Operation Economic Outcast Sanctions Major Bank Helping Iran Evade Sanctions
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Key facts
Source:US Treasury (U.S. Government work, public domain)
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced new sanctions against the Russian financial institution VTB Bank Public Joint Stock Company (VTB Bank). The action, part of a broader initiative known as Operation Economic Outcast, targets the bank for its role in helping the Iranian regime bypass international sanctions. According to the Treasury, VTB Bank has established correspondent banking relationships with sanctioned Iranian banks and has worked to expand its presence in Tehran.
The designation was issued under Executive Order 13902, which targets specific sectors of the Iranian economy, including its financial industry. The Treasury noted that VTB Bank has taken steps to facilitate bilateral trade by creating a settlement system using Russian rubles and Iranian rials, as well as attempting to move billions in frozen Iranian assets. This move follows previous sanctions against VTB Bank under Executive Orders 13662 and 14024, which targeted its involvement in the Russian financial services sector.
Operation Economic Outcast aims to disrupt the financial networks used by the Iranian regime, the IRGC, and various terrorist proxies to fund operations and smuggle oil. Treasury officials stated that the program is designed to increase secondary sanctions risks for foreign institutions that continue to engage with the Iranian regime. The department also indicated that it is working with international partners, including the European Union and the United Kingdom, to identify and sever these economic lifelines.
Under the new restrictions, all property and interests belonging to VTB Bank that are within the United States or controlled by U.S. persons are now blocked. The Treasury warned that any entity found facilitating money laundering or sanctions evasion for Iran risks being disconnected from the U.S. financial system. This announcement follows recent enforcement actions taken against various banks in the United Arab Emirates and Turkey.
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