November 27, 2021

US Treasury rules FBME ‘still a money laundering concern’

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The US Treasury`s Financial Crimes Enforcement Network (FinCEN) has issued a final ruling confirming the Tanzanian-headquartered Federal Bank of the Middle East (FBME) as an institution of “primary money laundering concern.”

The Bank of Tanzania (BoT) placed FBME under statutory management in 2014 after the United States Treasury prohibited American financial institutions from dealing with the bank.

The bank, which was established in Nicosia in 1982 as a subsidiary of the Federal Bank of Lebanon, changed four years later its country of incorporation to the Cayman Islands before relocating its headquarters to Tanzania in 2003.
FBME also maintains a representative office in Moscow. The bank is reportedly owned by two Lebanese brothers.

The final US Treasury ruling says that information available to FinCEN “provides reason to conclude that FBME’s anti money laundering compliance efforts remain inadequate to address the risks posed by FBME, and that FBME continues to facilitate illicit financial activity”.

“Because of the ongoing money laundering and terrorist financing concerns that FinCEN has regarding FBME, FinCEN finds that FBME continues to be a financial institution of primary money laundering concern.”

FBME is rated as one of Tanzania’s biggest commercial banks with assets of over $2 billion, but has few branches in the country. The bank conducts most of its business in Cyprus, where it has also been placed under statutory management by that country’s central bank.

According to the Central Bank of Cyprus, the FBME`s prohibition of access to the US financial system which had in essence taken place on the basis of the original decision of FinCEN in July 2014, now becomes final after the latest ruling by the United States.

FinCEN said the ban slapped on the bank “will guard against the international money laundering and terrorist financing risks that FBME poses to the US financial system.”

IMAGE: Federal Bank of the Middle East (FBME)

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