Treasury Scott Bessent Held a Press Conference to Announce That He Would Be Going After the Funding Mechanisms That the Iranian Republic

Four days ago, Sec. Treasury Scott Bessent held a press conference to announce that he would be going after the funding mechanisms that the Iranian Republic is still using to try to stay afloat. Treas. laid out in no uncertain terms that this would be a merciless economic 'onslaught' against the regime's remaining financial network that would not end until 'Tehran stood alone.

And Bessent made it quite clear that those who offered aid to the mullahs would share in their fate as their economies came crashing down in sync. 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. Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections…...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. President Trump has taken action that his predecessors have long deferred. Under his leadership, America is no longer managing the Iranian threat.

We are ending it. Those who stand with the United States will reap the rewards of our partnership. Those who tether themselves to Tehran should expect to share in the isolation of a withering regime.

The Treasury Department made its first move today, against branches of a United Arab Emirates bank based in Egypt. The move put the financial world on edge, wondering if Chinese banks were next. The Treasury Department is moving to sever an Egyptian bank’s United Arab Emirates branches from the US financial system as part of efforts to pressure Iran into ending the war in the Middle East.

On Friday, Treasury’s Financial Crimes Enforcement Network proposed a measure revoking Banque Misr’s UAE correspondent banking access to US financial institutions, according to a statement posted on Treasury’s website on Friday morning. Banque Misr is Egypt’s second-largest bank....In a statement on Friday, Egypt’s central bank said it was in touch with the US about the measures and that the move was only aimed at the Banque Misr’s branch in the UAE. It added that “none of these measures” extend to any other financial institutions in the Egyptian banking sector, including Banque Misr’s domestic branches in Egypt and foreign branches in other countries.

After Bessent’s announcement on Monday, markets and foreign governments were waiting to see if the US would sanction a Chinese bank, since China buys more than 90% of Iran’s oil and has put out defiant statements in the wake of the new US sanctions push. While Treasury called Banque Misr a “key financial lifeline” for the regime because it allegedly processed around $1.8 billion for 103 companies that could potentially be part of Iranian shadow banking networks, the move struck some analysts as underwhelming. While some financial analysts felt it was 'underwhelming, most Middle East watchers thought the message sent was significant.

First, because sustaining Iran is almost all the business that this bank does. A ~USD 6 billion UAE bank with only three U.S. correspondent lines is moving roughly a third of its balance-sheet-equivalent per year in suspected Iranian shadow-banking flows; cutting those three lines is a low-cost, high-impact way to sever an Iranian access node to the USD. Second, it's also owned by the Egyptians, who will now have received a clear message that, if they had any part in this, they've been found out and had best clean up their act, STAT.