US Treasury Escalates Sanctions Pressure on Iran's Trade Partners

Operation Economic Outcast

On August 24, the US Treasury launched Operation Economic Outcast, an escalated sanctions campaign targeting Iran and the third-country enablers that allow Tehran to evade existing restrictions. Treasury Secretary Scott Bessent told reporters the administration was giving other countries a defined, though undisclosed, timeline to wind down certain activities involving Iran: act on your own, or the US will act unilaterally.

The campaign designated nearly ninety entities, individuals, and vessels across Iran and third countries including China, France, Greece, Hong Kong, India, Singapore, Switzerland, Syria, Türkiye, Ukraine, the UAE, and the United Kingdom. New sectoral sanctions determinations expanded secondary sanctions exposure across aviation, digital assets, gold, shipping, and technology.

Bank sanctions announced weekly

At the G20 finance leaders' meeting in Asheville, North Carolina, on September 1, Bessent said Washington was likely to announce a bank sanction that week and another the week after. We are speaking to our allies here, who have all come forward, and we have had a great show of support, he said. We have zero tolerance. We are going to economically asphyxiate this regime.

Reuters reported that Bessent was also looking at targeting airline leasing companies and other entities doing business with the Islamic Revolutionary Guard Corps. He warned that countries doing business with Iran could face US sanctions, signalling that the financial front of the war would intensify even as military strikes continued.

Suspension of general licenses

Treasury suspended five general licenses that companies may have relied on for authorised Iran-related activity, combining a large batch of new designations with a tightening of existing exemptions. FinCEN used Section 311 authority under the USA PATRIOT Act against a Swiss private bank for money laundering including sanctions evasion related to Iran's oil industry — the first such use against a jurisdiction not traditionally viewed as a sanctions target.

Paul Hastings noted that Banque Misr's UAE branches were identified as channels for potential Iranian shadow banking activity. The campaign, Bessent said, will gather force with every day that follows, and it will not end until this regime stands alone.

Pushback from major trading partners

Some of Iran's largest trading partners, including China, have pushed back on the US position. Secondary sanctions reach conduct by non-US persons with no direct American nexus, putting foreign financial institutions and logistics providers on notice that engagement with Iran in the newly designated sectors carries real risk of exclusion from the US financial system.

Tehran remained defiant in response to Bessent's G20 announcement, warning it would prevent oil exports from the Gulf despite Trump's threat to hit Iran hard. The sanctions campaign and the military campaign are now explicitly linked: Washington aims to cut Iran's revenue while Iran aims to cut Gulf exports, producing a race to see which side exhausts the other's capacity first.