Home Economics, Policy & Regulation Are ‘D-Day’ Sanctions a Bridge Too Far or Not Far Enough?
Author: Rob Daly | Photos: Niphon Subsri
New U.S. sanctions target Iran’s tech, gold, and shipping sectors, pressing global intermediaries.
Editor’s note: This article has been updated to include new developments from the U.S. Treasury Department.
The U.S. Department of the Treasury invoked the memory of approximately 160,000 Allied soldiers storming a 50-mile stretch of Normandy’s coast when it published its latest round of secondary sanctions against Iran on Aug. 24. However, rather than capturing Gold, Juno, Omaha, Sword, and Utah beaches, the sanctions seek to hobble Iran’s digital assets, technology, gold, aviation, and shipping sectors .
“In the Second World War, D-Day marked the historic beginning of a campaign with our allies to target and drive the enemy from its positions, including those in third countries,” U.S. Treasury Secretary Scott Bessent posted on the social media platform X, formerly Twitter. “Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.”
The Treasury, Department of State, and the Department of Defense personnel have worked with their counterparts to convey expectations for immediate action on the sanctions.
“Every country will be given a defined timeline to shut down the Iran-related activity we have identified,” the Treasury said in a prepared statement . “If they fail to act, the Treasury will act. Any entity that facilitates money laundering or sanctions evasion on behalf of Iran risks being cut off from the U.S. financial system.”
Within less than a week, the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed a rule to strip Banqu Misr UAE’s correspondent banking access to U.S. financial institutions, as part of FinCEN’s Operation Economic Outcast.
“We … warned that Iran enablers cannot continue to enjoy access to the U.S. dollar and the global financial system,” Secretary Bessent said in a prepared statement . “Banque Misr UAE decided to find out the hard way, and today, we are taking the first step on holding it accountable for its continued, egregious support for the Iranian regime.”
At the same time, Treasury’s Office of Foreign Asset Control (OFAC) sanctioned Bank Melli’s Dubai branch manager Reza Mohammed Taeedi for allegedly facilitating transactions worth billions of dollars through accounts controlled by the Islamic Revolutionary Guard Corps Qod Force. OFAC also sanctioned Hong Kong-based Kameng Trading Ltd. for money laundering on behalf of the sanctioned Iranian exchange house Pedrram Pirouzan, also known as Opal Exchange.
The new sanctions may deter international companies from doing business in Iran, but their immediate effect may be over-compliance due to the Treasury’s new designations, Kari Heerman, Brookings senior fellow and Director of Trade and Economic Statecraft, told Global Finance .
The harder question is how much additional pressure the latest sanctions have on Iran’s economy.
“Years of sanctions have pushed Iran’s remaining trade toward firms and financial channels more willing or able to tolerate U.S. sanctions,” she added. “That makes evasion more expensive for Iran, but it also makes each successive round of enforcement more difficult for the United States.&#…