Treasury Proposes Cutting Banque Misr’s UAE Branches From U.S. Banking

The Treasury Department on Friday, August 28, 2026, proposed restricting U.S. correspondent-banking access for five United Arab Emirates branches of Egypt’s Banque Misr, accusing the branches of helping move money through Iranian shadow-banking networks.

The action is not final. FinCEN’s notice of proposed rulemaking is pending publication in the Federal Register. Once published, it will open a 30-day public-comment period; the current pre-publication document does not contain a final comment deadline.

What FinCEN proposed

FinCEN invoked Section 311 of the USA PATRIOT Act and identified the five UAE-based Banque Misr branches, collectively referred to as Banque Misr UAE, as a financial institution of primary money-laundering concern.

The proposed special measure would prohibit U.S. financial institutions from opening or maintaining correspondent accounts for, or on behalf of, Banque Misr UAE. It also would require U.S. institutions to take reasonable steps not to process transactions involving Banque Misr UAE through another foreign bank’s U.S. correspondent account.

In addition, U.S. financial institutions would have to apply special due diligence to certain foreign correspondent accounts to guard against their use in processing transactions involving Banque Misr UAE.

Treasury estimates that the five branches processed approximately $1.8 billion for 103 companies between January 2024 and June 2026. The department says those companies may have been connected to Iranian shadow-banking networks. The dollar figure and alleged connections are Treasury estimates and allegations, not independently adjudicated findings.

What is covered—and what is not

The proposal is limited to five Banque Misr branches in the UAE. It does not target Banque Misr’s operations in Egypt or all of the bank’s overseas branches.

The Central Bank of Egypt said the measure applies to the UAE branches and their dollar transfers. It said Banque Misr’s Egyptian operations and other overseas branches are not affected.

The proposal should not be described as an immediate blanket ban on every transaction involving Banque Misr UAE. Its stated effect is to restrict U.S. correspondent-account access, require transaction-screening steps and add compliance obligations for certain foreign correspondent relationships.

Separate OFAC designations

Treasury separately announced sanctions-list actions through the Office of Foreign Assets Control. OFAC added Reza Mohammad Taeedi, identified as the manager of Bank Melli’s Dubai branch, to its Specially Designated Nationals list. It also designated Hong Kong-based Kameng Trading Limited.

Those are separate from FinCEN’s proposed Section 311 measure. The OFAC actions designate a named individual and company, while the FinCEN proposal would impose regulatory restrictions and due-diligence requirements involving specified Banque Misr branches.

What happens next

FinCEN must first publish the notice of proposed rulemaking in the Federal Register. The public will then have 30 days to submit comments. After reviewing those comments, FinCEN could finalize, modify or decline to adopt the proposal.

For most U.S. consumers, the immediate direct effect is likely to be limited because the action is proposed and focused on specific foreign branches and dollar-based correspondent relationships. Banks, cross-border payment providers and companies with exposure to the named entities could face additional compliance and transaction-screening questions.

The broader significance is the administration’s effort to pressure financial institutions and companies that Treasury says facilitate Iran-related activity. The next developments to watch are Federal Register publication, the final comment deadline, responses from Banque Misr or Egyptian authorities, and FinCEN’s decision on whether to impose the measure.

Sources

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