US Forensic Investigation Underway at FBME Bank

7 August 2014

Specialist forensic accountants arrived in Cyprus on Wednesday, 30 July, to initiate an investigation into the Anti Money Laundering policies and procedures of FBME Bank. The investigation is part of the Bank’s engagement with the US Department of Treasury following the Financial Crimes Enforcement Network (FinCEN) Notice of Proposed Rulemaking and Notice of Findings, dated 15 July 2014.

FBME will be  responding  to the issues raised in these notices, which has led it to the commissioning of this independent investigation. The Bank is firmly committed to its anti-money laundering compliance program and reaffirms its unequivocal commitment to resolving the issues raised in the Notice of Finding and Notice of Proposed Rule Making to FinCEN’s satisfaction.
FBME’s shareholders say that the investigation will be thorough and , cooperative.. The work will have particular reference to the Bank’s compliance with EU-approved Anti Money Laundering and Know Your Customer regulations and best practice guidelines.
In addition, the Bank has appointed external counsel in Washington in regard to issues raised by the US Department of the Treasury.
FBME Bank’s shareholders have called for sufficient time to be allowed for the investigation to address the issues raised by the US Treasury.
At the same time, the Central Bank of Cyprus had started a new probe of the Cyprus branch of FBME, in line with normal regulatory practice. This follows a recent investigation into the whole financial sector in Cyprus including FBME, conducted on behalf of the Central Bank by international consulting firm PwC between 17 June and 4 July 2014. Written findings of this investigation have not been released to either FBME or its shareholders, but in talks with Central Bank officials it has been made clear that the audit did not uncover any serious Anti Money Laundering concerns.
FBME shareholders added that the Bank’s financial position was sound and is fully in line with capital adequacy and solvency requirements of the European Central Bank. At the time of the announcement by the US department of Treasury its short term liquidity ratio, at 104%, was sufficient to cover deposits.