The U.S. Treasury Department has proposed barring U.S. financial institutions from opening or maintaining correspondent accounts for Banque Misr UAE, an action that could curtail the UAE operation’s ability to access the American banking system and dollar-clearing channels. The proposal is directed at Banque Misr UAE alone, not the Egyptian bank’s domestic business or its operations in other countries.
The distinction is consequential for bank customers, counterparties and compliance teams across Egypt and the United Arab Emirates. Treasury is pursuing a proposed special measure under Section 311 of the USA PATRIOT Act, rather than announcing an OFAC designation of Banque Misr or a completed restriction. The measure is still subject to rulemaking, including a public-comment period that Treasury says will close 30 days after publication in the Federal Register.
Proposal targets a UAE operation, not Banque Misr as a whole
In its Aug. 28 announcement, Treasury said FinCEN had found Banque Misr UAE to be a financial institution of primary money-laundering concern and proposed the correspondent-account prohibition. U.S. banks also would be required to take reasonable steps to guard against transactions involving the UAE operation moving through correspondent accounts they hold for foreign banks, and to apply special due diligence to relevant relationships.
Correspondent accounts are accounts that banks maintain for other financial institutions, often enabling cross-border payments and access to currencies or payment infrastructure in markets where the respondent bank lacks its own direct presence. A prohibition on maintaining such an account can therefore have effects beyond a single bilateral relationship: foreign banks that retain U.S. correspondent access would need controls designed to avoid routing covered Banque Misr UAE business through those accounts.
Treasury expressly limited the scope in its proposed rulemaking. The finding and proposed special measure cover Banque Misr UAE as defined by the proposal, the department said, and do not extend to Banque Misr’s operations in Egypt or elsewhere. That limitation makes broad descriptions of the action as sanctions against the entire Egyptian lender inaccurate.
It also separates this action from the OFAC measures disclosed alongside it. Treasury said the Office of Foreign Assets Control designated Reza Mohammad Taeedi, identified as manager of Bank Melli’s Dubai branch, and Hong Kong-based Kameng Trading Limited. Those were the named OFAC designees in the announcement; Banque Misr UAE was the subject of FinCEN’s separate proposed Section 311 process.
Treasury alleges Iranian shadow-banking links
Treasury characterized Banque Misr UAE as an important route for Iranian access to U.S. dollars and alleged that the operation handled transactions for companies connected to Iranian shadow-banking networks. The department estimated that, from January 2024 through June 2026, the UAE operation processed about $1.8 billion for 103 companies it said were potentially part of those networks.
The figure implies an average of roughly $17.5 million per company over the 30-month period, though that simple calculation does not show how payments were distributed among customers, whether all activity was considered suspicious, or what volume may have been legitimate. Treasury did not provide transaction-by-transaction findings in its announcement.
The department further alleged that customers of Banque Misr UAE included apparent front companies used to evade U.S. sanctions by Iran’s Ministry of Defense and the Islamic Revolutionary Guard Corps, and to launder funds for Mojtaba Khamenei. Those are Treasury allegations, not findings described in the announcement as having been adjudicated in court.
For financial institutions, the proposed action places the practical focus on ownership data, customer names, payment messages and indirect payment routing. The rule as described by Treasury would not merely prevent a U.S. bank from directly maintaining an account for Banque Misr UAE; it would require institutions to address the risk of the operation’s transactions passing through accounts held for other foreign banks.
Egypt and UAE regulators begin their responses
Banque Misr said it was reviewing Treasury’s notice and intended to seek additional information from the department, according to Al Jazeera’s reporting. The report also said Egypt’s central bank described the measure as limited to Banque Misr UAE’s U.S.-dollar transactions with correspondent banks, without an effect on Banque Misr’s Egyptian operations or other overseas branches.
The Central Bank of the UAE, according to the same report, said it would carry out a special, urgent examination of Banque Misr’s UAE branches, including a forensic lookback. Neither response changes the legal status of the U.S. proposal, but both point to the supervisory work likely to accompany it: regulators and banks must determine which accounts, payment routes and historical transactions are implicated by Treasury’s allegations.
The timeline remains important. Treasury said Operation Economic Outcast was announced Aug. 24, followed on Aug. 28 by FinCEN’s proposed action and the separate OFAC designations. The next stated procedural milestone is publication in the Federal Register, after which the 30-day comment window begins. FinCEN would need to complete the rulemaking before the proposed correspondent-account prohibition could become final.
Until then, the immediate pressure falls less on an operative U.S. prohibition than on the compliance response to Treasury’s allegations. Banque Misr UAE’s counterparties will have to weigh the proposal’s narrow legal reach against the broader reputational and transaction-screening risks associated with a U.S. finding that a financial institution is of primary money-laundering concern.
