Georgia: Detailed Assessment Report on AML and CFT (by IMF)

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EXECUTIVE SUMMARY

Key Findings

1. The Georgian AML/CFT regime has significantly improved since the last assessment in 2007. The amendments to the legal framework enacted between 2008 and February 2012 have  improved technical compliance with the FATF recommendations, in particular with respect to the  criminalization of ML and FT and the preventive measures for financial institutions. Significant progress has been made since 2007 with regard to the effective use of the ML criminal provisions, provisional and confiscation measures, and international cooperation.

2. However, weaknesses remain with regard to compliance with key elements of the standard. A combination of technical deficiencies, poor implementation, and limited resources undermine the effectiveness of the financial intelligence unit (FIU) and AML/CFT supervision. In addition, there are still major loopholes in terms of transparency of legal entities, domestic cooperation, measures to prevent terrorism financing, and preventive measures for designated nonfinancial businesses and professions (DNFBPs).

3. These weaknesses should be urgently addressed in light of the significant ML/FT vulnerabilities and threats. These include: i) customers that are, or are owned by, offshore companies for which the identity of their beneficial owners is unknown or where the identity has not been verified; ii) a rapid and ongoing increase of nonresident deposits; iii) the development of private banking activities, including a clientele of foreign politically-exposed persons (PEPs); iv) the rapid growth of the casino business and rising number of non-face–to-face transactions; v) the existence of large Georgian-led criminal organizations abroad which exposes the risk of proceeds of crime being transferred back to Georgia; and vi) domestic statistics demonstrating the existence of major proceeds-generating crimes, such as corruption, tax evasion, and drug trafficking.

Link to detailed IMF report: click here