The Lari as the Sole Lawful Means of Payment
Georgia's monetary unit is the lari, which consists of 100 tetri. The lari is the only lawful means of payment on the territory of Georgia, save for free industrial zones, free trade points and cases defined by the National Bank. Where an entrepreneur offers for sale property or services in Georgia, or advertises them, the price must be expressed only in lari; a different rule may be established only by a legal act of the National Bank. Cash settlement follows the rounding principle — the amount is rounded up or down to the nearest multiple of 5, the method and procedure of rounding being set by the National Bank's council. Banknotes and coins put into circulation are the unconditional obligation of the National Bank at nominal value, except banknotes and coins withdrawn from circulation or classified as numismatic values. For FX compliance this means that every public offer of the entrepreneur — a shop window, price list, website or advertisement — must be expressed in lari, and cash payments apply the rounding principle at the moment of sale. Technically these are two requirements in one: the unit of price and the mechanics of payment — and both are objects of supervision.
Supervision of Microfinance Organizations
Under Article 50 of the law, the National Bank may supervise the activity of a microfinance organization: this includes registration and its revocation, inspection and regulation, written instructions, and the imposition of additional requirements, restrictions and sanctions. The Bank may demand information on the sources of the origin of capital and on the direct and beneficial owners of a significant share — including the origin of property or monetary funds — and establish norms for the classification of assets and reserves for possible losses, the minimum supervisory capital and the liquidation procedure, as well as suitability criteria for the administrator. It may suspend or restrict particular operations or the attraction of funds, prohibit the distribution of profit, the accrual and payment of dividends, increases of remuneration and the payment of bonuses, and demand additional capital. The administrator may have the authority to sign suspended, a monetary fine imposed and dismissal demanded. The Bank also audits the organization — taking any information from accounting documents and reporting components, including confidential information. Registration and fine procedures are defined by the Bank's normative acts, and the fine goes to the state budget. The model of supervision is uniform: the regulator's demands stretch from capital to administrators, and a breach entails both organizational and personal sanctions.
The Rules of the Exchange Point
The National Bank supervises the activity of exchange points through registration and its revocation, inspection, written instructions, requirements and sanctions, and may demand and receive any information — including confidential — under its own procedure. For consumer protection the point must, when providing service, supply full information on the exchange rate and the amount of commission; the procedure for supplying information, cancelling the exchange and returning the currency is defined by the National Bank. The Bank is also authorized to check compliance with the requirements of the agreement concluded for the purpose of the tax-compliance act with the United States — an international dimension of supervision extending to cross-border exchanges as well.
Confidentiality and the Consumer's Information
The exchange point must protect the confidentiality of information: information is given only to the tax authority on the basis of a court decision or the tax-compliance agreement with the United States. Information about a consumer — about any transaction or operation — may be given only to the parties of the respective transaction and their authorized representatives, the National Bank, the disputes commission at the Bank, in cases defined by legislation the Financial Monitoring Service, and, during an inspection provided by the personal-data law, the State Audit Service. Other persons receive information only by court decision or the consumer's prior written consent. Courts, investigative bodies and tax services are prohibited, before the relevant court decision, from transferring the information to another organ, including the mass media, and from its public use. For exchange points this regime also serves as a reputational boundary: the consumer's trust rests precisely on confidentiality.
Frequently Asked Questions
Below are answers to the questions most often asked about FX compliance.
Which is the lawful means of payment?
The lari, save for free industrial zones, free trade points and cases defined by the National Bank.
How is cash settlement rounded?
The amount is rounded up or down to the nearest multiple of 5; the method is set by the National Bank's council.
Who supervises microfinance organizations?
The National Bank — through registration, inspection, audit, instructions, restrictions and sanctions; the fine goes to the budget.
What capital information may the Bank demand?
On the sources of the origin of capital and on the direct and beneficial owners of a significant share, including the origin of property and monetary funds.
To whom may the exchange point's information be given?
Only to the subjects named in the closed list; to others — by court decision or the consumer's written consent.
How We Help on Legal.ge
On Legal.ge we help businesses observe the currency legislation: understanding the rules of pricing in lari, the requirements for exchange points and the questions of confidentiality. Contact our team — we will assess your currency rules and plan corrections in anticipation of supervision.