INVESTIGATIONS are going on against a 10 million euros (over 22.47bn/-) transfer made by an Italian politician (name withheld) through his FBME Bank account in Tanzania, last year.
Bank of Tanzania (BoT) and Treasury’s Financial Intelligence Unit have been investigating the money laundering allegations since last year and are yet to release a preliminary report.
“We are still investigating this and will soon release an official statement,” Prof Ndulu said as the troubled Lebanese bank which has already been placed under Cyprus central bank management since Friday.
Prof Ndulu did not give details as to whether the central bank will likely follow its Cypriot peer by putting FBME bank under its administration.
“We can only assure the bank’s clients in the country that everything is under control,” the BoT chief noted. In a statement released late on Friday, BoT said FBME which is headquartered in the country but conducts 90 per cent of its operations in Cyprus is under surveillance and not under direct central bank management.
The Cypriot Central Bank took over the operations of FBME Bank last Friday following the United States Treasury Department announced that it has blacklisted the bank.
“The Central Bank of Cyprus (CBC) announces that, under the powers conferred to it by the relevant legislation, [it] has taken over, as of today, the management of the operations of the branch of FBME Bank Ltd in Cyprus,” the Cypriot Central Bank said on its website.
Lebanese press reports however quoted FBME Chairman Ayoub-Farid Saab that the bank had requested the Cypriot action, in order to clear itself of the “unfounded allegations.”
“We are running a clean operation on the island,” he said. Last Thursday, the US Treasury accused FBME, which though chartered in Tanzania operates primarily in Cyprus, of facilitating financial activity for transnational organised crime and Hezbollah, labeling it a ‘primary money laundering concern.’
“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.” Financial Crimes Enforcement Network, a department of the US Treasury, Director Jennifer Shasky Calvery said in a statement.
“Today’s action, effectively shutting FBME off from the US financial system, is a necessary step to disrupt the bank’s efforts.” Since 2003, FBME has been headquartered in Tanzania and is widely regarded as the largest bank in Tanzania based on its $2 billion asset size, but it has only four branches.
While FBME is presently headquartered in Tanzania, FBME transacts over 90 per cent of its global banking business and holds over 90 per cent of its assets in its Cyprus branch. FBME has always maintained a significant presence in Cyprus.
Last year when the Italian politician’s scandal was published, Prof Ndulu said the central bank can only act against FBME once investigations by Financial Intelligence Unit are concluded and find the locally registered bank at fault.
“We are cooperating with the FIU which is conducting the investigations which are important to us as regulators before we can take any action,” Professor Ndulu told Daily News then.
An official at FIU said investigations in the case are at an advanced stage but referred Daily News to FIU Commissioner, Herman Kessy.
“It’s an investigation which crosses borders hence needs more time and resources to conclude,” said the official who preferred anonymity.
Press reports said last month that Italy’s financial unit of the tax police in Rome is currently investigating a questionable 4.5 million euros (approx. 9.5bn/-) transfer to Tanzania, while 1.2 million euros went to Cyprus and 1 million euro was invested in Norwegian currency.