First Arab Bank Targeted in 'Economic Pariah' Campaign: US Treasury Moves to Cut 'Bank Misr' UAE Branches Off from Dollar Over Iran Dealings

The US Treasury announced on Friday, August 28, 2026, that it is taking the 'first step' to hold the UAE branches of 'Bank Misr'—the second-largest Egyptian state bank—accountable for what it described as 'continuous and blatant support for the Iranian regime.' This marks the first targeting of an Arab banking institution as part of Washington's 'Economic Pariah Operation' launched four days ago to financially isolate Tehran.

Treasury Secretary Scott Besant stated in a release: 'Bank Misr UAE has chosen to test the sanctions we imposed on Iran despite our warnings, and today we are taking the first step to hold it accountable,' adding that the department 'is committed to cutting every remaining economic artery to Tehran' and has 'warned entities enabling Iran that they cannot continue to enjoy access to the US dollar and the global financial system.'

What Does the Measure Practically Mean?

The measure is not a traditional freeze sanction but a proposed rule from the 'Financial Crimes Enforcement Network' (FinCEN) under Section 311 of the 'Patriot Act,' classifying 'Bank Misr – UAE' as a financial institution of 'primary money laundering concern,' preventing US financial institutions from opening or maintaining correspondent accounts for it—effectively cutting it off from dollar clearing. The rule is subject to a 30-day public comment period before taking effect, marking the first use of this tool against a specific bank branch in the new campaign, according to the Associated Press. The Treasury did not disclose details or the scale of the transactions the bank is accused of.

On the same day, the Office of Foreign Assets Control (OFAC) listed Reza Mohammad Tayidi, the director of Iran's 'Bank Melli' branch in Dubai, on the sanctions list under counter-terrorism authorities, alongside a Hong Kong-based company accused of laundering Iranian money. The Treasury describes 'Bank Melli' as the financial hub for the Revolutionary Guards and Iran's Ministry of Defense, with Besant calling for the closure of all its branches.

Context: Four Days of Financial Escalation

The move culminates what Besant announced on Monday, August 24, as the 'Economic Pariah Operation,' where Washington expanded secondary sanctions to include digital and technological assets, gold, aviation, and shipping, listing about 60 entities, individuals, and vessels associated with Iran's shadow fleet in the UAE, Hong Kong, Singapore, and Switzerland. The Secretary promised a 'major announcement' about a financial institution before the week's end—which was fulfilled today. Besant stated then, 'This is an economic strangulation of this regime... no one should test our resolve,' offering countries 'a chance to distance themselves from Iran before it's too late.'

Reactions

Neither 'Bank Misr' nor UAE authorities issued immediate comments according to US agencies, while Al Jazeera Net reported that the Egyptian central bank clarified that the US measure is limited to the dollar correspondent account transactions of the UAE branch, excluding the rest of the bank's operations. In Tehran, the Iranian Foreign Ministry described the sanctions as 'state terrorism,' according to the same source.

The financial escalation comes as the US-Iran confrontation enters its sixth month, amid ongoing tensions in the Strait of Hormuz and international efforts to reopen it.