The United States has said it will cut off the UAE operations of Banque Misr from the US financial system after accusing Egypt\u2019s second-biggest bank of doing business with the Iranian government.<\/p>\n
\u201c Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime,\u201d US Secretary of the Treasury Scott Bessent said in a statement on Friday.<\/p>\n
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\u201cWe also warned that Iran\u2019s enablers cannot continue to enjoy access to the US 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,\u201d he said.<\/p>\n
Banque Misr said on Saturday that it was reviewing the US Treasury\u2019s notice.<\/p>\n
The move, announced on Friday, comes as Washington has stepped up its efforts to economically pressure Iran, dubbed Operation Economic Outcast, amid the deadlocked truce talks.<\/p>\n
Last week, the US Treasury also imposed new sanctions on nearly 60 individuals and entities, targeting networks accused by Washington of helping Iran generate oil revenue, procure weapons and conduct cyber operations.<\/p>\n
Iran has, however, rejected the latest US sanctions, with Economy Minister Ali Madanizadeh saying they will fail.<\/p>\n
So, what exactly is this financial limit on Banque Misr? How will it work?<\/p>\n
Here\u2019s what we know:<\/p>\n
What is the new US financial limit on Banque Misr?<\/p>\n
On Friday, the US Department of the Treasury\u2019s Financial Crimes Enforcement Network (FinCEN) proposed a rule that would revoke Banque Misr UAE\u2019s correspondent banking access to US financial institutions.<\/p>\n
This means that only the UAE branches of Egypt\u2019s second-largest bank will be unable to carry out transactions in dollars and will lose access to the US financial market.<\/p>\n
In a statement<\/a> on Friday, the Treasury said that Banque Misr UAE is a critical node for the Iranian regime\u2019s access to US dollars. It added that it estimates that \u201cbetween January 2024 and June 2026, Banque Misr UAE processed approximately $1.8bn for 103 companies that are potentially part of Iranian shadow banking networks\u201d.<\/p>\n The treasury added that in order to generate revenue abroad, Iran relies \u201con multi-jurisdictional shadow banking networks that provide key access to US dollar correspondent banking relationships\u201d.<\/p>\n Banque Misr UAE\u2019s customers include \u201cfront companies used by Iran\u2019s Ministry of Defence and the Islamic Revolutionary Guard Corps to evade US sanctions, as well as to launder money on behalf of Iranian Supreme Leader Mojtaba Khamenei,\u201d the Treasury said.<\/p>\n The US government\u2019s proposed punishment is expected to come into effect in 30 days after a public comment period, and will not impact any other branches of the bank.<\/p>\n What has Banque Misr said?<\/p>\n On Saturday, the bank said in a statement that it was reviewing the US Treasury notice.<\/p>\n It said the new \u201cregulatory measures (by the US) are subject to an official period for receiving and studying comments before a final decision is made regarding them.\u201d The bank added that it \u201cis dealing with these measures and the data and estimates they contain with the utmost seriousness and attention, and is studying them thoroughly.\u201d<\/p>\n The bank announced that it will also contact the US Treasury Department for further information and until then, said its branch in the UAE continues to provide banking services to its customers in accordance with the applicable rules and procedures.<\/p>\n Earlier, on Friday, the Central Bank of Egypt said<\/a> that, together with Egypt\u2019s Ministry of Foreign Affairs, it was in contact with US authorities on Banque Misr\u2019s UAE branches.<\/p>\n \u201cThe CBE (Central Bank of Egypt) affirms that this measure is limited to Banque Misr UAE\u2019s USD transactions with correspondent banks only. It does not affect any other bank within the Egyptian banking sector, including Banque Misr\u2019s operations in Egypt or any of its other overseas branches,\u201d it highlighted.<\/p>\n What has the UAE said?<\/p>\n The UAE\u2019s banking authorities have said they have launched an investigation into Banque Misr\u2019s operations there.<\/p>\n The UAE central bank said in a statement<\/a> on Sunday that it had decided to conduct a \u201cspecial and urgent examination\u201d of Banque Misr\u2019s branches in the country, including \u201ca forensic\/in-depth lookback covering the period referred to in the statement issued by the US authorities\u201d.<\/p>\n \u201cThe Central Bank expects banks licensed in the UAE not to expose the UAE\u2019s financial system to reputational risks, to respect the laws and regulations of the countries whose financial institutions are used in conducting transactions and not to misuse the advanced financial infrastructure of the UAE,\u201d it added in a statement.<\/p>\n Who else has the US taken action against?<\/p>\n Besides Banque Misr, the US Treasury Department\u2019s Office of Foreign Assets Control (OFAC) imposed sanctions<\/a> on Reza Mohammad Taeedi, the general manager of the Dubai branch of Iran\u2019s Bank Melli, under a counterterrorism authority.<\/p>\n \u201cBank Melli has facilitated billions of dollars\u2019 worth of transactions through accounts controlled by the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF). It has allowed the IRGC-QF and its parent organisation, the IRGC, to move funds inside and outside of Iran. The IRGC-QF\u2019s accounts at Bank Melli have also been used to fund Iranian-aligned proxies and partners, including in Iraq,\u201d the Treasury department said in a statement.<\/p>\n Simultaneously, another Treasury department statement said that OFAC has also sanctioned Hong Kong-based Kameng Trading Limited, which allegedly \u201caided sanctioned Iranian persons in accessing the international financial system.\u201d<\/p>\n \u201cSanctioned Iranian exchange house Pedram Pirouzan Exchange House, also known as Opal Exchange, has used Kameng Trading Limited to launder money for Iran,\u201d the Treasury Department said.<\/p>\n Why is the US sanctioning companies doing business with Iran?<\/p>\n Ahead of Friday\u2019s sanctions, on Monday August 24 , the United States announced sanctions on Iran and various global entities doing business with the country, in what officials called an \u201ceconomic D-Day\u201d and officially dubbed \u201cOperation Economic Outcast\u201d in an effort to isolate Tehran.<\/p>\n At least 60 entities across the Middle East, Asia and Europe have been targeted in the latest sanctions as part of the economic pressure campaign that could further disrupt energy markets and rattle the global economy.<\/p>\n Nearly six months into its war on Iran, the US is seeing little impact from its military operations.<\/p>\n The long-term implications of the war, analysts say, have pushed the Trump administration to try economic sanctions, but these are unlikely to compel Iran into meeting the demands.<\/p>\n \u201cThe United States is returning to economic pressure because military force has failed to deliver the quick victory it expected,\u201d Negar Mortazavi, senior fellow at the US-based Center for International Policy, told<\/a> Al Jazeera last week.<\/p>\n \u201cThe \u2018economic D-Day\u2019 declaration underscores the war\u2019s failure so far to force Iran\u2019s surrender or achieve Washington\u2019s political objectives.\u201d<\/p>\n Iran has rejected the sanctions.<\/p>\n Last week, Iranian government spokeswoman, Fatemeh Mohajerani, said the government and President Masoud Pezeshkian will guide Iran through these developments.<\/p>\n \u201cThe government and the president, with wisdom and resolve, will guide the country through this phase as well. We do not deny the economic hardships; but with sound judgment and by preserving unity, as in days past, we will pass through this intense gauntlet,\u201d she posted on X.<\/p>\n Sardar Mohebi, an IRGC spokesperson, said the US resorting to economic warfare against Iran is itself proof of its defeat on the battlefield.<\/p>\n