The U.S. Treasury Department on August 28 proposed a rule to revoke the access of Banque Misr UAE—the United Arab Emirates branch of Egypt’s second-largest bank—to U.S. financial institutions, citing its alleged role in facilitating transactions for Iran’s shadow banking networks.
The proposed action follows the announcement of Operation Economic Outcast, a new sanctions campaign launched by Treasury Secretary Scott Bessent to isolate Iran’s economy amid the ongoing conflict between the U.S., Israel, and Iran. The Treasury stated that Banque Misr UAE processed approximately $1.8 billion between January 2024 and June 2026 for 103 companies linked to Iran’s shadow banking system, which the U.S. accuses of laundering funds for Iran’s military, proxy groups, and leadership.
The rule will undergo a 30-day public comment period before taking effect. The Treasury emphasized that the measure targets only the UAE branches of Banque Misr and does not extend to the broader Egyptian banking sector.
Operation Economic Outcast and Broader Sanctions Campaign
The proposed action against Banque Misr UAE is part of a broader effort by the U.S. to sever Iran’s economic ties globally. On the same day, the Treasury also sanctioned Reza Mohammad Taeedi, the general manager of Iran’s Bank Melli’s Dubai branch, and Kameng Trading Limited, a Hong Kong-based entity accused of laundering funds for an Iranian exchange house.
Bessent described the campaign as an attempt to cut off all of Iran’s remaining economic lifelines, comparing it to the D-Day invasion of World War II. He warned that any entity facilitating transactions for Iran, including financial institutions in China and India, could face U.S. sanctions.
Egypt’s Response and Broader Implications
Egypt’s central bank stated that officials are in contact with U.S. authorities regarding the proposed measures. The bank emphasized that the U.S. action is limited to Banque Misr’s UAE branches and does not affect transactions in Egypt or other regions.
The Treasury’s proposal comes amid heightened tensions in the Middle East, including Iran’s retaliation to U.S.-Israel strikes by blocking most traffic through the Strait of Hormuz, a critical global oil transit route. While Iran’s crude oil exports have been disrupted, some tankers remain loaded and waiting to discharge in China, according to shipping data.
The U.S. has not indicated whether it will sanction Chinese institutions involved in facilitating Iranian oil transactions, though Bessent stated that no entity is exempt from U.S. sanctions if it supports Iran’s financial ecosystem.