UAE orders urgent probe of Banque Misr after US dollar access threat

The U.S. Treasury Department moved on Friday to sever Egypt's Banque Misr's UAE branches from the American financial system, targeting what it called a "critical node" for Iran's access to U.S. dollars as Washington escalates its economic pressure campaign six months into its war with Tehran.

The action, issued by the Treasury's Financial Crimes Enforcement Network under Section 311 of the USA PATRIOT Act, would prohibit U.S. financial institutions from opening or maintaining correspondent accounts for Banque Misr UAE. The proposed rule is subject to a 30-day public comment period before any final decision takes effect.turkiyetoday+1

Treasury Secretary Scott Bessent, who earlier in the week outlined plans for Iran's "economic asphyxiation," said in a statement first reported by the Financial Times that "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".newagebd+1

The Treasury estimated that between January 2024 and June 2026, Banque Misr UAE processed approximately $1.8 billion in transactions for 103 companies potentially linked to Iranian shadow-banking networks.english.ahram+1

UAE and Egypt Move to Contain Fallout

The UAE Central Bank responded on Saturday by ordering what it called a "special and urgent examination" of Banque Misr's branches in the country, including a forensic review of the period covered by the U.S. notice. The regulator warned that it "expects banks licensed in the UAE not to expose the UAE's financial system to reputational risks".economictimes+1

Banque Misr said Saturday it was reviewing the notice "with the utmost seriousness" and would seek further details from the Treasury before submitting a formal response. Egypt's central bank said it and the foreign ministry were in contact with U.S. officials, stressing that the measure was limited to the UAE branch's dollar transactions and did not extend to any other banks in the Egyptian banking sector.arabnews+2

A Treasury official confirmed the action applies only to Banque Misr's six UAE branches, leaving the bank free to continue dollar transactions through its headquarters in Cairo and branches in Paris, Frankfurt, Riyadh and elsewhere.ariananews

Broader Pressure Campaign Faces Limits

The move is part of what the Treasury has dubbed "Operation Economic Outcast," which also included sanctions on the manager of Iran's Bank Melli branch in Dubai and a Hong Kong-based front company accused of laundering funds for a sanctioned Iranian exchange house.newagebd+1

But the action against a mid-sized Egyptian bank underscores the limits of Washington's campaign. China remains a major buyer of Iranian oil, and moves against Chinese institutions could roil global markets and complicate an expected visit by President Xi Jinping to Washington in September. Bessent is due to press G20 finance ministers to join the pressure campaign at bilateral meetings next week in Asheville, North Carolina.africanews+1