Beneficial Ownership Disclosure: the Georgian Statutory Regime
The Georgian statutory regime for beneficial-ownership disclosure lives in the law on the prevention of money laundering and terrorism financing: Article 13 governs the concept and identification, Articles 21 and 19 the special risk categories, and Article 18 the disclosure instrument — enhanced preventive measures. One corpus, four distinct angles.
The practical meaning for a company is simple: identifying the beneficiary is not just a form — it begins with applying the 25 percent threshold and ends with establishing who holds ultimate control.
Who Is the Beneficial Owner
Under Article 13, the beneficial owner is the physical person who is the client’s ultimate owner or ultimate controller, and/or on whose behalf a transaction is prepared, concluded or executed. For a legal person, the beneficial owner is the physical person who directly or indirectly holds 25 percent or more of its shares or voting shares, or otherwise exercises ultimate control.
Direct ownership is the physical person’s own holding of 25 percent or more; indirect — ownership through a legal person controlled by that physical person. Where, after all possible measures, no beneficial owner can be established, preventive measures apply toward the client’s senior managing person. Where a trust or similar structure exists, measures apply to the trustee, settlor, protector, beneficiary and any other physical person exercising effective ultimate control.
Politically Exposed Persons
Article 21 defines a special category: a politically exposed person is a physical person performing significant public or political functions — head of state, head of government, minister, member of parliament, leader of a political association, member of the supreme courts, member of the central bank board, ambassador, head of the defence forces, head of an international organization, among others.
Where the client or its beneficial owner is a politically exposed person, the accountable person must obtain senior management’s permission to establish or continue the relationship, take reasonable measures to establish the origin of the person’s assets and funds, and conduct enhanced monitoring. The same measures extend to family members and persons with close business or other relations; after the function ends, effective measures for managing continuing risks remain.