The United States imposed sanctions on Russia's VEB Bank and Promsvyazbank (PSB) on Tuesday, according to statement from the U.S. Treasury Department, after Moscow formally recognized two regions of eastern Ukraine as independent.

"Today's actions, taken in coordination with our partners and allies, begin the process of dismantling the Kremlin's financial network and its ability to fund destabilizing activity in Ukraine and around the world," Treasury Secretary Janet Yellen said in the statement.

The U.S. Treasury said its economic sanctions are pursuant to Executive Order 14024, which authorizes sanctions against Russia for its harmful foreign activities, including violating core principles of international law such as respect for the territorial integrity of other states. Pursuant to the executive order, the secretary of the Treasury, in consultation with the secretary of state, has determined that section 1(a)(i) of E.O. 14024 applies to the financial services sector of the Russian Federation economy.

Further, according to the Treasury Department, "persons determined to operate or have operated in this identified sector can be subject to sanctions. This allows Treasury to target any person that operates or has operated in Russia’s financial services sector, including today’s designations of PSB and VEB."

The U.S. Treasury said VEB and PSB are "crucial to Russia's defense industry and 42 of their subsidiaries [and] play signficant roles in the Russian economy, holding combined assets worth tens of billions of dollars."