- Tribunal orders Cyprus to allow FBME officials access to premises
In International Chamber of Commerce (ICC) in Paris, The Arbitral Tribunal has ordered Cyprus to grant the shareholders and directors of embattled Federal Bank of the Middle East (FBME) access to the lender’s premises on the island, it was announced on Tuesday.
This year on March 31, Lenders and directors had been excluded on, at the same time as the Central Bank of Cyprus (CBC) sacked 140 employees of FBME in Cyprus, an FBME statement said.
The Cyprus branch of FBME was put in administration and subsequently in resolution by the CBC in July 2014, after the Financial Crime Enforcement Network (FinCEN), a division of the US Treasury, described the Tanzania-based bank as “of primary money laundering concern” with links to Hezbollah, considered a terrorist organization by the US and EU.
FinCEN banned American banks from opening and maintaining correspondent accounts with Federal Bank of the Middle East (FBME), which denies the allegations and decided to challenge the US and Cyprus authorities’ decisions in the courts. The CBC ordered the liquidation of the FBME Cyprus branch, in April.
Since the second half of 2014 Arbitration has been underway at the ICC, dealing with FBME owners’ claims for compensation against the Republic of Cyprus under the terms of the 2003 international agreement between Cyprus and Lebanon that protects investor rights in each other’s country.
Federal Bank of the Middle East (FBME) said the treaty was breached by the CBC when it took over the Cyprus branch and the claims for compensation are set at hundreds of millions of euros.
- ICC ruling cannot stop FBME liquidation, says CBC
Arbitral Tribunal of the International Chamber of Commerce may have ruled to allow the conditional access of FBME Bank’s owners to the lender’s premises, but it refused their request for the immediate cessation of all actions toward its liquidation, the Central Bank of Cyprus said in a statement which was stated on Friday.
It was responding to a statement by FBME on Tuesday, which claimed on the ICC that it had ordered that the embattled bank’s two shareholders be granted unfettered access to the premises, from which they had been removed on March 31.
FBME was placed in administration in July 2014 by the CBC, after the Financial Crime Enforcement Network (FinCEN), the division of the US Treasury, designated the Tanzania-based bank as “of primary money-laundering concern” with connectin links to Hezbollah.
Last December, the CBC revoked its banking licence, and ordered its liquidation.
FBME’s holders resorted to the ICC for arbitration in the second half of 2014, demanding compensation from the Republic of Cyprus under the terms of a 2003 international agreement between Cyprus and Lebanon that protects investor rights in each other’s country.
“On April 25, Messrs Farid and Fadi Saab filed for an injunction with the Paris Arbitral Tribunal, in order to order that the CBC: (i) immediately ceases all activities for the liquidation of the Cyprus branch until the last ruling has been issued by the Cypriot courts, and (ii) allows the shareholders full access to the offices, archives, and personnel of Federal Bank of the Middle East (FBME) branch,” the central bank’s statement said.
“In its May 27 and July 26 rulings, the Arbitral Tribunal fully refused the request for an order to cease all action by the CBC with regard to the branch’s liquidation.”
With regard to the problem of access to the offices, archives and personnel of the branch, the tribunal “ruled only that Messrs Farid and Fadi Saab be allowed given access to the branch’s office in the presence of their lawyer, and on constraints of practical arrangements made between the lawyers of both sides”.
“To date, no agreement on such practical arrangements has been reached,” the over-sight authority said.
“It is noted that the court came to the aforementioned conclusion after judging that the presence of these individuals at the offices of the FBME branch could effect the smooth operation of the branch, which is under the administration of the Special Administrator appointed by the CBC.”
Therefore, the central bank included, the Arbitral Tribunal’s ruling “in no way overrules the Special Administrator’s decision to final end the employment of Messrs Farid and Fadi Saab, nor does it allow them any rights of management or interference in the operation of the branch”.
Cyprus Mail asked an FBME spokesman for a copy of the ruling in question, but was told that the ICC does not decleared them.
A source from the Special Administrator’s office, speaking on condition of anonymity, said that the affair at hand is not really whether the owners are allowed physical entry to the building or not, but whether the right to such access would be unfettered and permanent.
“I’m sure the administrator is open to agree and to let them into the premises if they want to retrieve something,” the Mail was told.
“But what he won’t allow to be all the time, terrorizing the employees.”