US economic strategy against Iran needs broader international cooperation

A new assessment published this week by two senior fellows at the Washington Institute for Near East Policy argues that the United States' Operation Economic Outcast is not reaching its full potential. The campaign, which aims to cut off the economic lifelines supporting the Iranian regime, requires deeper coordination with international partners to be truly effective, the experts stated.

Michael Jacobson, the Mark and Wayne Levy Senior Fellow, and Matthew Levitt, the Fromer-Wexler Senior Fellow and director of the institute’s Reinhard Program on Counterterrorism and Intelligence, outlined their findings in the report. They contended that closer collaboration with allies on sanctions would significantly bolster Washington’s ongoing efforts to weaken the Iranian government, particularly alongside the current blockade of the Strait of Hormuz.

The researchers criticized the US government for relying too heavily on targeted and limited diplomatic actions to counter Iran-linked terrorism. They pointed out that the progress made so far actually highlights the benefits of adopting a more international approach to the issue.

Recent diplomatic moves illustrate the complexity of this coordination. On October 12, the United States joined 29 other governments in issuing a statement accusing Iran of plotting to destroy US air assets at RAF Fairford in the United Kingdom. This followed a similar declaration one week earlier, where the US and eight Western Hemisphere nations condemned Iranian terrorist and malicious activities in the region. Additionally, in June, the US State Department and more than 20 other governments accused Iran of being behind a series of attacks across Europe, North America, and Australia.

The fellows noted that several governments were initially hesitant to condemn Iranian plots, even those occurring on their own territory. Concerns regarding potential Iranian retaliation and the safety of their citizens detained in Iranian prisons contributed to this caution. However, these nations eventually joined in the condemnation with American support.

Washington’s diplomatic influence has also helped countries in Central and South America designate or sanction the Islamic Revolutionary Guard Corps, Hezbollah, and Hamas in recent years. The experts argued that these measures carry significant symbolic weight and provide governments with additional tools to counter the groups. Nevertheless, they cautioned that such designations must be supported by the material capabilities, skills, and knowledge necessary to tackle the complex Iranian threat, including its sophisticated financial schemes, if they are to result in meaningful action.

The report suggests that the Trump administration could utilize foreign assistance funding to advance these efforts. Congress has already allocated nearly $300 million to the State Department for the current fiscal year to strengthen partners' counterterrorism capabilities. While the department has committed some of these funds to addressing cartel and gang threats in Central America, the fellows believe similar support could be applied to countering Iran’s malign activities.

Specific recommendations include directing funds toward training and equipping Syrian border security authorities to intercept smuggling operations by Iran and Hezbollah, including bulk cash transfers. The experts also suggested helping Yemeni Coast Guard officials detect and disrupt Houthi weapons networks and improving the ability of Iraqi financial institutions to identify illicit Iranian financing schemes.

Furthermore, other initiatives could strengthen efforts by authorities in West Africa and South America to uncover and prosecute the illicit financial networks of Hezbollah. The report emphasizes that these steps are essential for translating diplomatic support into tangible results against the Iranian regime.