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Officials from Armenia and Iran signed an agreement on July 17 that seeks to boost agreed to boost mutual trade, despite tightening international sanctions against Tehran, and increased pressure on Caucasus states to respect them.

The memorandum on expanding cooperation was signed at a meeting in Yerevan between the chambers of commerce of Tehran and Yerevan, Asbarez Armenian News reports. The head of the Yerevan chamber of commerce, Robert Haratounyan, said Iran also wants to attract investment to the Aras Free Trade Area, which sit just across the border from the Armenian town of Meghri.

Yahya Al-e Eshaq, head of the Tehran chamber of commerce, told the meeting that trade could further increase if issues connected to copyright protection and customs duties could be resolved.

Armenian Deputy Economy Minister Ara Petrosyan added: "In the past two years, the trade turnover between Armenia and Iran amounted to about $320m; this figure, of course, needs to be increased."

Landlocked Armenia has hostile relations with two of its four neighbours - Azerbaijan and Turkey - leaving it reliant on trade with Georgia and Iran. Despite the international sanctions imposed on Iran to put pressure on Teheran to give up its nuclear programme, Armenia has been increasing trade ties with its neighbour.

However, the move to expand the relationship comes just as the spotlight of the international community falls on the role of Caucasus states in Iranian efforts to circumvent the sanctions. US officials have recently been spending time in Georgia to study the growing presence of Iranian investors and trade over the past few years. Tbilisi closed a visa-free regime that it has been running for Iranians earlier this month.