UAE, Egypt Central Banks Say Banque Misr's Branches Conducting 'Business As Usual'

The Central Bank of the UAE and the Central Bank of Egypt have issued a joint statement on Sunday evening, affirming close cooperation between the two regulators over the operations of Banque Misr's branches in the UAE, following a proposed rule by the US Department of the Treasury targeting the lender.

The statement comes as a follow-up to the proposal issued by the US Treasury regarding a regulatory rule providing for the imposition of a special measure relating to Banque Misr's branches in the UAE.

The two central banks affirmed“the full and continuous cooperation and coordination between them with regard to the branches of Banque Misr in the UAE,” and said the branches would continue“conducting all their business as usual".

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The regulators added that Banque Misr's UAE branches“will take all necessary actions and measures within the period specified for that purpose.”

On August 28, the US Treasury's Financial Crimes Enforcement Network (FinCEN) proposed a rule that would revoke Banque Misr UAE's correspondent banking access to US financial institutions, designating the lender's UAE operations as a channel through which Iran accesses foreign currency.

Banque Misr operates five branches in the UAE, across Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah.

The move forms part of a wider US Treasury campaign to sever the Egyptian bank's UAE branches from the US financial system, as Washington pushes to pressure Iran into ending the ongoing conflict in the Middle East.

The US Treasury has said the measure does not affect any other Egyptian bank.

Following the US announcement, the Central Bank of the UAE on Saturday said separately that it had decided to conduct a“special and urgent examination” of Banque Misr's UAE branches, including a forensic lookback covering the period referenced in the US statement, with a focus on transactions linked to the companies named.

The regulator said it expects banks licensed in the UAE not to expose the country's financial system to reputational risks, and to respect the laws of jurisdictions whose financial institutions are used in transactions.

The UAE Central Bank said it is evaluating regulatory options regarding Banque Misr's status should the US measure be formally imposed, while ensuring the bank's obligations to its customers in the UAE continue to be met.

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