agreements.