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FBME Bank Ltd sanctioned under Section 311

Special Measure 5, of course – prohibiting them from access to the US financial system.

You may wonder how a bank gets on FinCEN's bad side… here's one way (from the press release):

“FBME promotes itself on the basis of its weak Anti-Money Laundering (AML) controls in
order to attract illicit finance business from the darkest corners of the criminal underworld.” said
FinCEN Director Jennifer Shasky Calvery. “Unfortunately, this business plan has been far too
successful. But today’s action, effectively shutting FBME off from the U.S. financial system, is
a necessary step to disrupt the bank’s efforts and send the message that the United States will not
stand by while financial institutions help those who intend to harm or threaten Americans.”

FBME’s business model is based on its weak AML controls. FBME changed its country of
incorporation numerous times, partly due to its inability to adhere to regulatory requirements. It
has established itself with a nominal headquarters in Tanzania. However, FBME transacts over
90 percent of its global banking business through branches in Cyprus. Finally, FBME has taken
active steps to evade oversight by the Cypriot regulatory authorities in the recent past.

FBME openly advertises the bank to its potential customer base as willing to facilitate the
evasion of AML regulations. In addition, FBME solicits and is widely recognized by its high-
risk customers for ease of use. These facts, taken in concert with FBME’s extensive efforts over
the years to evade regulatory oversight, illustrate FBME’s willingness to service the global
criminal element.

Links:

FinCEN news release

Notice of Finding

Notice of proposed rulemaking

 

Categories: Anti-Money Laundering Section 311 Sanctions

eric9to5

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