UAE Central Bank Imposes Transaction Restrictions on Bank Melli Iran Branches

The Central Bank of the UAE has prohibited all Bank Melli Iran branches operating in the country from conducting financial transactions to and from Iran, including trade finance and fund transfers. The enforcement action was announced on 23 September 2026 after examinations found violations involving non-compliance with UAE regulations, laws and supervisory decisions, including requirements related to anti-money laundering, countering terrorism financing and proliferation financing.

What The Enforcement Action Covers

According to the Central Bank, the measures were imposed under Article 168-1-C of Federal Decree-Law No. 6 of 2025 regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business. The decision followed examinations of Bank Melli Iran's UAE operations.

Bank Melli Iran is Iran's largest lender, according to The National. Reuters reported that it began operating in the UAE in 1969, has branches across several emirates and has its main office in Dubai.

The Central Bank's statement focuses specifically on prohibiting transactions to and from Iran, including trade finance and fund transfers. It does not say whether other activities conducted by the branches are affected. Reuters described the measure more broadly as barring Bank Melli from operating in the UAE.

Why It Follows Broader Restrictions

The action comes after the UAE halted all trade, commercial exchanges and financial transactions with Iran until further notice in August 2026. The Ministry of Foreign Affairs said the decision was taken in light of regional escalations that undermine regional and international peace and security. The National reported that the suspension followed a spate of attacks on UAE-owned tankers and Tehran's rejection of talks with the US.

There is also a US sanctions dimension. On 28 August, the US Treasury's Office of Foreign Assets Control sanctioned Reza Mohammad Taeedi, identified by the Treasury as the general manager of Bank Melli's Dubai branch. It also sanctioned Hong Kong-based Kameng Trading Limited, which the Treasury said had assisted a sanctioned Iranian exchange house in accessing the international financial system.

Reuters reported that the UAE has historically been an important external economic link for Iran. The report also said it was not immediately clear whether the Central Bank's Bank Melli action represented a widening of restrictions following the US Treasury measures.

Part Of A Wider Compliance Pattern

The Bank Melli action comes amid other recent Central Bank scrutiny of foreign bank branches. In August, the regulator ordered a special and urgent examination of Banque Misr's UAE branches after the US Treasury's Financial Crimes Enforcement Network proposed restricting their correspondent banking access to US financial institutions.

Separately, in June, the Central Bank imposed an AED20 million penalty on an unnamed foreign bank branch after examinations found significant and repeated failures in its anti-money laundering, counter-terrorism financing, illegal organisations and sanctions framework.

These actions sit within the UAE's broader AML/CFT framework. The country's 2024-2027 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing was approved by the Cabinet and announced in September 2024. A year earlier, in January 2023, the Central Bank announced guidance for licensed financial institutions on using digital identification systems for customer due diligence.

What This Means For Businesses And Account Holders

For businesses and individuals using Bank Melli Iran's UAE branches, the Central Bank's announcement means financial transactions to and from Iran through those branches are prohibited, including trade finance and fund transfers. The statement does not clarify the status of other branch activities.

Businesses with Iran-linked payment flows through UAE banking channels may need to verify current transaction restrictions directly with their financial institutions rather than relying on arrangements that existed before the August suspension and the September enforcement action.

More broadly, businesses dealing across jurisdictions affected by sanctions or financial restrictions should be aware that transaction requirements can change as regulatory and supervisory measures are updated.

The Central Bank said it will continue strengthening its supervisory framework to safeguard the soundness and integrity of the UAE financial system and ensure that supervised institutions meet applicable compliance standards.

Key Takeaways

• The UAE Central Bank has prohibited all Bank Melli Iran branches operating in the UAE from conducting financial transactions to and from Iran, including trade finance and fund transfers.
• The Central Bank's statement defines the restriction in terms of transactions with Iran and does not clarify whether other activities of the branches are affected. Reuters described the measure more broadly as barring Bank Melli from operating in the UAE.
• The action follows the UAE's August 2026 suspension of trade, commercial exchanges and financial transactions with Iran, as well as recent US Treasury measures involving Bank Melli's Dubai branch manager.
• The enforcement action comes alongside other recent Central Bank scrutiny and penalties involving foreign bank branches operating in the UAE.

Sources: Emirates News Agency (WAM), Reuters, The National, UAE Ministry of Foreign Affairs, U.S. Department of the Treasury, Central Bank of the UAE.

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