What a Source-of-Funds Dossier Is and Why the Bank Demands One
When a bank asks for documents confirming the origin of your funds, it is performing a statutory duty: the Law of Georgia on the Facilitation of the Suppression of Money Laundering and the Financing of Terrorism obliges the accountable person — including a commercial bank — to apply enhanced preventive measures to a client attributed to a high level of risk, in accordance with the risks identified. The law names these measures expressly: additional information must be obtained on the property and activity of the client and/or the beneficial owner; the frequency of updating identification data must be increased; the bank studies the purposes and grounds of transactions; establishing or continuing the business relationship requires management permission; and — most importantly — the accountable person must take reasonable measures to establish the origin of the client's property and monetary funds, an obligation that under the wording now in force extends to the origin of a convertible virtual asset as well. A source-of-funds dossier is precisely the answer to that question — the documentary chain confirming where your property and monetary funds come from.
The Beneficial Owner — the 25 Percent Rule and Structures
The second pillar of the file is identifying the beneficial owner. Under the law, a beneficial owner is a natural person who is the ultimate owner or ultimate controller of the client and/or on whose behalf a transaction is prepared, concluded or performed. For a legal person, the beneficial owner is the natural person who directly or indirectly owns 25 percent or more of the shares or voting rights, or otherwise exercises ultimate control over the entity; direct ownership means the natural person's own holding of 25 percent or more, indirect ownership — a holding through a legal person that the individual controls. If, after all possible measures, no beneficial owner exists, the measures apply to the person holding a senior managing position; where a trust or a trust-like structure exists, the trustee, the settlor, the protector (where one exists), the beneficiary and any person exercising effective ultimate control are identified. Your dossier must reflect exactly this scheme — the owner behind the veil, not merely the formal share.
Politically Exposed Persons — Family and Close Associates Too
If you, or the beneficial owner of your structure, is a politically exposed person — a natural person performing prominent public or political functions, including a head of state, a head or member of government, a member of parliament, a member of the supreme or constitutional court, an ambassador, a member of the national bank's board or the head of an international organization — the bank must apply enhanced measures: management permission, determination of the origin of property, monetary funds and convertible virtual assets, and enhanced monitoring. The cessation of the function does not erase this regime: the bank must also manage the continuing risks. On top of that, these measures extend by law to family members directly — the spouse or the person with whom the politically exposed person maintains a joint household, and the sister, brother, parent, child/stepchild and the child's spouse or partner — and to close associates: persons who are beneficial owners of a structure together with the politically exposed person, or who have a close business, social or political relationship with one. A dossier that itself surfaces and explains these connections works far better than a fact concealed in a questionnaire and discovered later.
Crypto-Origin Funds — Money Coming Out of a Convertible Virtual Asset
Most often the dossier breaks precisely on crypto origin: the bank sees a sum arriving on the account from a crypto exchange or platform and asks — what was the source of this money? The legal basis here is known: under the wording now in force, the bank's duty to establish origin extends to convertible virtual assets, and for politically exposed persons the law expressly names the determination of the origin of a convertible virtual asset. In practice this means the dossier must describe the whole chain: what kind of crypto asset it was, where and how you acquired or received it, at what value it was exchanged, and on which exchange or platform the conversion into fiat took place. The chain is confirmed by exchange and platform statements, conversion orders, wallet history and the documents of the initial purchase — so that the chain is traceable from the first income to the bank account. If your activity touches the crypto sphere professionally, see also our page "Virtual Asset Service Provider (VASP) Licensing", which explains the regulatory framework for a crypto business's access to banking.
Assembling and Filing the Dossier — Our Service
We prepare a source-of-funds dossier in a form where a single file answers the bank's questions:
- typing the sources — salary and employment income, business income, sale of property, inheritance, return of investment, sale of crypto assets — each type with its own documentary basis;
- building the chain — a chronological and logical order of documents, so that every significant sum has a named source;
- the beneficial-ownership scheme — a description of ownership built on the 25 percent rule and, where needed, its documentary confirmation;
- translation and format — preparing foreign documents in a form intelligible to the bank; a particular bank's forms and lists are its policy and are verified with the bank before filing.
One honest note: the receiving decision always rests on the bank's risk assessment, and the law does not prescribe any single document as mandatory — so our task is not to tick a formal list but to assemble a file that genuinely dissolves the risk.
Frequently Asked Questions
Below we answer the questions most frequently asked about source-of-funds dossiers.
When is the bank obliged to establish the origin of funds?
When the client is attributed to a high level of risk — then the bank must take reasonable measures to establish the origin of the client's property and monetary funds, and, under the wording now in force, a convertible virtual asset is included in that duty.
What is the threshold for a beneficial owner?
For a legal person — 25 percent or more of shares or voting rights held directly or indirectly, or ultimate control; if no such person can be established, the measures pass to the senior managing person; for trusts — the trustee, settlor, protector and beneficiary.
I am not a politician — does the PEP regime still concern me?
It may: by law the enhanced measures extend to family members (spouse or partner, sister, brother, parent, child/stepchild and the child's spouse or partner) and to persons with a close business or social relationship.
Which documents are best for crypto origin?
Exchange and platform statements, conversion orders, wallet history and the documents of the initial purchase — assembled so that the chain is traceable from the first income to the bank account.
How We Help on Legal.ge
Our team prepares the full cycle of a source-of-funds dossier: typing the sources and building the documentary chain, describing the beneficial-ownership scheme under the 25 percent rule, surfacing and explaining PEP connections, the complete crypto-origin chain with exchange statements, and bringing the file to the bank. Contact us — at the first consultation we will assess your case, plan the structure of the dossier and draw up an exact document list on Legal.ge.