Central Bank in charge of FBME’s fate

By George Psyllides
THE ENFORCEMENT of anti-money laundering (AML) measures is the exclusive responsibility of the Central Bank (CBC), the anti-money laundering unit MOKAS said on Monday.
MOKAS’ statement came in response to media reports that followed the US Treasury’s announcement that Tanzanian-based FBME Bank had been deemed a “primary money laundering concern”.
Following the US Treasury’s announcement, the CBC last week put the FBME under administration and suspended its operations.
Tanzania’s Central Bank followed suit, announcing last Friday that it had taken over the management of the lender.
Tanzania said it took control of FBME Bank because of the potential effect of the Cypriot move on the country’s own banking system.
It said FBME’s four branches in the east African country would remain open for business.
“The objective underlying this decision … is to ensure safety of customers’ deposits and safeguard the entire banking system,” it said in a statement.
MOKAS said the degree of enforcement of the measures is the exclusive authority of the regulator.
The unit only investigates specific suspicious transactions reported by the banks and the other countries’ AML units.
MOKAS said FBME has reported suspicious transactions and accounts have been frozen using a court order.
“However, MOKAS is not aware of all the transactions carried out by a bank nor does it check the enforcement of measures concerning the opening of accounts, client id, and so on,” the statement said.
MOKAS said it had received a notification from the US Treasury in the past expressing concern over the activities of FBME.
“After asking their permission, we conveyed these general concerns to the CBC, so that they are taken into consideration in their checks,” MOKAS said.
The unit added that no specific transactions were listed, nor had the CBC informed MOKAS later about any suspicious transaction.
Following its recent announcement, MOKAS asked the US Treasury for more information but no response has been received yet.
The US accused FBME, which though chartered in Tanzania operates primarily in Cyprus, of facilitating financial activity for transnational organised crime and Hezbollah.
FBME has denied the allegations, saying the US Treasury had compiled the report without its input.
The bank also claimed that the CBC’s action was a hostile takeover and that the authorities seemed to have forgotten that it took part in a quarter million euro bond issue last year as part of the island’s bailout.
FBME employees held a protest outside the CBC on Monday, against the regulator’s decision to resolve the lender.
The workers, who marched from the FBME offices nearby on Makarios Avenue, held placards that read: “One more betrayal,” “we are not for sale,” “Haven’t we helped you enough,” and “Throwing 400 families on the street.”
Feeling betrayed by the Cypriot authorities, FBME said last week that its “solvency and commitment to the Republic of Cyprus are a matter of public record, both before and after the crisis of 2013 during which the lender maintained its support of the country through a €240 million investment in short term treasury notes.
“This helped the Republic to meet its financial obligations while negotiating the MOU. It funded the Republic until it could be bailed-out.”

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.