The US Treasury's Financial Crimes Enforcement Network has proposed barring American financial institutions from holding correspondent accounts for Banque Misr's branches in the United Arab Emirates, a step announced on 28 August that would cut the Egyptian state bank's Gulf operation off from clearing US dollars. FinCEN determined Banque Misr UAE to be "a financial institution operating outside the US of primary money-laundering concern", Ahram Online reported.
The Treasury said the branches had processed about $1.8bn in transactions that were "potentially part of Iranian shadow banking networks", according to Yahoo Finance. Banque Misr operates five branches in the UAE, The National reported. Asharq Al-Awsat reported that the action forms part of a US campaign named Operation Economic Outcast.
The proposal stops at the UAE border. It covers only Banque Misr's UAE operations and their US dollar transactions with correspondent banks, and "does not extend to Banque Misr's operations in Egypt or its branches in other countries", Ahram Online reported. It is also not yet in force: the proposed rule is subject to a formal period to receive and review comments before any final rule is issued.
What FinCEN has proposed, and what it has not
A correspondent account is the account a bank outside the United States keeps at a US bank so that it can settle payments in dollars. Take it away and dollar payments have to be routed some other way, or not at all. Under the proposal, "US financial institutions would be prohibited from maintaining correspondent accounts for, or on behalf of, Banque Misr UAE", according to Ahram Online's account of the FinCEN notice.
Asharq Al-Awsat described the practical effect in narrower terms: the UAE branches would not be able to move US dollars outside the UAE without monitoring and prior approval from US authorities, and the constraint attaches to the dollar rather than to the branches' business as a whole, leaving transactions in other currencies untouched.
- Covered: Banque Misr's UAE operation — which The National reports comprises five branches — and its US dollar transactions with correspondent banks, per Ahram Online and The National.
- Not covered: Banque Misr's operations in Egypt and its branches in other countries, per Ahram Online.
- Not covered: transactions in currencies other than the US dollar, per Asharq Al-Awsat.
- Not yet final: the proposal must pass a formal comment period before any final rule is issued, per Ahram Online.
Why the parent bank in Cairo was left out
Treasury Secretary Scott Bessent said the omission of Banque Misr's Cairo parent was deliberate. Speaking on the sidelines of the G20 finance leaders' meeting in Asheville, North Carolina, he explained why the department had reached for a FinCEN rulemaking against the branches rather than a sanctions designation against the bank itself, Enterprise reported.
We did not sanction them because we did not want to go back to the Egyptian parent. — Scott Bessent, US Treasury Secretary, quoted by Enterprise
Bessent framed the move as an opening rather than a conclusion. "We are taking the first step in holding it accountable for its continued, egregious support of the Iranian regime," he said in remarks reported by Asharq Al-Awsat. He also said Washington expects to sanction new Iran-linked entities "on a weekly basis", according to Enterprise, which puts the Banque Misr proposal at the front of a queue rather than at the end of one.
Cairo and Abu Dhabi answered together
The Central Bank of Egypt and the Central Bank of the UAE issued a joint statement on 30 August affirming "full and continuous cooperation and coordination" over the branches, Ahram Online reported. The statement said the branches would "take all necessary actions and measures within the period specified under the US regulatory process". Iran International reported the two regulators saying Banque Misr would "take all necessary measures to continue conducting its business as usual".
Banque Misr said it was reviewing the proposal, would cooperate with the relevant authorities and would undertake the necessary legal and regulatory measures, according to Ahram Online. The UAE Central Bank went further and ordered a "special and urgent examination" of the branches, including "a forensic/in-depth lookback covering the period referred to in the statement issued by the US authorities, with a focus on banking transactions of the companies mentioned in the statement", The National reported.
"Branches of Banque Misr operating in the UAE are subject to the laws and regulations in force in the UAE," the UAE regulator said. It added that it expects banks "not to expose the UAE's financial system to reputational risks, to respect the laws and regulations of the countries whose financial institutions are used in conducting transactions". The National noted that in June the same regulator fined a foreign bank Dh20m ($5.44m) for anti-money-laundering violations, among the largest penalties it has imposed.
What it means for a depositor in Egypt, and for an Egyptian in the Gulf
For a customer holding an account at a Banque Misr branch in Cairo, Alexandria or a governorate elsewhere in Egypt, the published scope of the proposal does not reach it. Ahram Online's account of the FinCEN notice is explicit that the measure covers the UAE operation and its dollar clearing with correspondent banks, and not the bank's business in Egypt. Bessent's remark in Asheville says the same thing from the other direction: the parent was left alone on purpose.
For an Egyptian working in the UAE who banks at one of the five branches, the pressure point is narrower but more immediate: dollars leaving the country. Asharq Al-Awsat reported that dollar transfers out of the UAE would require monitoring and prior approval, while transactions in other currencies are unaffected. The two central banks say the branches will keep operating as usual, and the UAE regulator has said the branches remain subject to UAE law while its examination runs.
What the reporting does not establish is how correspondent banks are behaving in the meantime. None of the accounts reviewed here say whether any US institution has already closed or curtailed a Banque Misr UAE account ahead of a final rule, how long the comment period runs, or what additional documentation customers of the five branches should expect to be asked for. Those are questions for the branch and the regulator, and neither has published an answer.
What happens next
Three processes now run in parallel. FinCEN's proposal has to clear its comment period before it can be finalised, per Ahram Online. The UAE Central Bank's forensic lookback into the five branches is under way, per The National. And the wider campaign continues: Yahoo Finance reported that the UAE investigation followed a fresh US sanctions campaign against Iran announced the previous week, and Bessent's "weekly basis" remark points to further names.
Nothing published so far sets out what happens to the branches if the rule is finalised as proposed, or whether Banque Misr's submissions during the comment period could narrow it. Until that is settled, the carve-out that matters most for Egypt is the one written into the proposal's own scope, and repeated by the Treasury Secretary in North Carolina: Cairo's operations are outside it.
