The government has initiated amendments to the Law “On the Promotion of the Prevention of Money Laundering and the Financing of Terrorism” that would require all individuals and legal entities to immediately block access to funds or property for sanctioned persons—without prior notification.

The amendments are being submitted for expedited consideration. According to the government, the changes are needed to address commitments made to the Council of Europe ahead of the MONEYVAL Committee’s plenary session scheduled for December 15–18.

The government explains that, based on MONEYVAL’s assessment report, Georgia’s current legislation does not fully meet international standards. Existing legal provisions requiring restrictive measures against individuals sanctioned under UN Security Council resolutions apply only to “accountable entities,” not to all individuals and legal entities.

Furthermore, when accountable entities file suspicious transaction reports related to the assets of sanctioned persons, the law does not explicitly require that the report include information on those assets. These gaps have resulted in Georgia receiving a “partially compliant” rating on Financial Action Task Force (FATF) Recommendations 6 and 7—standards related to preventing terrorism and terrorist financing.

Georgia has also been placed under the FATF compliance improvement procedure due to shortcomings under Recommendation 6. The government states that updating the legislation is necessary for the country to exit this procedure.

Under the proposed amendments, sanctioned persons would be prohibited from accessing—directly or indirectly—funds, assets, economic resources, or financial and related services that they own or control, unless exceptions are explicitly allowed under the relevant UN Security Council resolution.

To comply with this requirement, individuals and companies would need to check whether a person is sanctioned by verifying information through the UN website, the website of the Financial Monitoring Service, or the debtors’ registry of the National Bureau of Enforcement.

A new chapter will be added to the law introducing administrative liability for non-compliance. A first violation will result in a warning, while repeated violations will carry a fine of 1,000 GEL. The Financial Monitoring Service will be responsible for responding to such violations and overseeing enforcement.

The amendments also introduce a requirement for individuals and companies that apply financial restrictions to notify the Financial Monitoring Service. In addition, to meet FATF Recommendation 7, accountable entities must include information about restricted assets when submitting suspicious transaction reports.