Russian Bank Sanctioned by U.S. over Venezuela Business

A Moscow-based bank jointly owned by Russian and Venezuelan state-owned companies was put under U.S. sanctions on Monday, for allegedly trying to circumvent Washington’s economic measures on the South American country, the Associated Press reports.

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) said in a press release it is targeting Evrofinance Mosnarbank for its support of the Petroleos de Venezuela S.A., (PDVSA), the Venezuelan state-owned oil giant, which was previously targeted by sanctions in January.

The U.S. and more than 50 governments recognize opposition leader Juan Guaido as interim president of the country. They say president Nicolas Maduro wasn’t legitimately re-elected last year because opposition candidates weren’t permitted to run.

“This action demonstrates that the United States will take action against foreign financial institutions that sustain the illegitimate Maduro regime and contribute to the economic collapse and humanitarian crisis plaguing the people of Venezuela,” said Treasury Secretary Steven Mnuchin.

Evrofinance was founded as a bi-national bank to fund joint Russia-Venezuela oil and infrastructure projects, according to OFAC.

Maduro’s predecessor, President Hugo Chavez, bought a 49 percent stake in Evrofinance through the Venezuelan National Development Fund back in 2011.

In October, it was reported that Evrofinanz Mosnarbank has emerged as a key player in Nicolas Maduro’s efforts to work around U.S. sanctions that are cutting his country off from the global economy.

According to Bloomberg, the bank was tapped by the Maduro government as an alternative to handle payments to its suppliers, and officials in Caracas were urging local banks and companies to channel international transactions through Evrofinance, people with direct knowledge of the matter said.