UAE’s Central Bank has decided to conduct a special and urgent examination of Banque Misr branches in the Emirates, after the US Treasury flagged that they processed transactions potentially part of Iranian shadow banking networks.
Under Operation Economic Outcast, the U.S. Department of the Treasury had proposed to revoke Banque Misr UAE’s correspondent banking access to U.S. financial institutions. This would effectively block US Dollar transactions for UAE Branches of Egypt’s second-largest bank. The department said that between January 2024 and June 2026, Banque Misr UAE processed approximately $1.8 billion for 103 companies potentially part of Iranian shadow banking networks.
The US has alleged that Iran uses these networks to launder funds, procure weapons, and bankroll its regional proxies.
The UAE has now decided to conduct a forensic lookback covering the period mentioned above, focusing on transactions of the companies the U.S. identified. The Central Bank of the UAE (CBUAE) stressed that Banque Misr’s UAE branches remain subject to the Emirates’ laws and regulations. It also urged that banks licensed in the UAE are expected not to expose the country’s financial system to reputational risks and must not misuse the UAE’s advanced financial infrastructure.
It also underlined that the appropriate decision in this regard will be taken in due course, taking into consideration the obligations of the bank towards its customers in the UAE. Earlier on 18th August, UAE had suspended all trade, commercial exchanges and financial transactions with Iran, following detection of two ballistic missiles launched from Iran toward maritime traffic in the Gulf.
In a statement released on the issue, Banque Misr clarified that the US Treasury action constitutes a Notice of Proposed Rulemaking (NPRM), which is subject to a formal period for receiving and reviewing comments before any final rule is issued. The proposal is subject to a 30-day comment period and would affect the Egyptian Bank if finalised at the end of it.
The Bank further clarified that the regulatory action is limited to Banque Misr’s branch in the United Arab Emirates and does not extend to Banque Misr’s operations in the Arab Republic of Egypt or any other country where it has a presence.
(Manish Shiva is a Special Correspondent at Prasar Bharati)
