The United States has moved to cut off the United Arab Emirates operations of Egypt’s second-largest bank, Banque Misr, from the US financial system over alleged transactions linked to Iranian shadow banking networks.
The US Department of the Treasury announced the proposed measure on Friday, August 28, 2026, saying its Financial Crimes Enforcement Network (FinCEN) had proposed revoking Banque Misr UAE’s correspondent banking access to US financial institutions.
The proposed rule would prohibit US financial institutions from opening or maintaining correspondent accounts for, or on behalf of, Banque Misr UAE.
It would also require US financial institutions to take steps to prevent transactions involving Banque Misr UAE from being processed through correspondent accounts in the United States.
However, the measure applies specifically to Banque Misr UAE and does not affect Banque Misr’s operations in other countries, including Egypt.
The Treasury said Banque Misr UAE processed approximately $1.8bn between January 2024 and June 2026 for 103 companies that it said were potentially part of Iranian shadow banking networks.
According to the department, the bank’s UAE operations had become a key channel through which Iran could access US dollars and the international financial system despite comprehensive US sanctions against Tehran.
The Treasury alleged that some of Banque Misr UAE’s customers included apparent front companies used by Iran’s Ministry of Defense and the Islamic Revolutionary Guard Corps to evade US sanctions and launder money.
It also accused the Iranian shadow banking networks of helping Tehran generate revenue, procure weapons and finance regional groups aligned with Iran.
US Treasury Secretary Scott Bessent said Washington had warned financial institutions facilitating Iranian activities that they could lose access to the US dollar and the global financial system.
“Treasury promised to sever every economic lifeline Tehran has left,” Bessent said, accusing Banque Misr UAE of providing continued support to the Iranian regime.
The Treasury’s action against Banque Misr UAE forms part of the Trump administration’s broader Operation Economic Outcast, launched on August 24 to target financial networks that Washington says help Iran evade sanctions and generate illicit revenue.
Under the proposed measure, US financial institutions would also be required to apply enhanced due diligence to certain foreign correspondent accounts to guard against transactions involving Banque Misr UAE.
The Treasury said the public will have 30 days to submit comments after the proposed rule is published in the Federal Register, meaning the measure is not yet a final prohibition.
Alongside the proposed action against Banque Misr UAE, the Treasury’s Office of Foreign Assets Control(OFAC) sanctioned Reza Mohammad Taeedi, the manager of Iran’s Bank Melli branch in Dubai.
OFAC also sanctioned Hong Kong-based Kameng Trading Limited, accusing the company of helping sanctioned Iranian individuals access the international financial system and laundering money for an Iranian exchange house.
The US said the latest sanctions and proposed banking restrictions were aimed at cutting off financial channels used by Iran to evade sanctions and fund activities Washington considers a threat to regional security.
The measures could further complicate financial transactions involving Iranian-linked entities as the United States increases pressure on banks and companies accused of facilitating Tehran’s access to international finance.
(The Whistler)
