The Cyprus Central Bank said on Friday it had taken control of the local operation of FBME bank after Washington accused it of being a prime money laundering facility.
The US Treasury’s Financial Crimes Enforcement Network (FinCEN) this week named Tanzanian-based FBME Bank Ltd., which has offices in Cyprus, as a "foreign financial institution of primary money laundering concern".
“The Central Bank of Cyprus announces that, under the powers conferred by law, today (Friday) took over management of the operations of the branch FBME Bank Ltd in Cyprus,” the Bank said in a brief statement.
FBME transacts over 90 percent of its global banking business through branches in Cyprus, according to Washington.
FinCEN director Jennifer Shasky Calvery said in a statement earlier this week that FBME promotes itself "on the basis of its weak Anti-Money Laundering controls in order to attract illicit finance business from the darkest corners of the criminal underworld”.
Its declaration as a primary money laundering concern, she added, effectively shuts FBME off from the US financial system and "is a necessary step to disrupt the bank’s efforts”.
“FBME changed its country of incorporation numerous times, partly due to its inability to adhere to regulatory requirements. It has established itself with a nominal headquarters in Tanzania,” said Calvery.
“FBME has taken active steps to evade oversight by the Cypriot regulatory authorities in the recent past,” she added.