FMBE Bank Ltd., formerly known as the Federal Bank of the Middle East, a Lebanese-owned bank in Cyprus, was designated an institution of primary money laundering concern by FinCEN*, and has been taken over by the Cypriot government. Now incorporated in Tanzania, the bank appears have been suspected of extensive money laundering, sanctions violations, and terrorist financing.
The allegations include:
(1) Clients used the bank to evade international sanctions against Syria.
(2) Payments to Hezbollah were allegedly made through the bank.
(3) The widespread use of shell companies, by bank clients, for the purposes of money laundering.
Compliance officers who access Country Risk should review all the information available in this case, and consider whether to increase it for Cyprus at this time.