Dear All! Back with FBME hot news! Announcement on FBME website appears again, with a clarification. This is a sufficient explanation for you? I think we would like to know more…. ”FBME Bank Head Office Tanzania Announces Measures to Engage with US Authorities In an announcement released to the media FBME Bank has said that it is taking steps to engage with the US authorities regarding the report issued on 15 July by the US department of the Treasury. These measures will be managed through specialist legal advisors and independent forensic accountants. In the statement, FBME Bank stated its commitment to meet the requirements of the US Treasury but indicates concern about matters beyond its control in the financial system in Cyprus as a whole. The findings of the US Treasury report, says the Bank, while it dealt specifically with FBME Bank, also made references to the wider context in Cyprus and left many unanswered questions to prove that the Island is not a jurisdiction of High Money Laundering Risk. The background to this release by FBME is the difficult position that has been placed on the Bank due to measures taken by the Central Bank of Cyprus (CBoC). The Central Bank announced late on the night of Monday 21 July 2014 that it is exercising the power conferred under section 2A of the Resolution on Credit Institutions and Other Laws of 2013 to direct the reorganisation of the Cyprus Branch of FBME Bank Limited.The purpose of this reorganisation is stated by CBoC to be the sale of the business of FBME’s Cyprus branch in order to protect depositors. But FBME questions whether the measure will have benefits for depositors at all. This measure is taken at a time when FBME’s financial position is sound and fully in line with all relevant capital adequacy and solvency requirements of the European Central Bank. However, because of the announcement of the US Treasury, FBME has experienced difficulties in accessing financial markets via its correspondent banks. On the day of the CBoC announcement FBME’s short term liquidity ratio was 104%, sufficient to cover all depositors if required. On the same day, FBME’s legal counsel in Washington had already begun dialogue with the US Department of the Treasury to communicate the full and unequivocal cooperation of FBME in resolving the issue with them. This conversation between legal counsel and the US Treasury is continuing and has included the engagement of a forensic accountancy examination, arranged at the request of FBME. Legal counsel to FBME will discuss with the US Treasury as to scope of this forensic examination, but it is proposed that it will scrutinise the existence of any failings by FBME’s systems and recommend necessary remedial action. FBME added in its statement that the Bank firmly believes the examination will show the robust and extensive checks FBME performs on all customers and all payments that are in place. This forensic accountancy investigation comes soon after a recently concluded a 10-man Anti-Money Laundering examination by the Central Bank of Cyprus, which was conducted with the assistance of PricewaterhouseCoopers from 17 June to 4 July 2014. FBME has not been informed of any adverse findings emerging from this examination.In its statement FBME also stressed that, unilaterally and entirely of its own decision, engaged KPMG Germany to conduct a full Anti-Money Laundering Audit in April 2013. This report made best-practice recommendations which have been subsequently implemented by FBME. The Central Bank of Cyprus had been present on the premises of FBME’s Cyprus branch since Friday 18 July, following a meeting between the FBME’s senior management and CBoC and at the invitation of the Bank. The ostensible aim was for the CBoC to monitor operations and to assist FBME in making payments. FBME welcomed this and was in full agreement with the arrangement, seeing in it an opportunity to cooperate. Unfortunately, says FBME, this spirit of cooperation has not been reciprocated. FBME takes this opportunity of repeating that its solvency and commitment to the Republic of Cyprus are a matter of public record, both before and after the crisis of 2013 during which FBME maintained its support of the Country through a EUR240 million investment in short term treasury notes. This helped the Republic to meet its financial obligations while negotiating the MOU. Essentially, says FBME, it funded the Republic until it could be bailed-out. Given that Central Bank of Cyprus action has occurred at a time when the Bank maintains exceptionally high solvency ratios, it is natural for FBME to question whether the CBoC current action is motivated by concern for its depositors, or by the financial requirements of the CBoC itself and and the institutions it supervises. In the Bank’s view the CBoC measure is a hostile takeover. FBME does not know who this action is intended to help but it is clear that it will not be to the benefit of FBME Bank, its depositors, its employees, or the Republics of Tanzania or Cyprus. “
Posted on: Thu, 24 Jul 2014 12:14:42 +0000
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