The United Arab Emirates and Egyptian central banks are coordinating over Banque Misr after the US Treasury proposed cutting off the Egyptian bank’s UAE branches from dollar transactions over alleged financial links to Iran.In a joint statement on Sunday, the two central banks said Banque Misr would take “all necessary measures” to continue its business as usual, reported Reuters.The proposed US measure is expected to take effect less than 30 days after a public comment period. It applies only to Banque Misr’s UAE branches and would prevent them from carrying out transactions in US dollars through the US financial system.Banque Misr said on Saturday that it was reviewing the US Treasury notice.The move comes as Washington steps up pressure on banks and financial institutions seen as facilitating Iran’s access to the global financial system.Meanwhile, US treasury secretary Scott Bessent told Reuters on Sunday that the department was likely to announce new secondary sanctions against Iran-linked entities every week, with banks an initial focus.“You’re going to see a lot more of these every week,” Bessent said, warning banks that “it’s not okay to have Iranian money and to aid the regime.”“There can be no leakage,” Bessent added, “You’re either with us or you’re with the Iranians.”The Treasury launched the campaign, dubbed “Operation Economic Outcast”, last week, saying it aims to cut off the financial networks that help Iran generate revenue, evade sanctions and fund its activities.This came as the US treasury alleged on Friday that Banque Misr UAE had processed about $1.8 billion for 103 companies potentially linked to Iranian shadow-banking networks between January 2024 and June 2026.The Treasury described the UAE operation as a “critical node” in Iran’s access to US dollars and said some of the bank’s customers included apparent front companies used by Iran’s Ministry of Defence and Islamic Revolutionary Guard Corps to evade sanctions.The proposed rule would prohibit US financial institutions from maintaining correspondent accounts for Banque Misr UAE and require them to take steps to prevent transactions involving the UAE bank from being processed through the US financial system.The Treasury stressed that the proposed measure applies only to Banque Misr UAE and not to the bank’s operations in other countries.Bessent said the next stage of the campaign could involve cutting institutions off entirely from the dollar-based financial system, while urging G20 finance ministers and central bank governors to sever economic ties with Iran or risk secondary sanctions.The US has also imposed sanctions on Reza Mohammad Taeedi, manager of Bank Melli’s Dubai branch, and a Hong Kong-based company accused of helping sanctioned Iranian entities access the international financial system.
