The central bank of the United Arab Emirates (UAE) has largely prohibited Iran’s biggest state financial institution, Bank Melli, from doing business in the Gulf state.
The bank may no longer process financial transactions from Iran or to Iran in the Emirates, the central bank announced on Wednesday. This also applies to transfers and the financing of trade transactions.
Dubai and the other emirates have until recently been a key hub for Iran’s financial and trade business.
The UAE’ central bank accuses Bank Melli of violating laws “related to combating money laundering, the financing of terrorism and proliferation financing.”
The move piles economic pressure on the Islamic Republic in its conflict with the United States.
The US recently announced it wanted to further isolate Iran economically with new sanctions. Washington also threatened so-called secondary sanctions against countries and organizations that still do business with Iran in the areas of digital assets, technology, gold, aviation and shipping.
US President Donald Trump on Tuesday told world leaders at the UN that he could “annihilate” Iran.
The central bank sanctions come after the UAE decided in August to suspend all trade and financial transactions with Tehran until further notice. Since the start of the Iran war, the leadership in Tehran has repeatedly attacked neighbouring countries allied with the United States, including the UAE.