The U.S. Treasury Department has proposed a rule to sever the United Arab Emirates branches of Banque Misr from the American financial system, accusing the institution of serving as an economic lifeline for the Iranian government.
The move, announced Friday by Treasury Secretary Scott Bessent, would revoke the correspondent banking access of the UAE branches to U.S. financial institutions, effectively cutting them off from dollar transactions. The action is part of a broader campaign to increase economic pressure on Tehran as the U.S. war with Iran reaches the six-month mark.
Treasury officials described the six Banque Misr branches in the UAE as a critical node
for Iran’s access to U.S. dollars. According to the Treasury, the branches processed roughly $1.8 billion in transactions between January 2024 and June 2026 for 103 companies that may be part of Iranian shadow banking networks.
Strategic Scope and Limitations
The U.S. government specified that the restrictions are limited to Banque Misr’s operations within the UAE. A Treasury official stated that the bank may continue dollar transactions through its head office in Cairo and other international branches, which include locations in Riyadh, Beirut, Djibouti, Frankfurt, and Paris.
The Central Bank of Egypt confirmed the measure is limited to dollar transfers at the UAE branches and does not extend to other Egyptian banks or Banque Misr’s domestic operations. The Egyptian foreign ministry and central bank are currently communicating with U.S. officials regarding the rulemaking.
Secretary Bessent stated that Iran’s enablers cannot continue to enjoy access to the U.S. dollar and the global financial system
, adding that the action against Banque Misr UAE is a first step in holding the bank accountable for egregious support of the Iranian regime
.
Operation Economic Outcast
The restrictions fall under Operation Economic Outcast, an initiative launched in August 2026 to expand secondary sanctions against entities facilitating significant Iran-related transactions. These sanctions target third-party foreign companies and banks that deal with sanctioned regimes, potentially restricting their U.S. correspondent accounts.
The Treasury has expanded this sanctions framework to cover several sectors used to evade restrictions, including:
- Aviation and shipping
- Digital assets and gold
- Technology
Other entities previously targeted under this initiative include Nefertiti Shipping and Egyptian businessman Hatem Elsaid Farid Ibrahim Sakr.
Regional and Global Response
The UAE central bank announced Saturday that it has launched a special and urgent examination
of Banque Misr’s UAE branches. This includes a forensic/in-depth lookback
covering the period cited by U.S. authorities. The UAE central bank stated it expects licensed banks to avoid exposing the UAE financial system to reputational risks and to respect the laws of countries whose financial institutions are used for transactions.
Banque Misr stated on Saturday that it is reviewing the U.S. Treasury notice and maintained that its UAE branch continues to provide services to customers according to applicable procedures.
Beyond the action against Banque Misr, the Treasury’s Office of Foreign Assets Control issued sanctions against Reza Mohammad Taeedi, the manager of the Dubai branch of Iran’s Bank Melli, and a firm based in Hong Kong accused of laundering funds for Iran. State Department spokesperson Tommy Piggott noted that Bank Melli has acted as a financial hub for the Ministry of Defense and Armed Forces Logistics and the Islamic Revolutionary Guard Corps-Qods Force.
The proposed rule for Banque Misr UAE will undergo a 30-day public comment period before taking effect. Secretary Bessent is scheduled to meet with G20 finance ministers next week to encourage further economic isolation of Iran.