Preventive Measures: What the Law Requires
Georgian law on the prevention of money laundering and terrorism financing obliges accountable persons to implement and continuously manage compliance programmes founded on Articles 10, 12 and 29 of that law. Article 10 defines the preventive measures that must be carried out in the cases established by the legislation: identification of the client and verification based on reliable and independent sources; identification of the beneficial owner and taking reasonable measures to verify them; establishing the purpose and intended nature of the business relationship; and ongoing monitoring of that relationship.
Each element of this catalogue is a separate duty, not formal bureaucracy: identification answers the question — who the client is; uncovering the beneficial owner — who stands behind the structure; establishing purpose and nature — why and how the relationship runs; and monitoring keeps the process alive, so that it is not exhausted by a single act of form-filling at onboarding.
Identification and Verification in Different Situations
The law prescribes different rules for different situations. Where a person acts in the client's name, the accountable person must identify and verify that person and obtain a document confirming the authority of representation, certified in the appropriate manner. Towards a legal person, an unregistered organisational entity, a trust or a trust-like legal structure, the ownership and control structure of the client must be studied. When establishing the essence of activity, information is obtained on the character, volume and frequency of expected transactions.
At the monitoring level, the accountable person examines a transaction prepared, concluded or performed within the relationship in order to determine how far it corresponds to the information known about the client, to the client's commercial or professional activity and risk level — and, where necessary, to the origin of the client's assets and funds. At the same time, identification data and other information obtained through preventive measures must be updated with appropriate periodicity.