In prepared remarks for an anti-terrorism financing conference following the G7 finance leaders’ gathering in Paris, Bessent emphasized the need for participants to ”stand with us in full measure” against Iran.
”This will necessitate, for instance, our European partners joining the United States to take action against Iran by identifying its financiers, revealing its shell and front companies, closing its bank branches, and dismantling its proxies,” Bessent stated. ”It will also require efforts from those in the Middle East and Asia to eliminate Iran’s shadow banking networks.”
As the Trump administration seeks to pressure Tehran into reopening the Strait of Hormuz to restore crucial oil flows interrupted by the US-Israeli actions against Iran, the US Treasury has intensified its sanctions through a program named ”Economic Fury.” This initiative aims to disrupt Iran’s shadow banking systems and has resulted in the freezing of nearly half a billion dollars in cryptocurrency associated with Iran’s regime.
To enhance the effectiveness of these measures, the Treasury will modernize its sanctions framework, as ”our adversaries adapt and innovate” by establishing new shell companies.
Most US Treasury sanctions target individuals, companies, and entities included on its Specially Designated Nationals List, which comprises tens of thousands of individuals cut off from the dollar-based financial system, leading to frozen assets. Engaging in transactions with designated entities carries the risk of sanctions for the transacting parties.
”To refine national security outcomes, Treasury is customizing our sanctions program for the 21st century. We are evaluating outdated and ineffective designations to assist financial institutions in focusing on the most complex schemes in terrorist financing and sanctions evasion,” Bessent shared.
He pointed out that the most effective sanctions are those that are aggressive and targeted, and that those maintained for extended periods can lead to unintended consequences.
”Sanctions aim to alter behavior, not to penalize populations,” Bessent remarked. ”Sanctions that remain in place for years without clear and measurable behavior changes can have generational impacts that are almost impossible to foresee.”
Bessent indicated that the Treasury’s strategy would ”maintain agility to maximize effectiveness,” citing instances of easing sanctions on Syria and Venezuela following regime changes as examples of how the Trump administration plans to adapt sanctions.
