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The Central Bank of the UAE imposed strict enforcement measures against branches of Bank Melli Iran operating in the country, according to a statement released by the regulator on September 23. The action prohibits all such branches from any financial transactions linking to Iran, encompassing trade finance activities and fund transfers. Officials took the decision under Article 168-1-C of Federal Decree-Law No. 6 of 2025 concerning the central bank, financial institutions and insurance business.
Examinations conducted by the authority identified violations involving non-compliance with UAE regulations on anti-money laundering, countering the financing of terrorism and proliferation financing, the Central Bank of the UAE statement said. The regulator applied powers granted to its governor to enact the prohibition following those findings. Bank Melli maintains multiple branches across the Emirates, including a regional office in Dubai.
This step follows the UAE’s suspension of all trade, commercial exchanges and financial transactions with Iran announced in August 2026, a move the foreign ministry attributed to regional escalation and alleged threats to maritime security. The New Arab reported that the UAE had served as a critical trading partner for Iran, with bilateral flows approaching $30 billion annually before the halt. Gulf states overall account for roughly 90 percent of Iran’s regional trade, according to analysis published by the outlet.
In late August, the US Treasury Department sanctioned the manager of Bank Melli’s Dubai branch along with a Hong Kong-based entity accused of laundering funds for a sanctioned Iranian exchange house, Reuters reported. Those measures formed part of broader American efforts to restrict Iran’s access to the UAE financial system amid the ongoing conflict that began with US-Israeli strikes in February. The UAE central bank did not reference the US actions directly in its announcement.
Bank Melli ranks as Iran’s largest state-owned lender and has historically used its UAE presence to facilitate trade links despite longstanding Western sanctions on the Islamic Republic. The National noted that the lender operates eight branches and a regional office in the Emirates according to its own website. The latest prohibition targets only transactions connected to Iran rather than shutting the branches entirely.
The Central Bank of the UAE stated that the measures were taken to safeguard the soundness and integrity of the financial system while ensuring supervised entities meet required compliance standards. A report from Zawya indicated the decision aligns with international best practices on financial oversight. No monetary penalties or specific transaction details were disclosed in the regulator’s release.
