The Treasury Department sanctioned the UAE branch of Banque Misr for processing $1.8 billion through about 100 companies tied to Iran's shadow banking network. Two years of transactions. One point eight billion dollars. Shadow banking network is what we call it when the Iranians use the same correspondent banking system everyone else uses but we don't like it.
Banque Misr UAE moved money for Iranian front companies. The Treasury noticed. Took them two years and nearly two billion dollars but they got there. Real barn-burners at the Office of Foreign Assets Control.
The Egyptian bank's UAE branch processed payments for a hundred different entities. A hundred. Someone at compliance was either the worst employee in banking history or having the time of their f*cking life. Daily deposits from Definitely Not Iranian Oil Company LLC. Weekly wire transfers to Tehran Carpet Imports and Also Other Stuff Inc. The red flags had red flags.
Iran runs a shadow banking network because regular sanctions made regular banking inconvenient. So they set up shell companies. Route payments through third countries. Use correspondent banks that ask fewer questions. The system works until Treasury writes a strongly worded press release and freezes some accounts. Then they set up new shells and start over. It's like whack-a-mole except the moles have petroleum reserves and the mallet is a PDF.
Retail traders will see this headline and panic-sell their Egyptian ETFs. They will check if their portfolios have Iran exposure. They will ask their Reddit investing group if Banque Misr's problems affect JPMorgan. The answer is no but they will sell JPMorgan anyway because fear is a hell of a drug and reading is hard.
The UAE branch gets sanctioned. The parent bank in Egypt keeps operating. The Iranian front companies incorporate in a different jurisdiction. Everyone pretends this solved something.
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