UAE central bank sanctions local branches of Iran’s Bank Melli

The UAE Central Bank has prohibited Bank Melli Iran from engaging in any financial transactions between its branches in the UAE and Iran, following investigations that revealed the Tehran-based lender's non-compliance with anti-money laundering regulations. The ban, introduced on Thursday as part of the regulator's rigorous enforcement measures, applies to trade finance and fund transfers to and from Iran.

Bank Melli Iran, one of the country's largest lenders with eight branches in the UAE, including a regional office, is directly affected by this decision. The Central Bank stated that the prohibition is due to violations related to money laundering, terrorism financing, and proliferation financing, as per UAE laws and supervisory decisions.

This move comes after the UAE suspended all trade, commercial exchange, and financial transactions with Iran last month, following a series of attacks on UAE-owned tankers and Tehran's rejection of US talks. Despite political tensions, trade between the two nations remains significant, with the UAE being a key trading partner for Iran.

The UAE has been actively strengthening its financial sector regulations, enacting strict laws to prevent money laundering and terrorism financing, and implementing a national strategy against illicit financial activities.