Operations of the Federal Bank of the Middle East (FBME) in Tanzania are under scrutiny after the US accused the bank of money laundering and financing terrorism, the local media reported Monday.
Governor Benno Ndulu of the Bank of Tanzania (BoT) said his institution and the Financial Intelligence Unit (FIU) have placed the FBME under surveillance following last week’s detailed dossier issued by the US Treasury Department about the bank’s “shady” financial transactions amounting to US$875 million.
The Citizen daily here reported that Ndulu has confirmed that BoT officials, in collaboration with the FIU, were investigating FBME in the wake of allegations of money laundering and financing terrorism.
However, the Tanzania central bank boss allayed fears of FBME customers in the country about the safety of their deposits, saying “there is no need to panic.”
The dossier, issued by the US Treasury Department through its Director of Financial Crimes Enforcement Network, Ms Jennifer Shasky Calvery, said: “FBME has a significant number of shell company customers nominally based in Cyprus and in other high-risk jurisdictions.
“Wire transfers related to suspected shell company activities accounted for hundreds of millions of dollars of FBME’s financial activity between 2006 and 2014.”
According to the dossier, FBME was involved in at least 4,500 suspicious wire transfers through US correspondent accounts that totalled at least US$875 million between November 2006 and March 2013.