An Egyptian banking source and an economic expert downplayed the impact of the US sanctions against Banque Misr’s UAE branch on the Egyptian banking sector and the broader economy, stressing that its fallout remains limited. The source confirmed that the impact is confined to certain transactions of the UAE branch and does not extend to Banque Misr's operations within Egypt or its other international branches. The US Treasury Department had on Friday said that “under Operation Economic Outcast, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed a rule that would revoke Banque Misr UAE’s correspondent banking access to US financial institutions.” “We are taking the first step in holding it accountable for its continued, egregious support of the Iranian regime,” said Treasury Secretary Scott Bessent. An official Egyptian banking source told Asharq Al-Awsat that the decision will prevent the bank's branch from making any US dollar transfers outside the UAE without undergoing financial monitoring in Washington and obtaining its prior approval. This measure is designed to ensure that funds do not reach individuals or institutions subject to US sanctions or ban orders, he explained. The source noted that the decision applies strictly to the US dollar and no other currencies, as intercountry dollar transfers between banks are routed through a US intermediary bank or US intermediary transfer companies known as correspondents, allowing US authorities to track the movement of their currency. He continued: "Previously, these transfers were carried out routinely under the supervision of the US banking sector alone. However, following this decision, they are now subject to the Office of Foreign Assets Control (OFAC) - a department of the US Department of the Treasury, which is the primary US institution that monitors and blocks dollar transfers to entities and individuals listed on sanctions schedules." The same source stressed that Banque Misr’s UAE branch is an entity independent of the Egyptian banking sector and falls within the scope of the UAE banking sector, though it is fully owned by the state-owned Banque Misr of Egypt. He noted that "the US decision will not affect any bank inside Egypt in any way," adding that it is a reviewable measure that is highly likely to be canceled following coordination with the US. Economic expert Abdel Nabi Abdel Muttalib said the US measure will not affect the rating of Banque Misr or the Egyptian banking sector, as the decision was not directed against Banque Misr or its UAE branch directly. Instead, he explained that the measure targets the "correspondent" service, which is typically provided by US companies or banks to Banque Misr, particularly in countries where the bank does not have direct access to the banking system. Speaking to Asharq Al-Awsat, Abdel Muttalib said that the ban does not apply to all currencies, but rather strictly to the US dollar. He added that even dollar transfers cannot be completely halted, as some transactions are carried out, for instance, in UAE dirhams and received on the other end in dollars. Furthermore, he noted that many transfers are executed in various other currencies but are delivered in other countries in US dollars, given its status as the most widely used and globally available international currency. He continued: "US authorities frequently implement broad precautionary measures and include institutions as a safeguard; subsequent reviews and audits then prove that certain entities were wrongfully targeted, leading to the cancellation of measures against them." In a statement on Saturday, Banque Misr said was reviewing the US Treasury notice, adding that its branch in the UAE continued to provide banking services to its customers in line with applicable rules and procedures. The bank stressed that the measure is strictly limited to Banque Misr’s UAE branch and does not extend to its operations in Egypt or any other country where it operates.
