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Court rules against FBME in the States

A US Federal District Court has voided the temporary hold on the final decision of the Financial Crimes Enforcement Network (FinCEN) of the US Treasury Department against Cyprus-based FBME bank.

With the FinCEN’s decision, it was made illegal for US banks to open or maintain accounts with FBME due to concerns over money laundering.

With this decision by the US Federal District Court, FinCEN’s original decision is now made permanent.

The Central Bank of Cyprus announced in July 2014 that it was taking over the management operations of the Cyprus branch operations of FBME following a report in the same month by the US Financial Crimes Enforcement Network naming FBME as a “financial institution of primary money-laundering concern”.

The decision forbade US credit institutions from opening accounts with, or for, FBME Bank.

The Central Bank then revoked FBME’s licence to operate as a branch in December 2015 and activated the deposit guarantee scheme in April 2016.

District of Columbia Federal Judge Christopher Cooper rejected the hold on the FinCEN decision because, among other reasons, the bank did not manage to prove that the FinCEN decision would cause irrevocable damage.

The bank effectively ceased operations in 2014 as soon as the Central Bank of Cyprus acted on the FinCEN decision.

In a press release issued in April 2016, FBME said that the Special Administrator (the Central Bank) had “choked depositor access to funds on the instruction of the CBC and for the expressly stated purpose of maintaining sufficient funds in the Bank to repay the Deposit Protection Scheme”.

The FinCEN’s final decision had been issued in July 2015 and was reconfirmed in 2016, but was not applied because FBME, claiming legal and procedural issues, had secured a hold order, which was rendered void by the US Federal Judge with his decision last Friday.

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