FinCEN proposes cutting Banque Misr's UAE branches off from US dollar correspondent banking
On 1 September 2026 the Financial Crimes Enforcement Network published a notice of proposed rulemaking (FR Doc. 2026-17871), signed 28 August, finding the five United Arab Emirates branches of Egypt's state-owned Banque Misr — defined collectively as “Banque Misr UAE” — a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. FinCEN assesses the branches serve as a significant conduit for Iranian shadow banking, and says it identified 103 potential Iranian shadow-banking front companies moving approximately USD 1.8 billion through Banque Misr UAE accounts between January 2024 and June 2026, roughly USD 520 million of it in the most recent twelve months. The proposed special measure would prohibit US financial institutions from opening or maintaining correspondent accounts for the branches. Egypt-based Banque Misr and its operations outside the UAE are expressly excluded. The measure is proposed, not in force; the comment period closes on 1 October 2026.
A Section 311 correspondent-account prohibition is not an asset freeze. Unlike an OFAC designation, it blocks no property; it removes access to US-dollar clearing by severing the correspondent relationships through which dollars move — here, the three direct US correspondent accounts FinCEN says Banque Misr UAE holds. It is also the first time the desk has seen this instrument aimed at a named bank: the prior Section 311 action we covered targeted Huione, a payment network (Signal 011). The subject is a bank regulated by the Central Bank of the UAE, a US partner jurisdiction — the same corridor the desk has watched from the other end, in the Dubai exchange-house fronts of Signal 014.
The rulemaking arrived with two OFAC designations issued the same day under “Operation Economic Outcast.” Reza Mohammad Taeedi, named as general manager of Bank Melli's Dubai branch, was designated under the counterterrorism order E.O. 13224 and listed as linked to Bank Melli Iran, sanctioned years earlier. Hong Kong-based Kameng Trading Limited was designated under E.O. 13902, for operating in the financial sector of the Iranian economy. Neither invoked that order's digital-asset limb — the sector determination in Signal 018 — and the NPRM does not rest on it. Two qualifiers are the agency's own: the finding draws on non-public information, and “potential” is how FinCEN describes the 103 companies. Whether the measure is finalised, and when, turns on a rulemaking that the 1 October comment close only begins.