FBME under Administration Update

Central Bank of Cyprus in its capacity as The Resolution Authority announced that Mr Dinos Christofides, Special Administrator of FBME Bank Ltd (Cyprus Branch) has resignied for personal reasons, as of 16 May 2015. According to a press release by the Central Bank, Mr Andrew Andronicou, who was recently appointed as an additional Special Administrator, will continue to perform his duties in accordance with the provisions of the Resolution of Credit and Other Institutions Laws. On July 18, the Central Bank issued a resolution order and placed the FBME (Federal Bank of the Middle East) ,branches in Cyprus under its control, following a report from the Financial Crimes Enforcement Network of the U.S. The intervention followed a notification report by the United States Treasury Department – Financial Crimes Enforcement Network (FinCEN). FINCEN has cited the bank as a major money laundering player.

Back in August the District Court of Nicosia has rejected the injunction order sought by the Tanzania-based FBME Bank to prevent the sale of its local branch operations by the Special Administrator, that was appointed by the Resolution Authority in order to protect the interest of depositors and customers. The ultimate owners of FBME Bank are now seeking in excess of $500 mln in damages from the Republic of Cyprus through an arbitration process that has been filed with Paris-based International Chamber of Commerce (ICC Paris), over the decision to place the bank under administration and proceed with a forced sale of the operations.