The Council of Europe’s AML body MONEYVAL has published its 5th round mutual evaluation report (MER) for Georgia. The report evaluates the effectiveness of Georgia’s AML/CFT framework and its compliance with FATF recommendations.
While Georgian authorities have initiated some high-value ML investigations, they still fail to detect many potential ML cases. Consequently, the number of convictions involving complex ML cases and legal persons is quite low. On a positive note, Georgia’s CFT strategy is sufficiently integrated into its counter-terrorism strategies. Moreover, Georgian authorities effectively utilize alternate punishment measures when a TF conviction cannot be secured.
However, MONEYVAL’s report reveals that despite Georgia’s considerable understanding of many of its ML/TF risks, it faces some key deficiencies. These deficiencies are related to risk identification and threat and vulnerability analysis. Furthermore, Georgia’s Ministry of Finance does not undertake any AML/CFT supervision for casinos, despite the sector being the most vulnerable to ML/TF. Indeed, a risk assessment revealed serious technical deficiencies in various areas, such as casino licensing requirements, the level of AML/CFT supervision etc. As a result, the country witnesses reduced reporting of suspicious transactions in this sector. Therefore, the country must pay attention to ML/TF risks in high-risk non-financial sectors like gambling.
Overall, MONEYVAL has advised the Georgian authorities to strengthen the execution of their AML/CFT framework. In particular, the regulator has called for enhanced efforts to use financial intelligence for the identification of ML cases. MONEYVAL’s report has further identified that is particularly important for Georgia to understand risks related to use of cash in the economy, the real estate sector, trade-based money laundering and terrorism financing and the use of non-profit organisations, among other areas.
Source: Council of Europe