The Central Bank of the UAE ordered a “special and urgent examination” of Banque Misr’s branches in the Emirates on Saturday, August 29, 2026, including a lookback at the transactions cited by Washington. A day later, the UAE and Egyptian central banks said they were coordinating on the case. Both were responding to a proposed rule published on August 28 by the Financial Crimes Enforcement Network (FinCEN), the Treasury’s anti-money laundering bureau.
A Section 311 measure, not a sanction
The proposal relies on Section 311 of the USA PATRIOT Act, codified at 31 U.S.C. 5318A. It lets the Treasury find that a foreign financial institution is of “primary money laundering concern” and then impose one of five special measures set out in the statute. FinCEN chose the fifth, which targets correspondent accounts. Its finding rests on the role the five branches allegedly play as a gateway to the dollar for illicit Iranian finance: about $520 million of that activity over the most recent 12 months. No assets are frozen, and no one is added to an OFAC list.
- US financial institutions could not open or maintain a correspondent account for, or on behalf of, Banque Misr UAE.
- They would have to take reasonable steps not to process a transaction for a foreign bank’s US correspondent account if it involves Banque Misr UAE.
- They would have to apply special due diligence to all their foreign correspondent accounts to keep such transactions out.
FinCEN estimates that about 128 US institutions could have to notify their correspondents, and notes that only three of them maintain a direct account for Banque Misr UAE. Five branches depend on three banking relationships for their dollar access. Comments are open for 30 days under docket FINCEN-2026-0232. A final rule would then set the effective date.
Every dollar payment touches a US account
A correspondent account is an account one bank holds on the books of another so it can carry out transactions in a market where it has no presence. Dollars reach final settlement only inside the US banking system, so any dollar-denominated transaction ends up touching an account held in the US.
The second part of the measure targets nested correspondent banking. A foreign bank with a US account could no longer route transactions involving Banque Misr UAE through it, and the US bank holding that account would have to catch them with its sanctions screening systems.
Egypt says the impact stops at the UAE branches
The Central Bank of Egypt said the measure “is limited to Banque Misr UAE’s USD transactions with correspondent banks only” and does not affect Banque Misr’s other branches or any other Egyptian bank. The US proposal confirms that scope: it expressly excludes the Egypt-based parent and its operations outside the UAE. The UAE central bank said it is “studying the available options regarding the status of the bank” if the measure is imposed.
The legal scope and the practical one may not match. Screening systems match text strings, and the five branches carry the parent bank’s name. The special due diligence requirement also shifts the burden of checking onto counterparties that have no access to FinCEN’s non-public information.
In the ABLV case, the market moved before the rule
Latvia’s ABLV Bank was the target of a similar proposal in February 2018, withdrawn in September 2024 without a final rule ever being adopted. According to the withdrawal notice, one week after the US proposal the European Central Bank found that ABLV had experienced “an abrupt wave of deposit withdrawals and increasing lack of access to U.S. dollar funding.” Past Section 311 cases have taken anywhere from four to more than 20 months to go from proposal to final rule.
The remittance corridor at stake
Remittances from Egyptians abroad reached about $43 billion in the first 11 months of fiscal 2025-2026, up from about $33 billion a year earlier, according to Central Bank of Egypt data cited by AGBI. The UAE ranks behind Saudi Arabia as a source. In fiscal 2023-2024, Kuwait, Saudi Arabia, and the UAE together accounted for about $12 billion of roughly $26 billion, with about $8 billion from Saudi Arabia alone. The proposal targets neither these transfers nor the channels that carry them. The Latvian precedent suggests the risk lies in how counterparties react.