FINANCE: International Court of Arbitration rules in favour of Cyprus in FBME case

The International Court of Arbitration in Paris has ruled in favour of the Republic of Cyprus in the case of the Federal Bank of the Middle East (FBME), which the Central Bank of Cyprus decided to place under resolution in 2014.

The Central Bank said it was fully satisfied with the ruling that “indicates the correct decisions and actions taken by the Central Bank of Cyprus administration and its staff”, its Spokeswoman Aliki Stylianou told the Cyprus News Agency.

The Law Office of the Republic also welcomed the decision saying: "It confirms that the Central Bank of Cyprus acted as a prudent supervisory authority and that the Republic did not violate any of its obligations".

The licence granted on September 8, 2003 to FBME Bank Ltd of Tanzania for a branch operation in Cyprus, was revoked in December 2015 by the Central Bank, which had placed it in July 2014 under resolution.

The owners of the Bank submitted a request for arbitration against the Republic of Cyprus in the Court of Arbitration claiming damages and compensation of $1.4 billion.

Based on information from the US authorities, the Tanzania-owned FBME was accused of conducting money-laundering activities and violated international sanctions imposed on terror groups from the Middle East and Africa.