US adds VTB Bank to Iran sanctions list for evasion

The US Department of the Treasury's Office of Foreign Assets Control (OFAC) designated VTB Bank, Russia's second-largest state-controlled bank, on September 14, 2026, for circumventing Iran sanctions. According to Treasury statements, VTB established correspondent relationships with sanctioned Iranian financial institutions, opened representative offices in Iran starting January 2025, processed settlements with Iranian banks under sanctions, and facilitated the movement of billions of dollars in frozen Iranian assets. The bank also created a settlement system using national currencies through correspondent accounts in Iranian rials and Russian rubles to increase bilateral trade.

Treasury Secretary Scott Bessent stated the department would "continue to identify, expose, and isolate those providing material, technological, or financial support to the Iranian regime." The Iran-related sanctions designation follows other recent measures against Turkish and UAE banks as part of an "Economic Outcast" operation announced August 24, 2026, aimed at severing remaining economic links supporting Iran.

VTB has faced multiple rounds of US sanctions since 2014. It was placed under sectoral sanctions following the 2014 Crimea annexation and blocking sanctions after Russia's 2022 invasion of Ukraine. Analysts note VTB is the only Russian bank with a branch on mainland China and access to China's national payment system—connections it maintained despite prior US sanctions. Treasury warned that foreign financial institutions continuing dealings with VTB after the Iran sanctions designation face heightened secondary sanctions risk and must cease relations immediately.

According to former US Treasury sanctions official Miad Maleki, the Iran designation is "more toxic" than Russia-related sanctions and may pressure Chinese banks to sever VTB ties due to secondary sanctions exposure. A significant portion of Iran's oil revenues are held in China, making Chinese financial institutions key to the move's effectiveness.