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[AML-CFT] MONEYVAL Publishes Third Round Evaluation Report on Georgia

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  • Inonu Akgun ALP
    By Christina TashkevichThe Council of Europe s Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL committee) has published its
    Message 1 of 1 , Jun 21, 2007
      By Christina Tashkevich

      The Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL committee) has published its Third Round evaluation report on Georgia praising major changes in Georgia regarding money laundering and terrorist financing but also noting several 'must-dos' for the Georgian government.

      The report, for example, notes that in 2003 when the MONEYVAL committee issued its Second Round report, Georgia had no anti-money laundering preventive law, no regime to report suspicious transactions, nor any real provisional measures, confiscation regime or financial intelligence unit.

      In January 2004, however, a law on facilitating the prevention of illicit income legalization came into force and a financial intelligence unit was created. The report also says that money laundering cases have been brought to Georgian court, winning convictions.

      However, the committee says there are issues the Georgian government still needs to address.
      For example, according to Georgian legislation, income from crimes committed in the taxation fields and any offences involving less than GEL 5 000 (approx. EUR 2 230) cannot be considered money laundering offences.

      The report also criticizes Georgian legislation for not obliging financial institutions to pay closer attention to the financial interactions of public figures. "Georgian legislation does not oblige financial institutions to apply enhanced due diligence for higher risk categories of customers (e.g. politically exposed persons), transactions and products," says the report.

      The MONEYVAL committee also notes that Georgia still has no effective system of detecting the physical transportation of currency across borders.

      Talking about the criminal situation in the country, the committee says organized crime and corruption remain major issues for the Georgian authorities to address.

      "The legalization of illicit assets is still a major preoccupation of organized crime groups in Georgia. The major sources of illegal income are considered to be the same as at the time of the second evaluation [in 2003]. Illegal proceeds remain largely generated through smuggling, tax evasion, fraud, bribery, misappropriation and embezzlement, and abuse of power by public servants," the report reads.

      In 2003, there was the threat of Georgia being put on the "black list" of countries considered attractive for money laundering operations, compiled by the Finance Action Task Force on Money Laundering (FATF). In response, the Georgian government drafted legislation to combat money laundering.


      Posted By Inonu Akgun ALP to AML-CFT at 6/21/2007 05:17:00 AM
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