The designation places VTB, Russia's second-largest state-controlled bank, on the US sanctions list tied to Iran rather than to Russia. According to the US Treasury, the bank opened representative offices in Iran, conducted settlements with Iranian banks already under sanctions and took part in moving billions of dollars in frozen Iranian assets.
Miad Maleki, an analyst and former employee of the US Treasury unit responsible for sanctions, said in comments cited by Meduza that the measures against VTB should be seen as part of US pressure on China, where a significant share of Iranian oil revenue is held. According to him, VTB is the only Russian bank with a branch in mainland China and access to China's national payment system.
Maleki noted that Chinese banks had continued to work with VTB even though it had long been on the US sanctions list over Russia. The Iran sanctions list, however, is far more toxic, the analyst argued: the Treasury expects Chinese banks to begin refusing to deal with VTB for fear of secondary sanctions under the Iran program.
As Kommersant reported, citing the US Treasury, OFAC will begin assessing not only the formal owner or intermediary in a transaction but also who actually controls the assets and benefits from them. A change of owner or the use of an intermediary will therefore not allow sanctions to be circumvented.
VTB has been under US sectoral sanctions since July 2014, when the restrictions barred American companies from providing financing to the bank but did not provide for its full isolation from the US financial system. In 2022, after Russia's full-scale invasion of Ukraine, US President Joe Biden announced new restrictions and the bank was added to the SDN (Specially Designated Nationals and Blocked Persons) list, which provides for the blocking of assets and accounts in the United States and de facto isolation from the dollar financial system. The restrictions extended to subsidiaries in which VTB holds more than 50%. Britain and the European Union soon joined the sanctions against the bank.
VTB is the second-largest Russian bank and is controlled by the state.