The Central Bank of Cyprus (CBC) has imposed a 1.2-million-euro fine on the Tanzania-based Federal Bank of the Middle East (FBME), citing the bank's failure to comply with anti-money laundering legislation and preventing the financing of terrorism, a CBC statement said on Thursday.
The statement added that FBME failed to comply with the provisions of the Law on Combating Legalization of Revenues from Illegal Activities, the provisions of the Directive on the Prevention of Money Laundering and the provisions of the European Union and Council of Europe Regulations on providing information about the payer in cases of money transfers.
CBC said the omissions resulted from an on-site audit conducted in 2014 and concerned the degree of compliance by the bank's branch in Cyprus with the legal and regulatory framework on the prevention of money laundering and financing of terrorism.
FBME was founded in Cyprus in 1982 as a subsidiary of the Federal Bank of Lebanon SAL, as the property of Lebanese brothers Ayoub-Farid Saab and Fadi Saab.
It later moved to the Cayman Islands before establishing its head office in Tanzania, where it opened a second branch.
Its troubles began after Cyprus and Tanzania took over both branches of the bank and placed them under resolution.
This followed a report by the United States Treasury Financial Crimes Enforcement Network in July 2014, to the effect that the bank was involved in money laundering and financing terrorist activities.
The administration of the bank has transferred all assets of FBME in a bank account while considering purchase offers.
Shareholders objected to the expropriation of FBME but a Nicosia court has rejected an application for an interim order to halt its sale.
Cyprus' Supreme Court also rejected in August 2014, an application by FBME for suspending the decree for the sale of the branch's operations.
Source: globalpost.com
The statement added that FBME failed to comply with the provisions of the Law on Combating Legalization of Revenues from Illegal Activities, the provisions of the Directive on the Prevention of Money Laundering and the provisions of the European Union and Council of Europe Regulations on providing information about the payer in cases of money transfers.
CBC said the omissions resulted from an on-site audit conducted in 2014 and concerned the degree of compliance by the bank's branch in Cyprus with the legal and regulatory framework on the prevention of money laundering and financing of terrorism.
FBME was founded in Cyprus in 1982 as a subsidiary of the Federal Bank of Lebanon SAL, as the property of Lebanese brothers Ayoub-Farid Saab and Fadi Saab.
It later moved to the Cayman Islands before establishing its head office in Tanzania, where it opened a second branch.
Its troubles began after Cyprus and Tanzania took over both branches of the bank and placed them under resolution.
This followed a report by the United States Treasury Financial Crimes Enforcement Network in July 2014, to the effect that the bank was involved in money laundering and financing terrorist activities.
The administration of the bank has transferred all assets of FBME in a bank account while considering purchase offers.
Shareholders objected to the expropriation of FBME but a Nicosia court has rejected an application for an interim order to halt its sale.
Cyprus' Supreme Court also rejected in August 2014, an application by FBME for suspending the decree for the sale of the branch's operations.
Source: globalpost.com
