• Treasury Secretary Scott Bessent says the U.S. will announce new bank sanctions this week and continue on a weekly basis, targeting Iran's financial networks.
  • The first action under "Operation Economic Outcast" was a proposed measure against Banque Misr's UAE branches for alleged ties to Iranian shadow banking.
  • No specific new target has been named, leaving markets to brace for escalating sanctions that could disrupt dollar-based trade.

Treasury Secretary Scott Bessent said the United States expects to announce new bank-focused secondary sanctions on Iran this week, with additional actions to follow on a rolling basis, according to Reuters. The measures are part of a broader campaign to isolate Tehran from the global financial system.

The first major step came on August 28, when the Financial Crimes Enforcement Network (FinCEN) proposed cutting Banque Misr's UAE branches off from correspondent-banking access to U.S. financial institutions. Treasury alleges the branches processed about $1.8 billion for 103 companies potentially linked to Iranian shadow-banking networks between January 2024 and June 2026. The action, taken under Section 311 of the USA PATRIOT Act, would prohibit U.S. banks from maintaining correspondent accounts for the targeted unit.

"We're probably going to announce a bank sanction this week and next week," Bessent said, signaling a more aggressive tempo than previous isolated actions. He added that the next step could be a more severe measure, entirely cutting an institution off from the dollar-based system, and warned banks globally against holding Iranian funds or facilitating transactions for the government.

Banque Misr, Egypt's second-largest bank, has not been fully sanctioned; the proposed rule applies only to its UAE branches. Still, the action highlights the ripple effects of secondary sanctions, as financial institutions in regional hubs reassess exposure to avoid losing access to U.S. markets. The Gulf and Asia, particularly the UAE, are critical conduits for Iran's commercial networks, and banks may "de-risk" by dropping clients with even indirect ties.

Bessent's comments also underscore a wider objective: curbing Iran's oil revenue, which he claimed has been delivered, with China's purchases reduced and tanker-stored volumes down. These claims, however, require independent verification. The campaign faces a major test in China, Iran's largest trading partner, though the administration has yet to target Chinese institutions directly.

The proposed Banque Misr UAE measure is part of "Operation Economic Outcast," launched on August 24, which aims to disrupt Iranian channels for oil smuggling, sanctions evasion, and proxy financing. The proposal is open for public comment before finalization, but the threat of weekly actions has already heightened compliance costs and uncertainty across financial hubs.

Egypt's central bank sought to reassure markets, saying the action was limited to Banque Misr's UAE branches and does not affect the broader Egyptian banking system. But analysts warn that reputational and compliance spillovers could still complicate operations for the bank and others in the region.

The escalation comes amid renewed military tensions around the Strait of Hormuz, as reported by AP. Bessent plans to use G20 meetings to seek broader cooperation against Iran, warning that states maintaining economic ties with Tehran may face secondary sanctions.

As institutions await the next official designation, the immediate impact remains uncertain. "The key is whether this stays narrowly scoped or moves to a systemically important bank," said a former Treasury official familiar with the strategy. For now, banks, traders, and governments are left to navigate a landscape where weekly sanctions could become the norm, forcing painful choices between Iranian business and access to the U.S. financial system.