U.S. Treasury Expands Sanctions on Iran’s Bank Melli

The Trump administration announced a fresh round of sanctions aimed at Iran’s state-owned Bank Melli, seeking to shut down all of its overseas branches. Treasury Secretary Scott Bessent stated that every foreign outlet of the bank must be closed and rendered inoperative, framing the move as part of “Operation Economic Outcast,” an intensified campaign to isolate Tehran’s financial network.

New York Times

Bank Melli has been subject to repeated U.S. penalties for roughly two decades. The United States first formally accused the bank in 2007 of financing Iran’s nuclear and missile programs, prompting a series of restrictions that have progressively limited its ability to conduct business abroad. International bodies—including the United Nations and the European Union—have also pursued measures to curb the bank’s alleged use of foreign front companies for illicit financing.

New York Times

The Treasury’s directive emphasizes punitive action against any foreign entity that continues to engage with Bank Melli. Bessent warned that countries maintaining financial ties with the bank could face secondary sanctions. In contrast, a Bank Melli employee in Dubai confirmed that the bank’s branch there remains open for customers, suggesting a lag between the announced policy and on-the-ground implementation.

New York Times

If fully enforced, the sanctions could further restrict Iran’s access to global financial markets, compounding the economic pressure already felt from earlier U.S., UN, and EU actions. The requirement to close foreign branches may force the bank to rely more heavily on informal channels, potentially increasing the risk of illicit transactions. Observers note that the effectiveness of the new measures will depend on the willingness of foreign jurisdictions to comply with secondary-sanction threats.

New York Times