US imposes new sanctions on Russia's VTB over ties with Iran

The United States has imposed additional sanctions on Russian bank VTB, accusing it of participating in schemes that helped Iran circumvent US restrictions. The bank was already under blocking sanctions from Washington over Russia's full-scale invasion of Ukraine.

Reuters reports this, citing the US Treasury Department.

The new restrictions are part of the U.S. campaign Operation Economic Outcast, aimed at isolating Iran's financial channels and organizations in third countries that help Tehran evade sanctions.

The U.S. Treasury considers VTB one of the financial intermediaries used by the Iranian side to conduct operations in circumvention of restrictions. The agency previously reported that employees of Iran-linked financial structures interacted with Russia's VTB in currency conversion.

According to The Wall Street Journal, American authorities consider the bank an important financial channel for Iran. In particular, VTB is linked to currency operations and the movement of funds to which Iran's access was restricted by sanctions.

U.S. Treasury Secretary Scott Bessent said Washington intends to continue identifying and isolating companies and financial institutions providing material, technological or financial support to Iran.

“The Treasury Department will not tolerate any support for the regime and will continue to identify, expose and isolate those who help Iran”, – Bessent said.

For VTB itself this is not the first U.S. restrictions. The United States imposed blocking sanctions on the bank back in February 2022 after the start of Russia's full-scale invasion of Ukraine.

VTB is Russia's second-largest bank. After the 2022 sanctions, its assets under U.S. jurisdiction were frozen, and U.S. persons are mostly prohibited from dealing with the bank.

Therefore the current decision does not mean VTB is losing access to the American financial system for the first time. Its significance lies primarily in the fact that Washington now separately links the Russian bank to the circumvention of sanctions against Iran and includes it in its expanding pressure campaign on Tehran's international financial ties.

Operation Economic Outcast was launched by the U.S. Treasury on August 24. American officials said they intend to cut off remaining sources of funding for Iran, including oil trade, banking transactions, exchange offices, transport and brokerage networks.

As part of this campaign Washington also warned foreign banks and companies about the risk of secondary restrictions if they continue operations helping Iran evade sanctions.

Since the beginning of the current conflict, the U.S. has already introduced new measures against Iranian oil supplies, shipping networks, arms and technology procurement, financial intermediaries, cryptocurrency platforms, and the aviation sector.

Based on materials from: Reuters, U.S. Treasury Department