U.S. Treasury Secretary Scott Bessent has pressed the Group of Seven to uphold existing sanctions against Iran, arguing that stronger enforcement could cut off funding for the country's military operations. The push, delivered during a closed-door session, focuses on closing loopholes that Tehran has used to bypass restrictions and sustain its regional activities.
Why the call came now
Bessent's appeal lands as Iran continues to find workarounds for financial curbs, including through third-country intermediaries and shadow banking networks. The Treasury chief told G7 finance ministers that current measures are being undercut by inconsistent enforcement among member states. He stressed that a unified, tougher stance would directly reduce the revenue Tehran channels into proxy forces and missile programs.
The timing also reflects broader concerns about regional stability. Israeli officials and Gulf allies have warned that Iran's military funding has grown more sophisticated, using cryptocurrency and trade-based money laundering to move funds. Bessent's message was clear: without coordinated action, the sanctions regime loses its teeth.
What stronger enforcement would look like
Under Bessent's proposal, G7 countries would share more intelligence on sanctions evasion and impose secondary penalties on entities that facilitate Iranian transactions. That could include targeting banks in the United Arab Emirates, Turkey, and Iraq that have been linked to oil revenue skimming and weapons procurement.
The Treasury Department has already designated dozens of companies and vessels involved in Iranian petrochemical exports, but Bessent argues that a joint G7 effort — with harmonized penalties — would make evasion far more costly. He also pushed for extending sanctions to cover more front companies and shipping networks that move Iranian crude to Asian buyers.
The ripple effect on global finance
If the G7 follows through, banks and financial firms worldwide would face stricter compliance demands. The measures could raise the bar for due diligence on transactions involving jurisdictions with weak anti-money-laundering frameworks. Some compliance officers worry that a tougher crackdown will create new friction for legitimate trade with the region, especially in humanitarian goods like food and medicine.
Yet Bessent's team has signaled that exceptions for essential goods would remain, as long as they aren't routed through sanctioned entities. The real impact, they say, will fall on the informal value-transfer systems that Iran relies on — hawalas, trade-based laundering, and crypto exchanges that lack know-your-customer controls.
The G7's response is still being negotiated. A joint statement is expected within weeks. For now, Bessent's message has put Iran sanctions back at the top of the agenda, and financial institutions are already reviewing their exposure to the region.
