The U.S. Treasury Department proposed severing Banque Misr’s United Arab Emirates branches from the American financial system, targeting the Egyptian institution over alleged shadow banking transactions with Iran. The move escalates Washington’s economic squeeze as the war against Tehran reaches its six-month mark.
As the conflict between the United States and Iran passes the six-month mark, the Trump administration has turned its sights on a major financial player in the Middle East. Treasury Secretary Scott Bessent initiated a rulemaking process to cut off the Emirati branches of Banque Misr, one of Egypt’s most important financial institutions, over allegations that the bank served as an economic lifeline for Tehran.
The measure, proposed by the Financial Crimes Enforcement Network, would revoke the correspondent banking access of Banque Misr UAE to American financial institutions. Rather than slapping immediate sanctions on the bank itself, Washington opted for a proposed rule carrying a 30-day public comment period—a strategy designed to pressure foreign institutions while avoiding an immediate fracture of major international trade corridors.
Shadow Banking Networks and the $1.8 Billion Flow
U.S. officials outlined specific figures detailing how the Emirati branches allegedly sustained Iran’s financial apparatus. According to the Treasury Department, Banque Misr UAE processed approximately $1.8 billion in transactions between January 2024 and June 2026. These funds were handled on behalf of 103 companies suspected of operating within Iranian shadow banking networks.
The Treasury designated the bank’s six UAE branches as a critical node for the Iranian government to secure access to U.S. dollars. This action falls directly under the broader framework of Operation Economic Outcast,
an initiative launched in August 2026 by the Treasury to aggressively target third-party actors and entities facilitating significant Iran-related transactions.
“Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime. We also warned that Iran’s enablers cannot continue to enjoy access to the U.S. dollar and the global financial system. 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.”
Scott Bessent, Treasury Secretary
Cairo and Abu Dhabi Launch Examinations and Damage Control
The announcement immediately rattled leaders in Cairo, who feared the fallout could destabilize Egypt’s broader banking infrastructure. However, the Central Bank of Egypt issued a statement clarifying that the regulatory blow is strictly isolated.
The Egyptian central bank confirmed that the U.S. measure applies only to the bank’s branches in the UAE and specifically to its dollar transfers. Operations inside Egypt and across the institution’s other international branches—including locations in Paris, Frankfurt, Riyadh, Beirut, and Djibouti—remain unaffected.
Meanwhile, the Central Bank of the United Arab Emirates responded swiftly, announcing that it had initiated a special and urgent examination
of Banque Misr’s Emirati operations. That review includes a forensic lookback covering the precise operational timeline cited by American authorities.
Simultaneous OFAC Sanctions Target Dubai and Hong Kong Networks
Alongside the Banque Misr rulemaking, the Treasury Department’s Office of Foreign Assets Control targeted additional logistical and financial nodes. Authorities issued new sanctions against Reza Mohammad Taeedi, the manager of the Dubai branch of Iran’s Bank Melli.
State Department spokesperson Tommy Piggott noted that Bank Melli has long operated as a critical financial hub for Iran’s armed forces, including the Islamic Revolutionary Guard Corps-Qods Force and the Ministry of Defense and Armed Forces Logistics. In addition to the Dubai branch manager, OFAC sanctioned a Hong Kong-based firm accused of laundering funds for a sanctioned Iranian exchange house.
Diplomatic Balancing Acts Ahead of Global Finance Meetings
By targeting an Egyptian institution rather than financial giants in China or India, the administration signaled a calculated calibration of secondary sanctions. Bessent previously noted an intention to give major trading partners an opportunity to pivot away from Tehran to avoid upending the global financial system.
The timing of the enforcement action sets a sharp diplomatic backdrop as Bessent prepares to represent the United States at upcoming Group of 20 finance ministers meetings. There, he is scheduled to hold individual discussions with international counterparts to push for broader global participation in the economic isolation of Iran.
