BANKING REGULATION COMPLIANCE IN GEORGIA: NATION’S FINANCIAL SECTOR OPERATES WITH RESTRICTIVE MEASURES

Tbilisi, Georgia - International Financial Sanctions and Compliance Measures

In a move aimed at ensuring compliance with international financial sanctions, the National Bank of Georgia has implemented measures to prevent evasion of restrictive measures imposed on Russian nationals. This development comes as part of the country’s efforts to maintain its reputation as a trusted and law-abiding member of the global financial community.

Background and Recent Developments

According to sources within the National Bank of Georgia, the institution has been operating under strict guidelines since February 26, 2022, following instructions from the US, EU, and UK governments. Georgian financial institutions have been working closely with international partners to ensure that all transactions are conducted in accordance with applicable sanctions regimes.

A landmark case has recently emerged where a Georgian citizen was found to be subject to sanctions. The National Bank of Georgia has assured that every citizen is protected by the Constitution of Georgia, and international sanctions cannot be applied without a guilty verdict from a Georgian court.

New Regulation: Criteria for Applying Sanctions Regimes

In response to this development, the National Bank of Georgia has issued an amendment to its decree, effective August 4, 2023. The new regulation outlines the criteria for applying sanctions regimes to Georgian citizens and legal entities registered in the country. Specifically:

• Guilty Verdict from a Georgian Court: Sanctions will be applied if a citizen is found guilty by a Georgian court.
• Sanctioned Individual Ownership of Shares: Sanctions will also be applied if a sanctioned individual owns shares in a local company.

Commitment to Transparency and Cooperation

The National Bank of Georgia has stressed its commitment to ensuring that all potential cases are thoroughly investigated and risk of evasion is minimized. The institution has also offered to share details of this decision with international partners, underscoring its dedication to transparency and cooperation.

As the country continues to navigate the complexities of international financial regulations, the National Bank of Georgia remains resolute in its efforts to maintain a strong and compliant financial sector that upholds the highest standards of integrity and responsibility.