U.S. Sanctions Russian Bank for Supporting Venezuela's PDVSA

(Bloomberg) -- The U.S. Treasury Department sanctioned a Moscow-based bank owned jointly by Russian and Venezuelan state companies for evading U.S. restrictions aimed at putting economic pressure on Venezuelan President Nicolas Maduro’s regime.

Evrofinance Mosnarbank was placed on the U.S. sanctions list on Monday, according to a Treasury Department notice, for supporting Venezuela’s state-owned oil company PDVSA. The U.S. in January sanctioned the oil company.

“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,” Treasury Secretary Steven Mnuchin said in a statement.

Russian President Vladimir Putin has been a long-time ally of Maduro. While more than 50 countries, including the U.S., have recognized National Assembly leader Juan Guaido as the interim president of Venezuela, Russia has sided with Maduro’s regime. Putin has helped Maduro stave-off further declines in oil production, at least temporarily.

Evrofinance was the primary international bank that helped finance a Venezuelan crypto-currency, petro, which launched in 2018 as a work-around for U.S. sanctions, according to the statement.

The bank was set up in 2011 as a joint venture to build on the alliance between Putin and former Venezuelan leader Hugo Chavez. Venezuela’s development bank owns 50 percent of the bank, with the rest split between Russia’s state-controlled Gazprombank and VTB Group.

Evrofinance “will unconditionally fulfill all its obligations to customers and partners in full,” the bank said in a statement.

Once South America’s richest nation, Venezuela has suffered deeply under Maduro with poverty, violence, hyperinflation, food shortages and crippling electricity outages.

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