FBME assets now to be sold in Cyprus

Although headquartered in Tanzania, FBME does about 90 per cent of its business in Cyprus. Its operations in Tanzania, where it has been operating under a controversial licence for 11 years, were taken over by the central bank on July 24, a week after its counterpart in Cyprus had acted.PHOTO|FILE 

By The Citizen Reporter

In Summary

“Any attempt by the Cypriot authorities to sell the branch appears to be a move to prevent this investigation from being completed,” it said. The review is required to address issues raised in the FinCEN announcement.

Dar es Salaam. The future of the troubled lender FBME Bank is now gloomy after attempts to block the sale of its assets in Cyprus, where it does most of its business, hit a snag last week, The Citizen on Sunday has learnt.

The Dar es Salaam-based holding company of the bank had sought a court injunction over the sale, which was announced by the Central Bank of Cyprus (CBC) last month. That was after taking over its operations following accusations against it by the US authorities of financing terrorism and other dirty trades.

Early this week, FBME shareholders said they would seek other ways to stop the sale, which if it happens, would adversely affect its operations and devastate the whole business. These include working with legal counsel and forensic accountants in the US to conduct a comprehensive review of its anti-money laundering programme.

“Any attempt by the Cypriot authorities to sell the branch appears to be a move to prevent this investigation from being completed,” it said. The review is required to address issues raised in the FinCEN announcement.

Although headquartered in Tanzania, FBME does about 90 per cent of its business in Cyprus. Its operations in Tanzania, where it has been operating under a controversial licence for 11 years, were taken over by the central bank on July 24, a week after its counterpart in Cyprus had acted.

On August 8, the country’s Supreme Court rejected a request by bank owners for an order suspending procedures to sell Cyprus units, which CBC initiated after a US Treasury report named it a “primary money laundering concern”.

According to it, the decision by the Cypriot authorities to sell its branch there was a “hasty and ill-conceived response” to the US Treasury’s Financial Crimes Enforcement Network (FinCEN) report issued on July 17.

CBC argues that selling FBME Bank in Cyprus was the most appropriate measure to protect depositors’ savings and prevent possible risks emanating from the bank’s image damage that could affect the stability of the country’s whole banking system.

According to it, the decision to take preventive measures was not based on FinCEN’s report, “but rather on the immediate consequences of this report on the transactions of the branch, as a result of measures taken by other banks in which the branch maintained deposit accounts”.

The Bank of Tanzania (BoT) has dispelled a possibility of any damage to the banking system from the scam, which has exposed weaknesses in the country’s money laundering laws.

Poor gate-keeping is blamed for exposing the national economy and the whole country to syndicates of international criminals and their dirty money from narcotics trade, human trafficking and other vices.