In July 2021, popular protests erupted in Cuba for the first time in a generation, in an event that had the mark of Washington all over it (Helen Yaffe, “What’s Actually Going on in Cuba?” Novara Media, July 20, 2021). The immediate background to these protests was the U.S. tightening of the six-decades-long embargo in the midst of the COVID-19 crisis, by means of the Donald Trump administration’s imposition of 243 additional financial sanctions on Cuba, subsequently carried forward by the Joe Biden administration. The recent tightening of the economic blockade on Cuba, plus the related economic sanctions directed at Venezuela, resulting in tens of thousands of deaths there, can be understood only in the context of the new era of financial warfare, which the United States has unleashed on targeted countries.

A little over a decade and a half ago, in 2004, Washington launched a whole new strategy of financial war, with the creation within the U.S. Treasury Department of the Office of Terrorism and Financial Intelligence, together with the Office of Intelligence and Analysis—the first intelligence office assigned to a treasury department anywhere in the world. These new organizations within the U.S. Treasury were to be the headquarters of a grand strategy utilizing Washington’s financial leverage, based on the role of the U.S. dollar as the hegemonic foreign-exchange currency, to cut off the economic circulation of targeted states. More than 60 percent of all global foreign exchange reserves are denominated in the U.S. dollar, which also plays the preponderant role in international currency transactions. This has allowed the United States to create, as part of its “rules-based international order,” a coercive global framework extending U.S. financial jurisdiction to every country, economic entity, and person engaged at any point in U.S. dollar transactions anywhere in the world.

More specifically, Washington has imposed strict rules of compliance with U.S. standards on all of the world’s banks. It has given itself the right to designate any country, economic entity, or person in the world as a “terrorist” organization or individual, or as complicit with terrorism. Section 311 of the U.S. Patriot Act, passed by the U.S. Congress, gives the U.S. Treasury the authority to designate any bank throughout the globe as a “bad bank,” subject to U.S. financial and legal sanctions. Since 2016, the Global Magnitsky Act has authorized Washington to sanction all individuals in any country in the world that it stipulates as human rights offenders, freezing their assets. The U.S. Treasury has obtained complete access to the SWIFT (Society for Worldwide Interbank Financial Transactions) system that facilitates international transactions in U.S. dollars, thereby enabling U.S. surveillance of most international dollar exchanges. Close to a hundred executive orders have been issued to target various countries with financial sanctions. As a result, the United States has issued more economic sanctions on more occasions than have all other countries in the world put together (Jesse Van Genugten, “Conscripting the Global Banking Sector,” Berkeley Business Law Journal, 2019, 156).

As part of its imperial strategy, the U.S. Treasury has currently designated as its principal nation-state targets around forty countries/regions included on its Sanctions Programs and Country Information List that have in various ways resisted or failed to comply with U.S. power. The U.S. Treasury’s Specially Designated Nationals and Blocked Persons List, which is more than 1,500 pages long, includes all of those economic entities and persons linked to targeted countries that Washington has designated for scarlet-letter treatment. This list now extends to approximately 6,300 official targets, with additions to the list in 2018 around eight times those of 2002 (“2019 Year-End Sanctions Update,” Gibson Dunn, January 23, 2020; Lauren Smith, “United States Imposed Economic Sanctions,” MR Essays, March 10, 2020).

Under this system, every financial institution in the world is now compelled to adhere to the restrictions that the Treasury Department in Washington has instituted on pain of being themselves classified as complicit with money laundering and terrorist actions, and heavily fined (or targeted) by the United States. In practice, this means that the world’s major financial institutions such as banks and insurance companies are now forced to police their own transactions and the world financial system on a daily basis in order to protect their assets from U.S. sanctions. Hence, almost all of the major banks have been dragooned into supporting Washington’s financial war on its target countries. In this way, Cuba’s tourist industry, its access to foreign exchange, and its ability to purchase syringes in a pandemic have now been largely shut down. Venezuela, meanwhile, is cut off from the shipping companies necessary to move its oil due to the U.S. financial sanctions imposed both on the shipping companies themselves and on the insurance companies that insure the cargo. It is unable to receive the needed technology, services, and commodities to maintain its oil production, along with being deprived of the essential food and medical imports for its population. Similar constrictions on economic circulation are being experienced by all the other countries the United States is targeting.

Examples abound of the U.S. weaponization of finance in this new form of siege warfare directed at various nations in the Global South. Around 2006, U.S. Undersecretary of the Treasury for the Office of Terrorism and Financial Intelligence Stuart Levey met hundreds of times with bank officials throughout the world to get the entire global banking system to isolate Iran and other countries outlawed by the United States. As Juan C. Zarate, former deputy undersecretary in the Treasury Department’s Office of Terrorism and Financial Intelligence and one of the chief architects of the new system of financial warfare, explains in his 2013 book Treasury’s War: The Unleashing of a New Era of Financial Warfare, “a series of designations was designed to build like a financial crescendo, creating an international financial environment that would begin to reject, for its own sake, the risks of doing business with Iran [or any other ‘rogue state’]. U.S. executive orders would identify and target finance that supported terror…which would be matched by designations at the United Nations. Then Iran’s banks were exposed and targeted—one at a time” (303). On September 7, 2006, the U.S. Treasury severed the Iranian Bank Saderat from the international financial system. The next day, the bank was officially designated as a terrorist financing institution under presidential Executive Order 13224. In 2019, the U.S. financial war on Iran climaxed with the U.S. Treasury’s designation of the Central Bank of Iran, Bank Markazi, as a terrorist financing organization (“U.S. Sanctions Iran’s Central Bank,” Iran Primer, United States Institute of Peace, September 20, 2019; Zarate, Treasury’s War, 303, 332).

As early as 2005, the Treasury Department had designated Banco Delta Asia, a small bank in Macau (China), as a “bad bank” in its attempt to isolate North Korea financially and commercially, setting off an electric charge in the banking community internationally, threatening Chinese banks in particular. Instantaneously, Banco Delta Asia was converted into a financial pariah. North Korean accounts were closed down all over Asia. All other banks worldwide began to restructure their finances to ensure compliance with U.S. directives. CIA director Michael Hayden called the action “a twenty-first-century precision-guided munition,” spreading fear throughout global finance (Zarate, Treasury’s War, 244).

In recent years, the Treasury Department, the Justice Department, and other U.S. regulatory agencies have fined such key Western financial firms as BNP Paribus, HSBC, Credit Suisse, Barclays, Standard Chartered, and others over $11 billion in final plea or settlement deals for not fully complying with U.S. rules with respect to U.S. designated targets (Elizabeth Rosenberg et al., “The New Tools of Economic Warfare,” Center for New American Security, 2016, 11). In 2017, Washington imposed a $1.19 billion penalty on the Chinese Telecom manufacture ZTE for evading U.S. sanctions on Iran and North Korea, causing its stocks to plummet (Alex Capri, “Why US Sanctions Are So Lethal,” Diplomat, February 23, 2018).

The United States, directly and through its allies, has proceeded to confiscate and freeze billions—in some cases tens of billions—in dollars of assets of targeted countries, including those of Iran, Libya, and Venezuela. This has included U.S. seizure of the Venezuelan oil distribution company CITGO in the United States and (with United Kingdom support) the Venezuelan gold reserves held in London. On April 17, 2019, the U.S. Treasury sanctioned the Central Bank of Venezuela, Banco Central de Venezuela, placing it on its Specially Designated Nationals and Blocked Persons List, justifying this on the basis of Banco Central de Venezuela’s support of Venezuela’s elected government under Nicolás Maduro, which Washington has pronounced to be “illegitimate” (“Treasury Sanctions Central Bank of Venezuela and Director of the Central Bank of Venezuela,” U.S. Department of the Treasury, April 17, 2021). According to Ashi Moshiri, Chevron’s former top executive in Venezuela, “this sanction is saying: ‘You deal with the Venezuelan Central Bank, we [the United States Treasury] are going to come after you’” (“New U.S. Sanctions on Venezuela to Choke Off Government Finances,” New York Times, April 17, 2019).

Zarate warns in the closing pages of Treasury’s War that as U.S. economic dominance fades, so will its dollar hegemony. At some point in the future, other powers, notably China, may be compelled to reply in kind, generating a Financial World War. Nevertheless, it is clear that the current bipartisan financial war regime in Washington is determined to continue to use this weapon to the fullest in a desperate attempt to maintain the U.S. imperium. In the process, the population of the world is held hostage, with hundreds of millions suffering daily from the arrogance of U.S. financial power.

(Courtesy: Monthly Review, a socialist monthly published from New York.)