Currency-Exchange Bureau — the Statutory Term and Legal Status
Colloquially this business is called a "currency exchange office", but the Organic Law of Georgia on the National Bank of Georgia fixes a different, precise term — "currency-exchange bureau" (valutis gadamtsveli punkti). Article 2 places the currency-exchange bureau on the list of representatives of the financial sector, alongside commercial banks, microfinance organisations, payment system operators, payment service providers and others. This status determines the entire subsequent regime: as a representative of the financial sector, an exchange bureau falls within the supervision of the National Bank of Georgia, and the commencement of its activity is tied to registration.
Article 48 grants the National Bank full authority to supervise the activities of representatives of the financial sector — including currency-exchange bureaus — on the basis of this law and other legal acts. Preparing a registration application should be planned against the background of exactly these two articles: the terminology, the status and the basis of supervision are documented together in the law.
The Mandatory Nature of Registration — the Second Paragraph of Article 50
Article 50 establishes the supervision of the activity of microfinance organisations and currency-exchange bureaus. Under its second paragraph, the National Bank supervises the activity of a currency-exchange bureau through its registration and deregistration, inspection, the issuance of written instructions, and the establishment of requirements and sanctions. The very first element of this list suffices to establish that registration is not an administrative formality — it is the common gateway to supervision: without registration, the activity of an exchange bureau remains outside this system, while deregistration is allowed as a sanctioning instrument.
The Registration Procedure and Grounds for Refusal
Under the third paragraph of Article 50, the rules for the registration and deregistration of a currency-exchange bureau by the National Bank, and the amount and imposition procedure of monetary fines, are determined by normative acts of the National Bank; the amount of a monetary fine is directed to the state budget. The law therefore contains no concrete list of documents, deadlines or fine amounts — these must be specified through those normative acts, and an application is assessed according to their current versions.
The grounds for refusal deserve separate attention. Under the fourth paragraph of Article 48, in addition to the grounds provided for by Georgian legislation, the National Bank is entitled to refuse registration to a person if: the registration may threaten the stability of the financial sector of Georgia; it may cause a violation of, or non-compliance with, a requirement provided for by a binding decision or recommendation of an international organisation; it may cause a violation of an agreement between Georgia and a foreign country; the interested person, at the bank's request, failed to present complete information on the origin of the capital; or the structure of the group, ownership and governance — and the operational activity or environment — are not sufficiently transparent, which may hinder effective supervision. In practice the last ground carries particular weight: documentation on beneficial owners and the structure of the group must be prepared properly and in advance.
Supervisory Instruments After Registration
Registration is not the end of the process. Under the third paragraph of Article 48, to perform its supervisory functions the National Bank issues resolutions and orders, conducts corresponding measures, gives written instructions, establishes additional requirements and corresponding restrictions, and applies supervisory measures and/or sanctions. Under the fourth paragraph of Article 50, the bank is further entitled to request and receive any information from a currency-exchange bureau — including confidential information — in the manner it determines. In the anti-money-laundering sphere the bank's powers are broader still: separate sub-paragraphs provide for requesting information on the sources of the origin of capital and the ownership structure, suspending or restricting certain operations, imposing monetary fines and even cancelling registration in case of violation of anti-money-laundering legislation. Information on imposed sanctions is published on the bank's official website in the manner determined by the National Bank.
Consumer Rights and the Confidentiality of Information
Article 50-1 sets consumer protection standards: when providing services, a currency-exchange bureau is obliged to supply the consumer with complete information about the exchange rate and the amount of the service commission (where one exists). The cancellation of a currency exchange operation and the return of the exchanged currency may be carried out according to the rule that the National Bank determines — the provision of information and the cancellation of the operation are regulated as a single package.
Article 50-2 establishes the confidentiality regime. A bureau is obliged to protect the confidentiality of information: information about a consumer — about any transaction or operation — may be given only to the parties of the respective transaction and their authorised representatives, the National Bank, the commission for the consideration of disputes existing at the National Bank, in cases determined by Georgian legislation — the Financial Monitoring Service of Georgia, and during an inspection provided for by the law on personal data protection — the State Audit Service. Other persons may receive such information only by a court decision or with the consumer's prior written consent. The tax-related exception likewise rests on a court decision. This regime needs to be translated into internal rules — even for a bureau's small team.
If your activity also covers broader payment functions, see our neighbouring service on the regulation of electronic money and digital transfers (payment system operators and payment service providers) — it describes the neighbouring licensing regime standing under the same supervision.
Frequently Asked Questions
Does a currency-exchange bureau need a licence?
The law does not regulate this activity through a licence — the matter is resolved by registration. Under the second paragraph of Article 50, the National Bank supervises a bureau's activity through its registration and deregistration, inspection, the issuance of written instructions, and the establishment of requirements and sanctions. Registration is in any event a mandatory gateway.
Where are the registration rules and fine amounts set out in detail?
Under the third paragraph of Article 50, the rules of registration and deregistration, and the amount and imposition procedure of monetary fines, are determined by normative acts of the National Bank — the law does not contain these details, so preparing an application proceeds against the current versions of those acts.
When can registration be refused?
Under the fourth paragraph of Article 48, besides the grounds provided for by legislation, the bank will refuse if the registration may threaten the stability of the financial sector, may cause a violation of an international requirement or of an agreement between Georgia and a foreign country, if the person cannot present complete information on the origin of the capital, or if the group, ownership and governance structures are not sufficiently transparent.
To whom may information about a consumer be transferred?
Under Article 50-2 — to the parties of the transaction and their authorised representatives, the National Bank, the disputes commission at the National Bank, the Financial Monitoring Service in cases determined by legislation, and the State Audit Service during the provided inspection. To other persons — only by a court decision or the consumer's written consent.
How We Help on Legal.ge
The Legal.ge team delivers the full cycle of currency-exchange bureau registration: we prepare the legal form and the documentation of the group and ownership structure, draft the application in line with the requirements of the National Bank's normative acts, build the internal rules for informing customers about rates and commissions and for cancelling operations, and design the confidentiality regime. Contact us to plan the launch of your exchange bureau with a detailed timeline.