U.S. Treasury Secretary Scott Bessent on Tuesday asked allied governments to step up efforts to dismantle Iran's financial networks and detailed plans to streamline Washington's sanctions regime so financial institutions can more readily spot complex terrorist financing schemes.
Speaking at an anti-terrorism financing conference held after a G7 finance leaders meeting in Paris, Bessent urged attendees to "stand with us in full measure" against Iran. He outlined a set of actions he says are needed to choke off resources flowing to Tehran.
Bessent called on European partners to mirror U.S. measures by formally designating Iranian financiers, uncovering and publicizing shell and front companies, shutting down bank branches used for illicit flows, and dismantling networks of proxies. He also urged nations in the Middle East and Asia to take steps to eliminate Iran's shadow banking operations.
The Secretary framed these appeals in the context of a broader U.S. campaign to press Tehran to reopen the Strait of Hormuz and restore oil shipments that Washington says were disrupted by U.S.-Israeli attacks on Iran. As part of that pressure, the Treasury has accelerated sanctions through an initiative called "Economic Fury," which the department says targets Iran's shadow banking systems and has resulted in the freezing of nearly $500 million in cryptocurrency linked to Iran's regime.
To keep pace with evolving tactics used to evade restrictions, Bessent said the Treasury will modernize its sanctions framework. He warned that "our adversaries adapt and innovate" by creating new shell companies and other obscuring structures that make enforcement more difficult.
Most U.S. Treasury sanctions are applied using the Specially Designated Nationals List, which includes tens of thousands of individuals, companies and entities that are blocked from accessing the dollar-based financial system and have their assets frozen. Transactions involving designated parties carry the risk of sanctions.
Recognizing that an overly cluttered sanctions list can blunt enforcement, Bessent said the Treasury is reviewing outdated and obsolete designations so that banks and other financial institutions can focus on more sophisticated terrorist financing and sanctions evasion schemes. He argued that while effective sanctions should be aggressive and targeted, leaving measures in place indefinitely can produce undesirable outcomes.
"Sanctions are meant to change behavior, not to punish populations," Bessent said. He added that "Sanctions left in place for years with no visible and tangible changes in behavior can have generational impacts that are nearly impossible to predict."
The Treasury's intended approach emphasizes agility, allowing authorities to tighten or ease measures in response to changing circumstances. Bessent cited the easing of sanctions on Syria and Venezuela after regime changes as illustrative examples of how the administration expects to adjust restrictions when conditions warrant.
The announcements and appeals from the Treasury came amid a separate development in which President Donald Trump said he postponed a planned major military strike on Iran that had been scheduled for Tuesday. Trump said he paused the operation at the direct request of Gulf Arab leaders while serious negotiations take place. In a post on Truth Social, he said the leaders of Saudi Arabia, Qatar and the United Arab Emirates intervened and asked him to hold off on the planned large-scale attack to give diplomatic channels a chance to end the war.
Implications and context
Bessent's remarks signal a two-track approach by the Treasury: more aggressive targeting of Iran's financial lifelines abroad combined with an effort to make sanctions lists more precise so that enforcement can be concentrated on the most evasive networks. The Treasury's actions under the "Economic Fury" banner and the recent cryptocurrency freeze demonstrate a willingness to use both traditional and digital-finance tools in that effort.
What remains uncertain
How quickly allies will align their own designation practices and enforcement actions with the U.S. requests remains unclear. Equally uncertain is the timeline and scope for the Treasury's planned review and removal of outdated listings, and how financial institutions will reallocate compliance resources as a result.