Washington – In a move aimed at tightening economic pressure on Tehran, the Trump administration is preparing a Treasury rule that would sever the United Arab Emirates (UAE) branches of Banque Misr, Egypt’s second‑largest bank, from the U.S. financial system. The proposal, unveiled on Friday, accuses the bank of acting as an economic lifeline for Iran’s leadership as the six‑month anniversary of the U.S. war against Iran approaches.
Policy rationale and expected impact
Treasury Secretary Scott Bessent explained that the rule is part of a broader campaign to compel nations and financial institutions that continue to do business with the heavily sanctioned Islamic Republic to cut those ties or face retaliation. “Iran’s enablers cannot continue to enjoy access to the U.S. dollar and the global financial system,” Bessent said in a statement. He added that Banque Misr’s UAE operations “decided to find out the hard way” and that the administration is taking the first step in holding the bank accountable for its “egregious support of the Iranian regime.”
Rulemaking process
The proposed rule will be open for a 30‑day public comment period before it can take effect. If finalized, the UAE branches would lose the ability to process transactions in U.S. dollars, effectively cutting them off from the world’s primary reserve currency and limiting their capacity to move funds that could benefit Iran.
Broader diplomatic effort
Bessent is scheduled to represent the United States next week at the Group of 20 finance ministers’ meetings. There, he will meet individually with counterparts from major and developing economies to encourage participation in the economic isolation of Iran. The Treasury Department also posted new sanctions on the manager of the Dubai branch of Iran’s Bank Melli and a Hong Kong‑based firm alleged to have helped launder funds for Tehran.
Balancing sanctions with global finance
While the administration is moving to target Banque Misr, it is stopping short of imposing full sanctions on the Egyptian bank. This signals a measured approach, aiming to avoid destabilizing broader financial relationships with major trading partners such as China and India, which also maintain ties with Iran. Bessent emphasized that the United States wants countries to have an opportunity to shift away from Iran before broader punitive measures become necessary, thereby preserving stability in the global financial system.
Implications for regional banks
If the rule is enacted, other banks with operations in the UAE that are suspected of facilitating Iranian transactions could face similar restrictions. The move underscores the administration’s commitment to using economic tools to isolate Iran, complementing the ongoing military campaign.
What’s next?
Stakeholders, including Banque Misr and industry groups, are expected to submit comments during the 30‑day window. The Treasury will review feedback before deciding whether to finalize the rule. Observers note that the proposal reflects a growing willingness by the Trump administration to leverage financial policy as a strategic weapon in the fight against Iran’s malign activities.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
