The U.S. Treasury Department named FBME Bank Ltd. as a “financial institution of primary money laundering concern,” effectively shutting the bank off from the U.S. financial system.
The agency’s Financial Crimes Enforcement Network said that the bank, formerly known as the Federal Bank 500469.BY -0.02% of the Middle East, had a “large shell company customer base” and openly advertised its willingness to help potential customers flout anti-money laundering regulations.
The bank has shown a “willingness to service the global criminal element,” Fincen said in a press release. It is used by customers involved in terrorist financing, transnational organized crime and sanctions evasion, among other nefarious activities, the agency said.
The bank is now based in Tanzania, but has changed its country of incorporation multiple times and does most of its global banking business through branches in Cyprus, Fincen said.
FBME didn’t immediately respond to a request for comment but in the past has said it was ”fully applying” money-laundering regulations in Tanzania and Cyprus.
The Central Bank of Cyprus has found weaknesses in in the bank’s AML controls and said last year that the bank may be subject to a fine of up to 240 million euros for alleged violations of capital controls, according to Fincen.
FBME has turned up in connection with other allegations that the U.S. authorities has pursued. For instance, the Treasury of Equatorial Guinea wired $7.2 million to a British shell company using an FBME account as a part of transactions that were consistent with Justice Department allegations of corruption against the president of the country’s son and his associates.
The designation bars U.S. banks from keeping accounts tied to the bank.
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