Why Accounts Get Blocked — Two Different Mechanisms
When a bank holds your operations and the account is effectively blocked, the first task is to know exactly which mechanism is at work, because your steps follow from that. The first and most regulated mechanism is an instruction of the head of the Financial Monitoring Service of Georgia to suspend a transaction — a written order that obliges the bank to suspend the preparation, conclusion or performance of the transaction. The second mechanism is the bank's internal control: the law obliges the accountable person — the bank — to submit a report to the Financial Monitoring Service on a suspicious transaction, or on its preparation or attempt, on the very day a substantiated suspicion arises, and it is against the background of such an assessment that banks often restrict operations on their own. A third boundary must also be kept in mind: a blocking is not a seizure. The seizure of an account is a different enforcement-law mechanism governed by other rules; what we deal with here is the anti-money-laundering law.
The Financial Monitoring Service Instruction — the 72-Hour Suspension
Under the law, when a substantiated suspicion of money laundering, the financing of terrorism or another crime arises, the head of the Service is empowered — regardless of the amount of the transaction — to give the accountable person, the bank, a written instruction to suspend, for no more than 72 hours, the preparation, conclusion or performance of the relevant transaction, and also of other transactions connected with it and/or with its participant. At the same moment the information held by the Service is immediately transferred to the Prosecutor General's Office of Georgia, the Ministry of Internal Affairs and/or the State Security Service — in other words, the suspension is, as a rule, accompanied by the reaction of state bodies. The 72-hour period is counted from the moment the bank receives the instruction, and rest days and holidays are not counted in its calculation. The instruction may be cancelled early if the substantiated suspicion is not confirmed, or, in the interests of an investigation, on the basis of a written request of the Prosecutor's Office, the Ministry of Internal Affairs or the State Security Service.
24 Hours — Written Confirmation of an Oral Instruction and the Right to Resume
In a case of urgent necessity the instruction may be given orally or by electronic communication — a written protocol is drawn up of that fact. But the law fences this route strictly: the oral or electronic instruction must be formalised by a written instruction of the head of the Service, which is handed to the bank within the following 24 hours. If the written instruction is not received within that period, the bank is entitled, after the period expires, to resume the preparation, conclusion or performance of the transaction. This norm matters to the client as well: it limits the state's action in time and defines the suspension at the level of a transaction as a temporary measure, not an open-ended state. The practical conclusion for you is this: if the blocking stretches beyond 72 hours and the bank has not received a new written instruction from the Service, the situation becomes questionable — either the suspension has continued on another basis, or the bank is acting on its own internal assessment, and these two cases need different responses.
Why the Bank Will Not Tell You the Reason — Confidentiality of Information
The most painful question during a blocking is "why?", and the answer often fails to arrive for precisely this reason: the law forbids the accountable person, its managers and employees from informing the client or any other person that measures are being carried out to detect a suspicious transaction, that a report has been submitted to the Service, or that an instruction to suspend the transaction has been given. The law also prohibits disclosing the identity of the employee who carries out those measures. In other words, the bank's silence is in most cases a statutory prohibition rather than ill will — and hammering at this wall is useless. What is useful is understanding that the prohibition binds the bank, not your right to ask about the state of your own file in correspondence, and that the requirement to protect the employee is part of that same prohibition.
Unfreezing Routes — What We Do for You
Our work on a blocked-account case proceeds along three directions:
- establishing the mechanism — we determine whether a Service instruction or a bank-internal assessment is in play; the bank's formulations, the behaviour of deadlines and the substance of the correspondence show this;
- a documented origin-of-funds file — we prepare the complete documentary chain of the origin of the sums under suspicion; this is the language in which the study of a suspicious transaction is completed;
- correspondence and, where necessary, court — we conduct the correspondence with the bank and, where a decision of a state body exists, we continue by the procedure established by legislation; where no decision exists, the case remains at the level of documentation and correspondence.
One further detail often proves decisive: under the law, where the Service requests it, the bank must submit any information it has obtained about the transaction and its participant — including confidential information — no later than 2 working days from the request. This means the file is alive at the state bodies, and your documents genuinely work in that process: a correctly assembled origin-of-funds file is the argument that dissolves the suspicion.
Frequently Asked Questions
Below we answer the questions most frequently asked about account blocking.
How long can a transaction be suspended?
The head of the Service issues the instruction for no more than 72 hours; the period runs from the bank's receipt of the instruction, and rest days and holidays are not counted; it may be cancelled early if the suspicion is not confirmed.
What happens if the instruction was given orally?
In an urgent case the instruction is given orally or electronically with a protocol, but it must be formalised by the head of the Service's written instruction handed to the bank within the following 24 hours; if the written instruction does not arrive, the bank is entitled to resume the transaction.
Why will the bank not tell me the reason for the blocking?
Because the law forbids the bank, its managers and employees from informing the client that a suspicious transaction is being studied, that a report has been filed, or that a suspension instruction has been given — the prohibition is statutory and is not the bank's choice.
Is a blocking the same as a seizure?
No — a seizure is an enforcement-law institution; the suspension of a transaction under the anti-money-laundering law is a temporary measure, and drawing the line between the two is the first step of any decision.
How We Help on Legal.ge
Our team works on blocked-account cases: we establish the mechanism and the deadlines, prepare the documentary origin-of-funds file, conduct the correspondence with the bank and, where needed, continue after a state body's decision by the procedure established by legislation. Contact us — at the first consultation we will review your blocking, assess the deadlines and draw up a precise plan on Legal.ge.