Concerns Remain Over Georgia’s Efforts Against Money Laundering and Terrorist Financing

Despite making progress in recent years, Georgia still faces significant challenges in combating money laundering (ML) and terrorist financing (TF). A new report highlights concerns over the country’s efforts to address these threats.

Unsatisfactory Feedback, Guidance, and Training

The report notes that financial institutions in Georgia still lack satisfactory feedback, guidance, and training on how to detect and prevent ML and TF. This shortage of resources has resulted in a decrease in the number of suspicious transaction reports (STRs) filed with law enforcement agencies. Furthermore, the report highlights the need for more effective processes for filing STRs, which are crucial for disseminating information to law enforcement agencies.

Insufficient Investigations and Convictions

The report also expresses concerns over the low number of ML investigations, which have resulted in modest asset values and complex cases involving cross-border criminality. Additionally, there is a low number of convictions involving banking sector employees, despite this sector being involved in most ML cases. The report notes that few cases involve predicate offenses identified in the National Risk Assessment (NRA) or observed in Georgia.

Compliance with Obligations

Georgia has achieved convictions for all types of ML, but the proportion of convictions for legal persons is relatively low. Moreover, competent authorities have not provided specific guidance to ensure compliance by financial institutions and designated non-financial businesses and professions (DNFBPs) with their obligations to implement targeted financial sanctions.

Recommendations for Improvement

The report highlights several areas that require improvement:

• Raise awareness among law enforcement agencies and the private sector about different types of TF.
• Improve Georgia’s standing task force and use TF cases to support designations.
• Provide specific guidance to ensure compliance by financial institutions and DNFBPs with their obligations.

Progress in Implementing UN Security Council Resolutions

While Georgia has made progress in implementing UN Security Council resolutions related to TF, there are still deficiencies in its system. The report notes that the time taken to accomplish each step in the implementation process was revised but did not result in action being taken “without delay”.

Conclusion

In conclusion, while Georgia has made some progress in combating ML and TF, there are still significant concerns that need to be addressed to strengthen the country’s efforts against these threats. The report highlights the importance of improving feedback, guidance, and training for financial institutions, as well as increasing investigations and convictions involving ML and TF.