In July 2014 Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury represented a report regard the illegal activities taking place in FBME Cyprus branch. In its report, it stated that FBME Ltd. Cyprus is involved in and provides assistance to its clients in money laundering, fraud, terrorist financing, transnational organized crime, sanctions evasions and other illicit activity internationally and through the US financial system.
FinCEN’s statement made the situation very difficult for FBME Ltd. Because of their statement, many national and international banks stopped the transfer of money with FBME Ltd. Clients were urged to withdraw their assets or money from the bank. In this situation, the bank suffered a great loss because of the employees and operational management with no input from clients. In short withdrawal of money increased drastically and input was negligible while running cost remained the same. Banks was suffering a complete loss at that time.
In that condition, central banks of Cyprus and Tanzania assumed control of the bank and decided to resolve the bank. This led to the suspension of all the commercial activities and end of the major consignments. Customers and clients were rendered unable to avail any service or product offered by the bank. International card services suspended for a long time and account holders were left without any information about their money deposited in the bank. Customers and clients suffered a lot in this scenario, as business activities and money transfer services were affected badly.
International Chamber of Commerce called on arbitration and decided to consider and examine this serious issue in 2015. Owners of FBME, Ayoub-Farid Michel Saab, and Fadi Michel Saab filed the request for interim measures against the resolution or sell of FBME by the Republic of Cyprus. ICC stopped the authorities to take any further step regarding the resolution of the bank until the matter is cleared.
Bank owners succeeded in getting cancellation of resolution of the bank. The central bank of Cyprus revoked the Cyprus branch license of FBME in December 2015. After the cancellation or resolution of the bank, it has to face many crises, problems, and trouble. Like transactions, transfer of money, unavailability of services to clients and customers. Many customers were determined to close their account in this branch despite all above strikes by employees and working staff. Further, several court hearing is going on in 2016.