The U.S. Treasury Department proposed rules on August 28, 2026, to cut off Banque Misr’s six United Arab Emirates branches from the U.S. financial system, accusing the Egyptian bank of processing $1.8 billion in shadow banking transactions for Iran as Washington’s war reaches the six-month mark.
Six months into Washington’s war with Iran, the administration is shifting its economic strategy from broad warnings to targeted financial isolation. Treasury Secretary Scott Bessent announced a campaign to penalize international financial institutions that continue to maintain ties with Tehran. Rather than imposing immediate sanctions on the Egyptian bank itself—a move that could risk broader trade relations with major economies like China and India—the Treasury opted for targeted regulatory action.
The U.S. Treasury Department’s Financial Crimes Enforcement Network proposed a rule on Friday that would revoke the correspondent banking access of Banque Misr UAE to American financial institutions. According to federal estimates, the institution’s six branches in the Emirates processed approximately $1.8 billion in transactions between January 2024 and June 2026 for 103 companies tied to Iranian shadow banking networks.
Targeting the UAE Branches Without Hailing a Full Bank Ban
By drawing a sharp line around the bank’s Emirati operations, Washington has deliberately avoided shuttering the entire financial institution. A Treasury official noted that the proposed rule applies strictly to Banque Misr’s UAE network. This distinction allows the bank to continue standard dollar transactions through its primary head office in Cairo, alongside other foreign branches located in cities such as Paris, Frankfurt, Riyadh, Beirut, and Djibouti, as outlined on Banque Misr’s official website.
The action follows a tease earlier in the week from Treasury Secretary Scott Bessent, who labeled the impending move a major announcement of a secondary sanction on an international bank.
“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.”
Treasury Secretary Scott Bessent
Simultaneous Sanctions on Network Managers and Shell Companies
The regulatory filing against the Egyptian bank’s UAE operations did not stand alone on Friday. The Treasury Department’s Office of Foreign Assets Control executed complementary penalties aimed at dismantling separate logistical pipelines used by Tehran. Officials slapped fresh sanctions on Reza Mohammad Taeedi, the Dubai branch manager for Iran’s Bank Melli, alongside a Hong Kong-based corporate entity accused of laundering funds on behalf of a sanctioned Iranian exchange house.
These coordinated moves emphasize how American authorities view the United Arab Emirates network as a critical financial junction for the Iranian government.
Global Diplomatic Push at Upcoming G20 Meetings
Winnipeg Free Press reported the details of the administration’s broader diplomatic offensive as Bessent prepares to travel to upcoming Group of 20 finance ministers meetings. There, the Treasury Secretary intends to hold individual discussions with global counterparts to press for broader international participation in isolating Iran’s economy.
The proposed rule against Banque Misr UAE is subject to a 30-day public comment period before taking final effect. Neither Banque Misr UAE nor the sanctioned Bank Melli manager immediately responded to media requests for comment, with Banque Misr UAE observing a local public holiday.
