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- The Treasury Department on Monday announced new sanctions on Russia’s VTB Bank as part of its effort to economically isolate Iran by targeting its business partners and other financial “enablers.”
- Some observers were quick to raise questions about how much of an impact the new sanctions would have.
- The sanctions also drew questions about a potential indirect impact on China, Iran’s top trading partner and oil buyer. VTB is reportedly the only Russian bank with a branch in China.
A photo shows an exterior view of a branch of Russia’s VTB Bank, on May 23, 2023 in Tehran, Iran.Fatemeh Bahrami | Anadolu Agency | Getty Images
The Treasury Department on Monday announced new sanctions on Russia’s state-controlled VTB Bank as part of its effort to economically isolate Iran by targeting its business partners and other financial “enablers.”
The action, which followed Treasury Secretary Scott Bessent’s promise that a “large bank” would be sanctioned on Monday, was the latest penalty to be doled out as part of “Operation Economic Outcast,” the Trump administration’s non-military warfare strategy against Iran.
The new sanctions against VTB Bank Public Joint Stock Company, Russia’s second-largest bank, stemmed from allegations that it helped Tehran evade sanctions in part by “establishing correspondent relationships with sanctioned Iranian banks.”
The new financial action, which Treasury expects to block at least tens of millions of dollars, makes VTB “among the most comprehensively sanctioned financial institutions in the world,” Treasury said in a press release.
That’s because the bank was already sanctioned by the U.S. in 2022 and early 2025 under the Biden administration. But curbing the bank may indirectly lead to economic limits on China, which is the top buyer of Iran’s oil.
Some observers were quick to raise questions about how much of an impact the new sanctions would have.
“We’re still digesting it a little bit,” Tobin Marcus, head of U.S. policy and politics at Wolfe Research, told CNBC following Treasury’s announcement.
While VTB is a large bank in Russia, it has already been significantly sanctioned, Marcus noted. “The devil does tend to be in the details,” he said.
“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,” Bessent said in a statement. “Treasury will not tolerate any support to the regime and will continue to identify, expose, and isolate Iran’s enablers.”
Monday’s action follows a small handful of other sanctions the Trump administration has imposed since last month, when it vowed to unleash “economic D-Day” on Iran and hobble its regime through global economic pressure.
The new sanctions also drew questions about a potential indirect impact on China, Iran’s top trading partner and oil buyer. VTB is reportedly the only Russian bank with a branch in China.
“This is a China play,” Miad Maleki, a senior fellow at the Foundation for Defense of Democracies and former U.S. Treasury sanctions official, said in an X post.
“What changes today: every Chinese bank touching VTB Shanghai now carries Iran-program secondary-sanctions exposure, inside an operation where Treasury is naming a bank a week,” Maleki wrote.
“Beijing has shielded its big banks from the Russia fight. Shielding them from the Iran fight is a different calculation,” he wrote, noting Chinese President Xi Jinping is expected to meet with President Donald Trump later this month.
