Trump adds extra sanctions to Russian bank for ties to Iran

The Trump administration on Monday added extra sanctions on one of Russia’s largest financial institutions, VTB, over its ties to Iran, layering on penalties first imposed because of Moscow’s full-scale invasion of Ukraine.

The Treasury Department is redesignating VTB as part of the administration’s “Operation Economic Outcast.” The sanctions campaign was launched in August to squeeze Iran financially as the Islamic Republic has resisted more than six months of U.S. military bombardment and effectively held the world’s energy supply hostage through its military threats on the Strait of Hormuz .

Iran’s support for the Houthis in Yemen, who have recently taken over critical infrastructure on the Red Sea, has recently threatened another key energy maritime route.

“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,” said Secretary of the Treasury Scott Bessent.

“Treasury will not tolerate any support to the regime and will continue to identify, expose, and isolate Iran’s enablers.”

VTB is Russia’s second largest financial institution with thousands of branches across the world, particularly across India, southeast Asia and China. The Biden administration first designated the bank in 2022 following Moscow’s full-scale invasion of Ukraine.

The Trump administration’s new sanctions are an effort to encourage countries and institutions to cut ties with VTB by publicizing its role helping Iran evade sanctions and finance its international terrorism activity.

This includes VTB helping Iran move billions of dollars in frozen assets and enabling tens of millions of dollars in transactions for Iran’s Islamic Revolutionary Guards Force (IRGC), the military force primarily responsible for Iran’s terrorist activity across the world.

State Department spokesperson Tommy Piggott said today’s actions “sends a clear message to governments and financial institutions considering similar arrangements: any effort to help Iran evade sanctions will carry serious consequences, including exposure to U.S. financial restrictions.”

Still, it’s not entirely clear the main impact of the additional sanctions. Treasury officials will meet with international financial institutions this week to provide them information to shut down revenue streams and procurement networks tied to the Iranian regime, the IRGC, Iran’s terrorist proxies and other beneficiaries, The Hill has learned.

The sanctions prevent any U.S. person or entity from doing business with VTB and prohibits transactions with any entities with a 50 percent or more ownership by the blocked entity.