UAE Central Bank Restricts Bank Melli Iran Branches Over AML Violations

The Central Bank of the UAE (CBUAE) has imposed enforcement measures on the UAE branches of Bank Melli Iran following violations of the country’s financial regulations, including requirements covering anti-money laundering (AML), counter-terrorist financing (CTF), and proliferation financing.

The regulator announced the action on 23 September 2026 under Article 168-1-C of Federal Decree-Law No. 6 of 2025, which governs the Central Bank, financial institutions and activities, and insurance business.

Financial transactions with Iran prohibited

Following regulatory examinations, the CBUAE prohibited all Bank Melli Iran branches operating in the UAE from conducting financial transactions to or from Iran.

The restriction covers trade finance and fund transfers, preventing the affected branches from carrying out these activities between the UAE and Iran. The CBUAE said the enforcement action followed findings of non-compliance with UAE laws, regulations and supervisory decisions, including obligations established under financial crime legislation.

The regulator did not disclose specific transactions or individual control failures identified during its examinations.

What the action means for compliance teams

The enforcement action highlights how AML compliance extends beyond customer-level screening and transaction monitoring. Financial institutions operating across higher-risk jurisdictions must also ensure that their controls address applicable AML, CTF and proliferation-financing requirements alongside restrictions affecting specific financial relationships and transaction corridors.

For compliance teams, restrictions involving trade finance and fund transfers also demonstrate the importance of applying regulatory requirements at the transaction level. Controls must be capable of identifying prohibited activity before a transaction is processed, rather than relying solely on periodic customer reviews.

The CBUAE said it will continue strengthening its supervisory framework and taking measures to protect the integrity of the UAE financial system. It also reaffirmed that supervised financial institutions are expected to comply with applicable regulatory requirements and international standards.

The action reinforces the importance of maintaining effective AML/CTF controls, transaction-level risk assessment and regulatory compliance processes across cross-border banking activities.