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Cyprus allows limited activity to resume at seized FBME branch
September 1, 2014 / 3:01 PM / 3 years ago

Cyprus allows limited activity to resume at seized FBME branch

NICOSIA, Sept 1 (Reuters) - Two Cypriot branches of a bank accused of money laundering by the United States will resume limited activities, an administrator appointed by the island’s central bank said on Monday.

Clients of Tanzania-based FBME Ltd., which has two branches in Cyprus, would be permitted a daily withdrawal of up to 10,000 euros by cheque and in the depositor’s name. The arrangement would only be applicable in Cyprus, the administrator, Dinos Christofides, said in a statement.

Cyprus’s central bank assumed control of FBME’s local branches in July after a division of the U.S. Treasury described the bank as a “primary money laundering concern”.

Although the bank is headquartered in Tanzania, the U.S. Financial Crimes Enforcement Network (FinCEN) has said that most of its activities are conducted through its Cypriot branches. According to FinCEN, the bank also came under scrutiny by Cypriot authorities in 2013 for allegedly circumventing currency controls imposed by Cyprus in the wake of an international bailout that year.

FBME’s Lebanese shareholders deny the allegation of money laundering and have hired lawyers and auditors to fight them.

In a statement carried by the semi-official Cyprus News Agency, Christofides was quoted as saying efforts were being made to extend the withdrawal facilities for overseas transactions.

Work at the bank has come to a virtual standstill since the U.S. Treasury report was released in mid-July and Cypriot authorities took over, announcing days later that the bank was being placed under resolution for its eventual sale.

Cypriot authorities say they had to act because as a result of the U.S. report the bank could not access a pan-European payments system known as SEPA, while an administrator appointed in Tanzania, suspended operation of SWIFT payments.

The Cypriot central bank has not commented on the merit of the U.S. allegations. (Reporting By Michele Kambas; Editing by Susan Fenton)

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