“We did not impose sanctions because we did not want the measures to extend to the parent Banque Misr,” Bessent said on the sidelines of a meeting of senior global finance officials in Asheville, North Carolina.
Bessent claimed the UAE branch had processed more than $1.8 billion in transactions linked to Iranian networks, prompting Washington to invoke Section 311 of the USA PATRIOT Act — a power he said the Treasury had not previously used in this manner.
“We have never engaged in an action at this level of force,” Bessent said, adding that the United States was moving to halt the branch's activities.
The comments come after the US Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed on 28 August a rule that would cut Banque Misr’s five UAE-based branches, collectively referred to as Banque Misr UAE, from correspondent banking access to US financial institutions.
The US Treasury alleges that some of the entities were connected to Iranian state institutions and efforts to circumvent US sanctions.
The proposed measure does not target Banque Misr’s operations in Egypt.
Egypt’s Central Bank has also stressed that the US action is limited to the bank’s UAE operations and their US dollar correspondent relationships.
Banque Misr said its UAE branch continues to provide banking services and meet its obligations to customers and other stakeholders, while it is communicating with the US Treasury regarding the proposed regulatory action.
The UAE Central Bank has meanwhile launched an urgent examination of Banque Misr’s branches in the country, including a detailed review of their activities.
Section 311 of the USA PATRIOT Act gives the US Treasury secretary authority to identify a foreign financial institution as a “primary money laundering concern” and impose special measures, ranging from enhanced record-keeping requirements to restrictions on correspondent banking relationships.
FinCEN's proposal remains subject to a 30-day public comment period, with comments due by 1 October 2026, meaning the measure has not yet become final.
Bessent's remarks came as Washington steps up its campaign to isolate Iran economically under its “Operation Economic Outcast.”
He said the United States is likely to announce sanctions on another Iranian bank this week and an additional bank next week, while also considering measures targeting aircraft-leasing companies as part of the campaign.
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