ABU DHABI: The United Arab Emirates’ central bank on Wednesday barred Iran’s Bank Melli from operating in the Gulf state, the latest sign of worsening relations between the two countries since the start of the US war on Iran in February.
The central bank said the move was prompted by breaches of regulatory requirements. The action follows the UAE’s decision in August to suspend all trade, commercial exchanges and financial transactions with Iran until further notice.
Iran has attacked neighbouring countries aligned with the US, including the UAE, since the start of the conflict.
The UAE has historically been one of Iran’s main economic links to the outside world, while banks in Dubai have long held substantial Iran-related deposits, many frozen under US sanctions.
The central bank said all Bank Melli branches in the UAE would be barred from conducting financial transactions to and from Iran, including trade finance and fund transfers.
“These measures have been taken as a result of violations related to non-compliance with the regulations, laws, and supervisory decisions in force in the UAE,” it said.
The violations included failures to meet requirements under laws aimed at combating money laundering, terrorist financing and proliferation financing, it added.
It was not immediately clear whether the move marked a broader tightening of restrictions following US sanctions.
In late August, the US Treasury’s Office of Foreign Assets Control imposed sanctions on the manager of Bank Melli’s UAE branch and a Hong Kong entity that it said helped launder money for a sanctioned Iranian exchange house.
The US Treasury and Bank Melli did not immediately respond to requests for comment.
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.
The UAE is home to a large Iranian community, with many businesses clustered around Dubai Creek, the emirate’s historic trading hub.
Before the suspension of financial ties, the UAE was one of Iran’s largest trading partners, accounting for about 30% of its imports worth roughly $21 billion in 2024, according to World Trade Organization data.
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