US wants to cut off Egypt's second largest bank from the global financial system

The United States is considering cutting off Egypt’s second-largest bank from the global financial system.

The U.S. Treasury Department announced on August 28 its intention to cut off the United Arab Emirates (UAE) branches of Egypt’s Banque Misr from the global financial system. The move, which President Donald Trump’s administration says is aimed at financially weakening what it calls Iran’s “backers.”

The UAE branch of Banque Misr, Egypt’s second-largest bank, will no longer be able to transact in U.S. dollars starting September 28.

The public will have a 30-day notice period to comment on the decision. During the process, the U.S. government will gather messages of support or opposition that could influence the decision.

The Treasury Department said in a statement that “the Department’s Financial Crimes Enforcement Network (FinCEN) has recommended that Banque Misr UAE be removed from the U.S. banking system because the Treasury Department has determined that the bank has served as a primary conduit for U.S. dollars to the Iranian regime.”

Operation Economic Outcast was announced by Treasury Secretary Scott Bessant on August 24. It is part of Washington’s efforts to pressure Iran in the face of the dispute over the Strait of Hormuz.

The Treasury Department said that American banks must stop any money transfers involving Banque Misr UAE. They must also conduct special due diligence on transactions involving the bank when working with foreign banks.

The August 28 announcement also included a branch of Bank Melli in Dubai. The US has imposed sanctions on its manager, Reza Mohammad Tayedi. Bank Melli is a major commercial bank in Iran that served as the central bank until the 1979 revolution. It has branches in Europe and the Middle East.

According to the Ministry of Finance, "Bank Melli has served as a key financial center for Iran's armed forces, including the Islamic Revolutionary Guard Corps' Quds Force, which is subject to US sanctions, and the Ministry of Defense and Armed Forces Logistics."

Hong Kong-based Kameng Trading Limited was also sanctioned.

The statement said, "The sanctioned Iranian currency exchange Pedram Pirouzan Exchange House (also known as Opal Exchange) used Kameng Trading Limited to launder money for Iran."