US Sanctions Russian VTB Bank Over Iran Sanctions Evasion

Shibbir Ahmed, New York — The United States has imposed new sanctions on Russia’s VTB Bank, accusing the major financial institution of helping Iran evade U.S. sanctions and establishing correspondent banking relationships with sanctioned Iranian banks. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the action on September 14 under the administration’s Operation Economic Outcast, a campaign aimed at disrupting the Iranian regime’s financial networks and sources of revenue.

“Under Operation Economic Outcast, Treasury will continue to target and disrupt those who provide material, technological, or financial support that allows the Iranian regime to sustain its terrorist enterprise,” Treasury Secretary Scott Bessent said. Bessent added that the United States would continue identifying, exposing and isolating individuals and institutions that support the Iranian regime.

VTB Accused of Expanding Ties With Iran

According to the Treasury Department, VTB Bank, one of Russia’s largest financial institutions, has expanded its banking presence in Iran in recent years as Moscow and Tehran have sought to deepen economic and trade ties.

U.S. authorities said VTB established correspondent banking relationships with Iranian financial institutions already under sanctions and began taking additional steps to expand its presence in Tehran in January 2025.

The Treasury Department also accused the bank of helping establish a settlement mechanism using Iranian rials and Russian rubles through correspondent accounts, with the aim of facilitating bilateral trade. U.S. officials further alleged that VTB took steps to move billions of dollars in frozen Iranian assets.

Operation Economic Outcast

The Treasury Department announced Operation Economic Outcast on August 24, describing the campaign as an effort to sever the remaining economic lifelines supporting the Iranian regime. The operation focuses on financial networks involved in oil smuggling, sanctions evasion and the financing of Iran’s security apparatus, terrorist proxies and other affiliated networks.

Washington has warned foreign financial institutions that continuing significant business with sanctioned Iranian entities could expose them to secondary sanctions and potentially restrict their access to the U.S. financial system. The Treasury Department said it is also working with partners in the European Union, the United Kingdom and Gulf countries to target financial channels connected to Iran.

VTB Already Under U.S. Sanctions

The latest action is not the first time VTB Bank has been targeted by the United States. OFAC previously designated VTB in January 2025 under sanctions authorities targeting Russia’s financial sector. The bank was also sanctioned in February 2022 over its ties to the Russian government and its operations in Russia’s financial services sector. The new designation adds Iran-related sanctions exposure to the bank’s existing restrictions.

Assets Blocked

Under the latest action, all property and interests in property belonging to VTB Bank that are located in the United States or held by U.S. persons are blocked and must be reported to OFAC. U.S. persons are generally prohibited from conducting transactions involving the blocked property unless authorized by OFAC or covered by an applicable exemption. The restrictions also extend to entities that are owned, directly or indirectly, 50% or more by one or more blocked persons.

Foreign financial institutions engaging in certain significant transactions involving designated entities may also face the risk of secondary sanctions, including restrictions on their ability to maintain correspondent or payable-through accounts in the United States.

The Treasury Department said the latest action sends a broader warning to foreign banks and businesses that facilitate Iran’s efforts to circumvent U.S. sanctions. Washington is expected to continue targeting financial institutions and other entities that it says provide Iran with access to international financial networks.