This content is from: Local Insights

Georgia

After much review and discussion, on June 6 2003, the parliament of Georgia adopted the Law on the Prevention of the Legalization of Illegal Revenues. The law is expected to assist the Georgian government in fighting two of the country's most problematic economic issues - money laundering and tax evasion. The legislation creates mechanisms to prevent the legalization of illegal revenues and the financing of terrorism. It will apply equally to both residents and non-residents of Georgia, as well as to their representatives, representative offices and branches.

As well as strengthening control over the movement of funds within Georgia, the law introduces a new independent public law entity, the Financial Monitoring Service of Georgia, which will supervise the work of various state and non-state agencies. Under the law, a transaction (or group of transactions, where one transaction has been broken down into several parts to evade application of the law) will be subject to monitoring where its value exceeds GeL20,000 ($9,492) for cash transactions and GeL40,000 for wire transfers, where it is deemed suspicious, and where it falls within one of the categories set out in the law. The categories of suspicious transactions are described in detail in Article 5.

The entities immediately responsible for monitoring transactions will be determined according to the type of transaction and may range from commercial banks and currency exchange points to customs agencies and public notaries. The Financial Monitoring Service will collect and process all data received from such monitoring entities and, where necessary, forward it to the relevant state bodies for further examination. The objectives, structure and functions of the Financial Monitoring Service have been set out in Regulations approved by the president of Georgia on July 16 2003.

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