Operation Economic Outcast Sanctions Major Bank Helping Iran Evade Sanctions

WASHINGTON—Today, under Operation Economic Outcast, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated prominent Russian financial institution, VTB Bank Public Joint Stock Company (VTB Bank) for its involvement in Iranian sanctions evasion, including establishing correspondent relationships with sanctioned Iranian banks.

“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.”

OFAC’s action against VTB Bank is being taken pursuant to Executive Order (E.O.) 13902, which targets certain sectors of the Iranian economy, including Iran’s financial sector.  VTB is now among the most comprehensively sanctioned financial institutions in the world. Operation Economic Outcast introduced greater secondary sanctions risk and an accelerated pace of enforcement for those who continue to do business with the Iranian regime.  Foreign financial institutions that continued to deal with VTB following its designation under OFAC’s Iran sanctions authorities are exposed to even more sanctions risk than before and should cut off those relationships immediately.

Additionally, this week, Treasury is meeting with global financial institutions to arm them with the information they need to shut down revenue streams and procurement networks tied to the Iranian regime, the IRGC, Iran’s terrorist proxies, and their enablers.

Announced by Secretary Bessent on August 24, 2026 and dubbed “Economic D-Day,” Operation Economic Outcast is severing the remaining economic lifelines that sustain the Iranian regime.  Treasury has mapped the networks, facilitators, and financial channels that Iran uses to smuggle oil, evade sanctions, and fund terror.  Working with partners across the U.S. government, the European Union, United Kingdom, Gulf partners, and others, Treasury is targeting any source of the regime’s illicit revenue.

Treasury warned that any entity facilitating money laundering or sanctions evasion on behalf of Iran risks being cut off from the U.S. financial system.  Treasury also emphasized the secondary sanctions exposure for those who continue doing business with the Iranian regime and will accelerate the pace of U.S. enforcement.  More information on Operation Economic Outcast is available here.

Today’s action follows recent Treasury actions targeting banks in Turkey and UAE, and serves as a further warning to financial institutions and other foreign businesses that there is no safe way to do business with Iran. 

VTB Bank Public Joint Stock Company (VTB Bank), one of Russia’s largest financial institutions, has opened bank offices in Iran in recent years in order to formalize closer banking coordination with the Iranian regime and expand trade between the two countries.  Over the past three years, VTB Bank has established correspondent banking relationships with sanctioned Iranian financial institutions and began taking steps to increase its presence in Tehran in January 2025.  VTB Bank has taken steps to move billions of frozen Iranian assets and created a settlement system for national currencies through correspondent accounts in Iranian rials and Russian rubles with the goal of increasing bilateral trade.

VTB Bank is being designated pursuant to E.O. 13902 for operating in the financial sector of the Iranian economy.  VTB Bank was previously designated by OFAC on January 15, 2025 pursuant to E.O. 13662 for operating in the financial services sector of the Russian Federation economy, and on February 24, 2022 pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, the Government of Russia and for operating or having operated in the financial services sector of the Russian Federation economy.

As a result of today’s action, all property and interests in property of the designated or blocked person described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.  In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.  Unless authorized by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons. 

Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons.  OFAC may impose civil penalties for sanctions violations on a strict liability basis.  OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions.  In addition, financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities involving designated or otherwise blocked persons.  The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated or blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person.  Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions.  Individuals located in the U.S. or abroad who provide information about sanctions violations to the Financial Crimes Enforcement Network’s whistleblower incentive program may be eligible for awards if the information they provide leads to a successful enforcement action that results in monetary penalties exceeding $1,000,000.

Furthermore, engaging in certain transactions involving the person designated today may risk the imposition of secondary sanctions on participating foreign financial institutions.  OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a person who is designated pursuant to the relevant authority.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law.  The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.  For information concerning the process for seeking removal from an OFAC list, including the SDN List, or to submit a request, please refer to OFAC’s guidance on Filing a Petition for Removal from an OFAC List.

Click here for more information on the entity designated today.