International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Wednesday, June 12, 2019

Cypriot Police Raid FBME Bank, Which is Run By Central Bank of Cyprus and Former CBC Governors, in Money Laundering Probe

Organized Crime and Corruption Reporting Project (OCCRP) reports that: Cypriot police raided on Friday the premises of FBME Bank in Nicosia and in Limassol, looking for evidence of money laundering, two sources told OCCRP.  ... The investigation concerns “many cases” of legalization of illegal proceeds from various activities, including drug smuggling, as well as terrorism financing, he explained, adding that the bank’s owners had not been questioned yet.

FBME is run by the Central Bank of Cyprus (CBC) and has been for several years, via CBC Governors.  So this latest development is very interesting.  Are the Cyprus police investigating the activities of the Central Bank of Cyprus as these relate to CBC's control of FBME activities?  That the police were required to raid the FBME premise implies that the CBC is not cooperating in the AML investigation.  All mere speculation. But this FBME takeover by the CBC four years ago, and the FinCEN banking death penalty applied, raise many questions and issues.  To date, no bank employee or director have been charged with an AML violation?  No doubt that FBME has had AML violations.  But many banks have, and received quite different treatment, such as fines, monitors, non-prosecution agreements or deferred prosecution agreements.  What did FBME do that led FinCEN to shut it out of the US and US dollars market?  Did the CBC initiate the FinCEN action via providing FinCEN information because of something else going on in Cyprus?  Again - all speculation.  Perhaps we will never know what really happened with the FBME situation? 

Read previous articles about FBMEs long struggle with AML allegations (but no actual charges)

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