Institutional Capacity Building

Seminar on the application of the EU anti-money laundering and countering terrorist funding legislation

Description

With the adoption of the Law on Facilitating the Prevention of Money Laundering and Terrorism Financing in 2019, the Service for Accounting, Reporting and Auditing Supervision became a supervisory authority responsible for the implementation of anti-money laundering and countering the financing of terrorism (AML/CFT) measures relating to two groups of obliged entities – certified accountants and auditors/audit firms registered in Georgia.

To support SARAS in undertaking the new supervisory duties, the project organized a three-day seminar on the application of the EU anti-money laundering and countering terrorist funding legislation.

Extensive discussions were held during the first day of the seminar between specialists from Greek public administrations and members of SARAS staff on issues such as National Risk Assessment, which is aimed at identifying and evaluating money laundering and terrorist financing risks in Georgia, the action plan and strategy for mitigating those risks and ensuring compliance with relevant international standards, SARAS’s cooperation with obliged entities and domestic and international competent authorities, the benefits of adopting a risk-based approach in supervision, development of training programs for certified accountants and auditors, etc.

On the second day, the invited experts gave presentations on the findings of the 2019 FATF Mutual Evaluation Report for Greece, pointing out the strengths and shortcomings of its framework for the protection of the financial system from abuse. The experts outlined the procedures applied by the Hellenic Accounting and Auditing Standards Oversight Board and the Independent Authority for Public Revenue for the supervision of auditors and certified accountants, providing information on circulars and guidelines issued by the two Greek supervisory authorities. They also presented case studies from their experience with on-site inspections and shared materials that will help improve relevant policies and procedures at SARAS.

Outcomes

The experts developed a set of recommendations for SARAS based on best international practices and taking into account the deficiencies identified in Georgia’s AML/CFT law. These include the following:

• Carrying out separate on-site inspections of audit firms and certified accountants
• Raising awareness among obliged persons (e.g. by providing simple, informative guidelines for accountants)
• Issuance of decisions obligating audit and accountant firms to appoint compliance officers, adopt AML/CTF policies and procedures, gather information for client identification and verification
• Providing information to audit and accountant firms about typologies of suspicious transactions
• Setting up a risk analysis system for prioritizing and targeting cases to inspect. Prior to that, making submission of basic accounting business data obligatory in order to establish an obliged persons internal database
• Continuous training of obliged persons and associations
• Continuous training of SARAS staff
• Cooperation with the Ministry of Justice for checking criminal records
• Cooperation with all competent authorities
• Establishment of a reliable and effective data security policy
• Increasing AML due diligence fines
• Establishment of Beneficial Owner and Politically Exposed Persons Registries. Suspension or revocation of tax clearance certificate may be proposed in case of non-registration in the Beneficial Owner Registry
• Establishment of a private sector consultation body for addressing AML/TF, with the participation of all Designated Non-Financial Business and Profession’s (DNFBP) associations
• Setting up an internal statistical record system
• Developing separate AML/TF section on SARAS website with MONEYVAL typologies, guidelines, and list of high risk countries
• Distribution of terrorist list to all obliged persons