Nicolas Maduro, Venezuela's president, center, waves a Venezuelan flag during an anti-imperialist rally outside of Miraflores Palace in Caracas, Venezuela, on March 9, 2019. Photo: Adriana Loureiro Fernandez/Bloomberg

Dealing with state-owned Russian financial institutions—already a risky proposition for many U.S. companies—is even riskier now in the wake of the Treasury Department's announcement Monday that it had sanctioned a Russian bank for allegedly attempting to sidestep U.S. sanctions on Venezuela, according to a former U.S. sanctions official.

The Treasury Department's Office of Foreign Assets Control added Moscow-based Evrofinance Mosnarbank to the U.S. sanctions list after finding the bank had continued to “maintain its significant relationship” with the regime of Venezuelan President Nicolas Maduro.

Russian and Venezuelan state-owned companies control Evrofinance, which was founded in 2011 to finance joint Russia-Venezuela oil and infrastructure projects, according to the Treasury.

Evrofinance did not immediately respond to a request for comment. But the bank has stated it “will unconditionally fulfill all its obligations to customers and partners in full,” according to Bloomberg.

Michael Dobson, former senior sanctions policy adviser for the Office of Foreign Assets Control, described the Evrofinance sanction as a “two-for-one” move that ratchets up the pressure on Maduro and shows that “dealing with state-owned Russian financial institutions is a high-risk proposition.”

The main takeaway for U.S. companies worried about potential sanctions violations is that the Treasury isn't focusing solely on Venezuelan entities, Dobson said: “They're also looking at non-Venezuelan parties who are helping prop up the Maduro regime.”

He added companies and their legal departments need to ask, ”Is this a risky entity to be dealing with and also is this entity active in a sanctions hot space?”

Dobson, now of counsel at Morrison & Foerster in Washington, D.C., believed that the Trump administration was “trying to signal that there are others who should take notice that the U.S. isn't going to continue to tolerate actors meddling in the Western Hemisphere, and Venezuela in particular, without fear of repercussions.”

“So far, they've targeted corruption networks around the Maduro regime,” he said.

Dobson added the action shows the “breadth of [OFAC's] sanctions authority,” which he said “allows OFAC broad discretion to go after anyone that they view as, and can make a legally defensible case of, supporting the Maduro regime.”

Treasury Secretary Steven Mnuchin said in a prepared statement that sanctioning Evrofinance “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.”

The Treasury asserted that Evrofinance's net assets increased by more than 50 percent during 2018, when the bank allegedly financed Venezuelan cryptocurrency Petro as part of an effort to help the country circumvent U.S. sanctions.

Evrofinance also is accused of assisting Venezuela state-owned oil company Petróleos de Venezuela SA, or PDVSA, the parent company of Citgo and several other subsidiaries. The United States announced new sanctions against PDVSA in January as part of an effort to pressure Maduro to resign.

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