The U.S. Treasury Department is threatening to cut off $1.8 billion in Iranian shadow banking activities processed through the United Arab Emirates as part of "Operation Economic Outcast." The action targets Banque Misr UAE, which the Treasury estimates processed the funds for 103 companies potentially linked to Iran's illicit finance networks between January and June 2026.
Treasury Secretary Scott Bessent announced Friday that the department has listed the five UAE branches of Banque Misr, an Egyptian bank, as a "Financial Institution Operating Outside of the United States of Primary Money Laundering Concern." This designation, under a proposed rule, could lead to the bank's exclusion from the U.S. financial system within 30 days.
According to the Treasury, customers of Banque Misr UAE include companies that act as fronts for Iran's Ministry of Defense and the Islamic Revolutionary Guard Corps. The department claims these entities are used to evade U.S. sanctions and launder money on behalf of Iranian Supreme Leader Mojtaba Khamenei.
"Treasury promised to sever every economic lifeline Tehran has left and finally end the threat of the Iranian regime," Bessent stated. "We also warned that Iran's enablers cannot continue to enjoy access to the U.S. dollar and the global financial system. Banque Misr UAE decided to find out the hard way, and today, we are taking the first step in holding it accountable for its continued, egregious support of the Iranian regime."
The Treasury Department is utilizing a section of the Patriot Act to revoke the UAE-based bank's access to U.S. financial institutions. This act empowers the government to target foreign banks, countries, or accounts posing significant money laundering risks related to terrorism.
Treasury's Financial Crimes Enforcement Network (FinCEN) previously identified as much as $9 billion in potential Iranian shadow banking activities passing through U.S. financial institutions in 2024 alone. The department stated that Banque Misr UAE "serves as a critical access node to the U.S. dollar (USD) for Iranian illicit finance, putting U.S. national security at risk and undermining the integrity of the U.S. financial system."
Iran, already under U.S. sanctions, reportedly uses shadow banks to launder funds, procure weapons, and finance regional proxy groups. The U.S. government views these actions as part of an economic strategy to pressure Iran, particularly amid ongoing conflict.
In conjunction with these actions, Treasury also blacklisted Iranian national Reza Mohammad Taeedi, the general manager of the Dubai branch of Iran's Bank Melli, and sanctioned Hong Kong-based Kameng Trading Limited for allegedly acting as a money laundering front company for an Iranian exchange house. These measures are part of "Operation Economic Outcast," announced by Bessent earlier in the week, which aims to identify and target revenue streams supporting the Iranian regime.