WASHINGTON: The US Treasury slapped sanctions Monday on a Russia-based bank partly owned by Venezuela for its support for the government of embattled President Nicolas Maduro and the sanctioned state oil company PDVSA.
The sanctions targeted Moscow-based Evrofinance Mosnarbank, which when founded in 2011 was 50 per cent-owned by leading Russian banks and 49-per cent owned by Venezuela's National Development Fund.
"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 in a statement.
The move came as Washington ramps up actions on Maduro's regime, which is battling to hold onto power in the face of heavy domestic and international pressure.
Last week the United States indicted Venezuelan industry minister and former vice president Tareck El Aissami for violating sanctions in arranging unexplained flights on private jets to Turkey and Russia.
According to the US Treasury, Evrofinance Mosnarbank has been a key "lifeline" of Maduro's government.
As the Maduro government endured increasing pressure in the past year, the bank's assets soared by 50 per cent in 2018, according to the Treasury.
It also was a key point of support for the Maduro government's failed effort to create a new cryptocurrency, the petro, last year.
"Evrofinance emerged as the primary international financial institution willing to finance the Petro," the Treasury said.
The Treasury's action prohibits US citizens and entities for doing business with Evrofinance and freeze its assets under US jurisdiction.
The move is part of US efforts to choke of Venezuela's access to the international banking network.
Because penalties for sanctions violations are costly, some banks are beginning to avoid doing any business with Venezuela, according to Daniel Gutierrez, head of the Florida International Bankers Association's anti-moneylaundering committee.
That is making more difficult for legitimate businesses to make transactions and for Venezuelans abroad to sent money home.
"There are many major banks in the United States that have made the decision to decouple from Venezuela," said Gutierrez, who works with 60 domestic and international banks in Florida.