WASHINGTON (AP) — The Trump administration is taking steps to limit an Egyptian bank’s operations in the United Arab Emirates, accusing the financial institution of serving as an economic lifeline to Tehran’s leadership as the U.S. war against Iran reaches the six-month mark.
Under a new rule proposed Friday by the Treasury Department, the Emirati branches of Banque Misr, Egypt’s second-largest bank, would be severed from access to the U.S. financial system.
It follows Treasury Secretary Scott Bessent’s announcement this week of a new campaign to push countries that still do business with the already heavily sanctioned Islamic Republic to sever their financial ties or face retaliation from the United States.
In stopping short of imposing sanctions on the Egyptian bank, the move signals the Republican administration’s reluctance to penalize major trading partners that do business with Iran, including China and India. Bessent told reporters on Monday that he wanted countries to have an opportunity to shift away from Iran before it was too late in a bid to avoid upending the global financial system.
The rule will be subject to a 30-day public comment period before it takes effect, the Treasury Department said.
The Trump administration “warned that Iran’s enablers cannot continue to enjoy access to the U.S. dollar and the global financial system,” Bessent said in a statement Friday. “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.”
Egypt’s foreign ministry and central bank confirmed knowledge of the new rulemaking and are communicating with U.S. officials, according to a statement issued by the Central Bank of Egypt on Friday.
“The CBE affirms that this measure is limited to the bank’s branches in the UAE and only to its dollar transfers,” the statement said.
It added that the measure does not affect any other Egyptian bank and does not extend to the Banque Misr’s operations inside Egypt or to any of its overseas branches.
“The Central Bank of Egypt affirms the strength and resilience of all banks operating in Egypt,” the statement said.
Also Friday, the U.S. Treasury Department posted on its Office of Foreign Assets Control website new sanctions on the bank manager of the Dubai branch of Iran’s Bank Melli and a Hong Kong-based firm that the U.S. accuses of helping launder funds for Iran.
Bessent is set to represent the U.S. next week at Group of 20 finance ministers meetings, where he will meet individually with his counterparts from the world’s major and developing economies to encourage participation in the economic isolation of Iran.
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Amiri reported from New York. Associated Press writer Noha ElHennawy in Cairo contributed to this report.
