Federal Register / Vol. 79, No. 140 / Tuesday, July 22, 2014 / Notices
Dated: July 8, 2014.
Julie P. Agarwal,
Secretary, Maritime Administration.

institution, class of transaction, or type
of account is of ‘‘primary money
laundering concern,’’ to require
domestic financial institutions and
financial agencies to take certain
‘‘special measures’’ to address the
primary money laundering concern.

[FR Doc. 2014–16592 Filed 7–21–14; 8:45 am]
BILLING CODE 4910–81–P

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Notice of Finding That FBME Bank
Ltd., Formerly Known as Federal Bank
of the Middle East, Ltd., Is a Financial
Institution of Primary Money
Laundering Concern
Financial Crimes Enforcement
Network (‘‘FinCEN’’), Treasury.
ACTION: Notice of finding.
AGENCY:

This document provides
notice that, pursuant to the authority
contained in 31 U.S.C. 5318A, the
Director of FinCEN found on July 15,
2014, that reasonable grounds exist for
concluding that FBME Bank Ltd.
(‘‘FBME’’ or the ‘‘Bank’’), formerly
known as Federal Bank of the Middle
East, Ltd., defined to include all of its
branches, subsidiaries, and offices, is a
financial institution operating outside of
the United States of primary money
laundering concern.
DATES: The finding referred to in this
notice was effective as of July 15, 2014.
FOR FURTHER INFORMATION CONTACT:
FinCEN, (800) 767–2825.
SUPPLEMENTARY INFORMATION:

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SUMMARY:

I. Statutory Provisions
On October 26, 2001, the President
signed into law the Uniting and
Strengthening America by Providing
Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the
‘‘USA PATRIOT Act’’), Public Law 107–
56. Title III of the USA PATRIOT Act
amends the anti-money laundering
(‘‘AML’’) provisions of the Bank Secrecy
Act (‘‘BSA’’), codified at 12 U.S.C.
1829b, 12 U.S.C 1951–1959, and 31
U.S.C. 5311–5314, 5316–5332, to
promote the prevention, detection, and
prosecution of international money
laundering and the financing of
terrorism. Regulations implementing the
BSA appear at 31 CFR Chapter X. The
authority of the Secretary of the
Treasury (the ‘‘Secretary’’) to administer
the BSA and its implementing
regulations has been delegated to the
Director of FinCEN.
Section 311 of the USA PATRIOT Act
(‘‘Section 311’’), codified at 31 U.S.C.
5318A, grants the Director of FinCEN
the authority, upon finding that
reasonable grounds exist for concluding
that a foreign jurisdiction, financial

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II. History of FBME and Jurisdictions of
Operation
FBME was established in 1982 in
Cyprus as the Federal Bank of the
Middle East, Ltd., a subsidiary of the
private Lebanese bank, Federal Bank of
Lebanon. Both FBME and the Federal
Bank of Lebanon are owned by AyoubFarid M. Saab and Fadi M. Saab. In
1986, FBME changed its country of
incorporation to the Cayman Islands,
and its banking presence in Cyprus was
re-registered as a branch of the Cayman
Islands entity. In 2003, FBME left the
Cayman Islands due to problems with
capital adequacy regulations and reestablished itself in Tanzania by
acquiring Delphis Bank, a small
Tanzanian financial institution with
three bank branches. At the same time,
FBME’s Cypriot operations became a
branch of FBME Tanzania Ltd. In 2005,
FBME formally changed its name from
Federal Bank of the Middle East, Ltd. to
FBME Bank Ltd.
Since 2003, FBME has been
headquartered in Tanzania. FBME
headquarters is widely regarded as the
largest bank in Tanzania based on its $2
billion asset size, but it has only four
branches. While FBME is presently
headquartered in Tanzania, FBME
transacts over 90% of its global banking
business and holds over 90% of its
assets in its Cyprus branch. FBME has
always maintained a significant
presence in Cyprus. FBME has stated,
however, that it is not in direct
competition with local retail banks in
Cyprus for several reasons, including
that it does not issue checks, has no
retail counters, and its Cypriot
customers are limited to mainly staff,
contractors, and professionals providing
services to FBME.
The Central Bank of Cyprus (‘‘CBC’’),
which supervises and regulates all
Cypriot banks, including branches of
foreign financial institutions such as
FBME, has found FBME’s compliance
with Cypriot banking laws and AML
regulations deficient on at least two
occasions. As evidenced by its failure to
comply with the Cypriot AML law,
FBME’s weak AML controls and
customer due diligence resulted in a
fine by the CBC in 2008. In addition, in
2013, FBME took active steps to evade
oversight by the Cypriot regulatory
authorities. In November 2013, the CBC
stated that FBME may be subject to

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sanctions and a fine of up to 240 million
euro for alleged violations of capital
controls.
III. The Extent To Which FBME Has
Been Used To Facilitate or Promote
Money Laundering In or Through
Cyprus and Tanzania
1. FBME Facilitates Money Laundering,
Terrorist Financing, Transnational
Organized Crime, Fraud Schemes,
Sanctions Evasion, Weapons
Proliferation, Corruption by PoliticallyExposed Persons, and Other Financial
Crimes
FBME facilitated a substantial volume
of money laundering through the Bank
for many years. FBME is used by its
customers to facilitate money
laundering, terrorist financing,
transnational organized crime, fraud,
sanctions evasion, and other illicit
activity internationally and through the
U.S. financial system. FBME has
systemic failures in its AML controls
that attract high-risk shell companies,
that is, companies formed for the sole
purpose of holding property or funds
and that do not engage in any legitimate
business activity. FBME performs a
significant volume of transactions and
activities that have little or no
transparency and often no apparent
legitimate business purpose.
Through relationships developed by
FBME’s management since at least 2006,
as well its large shell company customer
base, FBME facilitates the activities of
international terrorist financiers,
organized crime figures, and money
launderers. For example, since at least
early 2011, the head of an international
narcotics trafficking and money
laundering network has used shell
companies’ accounts at FBME to engage
in financial activity. In late 2012, the
head of the same international narcotics
trafficking and money laundering
network continued to express interest in
conducting financial transactions
through accounts with FBME in Cyprus.
Separately, in 2008, an FBME customer
received a deposit of hundreds of
thousands of dollars from a financier for
Lebanese Hezbollah. FBME also
facilitates financial activity for
transnational organized crime. As of
2008, a financial advisor for a major
transnational organized crime figure
who banked entirely at FBME in Cyprus
maintained a relationship with the
owners of FBME.
FBME facilitated transactions for
entities that perpetrate fraud and
cybercrime against victims from around
the world, including in the United
States. For example, in 2009, FBME
facilitated the transfer of over $100,000

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Federal Register / Vol. 79, No. 140 / Tuesday, July 22, 2014 / Notices

to an FBME account involved in a High
Yield Investment Program (‘‘HYIP’’)
fraud against a U.S. person. In July
2012, the FBME customer operating the
alleged HYIP was indicted in the United
States District Court for the Northern
District of Ohio for wire fraud and
money laundering related to the HYIP
fraud. FBME has processed payments
for cybercrime networks. In September
2010, FBME facilitated the unauthorized
transfer of over $100,000 to an FBME
account from a Michigan-based
company that was the victim of a
phishing attack. Several FBME accounts
have been the recipients of the proceeds
of cybercriminal activity against U.S.
victims. For example, in October 2012,
an FBME account holder operating as a
shell company was the intended
beneficiary of over $600,000 in wire
transfers generated from a fraud scheme,
the majority of which came from a
victim in California.
FBME’s offshore banking business
allows sanctioned entities to circumvent
sanctions imposed by the International
Emergency Economic Powers Act
(‘‘IEEPA’’). IEEPA authorizes the
President to declare the existence of an
unusual and extraordinary threat to the
national security, foreign policy, or
economy of the United States
originating outside the United States. It
further authorizes the President, after
such a declaration, to impose sanctions,
block transactions, and freeze assets to
respond to the threat. FBME facilitates
U.S. sanctions evasion through its
extensive customer base of shell
companies. For example, at least one
FBME customer is a front company for
a U.S.-sanctioned Syrian entity, the
Scientific Studies and Research Center
(‘‘SSRC’’), which has been designated as
a proliferator of weapons of mass
destruction. The SSRC front company
used its FBME account to process
transactions through the U.S. financial
system. This SSRC front company also
shared a Tortola, British Virgin Islands
(‘‘BVI’’) address with at least 111 other
shell companies, including at least one
other additional FBME customer that is
subject to international sanctions.
FBME solicits and is recognized by its
high-risk customers for its ease of use.
FBME advertises the Bank to its
potential customer base as willing to
facilitate the evasion of AML
regulations. Separately, FBME is
recognized for the ease of its account
creation. In September 2013, FBME’s
offshore bank account services were
featured prominently on a Web site that
facilitates the formation of offshore
entities. FBME is also popular with
online gamblers, particularly U.S.
gamblers that seek to engage in unlawful

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internet gambling. One Web site that
encourages the opening of offshore bank
accounts to gamble online notes that
FBME in Cyprus is ‘‘[a]nother Europebased bank [we’ve] found particularly
easy to deal with.’’
In October 2011, the Department of
Justice (‘‘DOJ’’) filed civil forfeiture
complaints against approximately $70.8
million in real and personal property
alleged to be the proceeds of foreign
corruption offenses perpetrated by the
President of Equatorial Guinea, Teodoro
Obiang’s son and his associates and
laundered through the United States.
Subsequently, between December 2011
and July 2012, the Treasury of
Equatorial Guinea wired over $47
million to several Cypriot banks and
entities in a pattern of transactions that
was identified as being consistent with
the allegations in the DOJ complaint.
This included $7.2 million wired to a
British shell company using an FBME
account.
2. FBME’s Weak AML Controls
Encourage Use of the Bank by Shell
Companies and Allow Its Customers To
Perform a Significant Volume of
Obscured Transactions and Activities
Through the U.S. Financial System
FBME accesses the U.S. financial
system through both direct and indirect
correspondent accounts. In 2009, one
U.S. financial institution terminated its
banking relationship with FMBE based
on money laundering concerns. The
volume of suspicious wire activity
conducted by FBME customers through
the U.S. financial system, however,
remains significant. In just the year from
April 2013 through April 2014, FBME
conducted at least $387 million in wire
transfers through the U.S. financial
system that exhibited indicators of highrisk money laundering typologies,
including widespread shell company
activity, short-term ‘‘surge’’ wire
activity, structuring, and high-risk
business customers.
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. For example,
FBME was involved in at least 4,500
suspicious wire transfers through U.S.
correspondent accounts that totaled at
least $875 million between November
2006 and March 2013. The FBME
customers involved in these wire
transfers exhibited shell company
attributes, and other financial
institutions involved in the transfers
reported that they were unable to verify

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the identities of FBME’s customers. A
lack of transparency for such significant
wire activity involving FBME’s
customers makes it extremely difficult
for U.S. and other financial institutions
involved in these transactions to verify
the bona fides of all of the parties to
these transfers.
FBME customers, including its many
shell company customers, have
frequently used FBME’s Cyprus address
to conduct collectively tens of millions
of dollars of transactions. From July
2007 to February 2013, at least 71
entities used FBME’s Cyprus address to
conduct transactions through the U.S.
financial system. Although there may be
rare occasions when use of the bank’s
address as a bank customer’s address of
record is legitimate, such a practice is
highly unusual and indicative of the
bank’s potential complicity in its
customers’ illicit activities. This is
particularly true if a party to such a
transaction is located in a high-risk or
sanctioned jurisdiction. Obscuring the
true address of the customer inhibits
compliance checks by counterparty or
intermediary financial institutions.
IV. The Extent To Which FBME Is Used
for Legitimate Business Purposes in
Cyprus and Tanzania
Legitimate activity at FBME’s Cyprus
branch is difficult to assess because of
the limited amount of information that
is available regarding Cypriot branches
of foreign banks, such as FBME. FBME
claims to have a relatively limited
number of customers in Cyprus, yet it
also states that it transacts over 90% of
its global banking business, and holds
over 90% of its assets, in its Cyprus
branch. As discussed in this Notice of
Finding, FBME functions largely as an
offshore bank catering to a significant
number of shell entities that are
nominally located in Cyprus and other
high-risk jurisdictions.
V. The Extent To Which This Action Is
Sufficient to Guard Against
International Money Laundering and
Other Financial Crimes.
FinCEN’s July 22, 2014 proposed
imposition of the fifth special measure
would guard against the international
money laundering and other financial
crime risks described above directly by
restricting the ability of FBME to access
the U.S. financial system to process
transactions, and indirectly by public
notification to the international
financial community of the risks posed
by dealing with FBME.

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 Federal Register / Vol. 79, No. 140 / Tuesday, July 22, 2014 / Notices
Dated: July 15, 2014.
Jennifer Shasky Calvery,
Director, Financial Crimes Enforcement
Network.
[FR Doc. 2014–17171 Filed 7–21–14; 8:45 am]
BILLING CODE 4810–02–P

DEPARTMENT OF THE TREASURY
United States Mint
Citizens Coinage Advisory Committee
Meeting
Notification of Citizens Coinage
Advisory Committee July 22, 2014,
Public Meeting.

ACTION:

Pursuant to United States
Code, Title 31, section 5135(b)(8)(C), the
United States Mint announces the
Citizens Coinage Advisory Committee
(CCAC) public meeting scheduled for
July 22, 2014.

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SUMMARY:

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Date: July 22, 2014
Time: 3:00 p.m. to 4:00 p.m. EDT
Location: This meeting will occur via
teleconference. Interested members of
the public may attend the meeting at the
United States Mint; 801 9th Street NW.,
Washington, DC; Conference Room A.
Subject: Discussion of a potential
2015 24-Karat Gold Ultra-High Relief
Coin and Silver Medal.
Interested persons should call the
CCAC HOTLINE at (202) 354–7502 for
the latest update on meeting time and
room location.
In accordance with 31 U.S.C. 5135,
the CCAC:
D Advises the Secretary of the
Treasury on any theme or design
proposals relating to circulating coinage,
bullion coinage, Congressional Gold
Medals, and national and other medals.
D Advises the Secretary of the
Treasury with regard to the events,
persons, or places to be commemorated
by the issuance of commemorative coins

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in each of the five calendar years
succeeding the year in which a
commemorative coin designation is
made.
D Makes recommendations with
respect to the mintage level for any
commemorative coin recommended.
FOR FURTHER INFORMATION CONTACT:
William Norton, United States Mint
Liaison to the CCAC; 801 9th Street
NW., Washington, DC 20220; or call
202–354–7200.
Any member of the public interested
in submitting matters for the CCAC’s
consideration is invited to submit them
by fax to the following number: 202–
756–6525.
Authority: 31 U.S.C. 5135(b)(8)(C).
Dated: July 17, 2014.
Richard A. Peterson,
Deputy Director, United States Mint.
[FR Doc. 2014–17245 Filed 7–21–14; 8:45 am]
BILLING CODE 4810–37–P

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