MONEYVAL, the Council of Europe’s AML authority, has published its report on the progress in Georgia’s AML/CFT framework and its compliance with FATF recommendations. Here are the highlights from this report.
In its investigation, MONEYVAL found that while Georgia reasonably understands its ML/TF risks, its AML/CFT framework is deficient in threat identification and thorough risk analysis. As a result, authorities are unable to identify many possible ML cases. Even in the ML cases that are identified and pursued legally, the rate of conviction is quite low. However, MONEYVAL’s report also states that Georgia effectively investigates TF cases when identified. Georgian authorities even use alternative penalizing measures in cases where conviction of TF is not possible.
Further, Georgia’s financial institutions displayed good understanding of their ML/TF risks. However, MONEYVAL detected many significant gaps in customer due diligence measures by non-financial businesses. There is also a lack of a central AML/CFT supervision for casinos, despite the ML/TF risks associated with this sector. In particular, MONEYVAL identified deficiencies in ensuring that licensing requirements are fulfilled by Georgian casino operators. Overall, existing standard of AML/CFT supervision is inadequate, resulting in low suspicious transaction reporting.
Despite these deficiencies, MONEYVAL has recognized Georgia’s effective international cooperation in sharing and requesting information with many jurisdictions. Still, Georgia must enhance its use of financial intelligence to identify and inspect cases of money laundering and improve its AML supervision for high-risk non-financial sectors like casinos. In addition, MONEYVAL believes that Georgia needs to improve its understanding of risks related to the real estate sector, trade-based money laundering, TF, etc.
Source name: Council of Europe