UAE regulator launches Banque Misr transaction examination

The Central Bank of the UAE has ordered a special and urgent examination of Banque Misr’s branches in the country after US authorities identified the lender’s UAE operations as a primary money laundering concern and proposed cutting their access to the US financial system.

The regulator said the examination would include a forensic, in-depth lookback covering the period cited by US authorities, with particular focus on transactions involving companies named in the American statement. It is also considering options for the status of Banque Misr’s UAE branches if Washington proceeds with the proposed special measure.

The action follows a notice of proposed rulemaking issued on Friday by the US Treasury Department’s Financial Crimes Enforcement Network, or FinCEN. The agency proposed prohibiting US financial institutions from opening or maintaining correspondent accounts for, or on behalf of, Banque Misr UAE, a step that would sharply restrict its ability to conduct dollar-linked business through the American banking system.

FinCEN alleged that the UAE operations processed about $1.8 billion for 103 companies it associated with Iranian shadow banking networks between January 2024 and June 2026. The US agency said the transactions enabled access to dollars and financial channels used by entities tied to Iran, forming part of Washington’s wider effort to restrict Tehran’s access to international finance.

Treasury said some Banque Misr UAE customers appeared to be front companies used by Iran’s Ministry of Defence and the Islamic Revolutionary Guard Corps to evade US sanctions. It also alleged that certain customers were involved in laundering funds on behalf of Iran’s supreme leader. Those assertions form part of the US regulatory case and have not been established by the UAE examination.

The US action remains a proposal rather than a final rule. Banque Misr said the measure is subject to a formal period for public comments and review before any final decision is issued. The bank said it was examining the notice and would communicate with the US Treasury to obtain further information and prepare its regulatory and legal response. The proposed rule carries a 30-day comment period, during which interested parties may submit responses before FinCEN determines whether to finalise the restriction.

Banque Misr said the US measure applies only to its branch operations in the UAE and does not extend to its business in Egypt or other countries. It added that the UAE branch continues to provide services to customers under applicable rules and procedures and remains committed to meeting its obligations to customers and other related parties.

The UAE Central Bank stressed that Banque Misr’s local branches are subject to UAE laws and regulations. It said licensed banks are expected to avoid exposing the country’s financial system to reputational risks, comply with the laws and regulations of jurisdictions whose financial institutions they use for transactions, and refrain from misusing the UAE’s financial infrastructure.

The regulator also said it routinely examines anti-money laundering and counter-terrorism financing controls at banks operating in the country. Those reviews include testing the effectiveness of sanctions-screening and related compliance systems, with banks required to strengthen controls where necessary under applicable regulatory requirements.

FinCEN’s proposed measure would go beyond barring direct correspondent accounts. US financial institutions would also be required to take reasonable steps to prevent transactions involving Banque Misr UAE from passing through correspondent accounts held for other foreign banks, and to apply enhanced due diligence designed to guard against indirect access.

The finding was made under Section 311 of the USA Patriot Act, which allows the US Treasury to designate foreign financial institutions as being of primary money laundering concern and impose special measures intended to protect the American financial system. The proposal targets Banque Misr’s UAE operations specifically rather than the wider banking group.