Financial Crime World

Georgia Steps Up Efforts Against Money Laundering and Terrorist Financing, but Challenges Remain

Tbilisi, Georgia - Georgia has made significant strides in enhancing its anti-money laundering (AML) and counter-terrorist financing (CFT) measures in recent years. However, concerns persist over the effectiveness of these efforts, particularly in detecting and investigating potential money laundering (ML) cases.

Progress Made

According to a recent assessment by international authorities, Georgia’s AML/CFT framework has improved significantly since 2018. The country has introduced new legislation and strengthened its institutions to combat financial crimes. Additionally, law enforcement agencies have demonstrated their ability to investigate and prosecute complex ML cases involving high asset values and organized crime groups.

Challenges Persist

Despite these advancements, the assessment highlighted several concerns that need to be addressed:

  • Obligated entities have reported unsatisfactory feedback, guidance, and training on filing Currency Transaction Reports (CTRs), which can lead to delays in detecting suspicious transactions.
  • Bank employees may be exposed to court proceedings, potentially hindering investigations.
  • The number of Suspicious Transaction Reports (STRs) filed by financial institutions has decreased significantly over the past year, raising concerns about the effectiveness of AML/CFT measures.
  • Georgia’s Financial Monitoring Service (FMS) has not been fully integrated into the country’s CFT framework, which can hinder investigations and prosecutions.

Terrorist Financing

Georgia has made progress in identifying and prosecuting cases related to terrorist financing. However, there is still room for improvement, particularly in raising awareness among other law enforcement agencies and the private sector about different types of terrorist financing activities.

Recommendations

The assessment provided several recommendations for Georgia to strengthen its AML/CFT measures:

  • Improve training and guidance for obligated entities on filing CTRs.
  • Enhance feedback mechanisms for financial institutions to report suspicious transactions.
  • Strengthen integration of the FMS into the country’s CFT framework.
  • Raise awareness among law enforcement agencies and the private sector about different types of terrorist financing activities.

Conclusion

By implementing these recommendations, Georgia can further enhance its AML/CFT framework and ensure a safer financial system for its citizens. While significant progress has been made, it is crucial that the country continues to address these challenges to ensure the effectiveness of its measures against money laundering and terrorist financing.