Cyprus’s central bank took control of the Cypriot branch of a Tanzanian-based bank on Friday, a day after the United States called it a “financial institution of primary money-laundering concern.”
The Central Bank of Cyprus said that acting under the authority given to it by law, it had assumed the administration of operations of the FBME Bank branch on the island from Friday.
FBME could not immediately be reached for comment.
A central bank spokeswoman declined further comment.
The Financial Crimes Enforcement Network (FinCEN) of the US Treasury said on Thursday that FBME had facilitated a “substantial volume” of money laundering through the bank for many years and had systemic failures in its anti-money laundering controls.
The bank is headquartered in Tanzania, but most of its activities are carried out through its Cypriot branch, FinCEN said.
FinCEN said a large shell company customer base facilitated international terrorist financiers and international narcotics trafficking, including the evasion of sanctions on countries like Syria.
“FBME solicits and is recognized by its high-risk customers for its ease of use,” FinCEN said in its report.
Cypriot authorities found FBME’s compliance with Cypriot banking laws and anti money-laundering regulations deficient on at least two occasions, the US agency said.