UAE central bank moves against Bank Melli Iran branches as US sanctions tighten the noose

The UAE Central Bank is taking aim at the local branches of Bank Melli Iran, Iran’s largest state-owned lender, in a move that reflects growing pressure from Washington on Gulf financial institutions to cut ties with sanctioned Iranian entities.

The action comes directly in the wake of an August 28 designation by the US Treasury’s Office of Foreign Assets Control, which sanctioned Reza Mohammad Taeedi, the Iranian general manager of Bank Melli Iran’s Dubai branch, under Executive Order 13224, the US government’s primary counterterrorism financing authority.

How a Dubai bank manager ended up on a Treasury blacklist

Treasury’s case against Taeedi centers on Bank Melli Iran’s role facilitating financial transactions on behalf of Iran’s Islamic Revolutionary Guard Corps-Qods Force, the external operations arm of the IRGC.

Bank Melli Iran has operated under comprehensive US sanctions for years, yet its Dubai branches have continued to function under licenses issued and supervised by the Central Bank of the UAE. The CBUAE has launched what it describes as a “special and urgent examination” of the Bank Melli Iran branches operating within its jurisdiction.

Operation Economic Outcast and the Banque Misr dimension

The Bank Melli action is one piece of a larger US pressure campaign that Treasury has branded “Operation Economic Outcast,” a coordinated effort targeting Iranian shadow banking networks running through Middle Eastern and North African financial institutions.

Egypt’s Banque Misr has been caught in the same dragnet. On August 28, the same day Treasury sanctioned Taeedi, the Financial Crimes Enforcement Network proposed revoking Banque Misr’s access to US correspondent banking accounts. The allegation: Banque Misr processed approximately $1.8 billion in transactions linked to Iranian shadow banking networks between January 2024 and June 2026.

The CBUAE responded by initiating its own “urgent examination” of Banque Misr’s UAE branches, a parallel track to its review of Bank Melli. Neither set of branches has been formally shut down or had its UAE license revoked as of the time of writing.

What the Banque Misr acquisition signals

Egypt’s National Bank of Egypt received preliminary approval on September 22 to acquire Banque Misr’s UAE operations outright.

The UAE has served as a pivotal financial hub for Iranian trade, facilitating around $28 billion in bilateral trade in 2024. The UAE has also spent years working its way off global financial gray lists by strengthening its anti-money-laundering and counterterrorism financing frameworks.