Washington, Feb 5
The United States has defended its sanctions-led foreign policy toward Iran and Myanmar, with Treasury Secretary Scott Bessent telling lawmakers that economic pressure remains a central pillar of Washington's national security and global financial stability strategy.
Testifying before the House Financial Services Committee on the Financial Stability Oversight Council's 2025 annual report on Wednesday (local time), Bessent said the Trump administration continues to pursue what he described as a "maximum pressure campaign" against Iran, arguing that the strategy is producing visible economic strain inside the country.
"With respect to Iran, President Trump, upon entering office, instructed the US Treasury to implement a maximum pressure campaign," Bessent said. "We saw the fruits of that campaign in December, as the Iranian economy has collapsed."
Bessent told lawmakers that Iran had suffered a major banking shock late last year, forcing authorities to intervene. "We had a large bank collapse there. The central bank was forced to bail it out, created inflation and the Iranian -- the brave Iranian people have taken to the streets," he said.
Republican lawmakers argued that sanctions were constraining Tehran's ability to fund weapons purchases and overseas activities.
Bessent said Treasury continues to monitor financial flows and trade activity involving sanctioned countries, particularly where third parties may be facilitating evasion.
"We continuously monitor trade between the two countries like that," he said, adding that Iran faces a shortage of dollars to purchase goods or weapons.
Lawmakers also pressed the administration on Myanmar, where bipartisan concern has grown over the military junta's actions and its role in regional instability.
Congressmen cited reports of Iranian jet fuel shipments to Myanmar and urged tougher action against the military regime. Bessent responded that sanctions enforcement tools remained available and said Treasury was working across agencies to apply pressure.
Bessent said sanctions policy was designed to target regimes and illicit networks rather than civilian populations, and that Treasury relied on financial intelligence, monitoring and enforcement to disrupt evasion.
The hearing also highlighted how financial stability oversight increasingly intersects with geopolitics, as lawmakers scrutinise the global consequences of sanctions on energy markets, shipping, banking and capital flows.
Iran and Myanmar remain areas of close attention for global markets, given their roles in regional energy supply, trade routes and cross-border finance.
US sanctions policy has implications for international banking, insurance and trade settlement systems, particularly for countries navigating economic ties alongside strategic relationships.
- IANS
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