FBME Bank Problems
The 23rd of July 2014 was disaster day for the Federal Bank of the Middle East. FBME bank accounts were partly blocked after the FinCEN bureau of the US Treasury published a very detailed report on the daily operational course of action executed by the bank. According to the study, FBME had a basic and simple KYC procedure and therefore facilitated money laundering and even worse, terrorism financing.
Obviously, the conclusions of the report activated the Cyprus government. They are still under strict scrutiny of the European Union and the Trojka and more difficulties in the financial industry might jeopardize the willingness of foreign investors to work with Cypriot companies.
Unfortunately, thousand of customers who have nothing to do with illegal activities or black money, are duped by this whole situation. They can't touch or move their deposits and are dependent on the input of third parties like the Central Bank of Cyprus.
The FinCEN study: The conclusion in the FinCEN report is devastating. According to FinCEN the Federal Bank of the Middle East facilitated, due to their lack of supervision, criminal activities. In every country this would be a reason to properly investigate the true modus operandi of the bank. In Cyprus, the wheels of investigation turn slow. The result is that the majority of FBME customers are getting deservedly nervous.
The role of the Central Bank: The Central Bank of Cyprus immediately appointed an administrator and on the 18th of July, the Central Bank of Cyprus had taken over the management of the operations of the bank and announced its intention to sell the operations of the Cyprus branch of FBME with the aim of protecting the bank’s depositors.
Naturally, the idea to sell a part of the bank would create some potential for all customers, the bad ones included. This would result in a situation where funds that should be seized come back into the economy. In August 2014, the Central Bank therefore suspended the sale of the bank.
The administrator: Immediately after FBME was placed under resolution, Mr. Dinos Christofides was appointed as the administrator of the bank. Mr. Christofides is responsible for the daily operation and mainly studies the outgoing payments.
The current status of FBME: Uncertain and unclear, are the two words that describe the current status of FBME bank best. The bank is liquid, it has no difficulties to honor short term deposits. However, when customers have few ways to access their account, people get nervous and a "bank run" might start.
As you can see in the article FBME Bank Latest from Legal Floris, a legal advisory firm that helps FBME customers to claim their funds from FBME, there are some challenges. Customers cannot use their bank cards. Internet banking facilities are blocked, but do allow customers to transfer funds to other accounts at FBME. The only way to withdraw funds from an account is by bank check. This bank check cannot be cashed. It must be deposited at another bank in Cyprus under the exact same name as the account at FBME is.
Actions taken by FBME: FBME tries to help its customers but it looks like they are banging with their heads against a thick wall. The Cyprus government is thus far not willing to cooperate. The courts cannot help either and a large number of customers are getting more nervous every day.
FBME went to court, they visited FinCEN in Washington DC and also they went to the International Chamber of Commerce to file for arbitration. None of these actions have resulted in a better situation for FBME customers yet and to be frank, the question stays if there ever will be a solution presented by the bank for its customers. A mistake can be set right, but more than half a year of waiting is not a mistake anymore.
The future of FBME: It is unclear what will happen in the near future. FBME is trying hard to find a mutual solution that fits all. The administrator lowered the daily payment levels to one thousand Euro's per day. This means that there is some fear for a bank run to take place.
Solutions for customers: FBME customers have two options to move funds from their bank account. They can wire internally to other FBME accounts via internet banking, but still, funds are not freely transferable. The second option is to issue a bank check for a maximum of 1.000 Euro per day and wire it to an account in your name at another bank in Cyprus.
The bank check cannot be cashed, it has to be deposited. Then after clearance of the check your funds are freely transferable again. Of course, this scenario is only possible for FBME clients who can pass the Due Diligence process.
Claim your funds: If you are a current customer of FBME bank and can't wait for things to change, you'll have to follow the strict rules set by the Central Bank of Cyprus and its administrator. To claim your funds, please visit the "claim your funds here" page on this website for future procedures.
Obviously, the conclusions of the report activated the Cyprus government. They are still under strict scrutiny of the European Union and the Trojka and more difficulties in the financial industry might jeopardize the willingness of foreign investors to work with Cypriot companies.
Unfortunately, thousand of customers who have nothing to do with illegal activities or black money, are duped by this whole situation. They can't touch or move their deposits and are dependent on the input of third parties like the Central Bank of Cyprus.
The FinCEN study: The conclusion in the FinCEN report is devastating. According to FinCEN the Federal Bank of the Middle East facilitated, due to their lack of supervision, criminal activities. In every country this would be a reason to properly investigate the true modus operandi of the bank. In Cyprus, the wheels of investigation turn slow. The result is that the majority of FBME customers are getting deservedly nervous.
The role of the Central Bank: The Central Bank of Cyprus immediately appointed an administrator and on the 18th of July, the Central Bank of Cyprus had taken over the management of the operations of the bank and announced its intention to sell the operations of the Cyprus branch of FBME with the aim of protecting the bank’s depositors.
Naturally, the idea to sell a part of the bank would create some potential for all customers, the bad ones included. This would result in a situation where funds that should be seized come back into the economy. In August 2014, the Central Bank therefore suspended the sale of the bank.
The administrator: Immediately after FBME was placed under resolution, Mr. Dinos Christofides was appointed as the administrator of the bank. Mr. Christofides is responsible for the daily operation and mainly studies the outgoing payments.
The current status of FBME: Uncertain and unclear, are the two words that describe the current status of FBME bank best. The bank is liquid, it has no difficulties to honor short term deposits. However, when customers have few ways to access their account, people get nervous and a "bank run" might start.
As you can see in the article FBME Bank Latest from Legal Floris, a legal advisory firm that helps FBME customers to claim their funds from FBME, there are some challenges. Customers cannot use their bank cards. Internet banking facilities are blocked, but do allow customers to transfer funds to other accounts at FBME. The only way to withdraw funds from an account is by bank check. This bank check cannot be cashed. It must be deposited at another bank in Cyprus under the exact same name as the account at FBME is.
Actions taken by FBME: FBME tries to help its customers but it looks like they are banging with their heads against a thick wall. The Cyprus government is thus far not willing to cooperate. The courts cannot help either and a large number of customers are getting more nervous every day.
FBME went to court, they visited FinCEN in Washington DC and also they went to the International Chamber of Commerce to file for arbitration. None of these actions have resulted in a better situation for FBME customers yet and to be frank, the question stays if there ever will be a solution presented by the bank for its customers. A mistake can be set right, but more than half a year of waiting is not a mistake anymore.
The future of FBME: It is unclear what will happen in the near future. FBME is trying hard to find a mutual solution that fits all. The administrator lowered the daily payment levels to one thousand Euro's per day. This means that there is some fear for a bank run to take place.
Solutions for customers: FBME customers have two options to move funds from their bank account. They can wire internally to other FBME accounts via internet banking, but still, funds are not freely transferable. The second option is to issue a bank check for a maximum of 1.000 Euro per day and wire it to an account in your name at another bank in Cyprus.
The bank check cannot be cashed, it has to be deposited. Then after clearance of the check your funds are freely transferable again. Of course, this scenario is only possible for FBME clients who can pass the Due Diligence process.
Claim your funds: If you are a current customer of FBME bank and can't wait for things to change, you'll have to follow the strict rules set by the Central Bank of Cyprus and its administrator. To claim your funds, please visit the "claim your funds here" page on this website for future procedures.