The U.S. sanctioned Russia’s VTB Bank over its work with Iran. A former Treasury official says the move is also meant to pressure Chinese banks.

The U.S. Treasury Department sanctioned Russia's VTB Bank for its involvement in evading sanctions against Iran. According to the Treasury, VTB opened offices in Iran, processed transactions with sanctioned Iranian banks, and facilitated the movement of billions of frozen Iranian assets. Analyst Miad Maleki, a former U.S. Treasury official, suggests the measures against VTB are part of broader U.S. pressure on China, which holds a significant portion of Iran's oil revenue.

VTB is the only Russian bank with a branch in mainland China and access to the country's domestic payment system. Despite long-standing U.S. sanctions on VTB due to Russia's actions, Chinese banks continued to do business with the bank. Being added to the Iran sanctions list is seen as even more damaging. The Treasury expects Chinese banks to distance themselves from VTB due to potential secondary sanctions under the Iran sanctions program.

VTB, Russia's second-largest bank, is state-controlled. The U.S. first imposed restrictions on VTB in 2014 over Crimea's annexation and placed it under blocking sanctions in 2022 following Russia's invasion of Ukraine.