US Sanctions VTB Over Alleged Iranian Banking and Sanctions-Evasion Activities

The United States has imposed new sanctions on Russia’s VTB Bank over its alleged involvement in Iranian financial activities and efforts to circumvent US sanctions. The action was taken by the Office of Foreign Assets Control under Executive Order 13902, which authorises sanctions against persons operating in specified sectors of the Iranian economy, including the financial sector.

The designation concerns VTB Bank Public Joint Stock Company, one of Russia’s largest financial institutions. VTB was already subject to extensive US sanctions connected with Russia, including measures imposed following Russia’s invasion of Ukraine in 2022. The latest action adds an Iran-related basis to the bank’s US sanctions exposure.

According to the US Treasury Department, VTB established bank offices in Iran in recent years as part of efforts to develop closer banking coordination between Russia and Iran and facilitate trade between the two countries. Treasury stated that VTB had established correspondent banking relationships with sanctioned Iranian financial institutions during the previous three years.

The US authorities also stated that VTB began taking steps to expand its presence in Tehran in January 2025. The activities identified by Treasury included the development of banking relationships with Iranian financial institutions that are themselves subject to US sanctions.

A central element of the US action concerns correspondent banking arrangements. According to Treasury, VTB established correspondent relationships with sanctioned Iranian banks, creating channels through which financial institutions in Russia and Iran could conduct transactions and settle payments in their respective national currencies.

Treasury also alleged that VTB had taken steps to move billions of dollars in Iranian assets that had been frozen under sanctions. The department stated that the bank attempted to facilitate the movement of these assets as part of its broader financial relationship with Iran.

The measures were announced as part of the US government's Operation Economic Outcast, a sanctions initiative directed at financial and other networks connected to Iran. The campaign has included actions against financial institutions and companies accused of helping Iran circumvent existing restrictions.

The new designation means that VTB is subject to US sanctions under multiple authorities. OFAC's sanctions database identifies VTB under the Ukraine-related and Russia-related sanctions programmes as well as the Iran-related Executive Order 13902 programme.

US restrictions on Iranian financial institutions also affect correspondent banking relationships. OFAC guidance states that US financial institutions are prohibited from maintaining correspondent accounts for Iranian banks subject to the relevant restrictions. The US sanctions framework can also impose restrictions on foreign financial institutions in specified circumstances involving significant transactions with sanctioned Iranian financial institutions.

The latest action therefore concerns both VTB's direct activities involving Iran and its relationships with Iranian financial institutions. The US Treasury has specifically identified correspondent banking arrangements as part of the conduct underlying the designation.

VTB's existing sanctions status means that the latest designation does not represent the first US action against the bank. VTB has been subject to US restrictions for years, including measures relating to Russia. The Iran-related designation adds another sanctions programme to the restrictions already applicable to the institution.

The action also follows a series of recent US sanctions directed at financial institutions and commercial networks connected to Iran. On 10 September 2026, the United States announced additional measures against firms and individuals in Iraq, the United Arab Emirates, Lebanon and Turkey that it said were connected with Iranian proxy networks. Those measures were also announced under the broader Operation Economic Outcast campaign.

The VTB designation has implications for financial institutions maintaining relationships with the Russian bank because of its existing and newly expanded US sanctions exposure. Treasury has warned that foreign financial institutions engaging in transactions involving sanctioned Iranian institutions can face US sanctions exposure depending on the nature and significance of the transactions.

The US action is based on allegations concerning VTB's Iranian banking activities, including correspondent relationships and efforts involving Iranian assets. The designation itself is a sanctions measure and does not constitute a criminal conviction or judicial finding of liability. VTB was already subject to extensive sanctions before the September 2026 action.

The new sanctions place VTB among the financial institutions subject to US restrictions under both Russia- and Iran-related sanctions authorities. The measures specifically identify the bank's activities in Iran and its relationships with sanctioned Iranian financial institutions as the basis for the additional designation.

By fLEXI tEAM