UAE Central Bank Launches Urgent Investigation Into Banque Misr Following US Money Laundering Warning

The UAE Central Bank has announced it will carry out a special and urgent examination into the operations of Banque Misr's UAE branches after the US raised money laundering concerns regarding the lender.

According to a statement released on Saturday, the probe into the Egyptian lender will feature a forensic and in-depth lookback covering the timeframe specified by US authorities. The investigation will place a strong emphasis on the banking transactions of the companies highlighted in the official statement.

The action follows a move on Friday by the US Department of the Treasury’s Financial Crimes Enforcement Network, which proposed a rule to revoke Banque Misr UAE’s correspondent banking access to US financial institutions due to money laundering worries.

Responding to the development, the UAE Central Bank stated that it has reviewed the US statement. "Branches of Banque Misr operating in the UAE are subject to the laws and regulations in force in the UAE," the regulator noted. Banque Misr currently maintains five branches across the UAE, based on information from its website.

The Central Bank emphasized its expectation that licensed banks in the country avoid exposing the UAE financial system to reputational risks, respect the laws and regulations of countries whose financial institutions are involved in transactions, and refrain from misusing the nation's advanced financial infrastructure.

Furthermore, the regulator highlighted that it conducts periodic examinations of anti-money laundering and counter-terrorism financing procedures at banks operating in the UAE, while verifying the effectiveness of sanctions screening systems.

"The Central Bank is currently studying the available options regarding the status of the bank in the event it is decided to impose the special measure against it after completing the procedures in accordance with US laws," the regulator stated, adding that an appropriate decision will be made in due course while considering customer obligations.

The Central Bank continues to crack down on financial entities violating regulations. In June, a foreign bank branch in the UAE received a Dh20 million ($5.44 million) fine for severe anti-money laundering rule violations, marking one of the largest financial penalties issued to date.