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Sanctions Compliance

What are secondary sanctions?

These are penalties imposed on a non-sanctioned company (e.g., Georgian) if it facilitates trade or transactions for a sanctioned entity, helping them evade sanctions.

Is checking the OFAC list mandatory?

While not explicitly mandatory for all businesses under local law, Georgian banks require it. It is practically essential for conducting international transfers.

How do I check a company?

Verification involves searching specialized databases for the company name, owners, and affiliated persons against global sanctions lists.

What if a client is sanctioned?

You must immediately cease business relations, block the transaction, and report the finding to the relevant regulator (bank or Financial Monitoring Service).

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2 min

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Sanctions Compliance is a critical area for Georgian businesses given the global geopolitical situation. As an active participant in international trade, Georgia is obliged to adhere to international sanctions regimes (US, EU, UN). Businesses face the risk of inadvertently engaging in transactions with sanctioned individuals or entities, which can lead to frozen bank accounts, reputational destruction, and secondary sanctions. Legal.ge offers a comprehensive sanctions compliance service covering partner screening, transaction analysis, and internal policy development to protect your business from violating international regulations.

What does this service cover?

Our service covers sanctions risk management:

  • Partner Screening (KYC/KYB): Checking potential clients and business partners against international sanctions lists (OFAC, EU Consolidated List).
  • Transaction Monitoring: Analyzing financial transfers to detect suspicious routes and beneficiaries.
  • Internal Policy Development: Writing and implementing internal sanctions compliance regulations within the company.
  • Secondary Sanctions Consulting: Assessing risks of how trading with sanctioned countries (e.g., Russia, Iran) might affect company status.
  • Contract Clauses: Inserting special "Sanctions Clauses" in contracts to protect the company from liability.
  • Training: Preparing employees to recognize sanctions evasion attempts.

Common Scenarios and Needs

Sanctions control is needed by:

  • Banks and Financial Institutions: For daily transaction control.
  • Logistics Companies: To prevent the transport of sanctioned cargo.
  • Exporters/Importers: To ensure their products do not reach sanctioned entities.
  • Real Estate Developers: To verify the origin of investors.

Georgian Legal Framework

The National Bank of Georgia strictly monitors the financial sector's compliance with international sanctions. The Law on Facilitating the Prevention of Money Laundering and Terrorism Financing applies. Additionally, export control legislation mandates adherence to embargoes. Georgian banks are obliged to comply with US, EU, and UK sanctions.

Step-by-Step Process

The process begins with partner identification. The lawyer checks company owners and beneficiaries in sanctions databases. If a risk is identified, Enhanced Due Diligence is conducted. If the risk is confirmed, the transaction is blocked. For safe transactions, documentation is stored for audit purposes.

Why Legal.ge?

Violating sanctions is a death sentence for a company. Legal.ge connects you with experts who use professional search databases and have deep knowledge of international regulations. With our help, you can trade safely on the global market.

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Specialists for this service

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