The U.S. Department of the Treasury designated state-controlled VTB Bank—Russia’s second-largest lender—under Iran-related authorities as part of “Operation Economic Outcast,” layering on top of its existing Ukraine-war sanctions.

Treasury found that VTB established offices in Iran, created correspondent ties with sanctioned Iranian banks, set up a rial-ruble settlement mechanism, and attempted to move billions of dollars in frozen Iranian assets to facilitate illicit Moscow–Tehran trade.

Foreign banks and international entities maintaining business ties with VTB now face severe secondary sanctions, risking total isolation from the U.S. financial system.

The action forms part of a wider Trump administration campaign to cripple Tehran’s economic and shipping channels—following recent penalties against UAE branches of Bank Misr and a Turkish investment bank—aimed at resolving the regional conflict and reopening the Strait of Hormuz.