The Central Bank of the UAE has initiated a special and urgent audit of the branches of Banque Misr that are in the country after the US proposed to limit their access to dollar-denominated correspondent banking services.
The UAE central bank indicated that it is evaluating the circumstances and considering the options available in case the proposed US action is finally adopted.
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Banque Misr, in its turn, stated that the US move is not final yet and only covers its network of branches in the UAE. The Egyptian bank emphasized that the action does not impact its operations in Egypt or its branches in other countries.
On Friday, the US State Department announced that it had acted to limit dollar transactions with Banque Misr branches in the UAE due to its dealings with Iran.
UAE Central Bank Orders Emergency Inspection
The Central Bank of the UAE announced in a statement released by the official Emirates News Agency (WAM) that it had examined the announcement of the US authorities regarding the proposed actions against the branches of Banque Misr in the UAE.
The US move, the central bank said, brought up issues of anti-money laundering controls and assured that the UAE operations of Banque Misr are not beyond the jurisdiction of the laws and regulations of the country.
As part of its response, the regulator ordered a special and urgent inspection of the bank. The review will involve a detailed analysis of the time frame of the statement of the US authorities, and the transactions of the companies mentioned in the announcement will be considered.
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The central bank of the UAE indicated that it conducts frequent reviews of the systems and processes of banks in the fight against money laundering and terrorist financing. It also evaluates how well their electronic systems are effective in screening transactions against sanctions lists.
The regulator emphasized that licensed financial institutions should not put the financial system of the UAE at risk of being tainted by the risks that may harm its reputation. Banks are also supposed to abide by the laws and regulations of jurisdictions whose financial institutions they utilize to transact business.
The central bank further stated that it is evaluating its options with regard to Banque Misr in case the US measure is officially adopted after the completion of the legal procedures.
It indicated that any decision would be made at the right time and consideration of the responsibilities of Banque Misr to its customers in the UAE.
Banque Misr Says US Measure Not Final
Banque Misr reported that the announcement by the US Treasury Department is about a regulatory proposal that would limit the US financial institutions to offer dollar-denominated correspondent banking services to the UAE branch of the bank.
The Egyptian lender claimed that it complies with relevant legal and regulatory frameworks in full and is dedicated to relevant laws, regulations, instructions and supervisory requirements.
The bank also indicated that it is collaborating with the competent authorities and that the announced measure is still under a formal period where comments can be made and considered.
Banque Misr has not yet made a final decision on whether the restrictions will be put into effect.