FinCEN confirms original decision on FBME, Cyprus Central Bank says

FBME Bank Ltd
FBME Bank Ltd

A decision by the US Treasury`s Financial Crimes Enforcement Network (FinCEN) to prohibit US financial institutions from opening or maintaining a correspondent account for, or on behalf of, the Federal Bank of the Middle East (FBME) has become final, a Central Bank of Cyprus press release said on Sunday.

The final rule, issued by FinCEN on Friday, confirms an original final rule dated July 29, 2015, the Central Bank says.

It adds that in the original rule FinCEN had described FBME Bank Ltd (FBME) as an institution of “primary money laundering concern” and had pointed in the direction of both money laundering and funding terrorism.

“The recent Final Rule by FinCEN says that that the bank continues to facilitate illegal financial activities and reaches once more the original conclusion which had been announced by the Notice of Finding in July 2014 that FBME Bank Ltd is an `institution of primary money laundering concern`,” the press release continues.

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.

It is further noted that the fifth special measure of Section 311 of the USA Patriot Act is the most strict measure which could be imposed in the context of the Act which was passed in the US in October 2001 following the attacks of September 11.

The Final Rule on FBME, which is published on FinCEN`s website, outlines the process beginning with the Final Rule published on July 29, 2015 which was later voluntary remanded by the FinCEN “to allow for further rulemaking proceedings” in the context of legal proceedings by FBME in the US.

“On November 27, 2015, FinCEN published in the Federal Register a Notice to re-open the Final Rule for 60 days to solicit additional comment in connection with the rulemaking, particularly with respect to the unclassified, non-protected documents that supported the rulemaking, and whether any alternatives to the prohibition on the opening or maintaining of correspondent accounts for FBME would effectively mitigate the money laundering and terrorist financing risk associated with FBME,” the Final Rule published on Friday says.

FinCEN, it adds, “also made available for comment on www.regulations.gov the unclassified, non-protected material that FinCEN considered and intended to rely upon during the rulemaking proceeding.”

“After re-opening the comment period, FinCEN considered all of the special measures available to it under Section 311, as well as conditions rather than a prohibition under the fifth special measure, and concluded that a prohibition under the fifth special measure is the appropriate choice”, it says.

Accordingly, FinCEN “is issuing a final rule imposing a prohibition on U.S. financial institutions from opening or maintaining a correspondent account for, or on behalf of, FBME in place of the rule published on July 29, 2015.”

It is further pointed out that “FinCEN’s imposition of a prohibition under the fifth special measure will guard against the international money laundering and terrorist financing risks that FBME poses to the US financial system.”

This rule will take effect 120 days from the date of publication in the Federal Register.

Leave a Reply

Your email address will not be published. Required fields are marked *