U.S. Proposes Cutting Banque Misr UAE From Dollar Access

The U.S. Treasury Department on August 28 proposed restricting U.S. correspondent banking access for Banque Misr’s five branches in the United Arab Emirates, while separately sanctioning the Dubai manager of Iran’s Bank Melli and a Hong Kong-based company.

The Banque Misr action is not final. The Financial Crimes Enforcement Network, or FinCEN, issued a notice of proposed rulemaking under Section 311 of the USA PATRIOT Act. The proposal would begin a public-comment process; it does not immediately cut off the bank from the U.S. financial system.

What FinCEN proposed

The notice defines “Banque Misr UAE” as the bank’s five UAE branches, along with any other Banque Misr offices, branches, affiliates or subsidiaries located in the United Arab Emirates. It expressly excludes Egypt-based Banque Misr and the bank’s operations in countries other than the UAE.

If finalized, the rule would prohibit U.S. financial institutions from opening or maintaining correspondent accounts for, or on behalf of, Banque Misr UAE. It would also require U.S. institutions to take reasonable steps not to process transactions involving Banque Misr UAE through another foreign bank’s correspondent account in the United States.

FinCEN also proposed special due-diligence measures for foreign correspondent accounts. Covered institutions would have to notify foreign correspondent account holders that they may not provide Banque Misr UAE access to the U.S. correspondent account and take reasonable steps to identify such transactions in their records.

Treasury’s allegations and estimate

Treasury says it identified 103 potential Iranian shadow-banking front companies that transacted approximately $1.8 billion through accounts with Banque Misr UAE between January 2024 and June 2026.

That figure is Treasury’s assessment, not an independently adjudicated finding that the entire amount represented illicit transactions. The agency alleges that some customers were apparent front companies linked to Iranian military or financial networks and that the bank provided access to U.S. dollar correspondent banking.

FinCEN’s proposal finds Banque Misr UAE to be a financial institution operating outside the United States that presents a primary money-laundering concern. The NPRM says the bank has approximately $6 billion in assets and three direct U.S. correspondent relationships, while acknowledging that some of its business is legitimate.

Separate sanctions target two facilitators

OFAC separately added Reza Mohammad Taeedi to its Specially Designated Nationals list. The agency identifies Taeedi as the manager of Bank Melli Iran’s Dubai branch. He is listed in Dubai, is an Iranian national, and was designated under counterterrorism and Iran-related authorities for acting for or on behalf of Bank Melli Iran.

OFAC also designated Kameng Trading Limited, a Hong Kong-based company. Treasury says the company helped a sanctioned Iranian exchange house access the international financial system. Those designations are separate from the proposed FinCEN rule involving Banque Misr UAE.

Why Gulf banks and traders are watching

Correspondent banking relationships help foreign banks clear dollar payments and connect customers to the U.S. financial system. A proposed restriction involving a bank operating in the UAE may therefore increase screening and payment-routing concerns for other institutions handling Iran-linked trade or customers.

For Gulf banks and companies, the immediate issue is heightened compliance risk rather than an automatic closure of Banque Misr UAE operations. Businesses using UAE intermediaries may face more scrutiny of counterparties, ownership, invoices, shipment records and the path of funds.

U.S. companies and financial institutions must also account for the separate OFAC designations. Property and interests in property of designated persons that are in the United States or under the control of U.S. persons are blocked, and transactions involving them are generally prohibited unless authorized or exempt.

What happens next

FinCEN’s public-comment period will run for 30 days after the notice is published in the Federal Register. The NPRM does not establish an immediate final effective date. After the comment period, the agency could issue a final rule, modify the proposal or take another action.

The proposal follows Treasury’s August 24 launch of Operation Economic Outcast, a campaign aimed at increasing financial consequences for foreign institutions and facilitators that Treasury says help Iran evade sanctions, move money or support prohibited activity. The practical distinction remains important: Banque Misr UAE faces a proposed correspondent-account restriction, while the OFAC designations against Taeedi and Kameng Trading Limited are sanctions-list actions with immediate blocking consequences under U.S. sanctions law.

Sources

• U.S. Treasury: Iran’s Access to UAE Banks Targeted
• FinCEN: Banque Misr UAE Notice of Proposed Rulemaking
• OFAC: August 28 Iran-related Designations
• Associated Press: U.S. targets Egyptian bank’s UAE branches

Look for updates to this story

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