US hits Egyptian bank with Iran sanctions as war marks six months

The United States proposed sanctions on August 28, 2026, to cut off the UAE branches of Egypt's second-largest bank, Banque Misr, from the US dollar financial system. The US Treasury accused the branches of processing $1.8 billion for Iranian shadow banking networks. In response, the UAE central bank launched an urgent forensic examination of the branches, while Egypt's central bank engaged with US officials as the US-Iran war reached a six-month stalemate.

Banque Misr UAE sanctions

• ▪The US Treasury Department's Financial Crimes Enforcement Network proposed a rule on August 28, 2026, to revoke Banque Misr UAE's correspondent banking access to US financial institutions
• ▪The US Treasury's proposed restriction applies only to Banque Misr's UAE branches, allowing the bank to continue dollar transactions through its Cairo head office and other foreign branches
• ▪The proposed US Treasury restriction on Banque Misr UAE's correspondent banking access is subject to a 30-day public comment period before taking effect on September 28, 2026

US-Iran war economic pressure

• ▪US Treasury Secretary Scott Bessent plans to make direct appeals to G20 counterparts to halt interactions with Iran during finance minister meetings in Asheville, North Carolina
• ▪US Treasury Secretary Scott Bessent announced 'Operation Economic Outcast' on August 24, 2026, as part of an economic campaign to pressure Iran six months into the war

Iran sanctions evasion facilitation

• ▪The US Treasury Department estimates that Banque Misr UAE processed approximately $1.8 billion in transactions for 103 companies linked to Iranian shadow banking networks between January 2024 and June 2026
• ▪The US Treasury Department on August 28, 2026, sanctioned Hong Kong-based Kameng Trading Limited for allegedly laundering money for the sanctioned Iranian Pedram Pirouzan Exchange House
• ▪The US Treasury Department on August 28, 2026, sanctioned Reza Mohammad Taeedi, the manager of Iran's Bank Melli branch in the United Arab Emirates

Egyptian government response

• ▪Egypt's Banque Misr stated on August 29, 2026, that it is reviewing the US Treasury notice while its UAE branches continue to provide services to customers
• ▪The Central Bank of Egypt stated on August 28, 2026, that the proposed US sanctions only affect Banque Misr's UAE branches and do not extend to other Egyptian banks

UAE central bank examination

• ▪The Central Bank of the United Arab Emirates stated it is studying options regarding the status of Banque Misr UAE while considering obligations to its customers
• ▪The Central Bank of the United Arab Emirates announced on August 29, 2026, that it will conduct an urgent special examination and forensic lookback of Banque Misr's UAE branches

Six-month war stalemate

• ▪A June 2026 ceasefire memorandum of understanding brokered by Qatar and Pakistan between the United States and Iran stalled due to disagreements over the Strait of Hormuz
• ▪The ongoing war between the United States and Iran reached its six-month mark on August 28, 2026, amid a military stalemate and efforts to reopen the Strait of Hormuz

11 sources