Georgia’s Anti-Money Laundering and Counter-Terrorist Financing Efforts Remain Concerning

Despite some progress, Georgia still faces challenges in combating money laundering (ML) and terrorist financing (TF). A recent report highlights concerns about the country’s financial intelligence unit, which has detected a decline in suspicious transaction reports (STRs) submitted by banks. This may indicate that ML cases are not being adequately identified.

Challenges in Combating Money Laundering

• There is a low conviction rate for complex ML cases
• Limited number of cases involve bank employees or predicate offenses commonly observed in Georgia’s risk profile
• Asset confiscation measures are not effective, with many suspected funds dissipating due to delayed seizures or inadequate suspensions

Concerns about Counter-Terrorist Financing

• While there has been progress in investigating and prosecuting TF cases, there is still scope for improvement in raising awareness among law enforcement agencies and the private sector about different types of TF activity
• Georgia’s declaration system for cross-border cash movements is not being enforced effectively, resulting in low confiscation rates

Progress and Challenges in Implementing UN Security Council Resolutions

• Georgia has implemented new legislative frameworks to address deficiencies in implementing UN Security Council resolutions (UNSCRs) related to TF and proliferation financing (PF)
• However, there are delays in communicating amendments to the list of designated persons and entities, which may hinder timely compliance by financial institutions

Conclusion

While Georgia has made progress in combating ML and TF, continued efforts are needed to address the remaining deficiencies and ensure that the country’s financial system is robust against these threats. The report highlights the need for increased cooperation among law enforcement agencies, the private sector, and regulatory bodies to effectively combat money laundering and terrorist financing.