Overview of AML in Georgia
Georgia, a country at the crossroads of Europe and Asia, has been actively engaged in bolstering its Anti-Money Laundering (AML) efforts to align with international standards and combat financial crimes effectively. Georgia plays an important role in the international system of combating money laundering and the financing of terrorism. Under agreements with the European Union and Moneyval, Georgia is responsible for combating and detecting money laundering and terrorist financing. Moneyval checks compliance with the Financial Action Task Force (FATF) standards, a key requirement of countries to assess the risks of money laundering and terrorism financing.
The Financial Regulation Status in Georgia
Georgia has taken significant steps in the fight against financial crimes and has become compliant with international AML regulations. The Financial Monitoring Service of Georgia was established in 2003 to combat financial crimes under the law "On Facilitating the Prevention of Illicit Income Legalization" of Georgia. The Financial Monitoring Service of Georgia's main purpose is to facilitate the prevention of money laundering and terrorism financing.
In 2019, the Georgian Parliament adopted the Law on Facilitating the Prevention of Money Laundering and Financing of Terrorism to ensure international AML compliance. With this law, the Financial Monitoring Service has been authorized to supervise banks, microfinance institutions, foreign exchange offices, investment companies, and all other financial institutions in the country.
The concept of cryptocurrencies has evolved from a niche one to a mainstream asset class, altering banking and igniting debates over their long-term effects on international financial institutions. It has been positioned as a store of value and a catalyst for transforming the future of finance due to its decentralized nature and blockchain technology. Starting in 2023, Georgia, a prominent cryptocurrency-friendly country among post-Soviet states, is taking steps to monitor cryptocurrency firms to prevent money laundering and ensure compliance with sanctions. This move, beginning in 2023, to scrutinize VASPs is in line with anti-money laundering efforts and is anticipated to bolster the country's adherence to Western sanctions against Russia and Belarus. The Georgian government is set to greenlight cryptocurrency-related legislation during the autumn session. This proposed local bill on crypto regulation seeks to harmonize Georgian laws with significant European Union directives while establishing legal recognition for entities engaged in digital asset trading. These forthcoming cryptocurrency regulations have a dual purpose: firstly, to combat the potential misuse of cryptocurrencies for money laundering and terrorist financing, and secondly, to position Georgia as a prominent player in the global cryptocurrency industry.
High-Risk Sectors
The Financial Monitoring Service Of Georgia published a report on the risk level of money laundering and terrorist financing by sectors. All high-risk sectors are required to ensure AML compliance. Organizations must make AML controls to protect themselves from the threat of financial crime. These organizations are supervised by The Financial Monitoring Service Of Georgia. Organizations that do not meet the AML requirements are penalized.
To the requirements of the law of Georgia on Facilitating the Prevention of Illicit Income Legalization, Organizations have to implement and maintain measures for handling suspicious transactions. High-risk organizations in Georgia have to detect customers' money originating from unlawful activities or other money laundering activities and report all identified instances of suspicious activities to the relevant authorities. High-risk organizations must create an AML program that suits their risk levels and conduct checks starting from the customer onboarding process. In the subsequent processes, organizations must perform customer monitoring and control customer transactions periodically. Various areas and industries are represented by high-risk entities in Georgia, including but not limited to:
- Banks and Financial Institutions
- Foreign Exchange Offices
- Investment Companies
- Insurance Companies
- Real Estate and Property Developers
- Law Firms and Legal Professionals
- Accounting Firms and Auditors
- Casinos and Gambling Establishments
- Jewelry and Precious Metals Dealers
- Non-Profit Organizations
- Exporters and Importers
AML Solutions for Georgia
Businesses operating in Georgia must give top priority to ensuring compliance with a wide range of laws and rules since doing so has an impact on the integrity and stability of the country's financial sector. Sanction Scanner is dedicated to provide cutting-edge technologies to assist Georgian businesses in successfully navigating the regulatory world. Contact us or ask for a demo right away to have the assurance of improved security.
