The notice, and the regulator that moved first

The US Treasury's case against Banque Misr's UAE branches is a number and a list: an estimated 1.8 billion dollars processed for 103 companies it calls part of Iranian shadow banking networks. The step Washington took with that list was to cut those branches off from US financial institutions, the correspondent relationships through which dollars move.[1]

The Emirates central bank did not wait for that to be settled. It said on Saturday it would run a special and urgent examination, with a forensic lookback covering the period the US authorities named, focused on the banking transactions of the companies in that statement. A designation is written in Washington; an examination is carried out where the accounts sit.[1]

Where the pressure actually applies

The enforcement point here is a correspondent relationship: the account through which a dollar payment clears. On the same Saturday, oil ministry data reported by Fars put 7.5 billion dollars of oil sales revenue in Iran's own central bank for the first four months of the Iranian year. The two describe one channel measured at its two ends, with the money arriving in Tehran and the contested part being where it can go next.[1], [2]

Fars said the figure reached 99 per cent of what the budget projected for 21 March to 22 July and would cover the government's foreign currency spending from July through December. The claim has not been independently verified. The same reporting carries a second number, from the International Maritime Organization: up to 400 ships and about 6,000 seafarers still unable to leave the Gulf safely.[2]

Who pays while the rule is pending?

The Emirates central bank said it was studying options on the bank's status, and that the appropriate decision will be taken in due course, taking into consideration the obligations of the bank towards its customers in the UAE. That sentence also names the incidence. In the gap between a proposed rule and a final one, the people whose payments sit in those branches carry the cost of the wait.[1]

The banking test that opened in Damascus this week runs the other way here. There a permission existed and the question was whether banks would use it; at Banque Misr's branches in the UAE a prohibition is still pending while the supervisor already examines the accounts. In both places the decisive actor is the bank or the supervisor that has to price a risk before any rule is settled.[3], [1]