The United States government has initiated steps to sever the UAE-based operations of Banque Misr from the American financial system. This move follows allegations that the Egyptian bank’s local branches have been conducting business with the Iranian government, effectively acting as a conduit for prohibited financial activities.
US Secretary of the Treasury Scott Bessent announced the decision on Friday, stating that the action is part of a broader effort to dismantle Iran’s economic lifelines. “Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime,” Bessent said. He further noted that the bank had been warned against providing access to US dollars and the global financial system, adding that the institution “decided to find out the hard way.”
The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a rule to revoke the correspondent banking access of Banque Misr’s UAE branches. If finalized, this measure would prevent these specific branches from executing dollar-denominated transactions or accessing the US financial market. The proposal is currently entering a 30-day public comment period before a final decision is reached.
Treasury officials allege that Banque Misr UAE served as a critical node for Iran to access US currency. Estimates provided by the Treasury suggest that between January 2024 and June 2026, the bank processed approximately $1.8 billion for 103 companies suspected of being part of Iranian shadow banking networks. These networks reportedly provide the Iranian government with essential access to US dollar correspondent banking relationships, which are used to generate revenue abroad.
According to the Treasury, the bank’s client list included front companies linked to Iran’s Ministry of Defence and the Islamic Revolutionary Guard Corps (IRGC). These entities allegedly utilized the bank to evade existing US sanctions and launder money on behalf of Iranian Supreme Leader Mojtaba Khamenei.
In response, Banque Misr confirmed on Saturday that it is reviewing the US Treasury’s notice. The bank stated that it is treating the data and estimates provided by the US with the “utmost seriousness and attention.” The institution plans to contact the US Treasury for further clarification and noted that, for the time being, its UAE branch continues to provide services to customers.
The Central Bank of Egypt (CBE) has also engaged with US authorities regarding the matter. The CBE clarified that the proposed US restrictions are limited exclusively to the UAE branches and do not impact any other banks within the Egyptian financial system or other branches of Banque Misr.
Meanwhile, UAE banking authorities have launched their own investigation. The UAE central bank announced on Sunday that it is conducting a “special and urgent examination” of the bank’s local operations, which will include a forensic lookback at past transactions. The regulator emphasized that it expects all licensed banks to uphold international financial regulations and avoid exposing the UAE’s system to reputational risks.
This action against Banque Misr is part of a wider US campaign, dubbed “Operation Economic Outcast,” which has intensified during the current deadlock in truce negotiations. Last week, the US Treasury sanctioned nearly 60 additional individuals and entities accused of helping Iran generate oil revenue, procure weapons, and conduct cyber operations.
Specifically, the Treasury’s Office of Foreign Assets Control (OFAC) also sanctioned Reza Mohammad Taeedi, the general manager of the Dubai branch of Iran’s Bank Melli, for facilitating transactions for the IRGC-QF. Additionally, the Hong Kong-based Kameng Trading Limited was sanctioned for allegedly aiding Iranian entities in accessing the US financial system.
Iranian officials have dismissed the latest round of sanctions. Economy Minister Ali Madanizadeh stated that the measures would fail, while Iranian government spokeswoman Fatemeh Mohajerani noted that President Masoud Pezeshkian would guide the country through the developments. IRGC spokesperson Sardar Mohebi characterized the US economic pressure as evidence of a battlefield defeat, and Tehran-based researcher Ali Akbar Dareini asserted that Iran has extensive experience in circumventing such restrictions, claiming the US efforts are based on significant miscalculations. The report also notes that who else has the US taken action against. The report also notes that the IRGC, to move funds inside and outside of Iran, it has allowed the IRGC-QF and its parent organisation. The report also notes that on Monday August 24, the United States announced sanctions on Iran and various global entities doing business with the country, in what officials called an “economic D-Day” and officially dubbed “Operation Economic Outcast” in an effort to isolate Tehran, ahead of Friday’s sanctions. The report also notes that at least 60 entities across the Middle East, Asia and Europe have been targeted in the latest sanctions as part of the economic pressure campaign that could further disrupt energy markets and rattle the global economy. The report also notes that the US is seeing little impact from its military operations, nearly six months into its war on Iran. The report also notes that analysts say, have pushed the Trump administration to try economic sanctions, but these are unlikely to compel Iran into meeting the demands, the long-term implications of the war. The report also notes that “The United States is returning to economic pressure because military force has failed to deliver the quick victory it expected,” Negar Mortazavi, senior fellow at the US-based Center for International Policy, said last week. The report also notes that “The ‘economic D-Day’ declaration underscores the war’s failure so far to force Iran’s surrender or achieve Washington’s political objectives.”.
Source: Al Jazeera
