About this service
Client identification — the know-your-customer procedures — is an inseparable part of an accountable person's daily work: banks, financial institutions, crypto exchanges and other subjects are obliged by law to know whom they serve. This is not a formality but a full procedural institution defined by the law on the prevention of money laundering and terrorism financing. This service helps accountable persons build and re-verify these procedures — without friction for the client experience and in full compliance with the law's requirements.
Preventive measures — what the accountable person does
Article 10 of the law lists the preventive measures: the accountable person must identify the client and verify the client's identity on the basis of a reliable and independent source; identify the beneficial owner and take reasonable measures to verify the owner's identity; establish the purpose and intended nature of the business relationship; and conduct ongoing monitoring of the relationship. Where another person acts in the client's name, that person too is identified, and the authority of representation is established by an appropriately certified document. For a legal person or trust, the ownership and control structure is studied, and before providing the service information is obtained on the character, volume and frequency of expected transactions. Monitoring means that the established facts must be compared systematically throughout the relationship — a transaction is examined to establish its purpose.
When and how the measures are carried out
The rule is this: preventive measures are carried out proportionately to the client's risk level before the conclusion of an occasional transaction and before establishing a business relationship, and periodically — during the relationship and on material change of circumstances. Where, under lower risk, immediate verification would obstruct serving the client, it may be completed after the relationship is established — but as quickly as possible, within reasonable limits. The law is also categorical: it is prohibited to open or maintain an anonymous account or an account in a fictitious name. The client experience matters, but anonymity is never allowed.
The beneficial owner — who stands behind the company
The beneficial-owner institution is defined precisely: it is the natural person who is the client's ultimate owner or ultimate controller, or on whose behalf a transaction is prepared or performed. For a legal person, the beneficial owner is deemed to be the natural person who directly or indirectly holds 25 percent or more of the shares or voting rights, or otherwise exercises ultimate control. Direct ownership is defined so that indirect chains are also recognised — through legal persons controlled by the natural person. And where, after all possible measures, no beneficial owner exists, the preventive measures are carried out toward the person with senior managing authority.
Reliance on third parties
Article 16 regulates the third-party — intermediary — institution. The accountable person may rely on a third party that carries out preventive measures in conformity with international standards, keeps information and is subject to regulation and supervision. But reliance does not dissolve the duty: the third party is studied and the risk of reliance assessed before establishing the relationship; the risks of its jurisdiction are taken into account; and it is prohibited to rely on an intermediary whose location, place of management or operation is in a high-risk jurisdiction. Most importantly, the ultimate responsibility remains with the accountable person.
Practical advice
Client identification sounds simple, but in practice three points decide its quality. First — sources: verification must rest on reliable and independent sources, and their list must be defined in advance so the operator need not improvise the choice. Second — the beneficial-owner chain: many clients in Georgia arrive with holding structures, and calculation against the 25 percent threshold needs a concrete algorithm — a formula, not improvisation. Third — documentation of monitoring: decisions taken during the relationship must be confirmed by records, because this is exactly the documentation demanded at an inspection.
How we can help
Our specialists build the complete identification procedure: forms and lists, the rules for verification sources, the algorithm for determining the beneficial owner and monitoring criteria. Where practice already exists, we check its conformity with the law and remove excess formalism — what irritates the client without being required by the law. Contact us for a concrete plan for your segment.
Remember the balance too: an excessive procedure is as much a problem as an incomplete one. The more useless fields in the questionnaire, the greater the risk of data collected for the sake of formality and the lower its reliability; the fewer necessary questions, the higher the regulatory risk. Finding this balance is not a matter of a document written once but of a periodically re-verified practice — and that is precisely the re-verification our team performs. One more consideration: restructuring a procedure on your own initiative is perceived differently from correction by order — and usually costs half as much. Finally, remember the client's side of the process: procedures explained in plain language are completed faster and more accurately, and when the client understands why a document is needed and how it speeds up service, resistance falls and data quality rises.