FinCEN named FBME Bank Ltd as a foreign financial institution of primary money laundering
On July 17 FinCEN issued a press release taking action to Protect U.S Financial System. On that date, FinCEN named FBME Bank, which transacts 90 percent of its global banking business through branches in Cyprus, as a foreign financial institution of primary money laundering concern pursuant to Section 311 of the USA PATRIOT Act (Section 311).
Since then, FBME Bank and Central Bank of Cyprus issued press releases concerning this matter.
FinCEN Director Jennifer Shasky Calvery said,
“FBME promotes itself on the basis of its weak Anti-Money Laundering (AML) controls in order to attract illicit finance business from the darkest corners of the criminal underworld.”
As FinCEN report, FBME frequently change its country of incorporation partly due to its inability to adhere to regulatory requirements, though has established itself with a nominal headquarters in Tanzania.
On July 18, the Central Bank of Cyprus issued a press release notify that the Central Bank of Cyprus took the management of the branch of FBME Ltd in Cyprus.
Given the current media coverage relating to recent US Department of the Treasury notices, FBME Bank seeks to clarify its position, that the bank is shocked by the content of the US Department of the Treasury notice relating to the Bank, that sets out unexplained allegations of weak AML controls. The Bank confirms that it had no prior notification of this announcement nor has it had the opportunity to comment on or refute the various allegations set out in it.
FBME stated that has not been informed of any adverse findings emerging Anti-Money Laundering examination by the Central Bank of Cyprus which was conducted with the assistance of PricewaterhouseCoopers from 17 June to 4 July 2014.
In the Bank’s view the CBoC measure is a hostile takeover.
With a press release on July 23, The Central Bank of Cyprus (CBC) announces that the Resolution Authority, acting in accordance with article 7 (1) of the Resolution of Credit and Other Institutions Laws, 2013 – 2014, has suspended the obligations of the branch of FBME Bank Ltd in Cyprus for two working days, starting from 12 noon on 23 July 2014. Hence, the branch of FBME Bank Ltd in Cyprus will not execute any client orders for transfers or other payments during the two-day period.
In addition, on 21 July 2014, the Resolution Authority appointed a Special Administrator of the branch of FBME Bank Ltd in Cyprus.
In its statement FBME also stressed that, unilaterally and entirely of its own decision, engaged KPMG Germany to conduct a full Anti-Money Laundering Audit in April 2013. This report made best-practice recommendations which have been subsequently implemented by FBME.
On a press release today July 25, The Central Bank of Cyprus (CBC) announces that the Resolution Authority, acting in accordance with article 7 (1) of the Resolution of Credit and Other Institutions Laws, 2013 – 2014, has decided to extend the suspension of the obligations of the branch of FBME Bank Ltd in Cyprus by two working days, namely 25 and 28 July 2014.
Hence, the branch of FBME Bank Ltd in Cyprus will not execute any client orders for transfers or other payments during the aforementioned period.
Source: FinCEN, Central Bank of Cyprus, FBME
