US Proposes Cutting Banque Misr UAE Branches from Financial System

US Treasury Action

The United States Treasury Department has announced plans to sever the United Arab Emirates operations of Banque Misr from the US financial system. The proposal, announced on Friday, would prevent the Emirati branches of Egypt's second-largest bank from conducting business in US dollars.

According to the US Treasury, the move is intended to hold the bank accountable for what Washington described as "continued, egregious support of the Iranian regime". Treasury Secretary Scott Bessent stated that Iran's "enablers cannot continue to enjoy access to the US dollar and the global financial system".

Context and Strategic Goals

The sanctions are part of a broader campaign by the Trump administration to economically isolate Iran. This push comes as Washington seeks to "asphyxiate" entities it identifies as Iran's enablers amid a deadlock in truce talks. The action coincides with the six-month mark of the US war against Iran.

Treasury Secretary Scott Bessent recently announced a new campaign designed to pressure countries that maintain business ties with Iran to sever those connections or face US retaliation. The targeting of Banque Misr is viewed as a move to persuade other foreign financial institutions to stop facilitating Iranian trade.

Impact on Banque Misr

Banque Misr is fully owned by the Egyptian state. While the bank is reported to be well capitalized—with a capital adequacy ratio of 24.7%, exceeding the UAE central bank's 10.5% minimum—the sanctions pose a threat to its operational viability. Specifically, the sanctions target the bank's ability to manage international currency settlements and trade finance.

If the proposal is finalized, the Emirati arm of the bank will be unable to operate in US dollars starting September 28.

Implementation and Next Steps

The Treasury Department's action is not immediate; it is subject to a 30-day public comment period. During this window, the US government solicits messages of support or opposition before the rule takes effect.

The US has also introduced new sanctions on a Hong Kong company and a Dubai bank manager as part of the same economic isolation push.