NICOSIA Aug 1 Cyprus's central bank has
suspended efforts to find a buyer for branches of a
Tanzania-based bank, pending the outcome of legal action seeking
to block the sale, it said on Friday.
Cypriot regulators seized control of two branches of the
FBME bank in July, after a department of the U.S. Treasury
alleged the bank engaged in money laundering.
FBME has denied the allegations and accused Cypriot
authorities of a "hostile takeover" to seize control of the bank
and its assets.
The Cypriot central bank took effective control of the FBME
branches on the island on July 21 with the stated intent of
finding a buyer. But it said it would not proceed with the
matter until a verdict from the island's courts, following a
legal petition by FBME challenging the central bank's move.
A report from the U.S. Treasury's Financial Crimes
Enforcement Network described the bank as a "primary money
laundering concern". On its website, FBME said its lawyers have
been engaged with U.S. authorities. The bank also said it was
vetted by Cypriot authorities this year, without being informed
of anything untoward. It also appointed external consultants to
conduct anti-money laundering audits in 2013, it said.
The central bank refused to discuss why it almost
immediately moved to take over the bank branches after the U.S.
released its report on July 17.
(Reporting By Michele Kambas; Editing by Larry King)