00:04 Speaker A

Well, the US is issuing limits for one of Egypt’s largest banks against doing business with Iran. This comes after the Treasury announced sweeping sanc- sanctions on Iran and its partners.

00:15 Speaker A

Got Jake Connolly all over this story. Jake, walk us through this. What what exactly is the US doing with this this Egyptian bank and why? What’s the what’s going on here?

00:23 Jake Connolly

So let’s go back to uh Scott Besen’s initial uh kind of press conference about these sanctions coming. He had said, look, you’re going to see an action against a major international bank by the end of the week.

00:34 Jake Connolly

That’s what we got today. The FT first reporting, Treasury Secretary later confirming that the US Treasury has essentially levied very severe sanctions against Egypt’s second largest bank called Bank Misr, essentially um cutting off its Emirati branches from the US financial system.

00:54 Jake Connolly

Saying you can no longer do any business with the US. This is because they accused that bank of shadow banking Iran, laundering several billion dollars essentially for Iranian entities.

01:04 Jake Connolly

This is part of Besen’s push to say, anyone who does business with Iran, we’re cutting you off from the dollar system, from the US financial institutions.

01:12 Speaker A

All right, so this is Egypt, but we know the elephant in the room is China.

01:17 Speaker A

I mean, so if if this administration really wants to hit Iran’s money, Tehran’s money, right? Then you got to go after, I mean you’re going to have to go after Chinese companies and Chinese banks, right?

01:26 Jake Connolly

So this was the question everybody was asking at that press conference. Essentially, will the Treasury actually move against China? Will it take actions against some of China’s biggest institutions? Because the question is, are they willing to risk the almost certain blowback they’d get from Beijing?

01:44 Jake Connolly

We really haven’t seen that yet. Treasury has gone after smaller uh, you know, almost lone star banks in China that are operating on a much smaller scale, but we have not seen anything at a major Chinese financial institution.

01:57 Jake Connolly

But don’t forget, China is the buyer of about 90% of Iran’s crude oil, all of which is under sanction. That’s violating US sanctions. We know that’s happening.

02:07 Jake Connolly

But yet we have not seen the Treasury make significant moves against Beijing.

02:12 Speaker A

So bottom line is, I mean, do you look at this headline with this Egyptian bank and think, okay, well maybe this is just like Trump administration just getting started, or is it showing you actually there are just limits to how far this administration is willing to go in terms of really genuinely economically isolating that Iranian regime.

02:31 Jake Connolly

So you talk to former US sanctions officials, they’ll tell you two things. For Bank Misr, this Egyptian bank, this is kind of a death sentence, especially for their Emirati branches. This is a huge blow.

02:44 Jake Connolly

But in a sense, this is almost a disappointing move. People making the point that the 2 billion dollars this bank moved for Iran is a rounding error on what China’s been doing for their economy.

02:54 Jake Connolly

And this gets back to the question, will they ever take the decisive step of moving against China and taking that risk of alienating Beijing and further weakening that relationship. I think there is hope that this is only the start, but there is worry that this may be showing the cards of the Treasury and how far they are or are not willing to go in the fight against Iran’s economy.