Financial Crime World

National Bank of Georgia Enhances Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) Supervision

Legislative Framework for Financial Sector Regulation

The National Bank of Georgia has implemented various legislative packages and guidelines to regulate and supervise the financial sector, focusing on AML/CFT. Key developments include:

  • Legislative package regulating issuance of mortgage covered bonds: Provided a foundation for the development of a mortgage bond market in Georgia.
  • Regulatory package under the draft “Law of Georgia on Dematerialized Securities”: Updated ownership regime, central securities depository licensing, and regulatory framework.
  • Amendments to the “Law of Georgia on Securities Market”: Aligned with international best practices, IOSCO principles, and ESMA recommendations.

Strengthening Money Laundering Inspection and Supervision

The National Bank of Georgia has taken significant steps to enhance money laundering inspection and supervision:

Risk-Based AML Supervision

  • Risk-based AML supervision was adopted in 2017, significantly contributing to effective banking and non-banking supervisory processes.

New On-Site Inspection Methodology

  • New on-site inspection methodology for securities registrars and brokerage firms was developed in 2017.

Monetary Penalties Regulation

  • Regulation on determining and imposing monetary penalties for non-banking financial institutions was amended in 2017.

Supervisory Framework Establishment

  • Supervisory Framework on Combating Money Laundering and Terrorism Financing was established by the NBG in 2018.

Off-Site Supervision

  • Off-site supervision of currency exchange bureaus was adopted in 2018.
  • AML/CFT off-site supervisory software was launched by the NBG in 2018.

Follow-Up Inspections and Guidelines Development

  • Follow-up inspections were implemented to ensure correction of deficiencies identified during on-site inspections.
  • Guidelines on money laundering and terrorism financing risk assessment, customer due diligence, organizational and group-wide risk assessment, identification and verification of beneficial owners, correspondent relations, and loan issuing entities were developed or updated in 2019-2021.

Conclusion

The National Bank of Georgia’s efforts demonstrate its commitment to enhancing AML/CFT supervision and promoting a stable financial sector.