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US Treasury Expands Iran Financial Crackdown to UAE Bank, Hong Kong Firm

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The US Treasury targeted Iran's access to UAE banking channels, proposing restrictions on Banque Misr UAE under Operation Economic Outcast, it said Friday.

The Financial Crimes Enforcement Network proposed revoking Banque Misr UAE's correspondent banking access to US financial institutions, the Treasury said.

Treasury's Office of Foreign Assets Control also sanctioned the manager of Bank Melli's Dubai branch and a Hong Kong-based front company linked to Iranian money laundering.

"Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime," said Secretary of the Treasury Scott Bessent.

FinCEN classified Banque Misr UAE as a financial institution outside the US that poses a primary money-laundering concern and proposed restrictions under Section 311 of the USA PATRIOT Act.

The proposed measure would bar US financial institutions from opening or maintaining correspondent accounts for Banque Misr UAE and require them to take steps against related transactions.

The rule would also require enhanced due diligence for foreign correspondent accounts to prevent transactions involving Banque Misr UAE, but would apply only to the UAE operation.

Treasury estimates Banque Misr UAE processed about $1.8 billion for 103 companies potentially linked to Iranian shadow banking networks between January 2024 and June 2026.

Iran relies on multi-jurisdictional shadow banking networks to access US dollar correspondent banking relationships, using them to move funds, procure weapons and finance regional terrorist proxy groups, Treasury said.

OFAC also targeted Bank Melli's Dubai branch manager, citing the bank's role in processing billions of dollars through accounts controlled by the Islamic Revolutionary Guard Corps Qods Force and moving funds inside and outside Iran.

OFAC additionally sanctioned Hong Kong-based Kameng Trading, which Treasury said helped sanctioned Iranian exchange house Pedram Pirouzan Exchange House, also known as Opal Exchange, launder money and access the international financial system.

Operation Economic Outcast raises sanctions risks for entities doing business with Iran, with Treasury warning that facilitators of Iranian money laundering or sanctions evasion will lose access to the US financial system.

"We also warned that Iran's enablers cannot continue to enjoy access to the US dollar and the global financial system," Bessent said.

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