On August 28, 2026, the U.S. Treasury’s Financial Crimes Enforcement Network proposed a rule that would cut Banque Misr UAE off from correspondent banking with American financial institutions. The Central Bank of the UAE answered within a day. It ordered what it called a special and urgent examination of the Egyptian lender’s branches in the country.
What Treasury said
FinCEN described the action as part of Operation Economic Outcast, aimed at the Iranian government. It identified Banque Misr UAE as a financial institution operating outside the United States that is “of primary money laundering concern.”
Treasury Secretary Scott Bessent put it bluntly in a statement released Friday. “Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime,” he said. “Banque Misr UAE decided to find out the hard way, and today, we are taking the first step in holding it accountable for its continued, egregious support of the Iranian regime.”
Treasury’s reasoning, as Khaleej Times relayed it, is that Iran is already under comprehensive U.S. sanctions and therefore depends on shadow banking networks spread across several jurisdictions. Those networks give it access to U.S. dollar correspondent relationships. Treasury said Iran uses them to launder funds, procure weapons and bankroll regional proxy groups.
The UAE response
The CBUAE said it had reviewed the U.S. notice and stressed that Banque Misr’s UAE branches remain bound by local laws and regulations. Banks licensed in the country, it said, must not expose the financial system to reputational risk, must respect the laws of the countries whose institutions they use, and must not misuse the UAE’s financial infrastructure.
The examination will include a forensic, in-depth lookback covering the period referenced in the U.S. statement. It will concentrate on transactions linked to the companies that Washington named. The regulator added that it is studying its options on the bank’s status in the UAE, should the special measure be imposed once the procedures under U.S. law are complete. Any decision will come “in due course,” it said, with the bank’s obligations to UAE customers taken into account.
Egypt plays down the damage
Banque Misr said on Saturday that it was reviewing the Treasury notice and that its UAE branch continued to serve customers under applicable rules. The measure, it stressed, is limited to that branch and does not reach its operations in Egypt or any other country.
An Egyptian banking source told Asharq Al-Awsat the decision would stop the branch from sending U.S. dollar transfers outside the UAE without monitoring in Washington and prior approval. He said it applies strictly to the dollar and that the UAE branch, though fully owned by the state-owned Banque Misr of Egypt, falls under the UAE banking sector. “The US decision will not affect any bank inside Egypt in any way,” he said, adding that the measure is reviewable and likely to be cancelled after coordination with the U.S.
Economist Abdel Nabi Abdel Muttalib told the paper the move would not affect the rating of Banque Misr or the Egyptian banking sector. In his reading, it targets the correspondent service that U.S. banks provide, not the bank itself.
Sources
- UAE Central Bank orders probe into Banque Misr branches after US money laundering warning | Khaleej Times
- Banque Misr in UAE Targeted by US Sanctions
