US Slaps Iran-Related Sanctions on Russia's VTB Bank

The United States has imposed a fresh round of sanctions on Russia's VTB Bank, accusing the lender of helping Iran sidestep Western restrictions and cautioning that foreign institutions continuing to do business with it could face additional penalties.

VTB, Russia's second-largest bank, was already severed from the dollar system following Moscow's invasion of Ukraine. The new Iran-related measures add a further layer of exposure for banks and businesses that maintain ties with it.

According to the Treasury, VTB has opened offices in Iran, forged correspondent banking relationships with sanctioned Iranian lenders, and helped build financial channels intended to facilitate trade and financial coordination between Moscow and Tehran. The bank has also established a settlement system for Iranian rials and Russian roubles and has sought to move billions of dollars in frozen Iranian assets, Treasury said.

The action was taken under an executive order aimed at intensifying pressure on the Iranian economy, building on sanctions imposed on VTB in February 2022 after Russia's full-scale invasion of Ukraine. Treasury described the state-controlled lender as now being "among the most comprehensively sanctioned financial institutions in the world."

Treasury Secretary Scott Bessent said the measures were part of "Operation Economic Outcast," which he said would continue to target those providing material, technological, or financial support to the Iranian government. "Treasury will not tolerate any support to the regime and will continue to identify, expose, and isolate Iran's enablers," he said.

The announcement follows Bessent's warning last week that the Trump administration would sanction a large bank as it keeps up economic pressure on Tehran to end a conflict with Iran that has run for more than six months and to reopen the Strait of Hormuz, a key energy shipping chokepoint.

Washington has rolled out a series of economic measures against Iran since the US and Israel attacked it in February, targeting oil exports, shipping networks, weapons procurement channels, financial intermediaries, digital asset exchanges and aviation links. In recent weeks, Treasury sanctioned a small Turkish investment bank, cutting it off from dollar transactions, and imposed penalties with a similar effect on UAE branches of Egypt's Bank Misr.

Treasury also said it is meeting with global financial institutions to warn them about secondary sanctions risks and to give them the information needed to shut down revenue streams and procurement networks tied to the Iranian government, the IRGC, Iran's proxies and their enablers.