Yossi Schwartz ISL (RCIT section in Israel/Occupied Palestine) 02.09.2026
After the military failure against Iran, the main campaign that Trump is now waging is the “economic ostracism” that he announced, which began against the branches of the Egyptian-owned Bank of Egypt in the United Arab Emirates. On Friday, US Treasury Secretary Scott Bassant declared: “We have warned that Iran’s power actors will no longer be able to enjoy access to the US dollar and the global financial system. The Bank of Egypt in the United Arab Emirates has decided to find out the hard way, and today we are taking the first step against it because of its continued support for the Iranian regime.”
The bank’s management in Egypt has announced that the accusations are baseless and that Egypt and its financial institutions are making every effort to implement the sanctions policy, and they now have about 30 days to present evidence that may revoke the decree.
According to the US Treasury Department, between 2024 and 2026, the bank’s branches in the UAE carried out transactions totaling about $1.8 billion for 103 companies that are “potentially part of Iran’s hidden banking network.” If the bank fails to convince the US Treasury, its branches in the UAE are expected to disconnect from the dollar clearing system and the global banking system.
Sanctions were also imposed on a Hong Kong-based financial company that, according to the US Treasury secretary, was suspected of being a straw company of an Iranian company and engaged in money laundering for the Revolutionary Guards.
Sanctions were also imposed against the manager of the Emirati branch of Bank Meli, Iran’s largest bank, who was suspected of carrying out billions of dollars in transactions for the Revolutionary Guards.
The choice to attack a large Arab bank is intended to send a sharp message to financial institutions, brokers, and countries in the region: Anyone who continues to serve as a conduit for transactions with Tehran will lose access to the dollar system.
Trump has no problem announcing economic sanctions, but he has major problems overseeing them. For years, transactions, transfers, and bypass mechanisms have been able to take place through extensions, shell companies, and financial intermediate stations, and this will continue. Not only that, but the United States is losing control of Southeast Asia.
Egypt, for example, has already begun to interpret the U.S. move not only as a financial punitive action, but as a threatening message sent a few days before Chinese President Xi Jinping’s visit. Xi is expected to land in Cairo on Wednesday and discuss expanding economic and military cooperation with President Abdel Fattah al-Sisi.
In Egypt, people are asking why Trump is acting against us over economic ties with Iran when he is not imposing sanctions on China, the largest trader with Iran. We are wary of taking similar measures against China, which imports most of Iran’s oil and serves as the regime’s main lifeline.
Pakistan, which mediates between Iran and the United States, continues to operate the trade with Iran that was established in 2022 in the agreement between them. In early August, the delegations of the two countries discussed expanding the scope of trade between them, after signing an agreement to open six land crossings connecting the two countries, through which Pakistan would be able to export goods through Iran to the Caucasus region. So far, there has been no word of condemnation or warning from the White House about this.
In order to understand the expected failure through sanctions intended to subdue Iran, it is also impossible to ignore the precedent set in the conduct of the Turkish “Halk Bank.” For years, the bank has demonstrated an impressive ability to circumvent the sanctions imposed on Iran by means of financial mechanisms and trading in gold through complex intermediary networks.
The bank, which is mostly government-owned and partly publicly owned, was accused of violations amounting to about $20 billion, but then, Turkish President Recep Tayyip Erdogan managed to persuade Trump to come down from the tree, and in March of this year, about 10 days after the start of the war against Iran, a settlement agreement was signed between the bank and the US Department of Justice.
Not only was the bank not penalized, but Turkey maintained its trade ties with Iran and even continued to buy gas from it as part of an agreement signed between them 25 years ago that expired at the end of July. So, the policy of sanctions on countries like Egypt pushes it to join the Mecca Alliance.