The US is stepping up economic pressure on Iran by adding a new major entity to its sanctions list – the Russian bank VTB. The US Treasury Department has accused VTB of establishing correspondent banking relationships with Iranian banks that are already subject to sanctions. This forms part of a large-scale operation known as ‘Economic Outcast’, aimed at isolating the Iranian economy from international financial systems.
US President Donald Trump had previously announced that the country would now focus more on economic pressure on Iran than on military measures. This statement heralded new sanctions that threaten all organisations cooperating with sanctioned Iranian entities.
This is not the first time that VTB Bank has fallen foul of US sanctions. In 2022, it was placed on the sanctions list due to the military conflict between Russia and Ukraine. According to the US Department of the Treasury, the new restrictions could pose additional risks to those who continue to do business with VTB, including other banks and companies.
Interestingly, VTB has become the first Russian bank to be sanctioned in the context of the US’s Iran-related operations. Previously, banks from the United Arab Emirates, Turkey and Egypt had found themselves in a similar situation. This move demonstrates the US’s determination to intensify Iran’s economic isolation and serves as a warning to other financial institutions of the potential consequences of cooperating with sanctioned organisations.