FX (Foreign Exchange) Compliance is an integral part of financial operations in Georgia, where strict regulations of the National Bank apply to ensure national currency stability. Although the Lari (GEL) has a floating exchange rate, there are significant restrictions on dollarization and settlements in foreign currency. This service helps businesses and financial institutions correctly plan currency transactions, adhere to "Larization" requirements, and avoid fines. It is particularly relevant for international companies, importers, and crypto-exchanges that constantly perform currency conversions and cross-border transfers. Qualified lawyers ensure that your FX operations are fully compliant with National Bank regulations and Anti-Money Laundering (AML) norms.
What Does the FX Compliance Service Cover?
The service covers legal and regulatory aspects of currency operations:
- Larization Rules: Consultation on the obligation to issue loans under 200,000 GEL only in national currency and rules for pricing in GEL.
- Cross-Border Transfers: Structuring large volume currency transfers and preparing necessary documentation for banks to avoid AML/CFT risks.
- FX Derivatives and Hedging: Legal drafting of currency risk insurance instruments (swaps, forwards).
- Currency Exchange Licensing: Obtaining and monitoring permits for currency exchange booths and microfinance organizations to conduct FX operations.
- Crypto-Currency Operations: Ensuring compliance with currency conversion regulations for Virtual Asset Service Providers (VASPs).
Common Scenarios and Challenges
FX compliance issues often arise in the following situations:
- Borrowing in Foreign Currency: A company wants to take a loan in USD due to lower interest rates but must meet NBG criteria regarding hedging or receiving income in foreign currency.
- Real Estate Pricing: A developer lists apartment prices in USD in an advertisement, leading to a fine for legal violation.
- Dividend Repatriation: A foreign investor converts and transfers dividends abroad, which the bank halts pending additional justification.
- Forex Activity: Creating an electronic currency trading platform, which requires a special license and mechanisms for client fund protection.
Georgian Legal Framework
The field is regulated by the Organic Law of Georgia on the National Bank of Georgia and the Civil Code of Georgia (currency of obligation). Crucial are NBG decisions on Larization measures and the "Rule on Registration and Regulation of Currency Exchange Bureaus". In terms of AML, the Law on Facilitating the Prevention of Money Laundering and Terrorism Financing applies, paying special attention to high-risk currency transactions.
Service Process: What to Expect
The lawyer analyzes the planned transaction or business model. If it involves an international transfer, justification is prepared for the bank's Compliance Department. Regarding Larization rules, the lawyer reviews contracts and advertising materials to exclude violations. In case of licensing, a full package is prepared for submission to the National Bank.
Why Choose Legal.ge?
Currency regulations in Georgia change frequently and are complex. A wrong step can lead to transaction freezing or substantial fines. On Legal.ge, you will find banking law experts who constantly monitor National Bank policies and will help you conduct FX operations smoothly.
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