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

Announcement accuses Iranian bank of violating local laws, including those against terror financing, in latest move against Islamic Republic by historical economic lifeline

By Agencies Today, 6:17 pm

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The head offices of Iran’s Bank Melli in Dubai’s Deira district are pictured on March 9, 2026. (AFP)

DUBAI, United Arab Emirates — The United Arab Emirates’ central bank said Wednesday that it had imposed sanctions on the Emirati branches of Iran’s Bank Melli, accusing it of violating local laws on money laundering, terrorism and arms proliferation.

The bank said in a statement that “it has been decided to prohibit all branches of Bank Melli Iran operating in the UAE from conducting any financial transactions to and from Iran, including trade finance and fund transfers.”

It cited “non-compliance with the regulations, laws and supervisory decisions in force in the UAE, including the requirements and obligations set out under the legislation related to combating money laundering, the financing of terrorism and proliferation financing.”

The announcement comes against the backdrop of the Middle East war, which began with US-Israeli strikes on Iran in late February, as well as Washington’s more recent economic pressure campaign against the Islamic Republic.

As part of the stepped-up campaign, the United States announced new measures at the end of August targeting Iran’s trading partners, and sanctioned the director of the Dubai branch of Bank Melli.

Bank Melli began operating in the UAE in 1969 and has seven branches in the country across various emirates. Its main office is in Dubai, according to its website.

An Iranian woman walks past a branch of the state-owned Melli Bank, which absorbed the assets of the now-defunct Ayandeh Bank, with signage on its facade reading in Farsi ‘This former Ayandeh Bank branch is now part of Melli Bank,’ in the capital Tehran on October 25, 2025. (ATTA KENARE / AFP)

The UAE has historically been one of Iran’s most critical economic lifelines and Dubai’s banks have long held substantial Iranian-linked deposits, much of them immobilized under US sanctions.

It was not immediately clear whether the central bank’s decision marked a widening of curbs following US Treasury sanctions against Bank Melli.

The US Treasury did not immediately respond to a request for comment.

Last month, the United Arab Emirates announced the suspension of trade and financial exchanges with Tehran.

Iran has responded to American attacks throughout the war by targeting the US-allied UAE and other Gulf countries and tightening its grip on the strategic Strait of Hormuz, where Abu Dhabi has accused it of attacking Emirati vessels.

Dubai is home to a large Iranian community, estimated at several hundred thousand people, which has contributed to the emirate’s commercial development and weathered various periods of tension with Tehran.