The US Treasury Department has proposed cutting off Banque Misr’s branch in the United Arab Emirates from access to US correspondent accounts, alleging the branch handled large volumes of Iran-linked funds through the American banking system.

According to Treasury, the branch maintained dollar accounts at three unnamed US financial institutions and processed as much as $1.8 billion for companies connected to Iranian shadow banking between January 2024 and June 2026. The measure has been proposed but has not yet taken effect.

Treasury outlines alleged transfer activity

US officials said Iran continues to move money through foreign banks, including institutions in the UAE and China, that still rely on correspondent accounts in the United States. Treasury alleges that front companies are used to obscure the origin of transactions before they enter the dollar-clearing system.

In the case of Banque Misr’s UAE branch, Treasury said the bank processed up to $1.8 billion tied to firms linked to Iranian shadow banking over a roughly two-and-a-half-year period. The department did not identify the three US banks where the branch is said to have held its dollar accounts.

Wider US banking exposure flagged

The Treasury Department also pointed to a broader pattern beyond the Banque Misr matter. It said it identified about $9 billion in Iranian-linked funds moving through US banks across all channels during 2024.

That figure is separate from, and wider than, the total Treasury cited for the UAE branch. The department used the data to argue that significant Iran-related financial flows are still reaching the US banking system despite existing restrictions.

Part of Operation Economic Outcast

The proposed action against Banque Misr’s UAE branch falls under Operation Economic Outcast, a US campaign aimed at increasing financial pressure on Tehran. Treasury has also urged American banks to apply closer scrutiny to correspondent banking relationships that may expose them to Iran-related activity.

A restriction on correspondent access can be significant because foreign banks often depend on those relationships to clear US dollar transactions. Treasury’s current step, however, remains a proposal rather than an active enforcement measure.

Bank response and next step

Banque Misr said it is cooperating with regulators and that its operations in the UAE are continuing as normal. The bank did not, in the source material, address the specific dollar amounts cited by Treasury.

For now, the confirmed position is that the US has outlined allegations and proposed restrictions, while warning domestic banks to be more vigilant. The immediate next development to watch is whether the proposed curb is finalized and whether any further details emerge about the unnamed US institutions involved.

Source: dailyhodl.com