NICOSIA, Aug 1 (Reuters) - Cyprus’s central bank has suspended efforts to find a buyer for branches of a Tanzania-based bank, pending the outcome of legal action seeking to block the sale, it said on Friday.
Cypriot regulators seized control of two branches of the FBME bank in July, after a department of the U.S. Treasury alleged the bank engaged in money laundering.
FBME has denied the allegations and accused Cypriot authorities of a “hostile takeover” to seize control of the bank and its assets.
The Cypriot central bank took effective control of the FBME branches on the island on July 21 with the stated intent of finding a buyer. But it said it would not proceed with the matter until a verdict from the island’s courts, following a legal petition by FBME challenging the central bank’s move.
A report from the U.S. Treasury’s Financial Crimes Enforcement Network described the bank as a “primary money laundering concern”. On its website, FBME said its lawyers have been engaged with U.S. authorities. The bank also said it was vetted by Cypriot authorities this year, without being informed of anything untoward. It also appointed external consultants to conduct anti-money laundering audits in 2013, it said.
The central bank refused to discuss why it almost immediately moved to take over the bank branches after the U.S. released its report on July 17. (Reporting By Michele Kambas; Editing by Larry King)