Suspicious Activity Reporting (SAR) is a critical component of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) system in Georgia. Financial institutions, including commercial banks, gambling businesses, lawyers, and accountants, are required to identify any suspicious activity and send the corresponding notification to the Financial Monitoring Service of Georgia. This process is not merely a bureaucratic obligation; it is a mechanism of national importance that protects the country's economic security and financial stability in accordance with international standards, particularly FATF recommendations. Timely identification of suspicious transactions helps law enforcement agencies prevent the legalization of illicitly obtained income. The Legal.ge platform connects you with experienced specialists who can help you correctly set up an effective reporting system.
What does the Suspicious Activity Reporting service cover?
Legal and consulting services related to Suspicious Activity Reporting cover a broad range of actions aimed at protecting business from regulatory sanctions. The service includes: developing internal AML policies and procedures that define suspicion criteria; auditing client "due diligence" (CDD/KYC) processes; preparing and validating Suspicious Activity Report (SAR) forms for the Financial Monitoring Service; training employees to recognize suspicious indicators (Red Flags); and communication with regulatory bodies during inspection processes. Additionally, specialists will help implement a risk assessment methodology, allowing you to focus resources on the most critical areas and avoid an excessive number of "false positive" notifications.
Common real-world scenarios
In practice, Suspicious Activity Reporting often becomes necessary in specific situations. For example, when a client performs transactions involving large sums that do not correspond to their declared income or business profile. A second scenario is "structuring" (Smurfing), where a large transaction is divided into small parts to avoid the reporting threshold (30,000 GEL). It is also common for transactions to involve high-risk jurisdictions or offshore companies whose beneficial owners cannot be established. Another important scenario is transactions by Politically Exposed Persons (PEPs), which require enhanced monitoring. In such cases, legal consultation is crucial to decide whether there is sufficient basis to send an official notification.
Georgian Legal Framework
The reporting process in Georgia is based on the Law of Georgia on Facilitating the Prevention of Money Laundering and Terrorism Financing. This law details the circle of "obliged entities," their obligations, and deadlines for sending notifications. Also vital are the Orders of the Head of the Financial Monitoring Service of Georgia, which establish specific instructions for receiving, recording, and transmitting information. For the banking sector, National Bank of Georgia regulations additionally apply, setting strict requirements for compliance systems. The legislation also provides for a "Tipping Off" prohibition, meaning an obliged entity is forbidden from informing the client that a suspicious notification has been sent regarding their operation.
Step-by-step process when working with a specialist
The process begins with an analysis of the existing monitoring system and identification of "red flags." A specialist examines a specific transaction or client behavior to determine if there is a reasonable suspicion of money laundering. In the second stage, an internal investigation is conducted and evidence is collected. The third stage involves drafting the Suspicious Activity Report (SAR), detailing the grounds for suspicion and accompanying documentation. In the fourth stage, the notification is sent electronically to the Financial Monitoring Service portal. The process ends with data archiving and defining a further monitoring strategy. A lawyer ensures that the entire procedure is conducted with full confidentiality and within the timeframes established by law.
Why choose Legal.ge?
AML compliance is a field where a mistake can lead to heavy financial fines and reputational damage. On the Legal.ge platform, you have access to the country's best AML/CFT experts and lawyers who have practical experience working in both the private sector and regulatory bodies. Our platform allows you to compare specialists, read their ratings, and receive qualified assistance operatively. Find your compliance expert on Legal.ge and ensure your business's legal security. Our specialists will help you easily implement complex regulations.
Updated: ...