FinCEN proposes barring Banque Misr UAE branches over Iran laundering

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, has issued a notice of proposed rulemaking finding the five United Arab Emirates-based branches of Egypt’s state-owned Banque Misr — collectively Banque Misr UAE — to be of primary money-laundering concern. The proposal, published in the Federal Register of September 1, 2026, would invoke special measure five under section 311 of the USA PATRIOT Act to bar U.S. financial institutions from opening or maintaining correspondent accounts for the bank.

The action is set out in FR Doc. 2026-17871 (RIN 1506-AB76, Docket FINCEN-2026-0232), a proposed rule under 31 CFR Part 1010. Written comments must be submitted on or before October 1, 2026.

The finding and the proposed measure

Section 311 of the USA PATRIOT Act, codified at 31 U.S.C. 5318A, authorizes the Secretary of the Treasury to find that a financial institution operating outside the United States is of primary money-laundering concern and to impose one of five special measures. FinCEN proposes special measure five, which would:

• prohibit U.S. financial institutions from opening or maintaining a correspondent account for, or on behalf of, Banque Misr UAE;
• require U.S. financial institutions to take reasonable steps not to process a transaction for a correspondent account in the United States of a foreign banking institution if the transaction involves Banque Misr UAE; and
• require U.S. financial institutions to apply special due diligence to their foreign correspondent accounts to guard against their use to process transactions involving Banque Misr UAE.

Banque Misr UAE is defined as all five UAE branches of the Egypt-based, government-owned commercial bank Banque Misr, which began UAE operations in August 1972 under the name Banque Du Caire and was fully acquired by Banque Misr in July 2007. The branches are located in:

• Dubai (Deira and Business Bay);
• Abu Dhabi;
• Sharjah; and
• Ras Al Khaimah.

Egypt-based Banque Misr and its branches in countries other than the UAE are expressly excluded from the definition.

Iranian shadow banking exposure

FinCEN assesses that Banque Misr UAE serves as a critical access node to the U.S. dollar for Iranian illicit finance, putting U.S. national security at risk. The bureau identified 103 potential Iranian shadow-banking front companies transacting approximately USD 1.8 billion through accounts with Banque Misr UAE from January 2024 to June 2026, including about USD 520 million in the most recent 12-month period. The bank accesses USD through three direct correspondent accounts with U.S. financial institutions.

Named front companies linked to the activity include:

• Alpa Trading FZCO, a UAE-based front company designated as a Specially Designated Global Terrorist in September 2025, for which Banque Misr UAE processed over USD 32 million in transactions between 2024 and 2025;
• Naba Alzaki Raw Materials Trading LLC, a UAE front company used by Iran’s Khandan Exchange, for which the bank processed over USD 29 million between March and July 2025; and
• Midas Oil Trading DMCC, a key money-laundering entity on behalf of Iranian Supreme Leader Mojtaba Khamenei, for which the bank processed a transaction of over USD 1 million in January 2025.

Consultation and impact

In proposing the measure, FinCEN consulted with the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Secretary of State, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the National Credit Union Administration, the Federal Deposit Insurance Corporation, and the Attorney General. The bureau determined that special measure five would most effectively mitigate the risks posed by Banque Misr UAE.

For U.S. banks and their international correspondent relationships, the measure would effectively sever direct access to the U.S. financial system for the five UAE branches, a significant step in the Treasury’s broader campaign against Iranian shadow-banking networks that move oil proceeds and fund weapons procurement. Comments on the proposal are open until October 1, 2026.

Source: Federal Register, Vol. 91, No. 168, September 1, 2026, Proposed Rules, p. 56085 (official reference: FR Doc. 2026-17871, RIN 1506-AB76, Docket FINCEN-2026-0232).