The United States has announced it will cut off the UAE operations of Banque Misr, Egypt's second-largest bank, from the US financial system, citing accusations of the bank conducting business with the Iranian government. US Secretary of the Treasury Scott Bessent stated, "Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime." He added that Iran's enablers must not have access to the US dollar and the global financial system. Banque Misr acknowledged the US Treasury's notice and is currently reviewing it.
This decision, made public on Friday, is part of a broader US initiative to economically pressure Iran amid stalled truce negotiations. The US Treasury also imposed sanctions on nearly 60 individuals and entities linked to Iran's oil revenue generation and military operations. In response to the sanctions, Iranian Economy Minister Ali Madanizadeh stated that the measures would fail.
The proposed sanctions on Banque Misr involve revoking its correspondent banking access to US financial institutions, which would prevent its UAE branches from processing transactions in US dollars. The Treasury claims that Banque Misr UAE has facilitated approximately $1.8 billion in transactions for companies potentially involved in Iranian shadow banking networks between January 2024 and June 2026.
Banque Misr's customers reportedly include front companies associated with Iran's Ministry of Defence and the Islamic Revolutionary Guard Corps. The US government's proposed sanctions are expected to take effect 30 days after a public comment period. The Central Bank of Egypt stated that the sanctions are limited to Banque Misr's USD transactions with correspondent banks and do not affect other banks in Egypt.
The UAE banking authorities have initiated an investigation into Banque Misr's operations. The UAE central bank announced it would conduct a special examination of the bank's branches in the country. Additionally, the US Treasury Department's Office of Foreign Assets Control has imposed sanctions on Reza Mohammad Taeedi, the general manager of Iran's Bank Melli in Dubai, for facilitating transactions for the Islamic Revolutionary Guard Corps.
The US sanctions are part of a larger campaign, dubbed "Operation Economic Outcast," aimed at isolating Iran economically. This initiative has targeted at least 60 entities across the Middle East, Asia, and Europe. Analysts suggest that the US's shift to economic pressure follows a lack of success from military operations against Iran. Iranian officials have expressed confidence in their ability to withstand the sanctions, with some stating that Iran has extensive experience in circumventing such measures.