The United States government has moved to sever the ties between the UAE operations of Banque Misr and the American financial system, alleging that the bank acted as a conduit for the Iranian government. In a stern announcement on Friday, US Treasury Secretary Scott Bessent stated that the move is part of a broader strategy called Operation Economic Outcast, designed to eliminate the remaining economic lifelines available to Tehran. According to officials, Banque Misr’s UAE branches served as a critical node for Iranian shadow banking networks, processing roughly 1.8 billion dollars for over one hundred companies linked to the Iranian regime between early 2024 and mid 2026.
Specifically, the US Department of the Treasury’s Financial Crimes Enforcement Network proposes revoking the bank’s correspondent banking access. This would effectively block those specific UAE offices from carrying out transactions in US dollars or accessing US markets. Washington claims that front companies associated with Iran’s Ministry of Defence and the Islamic Revolutionary Guard Corps used these accounts to evade sanctions and launder money. These actions are part of a wider crackdown that has recently seen sanctions imposed on dozens of individuals and entities across various jurisdictions, including targets in Hong Kong and managers at other regional banks like Bank Melli in Dubai.
Banque Misr responded on Saturday by stating it is currently reviewing the notice and treating the allegations with the utmost seriousness. The bank noted that there is still an official window for submitting comments before a final decision is reached, meaning current services remain active during this interim period. Meanwhile, the Central Bank of Egypt has rushed to clarify that these penalties apply strictly to dollar transactions within the UAE branches and do not jeopardize any other parts of Egypt’s banking sector or Banque Misr’s domestic operations back home.
Adding more pressure to the situation, banking authorities in the UAE have launched their own urgent investigation into Banque Misr’s activities within their borders. The UAE central bank announced it will perform a forensic lookback at transactions mentioned by US authorities, emphasizing that no institution should use Emirati financial infrastructure to create reputational risks or violate international law. As diplomatic tensions persist between Washington and Tehran over stalled truce talks, this high stakes regulatory battle highlights how deeply geopolitical conflicts now penetrate global finance.
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