Who is an accountable person in the private banking sector?

The commercial bank and other financial institutions listed by the law; also advocates, notaries, accountants and auditors when performing the services named in the law.

How is the beneficial owner determined?

The natural person who is the ultimate owner or controller of the client or on whose behalf the transaction is concluded; for a legal person — whoever directly or indirectly owns twenty-five percent or more of the shares.

What does the law require from a bank in relation to a politically active client?

Senior management approval for establishing or continuing the relationship, reasonable measures to establish the origin of assets, and enhanced monitoring; the regime also covers family members and close associates.

Why is a risk assessment system necessary?

The law obliges the accountable person to introduce an effective system, to assess risks periodically and to justify the completeness of the assessment to the supervisory authority on request.

Private Banking Compliance in Tbilisi, Georgia

Private Banking Compliance Under Anti-Money-Laundering Legislation

Private banking — individual service for high-value clients and the management of substantial funds — stands at the centre of the legislation on the prevention of money laundering and the financing of terrorism. A commercial bank is an accountable person under this law: a full-fledged risk assessment and management system is required, together with the identification of the client and the beneficial owner and, at elevated risk, enhanced measures.

Who Is an Accountable Person and What the Status Involves

The law lists among accountable persons the financial institutions — besides the commercial bank, these include microfinance organisations, insurance and brokerage companies, leasing companies, currency exchange points, payment service and virtual asset service providers, microbanks, loan issuers, pension and asset management companies; from 1 January 2027 a factoring company and a factoring platform will be added. Accountable persons also include advocates, notaries, accountants and auditors where they provide services connected with the purchase or sale of real estate, the management of funds, securities or virtual assets, bank accounts, legal persons, trust-type structures or shares. The requirements do not extend to legal advice or to the representation of a client in court, arbitration or administrative proceedings.

Requirements for the Risk Assessment and Management System

An accountable person must, considering the nature and volume of its activities, introduce an effective system for the assessment and management of money laundering and terrorism financing risks; for a head enterprise, risks are also assessed at group level. The assessment rests on the client and the beneficial owner, their activity and jurisdiction, the product, the service and the transaction. A new technology, product or material change in business practice requires a prior risk assessment. The client risk level is determined before a one-off transaction and before establishing a relationship, and afterwards periodically and on material changes. The accountable person must take into account the national risk assessment and the guidance of the supervisory authority.