Treasury Secretary Scott Bessent signals weekly bank sanctions ahead of G20 meeting; warns China — Iran's top oil buyer — that all options remain on the table

US Treasury Secretary Scott Bessent announces the launch of "Operation Economic Outcast," a sweeping economic pressure campaign against Iran, at the Treasury Department in Washington on Monday. [AP]
US Treasury Secretary Scott Bessent announces the launch of "Operation Economic Outcast," a sweeping economic pressure campaign against Iran, at the Treasury Department in Washington on Monday. [AP]

The United States will impose additional sanctions this week targeting financial institutions that do business with Iran, Treasury Secretary Scott Bessent said Sunday (local time), warning that "all options are on the table" regarding China — Iran's largest oil buyer — as Washington moves to sever Tehran from the global financial system.

Bessent made the remarks ahead of a Group of 20 finance ministers and central bank governors meeting in Asheville, North Carolina, saying he planned to "impose sanctions on another bank this week."

Bessent warned banks doing business with Iran that the United States would resort to "financial violence" if necessary to cut off Tehran's funding. "We know who you are, and you know who you are," he said. "It's time to stop."

Washington intends to keep expanding sanctions against financial institutions dealing with Iran rather than treating the measures as one-off actions. Bessent said new secondary sanctions could be announced on a weekly basis, adding, "We are starting with the banks."

The Donald Trump administration earlier launched what it calls "Operation Economic Outcast," a campaign designed to isolate Iran from international financial and trade networks by sanctioning third-country companies and financial institutions that continue to do business with Tehran.

The first financial target under the operation was the UAE branches of Banque Misr, an Egyptian state-owned bank. The Treasury Department said Friday that those branches had processed transactions linked to Iran's "shadow financial network" and moved to cut off their access to the US financial system. Once the process is finalized, the branches will lose their correspondent banking relationships with American institutions.

China is the central variable. As Iran's largest trading partner and top oil buyer, Beijing's cooperation — or lack thereof — will largely determine whether Washington's economic blockade proves effective.

Bessent said he planned to raise the Iran issue with Chinese counterparts at the G20 meeting, adding that all options remained on the table when it came to potential sanctions against China.

He shrugged off suggestions that the United States was reluctant to sanction China out of fear of a direct confrontation, calling that framing "completely wrong," and went on to say that both Washington and Beijing shared an interest in reopening the Strait of Hormuz and preventing Iran from developing nuclear weapons.

Whether the United States will actually move against major Chinese financial institutions remains uncertain, however. Washington chose a graduated approach with Banque Misr — blocking the UAE branches' access to the US financial system rather than imposing sweeping sanctions on the entire bank. Directly targeting countries with large-scale trade ties to Iran, such as China or India, could send significant shockwaves through global financial markets.

The United States plans to use the G20 as a platform to press other countries to cut financial and trade ties with Iran. The success of Operation Economic Outcast will ultimately hinge on how major trading partners, China chief among them, respond.


sjy@heraldcorp.com