The Arbitral Tribunal at the International Chamber of Commerce (ICC) in Paris has ordered Cyprus to grant the shareholders and directors of embattled FBME Bank access to the lender’s premises on the island, it was announced on Tuesday.
Lenders and directors had been excluded on March 31 this year, at the same time as the Central Bank of Cyprus (CBC) sacked 140 FBME employees in Cyprus, an FBME statement said.
The Cyprus branch of FBME was put in administration and subsequently in resolution in July 2014 by the CBC, 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 organisation by the US and EU.
FinCEN banned American banks from opening and maintaining correspondent accounts with FBME, which denies the allegations and decided to challenge the US and Cyprus authorities’ decisions in the courts. In April, the CBC ordered the liquidation of the FBME Cyprus branch.
Arbitration has been underway at the ICC since the second half of 2014, 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.
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.