The Georgian Legal Framework of an Anti-Corruption Policy
The mandatory framework for developing an anti-corruption policy in Georgia is the law on the prevention of money laundering and terrorism financing: it defines the documentary form of the policy, its subject scope, the categories of corruption-risk persons and its group-wide extension. At the same time, the American foreign corrupt practices act, the British bribery act and foreign codes of conduct for state corporations are non-Georgian law and cannot carry the content of a Georgian policy. The core criminal prohibitions on bribery sit in the Criminal Code and are not part of this corpus — they are noted only as comparative context. The page is carried by the Georgian preventive anti-corruption regime.
The Documentary Form of the Policy — Internal Instruction
An accountable person must, to ensure compliance with the law, introduce internal control policies, rules, systems and mechanisms proportional to the nature and volume of its activity and the associated money-laundering and terrorism-financing risks. For the introduction of this system an internal instruction is developed, approved by the governing body or a person with leadership authority — this is the lawful form of an anti-corruption policy. The internal instruction defines the rights and duties of the responsible person or head of unit and its staff, selection rules for hiring highly qualified and reputable persons, a continuing training programme for employees, and an independent audit function to verify the system's effectiveness. The position of the responsible person must correspond to the top hierarchical level, and that person is accountable to the member of the governing body responsible for the system's effectiveness; with an effective possibility the responsible person must timely obtain needed information and independently decide on submitting reports.
The Subject Scope — What the Policy Fights
The law's terminology defines the phenomena toward which the anti-corruption policy is directed. Money laundering and terrorism financing are criminal offences; a suspicious transaction is a transaction with respect to which a well-founded suspicion exists that it was prepared, concluded or performed on the basis of illegally obtained property or income therefrom, for the purpose of money laundering or in connection with terrorism financing; an unusual transaction is a set of transactions that does not correspond to the client's activity profile. Around precisely these concepts the employee's standard of conduct is shaped in the policy text: what information objectively creates suspicion for the accountable person, and what action counts as an attempt at evasion — including the splitting of a transaction amount.
Corruption-Risk Persons — Politically Exposed Persons
The law singles out for anti-corruption policy a special category — the politically exposed person: a natural person performing significant public or political functions, including the head of state, the head and members of government, members of parliament, leaders of political associations, members of the supreme and constitutional courts, the auditor general, members of the national bank council, ambassadors, heads of defence forces, heads of enterprises with state equity participation and heads of international organizations. Where a client or beneficial owner is established to be such a person, the accountable person must obtain from its leadership permission to establish or continue the business relationship, take reasonable measures to establish the origin of the person's property and funds, and conduct enhanced monitoring. These measures extend to the person's family members and closely associated persons, and after the cessation of the function, measures continue to manage ongoing risks.
Group-Wide Extension and Foreign Branches
A head enterprise registered in Georgia must introduce a compliance control system at group level, which defines rules for the dissemination of information among group members and supplies the responsible person or unit with information on clients, beneficial owners and their transactions. A subsidiary or branch registered in another jurisdiction performs the requirements of the Georgian law where the legislation of its jurisdiction is less strict; if the jurisdiction restricts this performance, the accountable person must take additional measures and timely supply information to the supervisory body. In a group operating across many countries, the anti-corruption policy becomes unified in exactly this way.
Frequently Asked Questions
Below we summarise the questions that arise most often in practice on this topic.
Which document is the lawful form of an anti-corruption policy?
The internal instruction, approved by the governing body or a person with leadership authority, which is the instrument for introducing the compliance control system.
What must the internal instruction define?
The rights and duties of the responsible person and the team, staff selection rules, a continuing training programme and an independent audit to verify the system's effectiveness.
Who is a politically exposed person and what is required toward them?
A person performing a significant public or political function — relations with them require leadership permission, establishment of the origin of assets and enhanced monitoring; the measures extend to family members as well.
How does the policy extend to a group?
The head enterprise introduces the system at group level and sets information-dissemination rules; subsidiaries in less strict jurisdictions perform the Georgian requirements.
How We Help on Legal.ge
Our team will help you develop and approve the internal instruction, define the functions of the responsible person, write procedures for identifying politically exposed persons and formulate group-wide dissemination rules. Contact us on Legal.ge — we will build your company's anti-corruption policy in full compliance with the law.