Money laundering cases in Georgia low in 2020
Money laundering cases in Georgia low in 2020

The overall number of money laundering cases in Georgia is low in 2020 compared to the number of predicate offences, the US Department of State said in the 2021 Money Laundering report on Wednesday.

Georgia’s 2019 money laundering/terrorism financing NRA weights money laundering risks as medium and terrorism financing risks as low, the report noted.

The US Department of State believes Georgian prosecutors and law enforcement authorities should continue to put emphasis on pursuing links between organized crime and money laundering. Georgia also should take steps to supervise and improve the regulation of its gaming industry.

“Georgia’s ease of doing business attracts investments but also eases the entry of ill-gotten funds into the financial system. In June 2020, the Financial Monitoring Service (FMS), Georgia’s FIU, adopted new regulations to further define Georgia’s AML/CFT regulatory framework, and law enforcement utilized monitoring mechanisms created in previous years to identify links between drugs, organized crime, and money laundering. Much of the illegal income in Georgia derives from banking fraud and cybercrime,” the report read.

The US Department of State also stated that the unchecked growth of the gaming industry, including internet gaming, is concerning.

According to the report, cryptocurrency is unregulated in Georgia and is an area that Georgia should address, along with its gaming industry. It further said considerable illegal income in Georgia derives from banking fraud and cybercrime. Social engineering schemes are also used to commit mass marketing fraud. Banking systems and money transfer services are the primary means to move funds, and Georgia is often just one link in an international criminal chain.

“The general economic situation in Georgia, which is far from being a developed economy, forms a fruitful ground for money launderers to find frontmen. Ease of doing business, which enhances Georgia’s attractiveness for clean investments, is a vehicle for ill-gotten funds to enter the financial system. Cryptocurrency is unregulated in Georgia, increasing vulnerability to money laundering,” the report said.

The report authors added that bitcoin and other virtual currencies are extremely popular in Georgia. Georgia continues to be a popular virtual currency mining location.

“Georgia has an adequate legal and institutional framework for investigating and prosecuting money laundering offences. Georgia lacks experienced cybercrime labs and only has a handful of qualified digital forensic analysts. Training and capacity-building efforts need to be directed toward these areas and toward improving legislation on collecting and analyzing digital evidence. The Prosecution Service of Georgia (PSG) recently created a new cybercrime Georgia’s civil procedure code permits civil forfeiture of any undocumented property in the possession of persons convicted for money laundering or other designated offences,” the report added.

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