In the Courts

In November 2015, FBME filed an appeal of FinCen's decision in the United States District Court for the District of Columbia, alleging that its due process rights had been violated throughout the course of FinCen's investigation, including when FinCen would not produce documents or respond to inquiries from FBME. FinCen contended that FBME had no due process rights, as foreign companies are only afforded due process protections if its property or assets are in jeopardy as a result of the actions of the United States government — FinCen did not seek to access FBME's bank accounts in the United States.

FinCen was ultimately ordered to conduct its investigation into FBME again. Having concluded its renewed review in March 2016, FinCen once again found that FBME was a money laundering concern. FinCen's finding stemmed a second appeal by FMBE, and in April 2017, the court agreed with FinCen.

In response to FinCen's finding, Tanzania's central bank, the Bank of Tanzania, revoked FBME's license and placed it under liquidation. The Bank of Tanzania had previously taken over control of FBME's management following FinCen's 2014 investigation and regulation.

After filing an appeal with the United States Court of Appeals for the District of Columbia immediately following the decision of the lower court, on Oct. 3, 2017 FBME was withdrawn from the proceedings at the instruction of the Bank of Tanzania without explanation. With the removal of FBME from the appeal, the remaining party is FBME Limited, an FBME holding company.

The Oct. 4, 2017, Order instructed the parties to file a brief by Oct.10, 2017, explaining: 1) whether the holding company has standing to maintain the appeal; 2) what concrete redress would be afforded the holding company if the court rescinds the rule, given that the requested relief would not directly affect regulatory actions taken by Tanzanian and Cypriot authorities against the bank in those countries; and asking: 3) Is the case moot?

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In the Courts and Business Crimes Hotline were written by Colleen Snow, an associate at Mayer Brown, Washington, DC.

Appeals Court Orders FBME and FinCen Briefing

On Oct. 4, 2017, the United States Court of Appeals for the District of Columbia issued an Order concerning FBME Bank's (FBME) appeal of a 2014 decision against FBME by the United States Financial Crimes Enforcement Network (FinCen). A bureau of the United States Department of Treasury, FinCen gathers information regarding financial transactions to detect and prevent financial crimes.

Three years ago, FinCen issued a regulation to prohibit United States financial institutions from engaging in business with FBME — Tanzania's largest commercial bank — after FinCen obtained information indicating that FBME was involved in money laundering and terrorist financing.

In November 2015, FBME filed an appeal of FinCen's decision in the United States District Court for the District of Columbia, alleging that its due process rights had been violated throughout the course of FinCen's investigation, including when FinCen would not produce documents or respond to inquiries from FBME. FinCen contended that FBME had no due process rights, as foreign companies are only afforded due process protections if its property or assets are in jeopardy as a result of the actions of the United States government — FinCen did not seek to access FBME's bank accounts in the United States.

FinCen was ultimately ordered to conduct its investigation into FBME again. Having concluded its renewed review in March 2016, FinCen once again found that FBME was a money laundering concern. FinCen's finding stemmed a second appeal by FMBE, and in April 2017, the court agreed with FinCen.

In response to FinCen's finding, Tanzania's central bank, the Bank of Tanzania, revoked FBME's license and placed it under liquidation. The Bank of Tanzania had previously taken over control of FBME's management following FinCen's 2014 investigation and regulation.

After filing an appeal with the United States Court of Appeals for the District of Columbia immediately following the decision of the lower court, on Oct. 3, 2017 FBME was withdrawn from the proceedings at the instruction of the Bank of Tanzania without explanation. With the removal of FBME from the appeal, the remaining party is FBME Limited, an FBME holding company.

The Oct. 4, 2017, Order instructed the parties to file a brief by Oct.10, 2017, explaining: 1) whether the holding company has standing to maintain the appeal; 2) what concrete redress would be afforded the holding company if the court rescinds the rule, given that the requested relief would not directly affect regulatory actions taken by Tanzanian and Cypriot authorities against the bank in those countries; and asking: 3) Is the case moot?

*****
In the Courts and Business Crimes Hotline were written by Colleen Snow, an associate at Mayer Brown, Washington, DC.