Definition of terms

Illicit income – illicit or / and unjustified property possessed or owned by a person; 

Property – property as considered under the Civil Code of Georgia: all property (movable as well as immovable) and intangibleproperty, which can be owned, used and disposed of by natural and legal persons;

Three stages of money laundering:

• Placement – This is the movement of cash from its source. On occasion the source can be easily disguised or misrepresented. This is followed by placing it into circulation through financial institutions, casinos, shops, bureau de change and other businesses, both local and abroad. 
• Layering – The purpose of this stage is to make it more difficult to detect and uncover a laundering activity. It is meant to make the trailing of illegal proceeds difficult for the law enforcement agencies.
• Integration – This is the movement of previously laundered money into the economy mainly through the banking system and thus such monies appear to be normal business earnings. This is dissimilar to layering, for in the integration process detection and identification of laundered funds is provided through informants.

Financing of terrorism – a crime provided for by Article 3311 of the Criminal Code of Georgia. Implies any operation (irrespective of the amount) performed by any person by any means, whether directly or indirectly, unlawfully and intentionally, with the purpose of rising or collection of funds, with the intention or on the basis of the information that such funds or any part thereof will be used for preparing or committing of the acts of terrorism. In certain cases this may be applicable to the legally gained funds as well;

Client – any person who enters into a business relationship or a single transaction with the Organization to receive its service;

Resident natural person – natural person citizen of Georgia, as well as the individual entrepreneur;

Non-resident natural person – natural person that is the citizen of foreign country, as well as a natural person without citizenship, as well as citizen of the foreign country registered in Georgia as individual entrepreneur;

Resident legal entity – legal entity, as well as any organization established in accordance with Georgian legislation;

Non-resident legal entity – legal entity, as well as any organization established in accordance with the legislation of foreign country;

Beneficial Owner – a natural person as determined by Article 13 of the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism.  Natural person who is the last possessor or the last controller of a client and/or on whose behalf a transaction is prepared, made or completed.  beneficial owner of a entrepreneurial legal entity (as well as of an organizational formation (arrangement) not representing a legal entity, provided for in the Georgian legislation) shall be the direct or indirect ultimate owner, holder or / and controlling natural person(s) of 25% or more of such entity’s share or voting stock, or natural person(s) otherwise exercising control over the governance of the entrepreneurial legal entity;

Control – exercising strong influence directly or indirectly, alone or in concert with others, through use of voting shares or otherwise;

Controlling Person – Person exercising control;

Person – any resident or non-resident natural person and legal entity, as well as organizational formation considered under legislation, which does not represent a legal entity (non-registered union, partnership, partnership of apartment owners);

Identification of a person – obtaining information on the person, which, when necessary, allows tracing such person and distinguishing from the other person;

Verification – obtaining information (documents) which enables the Organization to verify the accuracy of the obtained identification data of a Person, and in the case of existence of a Beneficial Owner, also to ensure that it is aware of the identity of such Beneficial Owner.;

High risk jurisdiction –a country or a part of the territory thereof, identified as having weak mechanisms for prevention of money laundering or the financing of terrorism;

Financial institutions – legal entities engaged in providing financial services and acting as commercial banks, insurance companies, re-insurance companies, investment banks, stock exchange, central depositories, brokers, microfinance organizations, credit unions, investment funds and/or other organizations providing financial services;

Shell bank/company – bank/ company, physically not represented in the country where it is registered / licensed and on which control and supervision are not exercised.

Politically Exposed Person (PEP) – a natural person performing important public or political functions (except for low and medium rank officials). The PEPs are as follows:

• a head of a state, a head of government, a member of government (minister), deputy minister, a head of a state institution;
• a member of a legislative body (parliament);
• a head of geopolitical association, or a member of the management body thereof;
• a member of a Supreme Court, a Constitutional Court, or other court of the highest instance whose decisions are appealed in exceptional cases;
• a general auditor, a deputy general auditor, a member of a Court of Auditors;
• a member of a national (central) bank;
• an ambassador, or a head of a diplomatic representation;
• a chief officer of defence (military) forces;
• a head of an enterprise operating with the participatory interest of a state, or a member of the management body thereof;
• a head of an international organisation, a deputy head of international organisation, or a member of the management body thereof.;

Family member of PEP – a spouse / person with whom a PEP person is permanently involved in common household, sister, brother, parent, child/step-child and child’s/step child’s spouse / person with whom he / she is permanently engaged in a common household;.

Person having close business relationship with the politically exposed person (PEP) – a natural person who, together with a PEP, is the Beneficial Owner of a legal entity, an unregistered organizational formation or a trust or a legal structure similar to a trust or who has some other close business, social or political relationship with him / her;

Large or particularly large amount – for the purposes of this Regulation, large amount is the amount received from the client or paid to the client over GEL 30.000 (or equivalent in foreign currency) and particularly large amount is the one received from or paid to the client over GEL 30.000 (or equivalent in foreign currency);

Split of the transactions – according to this Policy, implies the set of transactions performed by a person within certain time interval with the total value of over GEL 30.000 or equivalent in foreign currency, in relation to which there is reasonable suspicion that the transaction was split intentionally. Basis for grounding of the suspicion is provided by the analysis conducted by the officer of financial monitoring.

Monitoring – identification by Organization of Persons defined under the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism;

Suspicious transaction – a transaction subject to a reasonable belief that it was prepared, made or completed on the basis of illegally acquired property or income gained from such property, and/or for the purpose of money laundering, or that it is related to the financing of terrorism; Unusual transaction – a complex, extraordinarily large transaction or an extraordinary set of transactions without a clear economic (commercial) or legal purpose;;

Offshore company – legal entity registered in the offshore zone.

For identification of the offshore zones, Organization relies on the “List of countries with preferential taxation / offshore countries” determined by the government decree No: 132 – https://matsne.gov.ge/ka/document/view/3523434;

One-time client – for the purpose of this Policy, natural person and/or individual entrepreneur who has applied to the organization for performing certain operation, without intention of making long-term contractual relations with Organization. Regarding operations of company, only clients performing currency exchange and/or remittances may be included into such category, unless the signs characteristic for the clients in business relations can be seen.

Client in business relations – for the purpose of this policy shall mean:

• Natural person and/or individual entrepreneur who has applied to organization for currency exchange and/or remittances more than 3 times per month;
• Natural person and/or individual entrepreneur, who has used or uses products of Organization;
• Natural person and/or individual entrepreneur, to whom Organization had or has liabilities;
• All legal entities applying to Organization for services.

 

Note: In the process of operations the cases can be identified (e.g. unusual transaction/operation) that shall be considered by the financial monitoring officer individually.

 

General

Purpose of this Regulation is development of proper control system for combatting money laundering and financing of terrorism by Organization.

The Regulation is based on legal and regulatory requirements of Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism, Financial Action Task Force (FATF) Recommendations and Fourth EU Directive 2015/849  obligating the credit and financial institutions to combat money laundering and financing of terrorism.

Money laundering is the crime implying legalization of the illicit property, with the purpose of masking of its unlawful origin, as well as concealing of the real nature of illicit income, its source, location, allocation, circulation, ownership and/or rights. Financing of terrorism implies gaining or supply of the financial assets or other property knowing that it can be used or possibly will be used, wholly, or in part, by the terrorist or terrorist organization.

For the purpose of efficient and effective redistribution of the resources, activities by Organization, against money laundering and financing of terrorism are oriented towards risks facing the Organization. For adequate implementation of the risk-based approach identification of the risks of money laundering and financing of terrorism is required. For proper implementation of the risk-based approach evaluation of the identified risks and management of those risks is required. It should be mentioned that overestimation of the risks results in unreasonable spending of the resources while underestimation can make Organization vulnerable to the dangers facing it. Hence, it is vital that all employees of Organization were well aware in the substance of risk-based approach.

Each employee and management member of Organization shall be responsible for compliance with the rules established by this Policy. In addition to compliance with the provisions of this Policy and laws, the employees of Organization shall show proper attention and due diligence in case of detecting circumstances that are suspicious, with respect of money laundering or financing of terrorism and contact the officer of financial monitoring.

Financial monitoring officer of Organization provides monitoring coordination within the Organization, hence, he/she bears responsibility for proper performance of the function of combatting money laundering and financing of terrorism. He/she shall be entitled to request any information about the Client and/or his/her transactions from the Organization branches and its structural subdivisions and the latter shall ensure prompt delivery of the relevant documents and materials.

Financial monitoring officer shall be responsible for assigning relevant risk categories to the Clients, as well as for the decisions on unusual or suspicious transactions. If the financial monitoring officer is unable to make decision, he/she may apply to the director of Organization. In any case, in making decisions specified in this Regulation, the financial monitoring officer shall have preference and his/her decisions shall not be subject to approval by any other manager or authorized person.

Financial monitoring officer shall be accountable to the management and submit the semiannual reports on the works performed during the past period.

 

Risk based approach

For the purposes of these policies, ML/TF risk can be regarded as set of three concepts: danger, vulnerability and caused outcomes. Ideally the risk should be the result of analysis of these three factors:

• Danger is 1. Natural person or group of individuals 2. Object or 3. Activities (e.g. past, present or future ML or TF activities of the persons) that can harm, in addition to reputation of Organization, the state, society, economy etc. The danger, in most cases, comprises the basis for analyzing ML/TF risks.
• Vulnerability includes the issues that could be used in favor of danger. Vulnerability of Organization can comprise the issue that is the weakness of internal control system or mechanisms intended for AML/CFT of Organization. It may also include specific product, service, activity etc.
• Caused outcome implies the impact or harm that can be caused by money laundering or terrorism financing to Organization, as well as society and economy in general.

In evaluation of risks facing Organization, it would be reasonable to taken into consideration that the activities of Organization is not complex and they are limited to the exchange (including via kiosks) between convertible virtual asset and fiat currencies (national or foreign), between one or more forms of virtual assets, between convertible virtual asset and financial instrument; Transfer of convertible virtual asset; Safekeeping and/or administration of convertible virtual asset or of the instrument enabling control over virtual asset; Portfolio management of convertible virtual assets (excluding collective portfolio management); Administration of the trading platform of the convertible virtual assets; Lending of convertible virtual asset (to companies); by Initial Coin Offering of convertible virtual asset and/or by service related to initial coin offering.

Irrespective of all above, it should be noted that certain risks are associated with all of the products of Organization. In particular:

• There is the danger that the monetary assets could be received from the person, whose property has emerged as a result of illicit activities;
• As a result of improper compliance with the provisions of this Policy and/or negligence thereof, Organization will become exposed and there will be the possibility that its services can be misappropriated by the above person;
• The outcome of the above weakness will be mingling of the illicit property with the financial sector endangering the sector, as well as financial stability of Organization (Organization may be subjected to sanctions);
• Lending is associated with lower dangers of money laundering, though the loan can be misappropriated by the persons engaged in terrorism;
• As a result of improper compliance with the provisions of this Policy and/or negligence thereof, services of Organization can become exposed to the above danger and there will be the possibility that its services can be misappropriated by the persons engaged in terrorism;
• Outcome of the above weakness can be financing of the act of terrorism and/or support to terrorism and this, certainly, will be particularly harmful for Organization, the state and general society.
• There is the risk that the persons engaged in money laundering desired to mask origin of their money assets through conversion for their further allocation and integration into the financial sector;
• As a result of improper compliance with the provisions of this Regulation and/or negligence thereof services of Organization can be exposed and there will be the possibility that its services can be misappropriated by the criminals;
• The outcome of the above weakness can be concealing of the origin of monetary assets and this can be the precondition for committing the crime of money laundering.
• There is particularly high risk of remittances by the persons who have gained the mentioned amounts from illicit activities and/or they desire to use such amounts for the criminal activities, such as financing of terrorism or promotion of financing of such transactions which are characterized with lack of transparency;
• As a result of improper compliance with the provisions of this Policy and/or negligence thereof, services of Organization can be exposed and there will be the possibility that its services can be misappropriated by the criminals;
• Outcome caused by the above weakness can be transmission of the money assets gained as a result of illicit actions through Organization and/or use the mentioned assets for unlawful actions thus endangering the Organization’s reputation or even make the Organization subject to risk of sanctions by the supervisory authority.

If the activities of Organization are changed or new services/products are added, the Organization shall analyze the risks associated with the mentioned products and develop relevant measures for minimization of the risk of money laundering and financing of terrorism. Particular attention should be paid to risks associated with introduction of such new technologies, products and services that promote anonymity. For the avodence of the the above risks, objective of Organization is to know its clients, to make sure, as far as possible, that its services were not used for money laundering and/or financing of terrorism.

 

Know Your Customer (KYC) Standard

For the effective fight against money laundering and financing of terrorism, the Organization has developed the “Know Your Client” (KYC) standard in accordance with international norms. This standard is the most important tool for the prevention of money laundering and terrorist financing and defines the measures that must be taken by the Organization when establishing a business relationship with the client, as well as during the entire process of the relationship.

Depending on the specifics of the activity, the Organization defines individuals as one-time and business clients and separates the measures to be taken when establishing a relationship with the client.

 

Client identification and verification procedure

Organization is obliged to identify and verify the client in the following manner in the presence of the following basis:

• When entering into a business relationship with a client;
• When making a one-time deal with a person.

 

Identification of a natural person

1. The client for the purpose of identification of a natural person or a person acting on behalf of the client: When establishing a business relationship; When concluding a one-time transaction (also in the case of related transactions), the amount of which exceeds 15,000 GEL or the equivalent of 15,000 GEL in foreign currency or For a one-time cash transfer (as well as a related one-time cash transfer), the amount of which exceeds 3,000 GEL, 1,000 USD, 1,000 EUR or the equivalent of 3,000 GEL in any other foreign currency, Organization needs the following data:

 

In case of natural person:

Table N1

KYC data that shall be recorded unconditionally	Other possible KYC data
Name, surname	Birth place/country, authority that has issued the document /country, issuance date/term of validity
Nationality	Double citizenship
	Residence address
Birth date	E-mail and phone
Registered address	Patronymic
Personal number (similar unique identifier, in case of non-resident)	Bank account details
Number of identification document	Occupation

 

If the client is a natural person registered as an individual entrepreneur and the business relationship with the organization is established for entrepreneurial purposes, together with the data listed in Table 1, the following should also be checked:

Table N2

KYC data that shall be recorded unconditionally	Other possible KYC data
taxpayer identification number	registration number
Legal address	registering authority
Country of registration	Registration date

 

2. For the purpose of identification of a natural person or a person acting on behalf of the client: The amount of a single transaction or the total amount of related transactions does not exceed 15,000 GEL or the equivalent of 15,000 GEL in foreign currency or If the amount of one-time cash transfer or the total amount of related one-time cash transfers does not exceed 3,000 GEL or the equivalent of 3,000 GEL in foreign currency, we need the following data:

Table N3

KYC data that shall be recorded unconditionally	Other possible KYC data
Name, surname	date of birth
	ID and/or citizenship document number, date of issue, issuing country, issuing body and validity period;
Personal number (if any)	citizenship
	gender
	Place of birth – country (also city – if such data exists)
	registration address
	Actual place of residence

1. The organization is obliged to verify the data of the client natural person or the person acting on behalf of the client when establishing a business relationship, when concluding a one-time transaction, except when buying and selling foreign currency in cash, if the amount of the operation does not exceed 1500 GEL and the operation is not completed within the scope of the business relationship, based on the following documents:
2. a) in the case of a citizen of Georgia – a passport, identity card or driver’s license of a citizen of Georgia, a certificate of a compatriot living abroad;
3. b) in the case of a person living legitimately in the Autonomous Republic of Abkhazia and the Tskhinvali region – a neutral identity card or a neutral travel document;
4. c) In the case of a citizen of a foreign country – a residence certificate issued by the relevant state authority, a temporary identification certificate, a passport, or another document permitted to cross the customs border of Georgia based on an international agreement and/or by Georgian legislation, or a certificate of a compatriot living abroad
5. d) in the case of a stateless person – a residence certificate issued by the relevant state authority, a temporary identification card or a travel passport issued by the relevant state authority;
6. e) in the case of an individual entrepreneur – Extract from the register of entrepreneurs and non-entrepreneurial legal entities of the National Public Registry Agency and the documents provided for in subparagraphs “a”-“d” of this paragraph;
7. The identification document obtained for the purpose of verification of a client natural person or a person acting on behalf of the client must meet the following requirements:

• must have the requisites characteristic of this type of documents (number, date of issuance and validity, protective attributes, etc.);
• must include the photo of the owner;
• The photograph should allow establishing the identity of the person presenting the document;
• should not be significantly damaged;
• Must be valid at the time of its presentation.

In the event that the electronic databases of the State Services Development Agency are not used for the identification/verification of the client and its beneficial owner, it is necessary to verify the document presented for identification by an authorized employee. When certifying, it is necessary to indicate the date of certification, the name, surname and/or signature of the certifying person.

 

Identification of a legal entity / unregistered organizational structure

1. In order to identify the client as a legal entity or an unregistered organizational entity: when establishing a business relationship, when concluding a one-time transaction, regardless of the amount of the transaction, the Organization requires the following data:

Table N4

KYC data that shall be recorded unconditionally	Other possible KYC data
Full name	Contact phone number
date of registration/creation	E-mail
Legal address;	country of registration
Legal form	Country of main activity/contractors
Registration number (if any);
Address of physical location	details of bank account(s)

2. In order to identify the person(s) with management and representative authority of a client legal entity or an unregistered organizational formation, when establishing a business relationship or concluding a one-time transaction, regardless of the amount of the transaction, Organization shall require:

• In the case of a natural person – at least name, surname and personal number (in the absence of such – date of birth or ID and/or citizenship document number) or identification data determined by “Table N1” of this Policy.
• In the case of a legal entity – name and identification number or registration number (if any). In the absence of an identification or registration number, one of the identification data defined by “Table N4” of this Policy.

3. If the client is a branch of a legal entity, Organization must additionally obtain the identification data of the client’s head office and its management defined by “Table N1” of this Policy.
4. If the client is an administrative body, international organization (agency), international financial institution or diplomatic representation (embassy), Organization must obtain the client’s name, legal address and identification data of the manager, in accordance with the rules defined by “Table N1” of this Policy.

Verification of legal entity and unregistered organizational structure

1. Organization is obliged to verify the data of the client legal entity and the its management when establishing a business relationship, when concluding a one-time transaction, regardless of the amount of the transaction, based on the following documents:

• In the case of a legal entity registered in Georgia – an extract from the register of entrepreneurs and non-entrepreneurial legal entities of the National Public Registry Agency;
• In the case of a legal entity registered in another jurisdiction – an extract from the relevant register of legal entities and/or another document confirming the registration and existence of the legal entity issued by the relevant registering authority.

2. Organization is obliged to verify the data of the unregistered organizational formation and its management when establishing a business relationship, when concluding a one-time transaction, regardless of the amount of the transaction, based on the following documents:

• Founding document (agreement, minutes of the general meeting);
• Document confirming tax accounting (registration) (if any).

3. The document obtained for the purpose of verification of the client legal entity must contain the identification data provided by this Policy at the time of verification and be dated (the date of issuance of the document) no later than 12 months before the verification, except for the cases when the verification is performed by direct access to the relevant register of legal entities.
4. The document obtained for the purpose of verification of the unregistered organizational structure must contain the identification data provided by the edition of Order №2 Of the Head of the Financial Monitoring Service of Georgia On Approval of the Procedure of Identification and Verification of a Customer by Obliged Entity available at the time of verification.
5. If the client is a branch of a legal entity, the verification of its head office and its management should also be carried out in accordance with the requirements stated in this provision.
6. If the client is an administrative body of Georgia, an international organization (agency), an international financial institution and a diplomatic representation (embassy), verification must be carried out using a publicly available or other reliable source.

 

Screening –all clients of the Organization shall be cross-checked with updatable databases developed by corporation Reed Business Information Limited that includes the following lists:

• OFAC List
• EU List
• UN List
• PEP International List
• PEP United States List

 

Custumer due diligence for acceptance of the client:

In case of acceptance of the client and need of application of the full due diligence to him/her, as well as in monitoring of the transactions of the existing clients, for the purpose of effective allocation of resources, upon taking the above client identification measures the clients should be assigned to ML/TF risk category (including the one-time clients).

 

Classification of Clients by Risks

Organization attributes to the clients the high, medium and low risk rankings and ensures implementation of the relevant enhanced, standard or simplified examination procedures. Where the circumstances of high or low risk are not clearly visible, the client shall be ranked as the medium risk client.

Low risk

Low risk ranking can be attributed to the natural person in the following circumstances:

• He/she is citizen of Georgia though he/she is not registered;
• Source of income constitutes of:
• Wages for the employment, deposited to the bank account;
• Old age pension;
• Incomes from business evidenced by the official and reliable documentation;
• He/she submits documents requested by the Organization in good faith and in a timely manner;
• Cross-checking showed that a person has good reputation and has no suspicious history records;

Low risk ranking can be attributed to the legal entity in the following circumstances:

• It is the resident legal entity;
• Person with the management/representation authorities, as well as the beneficial owner is the citizen of Georgia;
• Its sphere of business is not ranked as high ML/TF risk business;
• Its ownership structure is not complex (companies having founding structure with two or more levels of legal entities in vertical hierarchy are regarded as the ones with complex ownership structure);
• Source of monetary assets and property can be easily identified based on the public information;
• The legal entity is along-termclient whose transactions have never caused any doubt or concerns and products used correspond to the client’s profile. The client is:
• Joint stock company whose shares are traded at the publicly regulated stock exchange and is subject to information disclosure obligations, thus ensuring transparency of beneficial ownership; or
• Local administrative authority of enterprise in state ownership; or
• Client is administrative authority or legal entity of public law, founded in the state with low corruption level; or
• Client is complexly regulated credit or financial institution of Georgia or such other jurisdiction where effective AML/CFT regime is active and whose compliance with the AML/CFT obligations is inspected by the relevant supervisory entity;

Only in case of the above low risk circumstances the client may be ranked as the low risk client. If there was identified any high risk criterion the client shall not be ranked as the low risk client. The simplified due diligence may be applied to the low risk clients.

 

High risk

In ranking client as the high risk client, the following risk factors shall be taken into consideration:

1. Client’s risk factors;
2. Risk factors of the country or geographical area;
3. Transaction risk factors;

Relevant staff members of Organization shall clearly understand that presence of certain single risk factor shall not automatically result in ranking the client as high risk client, unless this is required by the law, in the presence of any high risk criterion the person can still ranked as medium risk client but in no case such client shall be ranked as low risk client.

 

1. Client’s risk factors
2. a) The following risk factors are relevant to the client’s and/or its beneficial owner’s commercial or professional activities:

• Client’s or beneficial owner’s relations with such sector/activities that are associated with high ML or TF risks, in particular:
• Professional service providers;
• Persons engaged in the gambling business;
• Persons engaged in the business related to the precious metals, precious stones and products thereof, antiquities and pieces of art;
• Persons engaged in production of and/or trade in the weapons and armaments, military equipment and vehicles (spare parts);
• Persons engaged in production and/or trade in the chemicals;
• Persons engaged in production and/or trade in materials for the nuclear reactors;
• Organizations whose activities are not oriented towards gaining of profits;
• Sports clubs;
• Investment funds/companies;
• Holding companies;
• Assets management companies;
• Trust companies;
• Real estate agents;
• Companies engaged in binary options trade;
• Relations of the client or beneficial owner with the sector that, in turn, is associated with the significant amounts of cash;
• Client is newly established entity that has no adequate business profile or past experience;
• Client’s political relations, e.g.
• the client is non-resident politically exposed person (PEP);
• the beneficial owner of the client is PEP;
• the client or beneficial owner has any other relevant relation with the PEPs (e.gany director of the client PEP) and if so, he/she exercises significant control. Where the client or its beneficial owner is PEP, Organization shall always provide enhanced due diligence as per this Policy.
• Client or beneficial owner holds the public office, through which a person can exercise the public functions for his/her own benefit.

1. b) The following risk factors are relevant to reputation of client and/or beneficial owner:

• There are negative assessments related to the client in mass media. For example, allegations dealing with his/her relations with the crime or terrorism (whether evidenced or not). If so, the reliability of the mass media entity shall be evaluated. Organization shall make decision based on the quality of information and independence of the data source, or regarding how frequently / insistently the allegations are made;
• There is a reasonable basis to assume that the client or beneficial owner or other person related to them was subjected to the property seizure in the past;
• The report on suspicious transaction in relation to the client or beneficial owner was submitted to Financial Monitoring Service of Georgia;
• There is a doubt that the client or beneficial owner or other person related to them has illicit income (gained as a result of crime);
• Organization has obtained other information related to integrity of the client or beneficial owner, gained as a result of long business relations with him/her.

1. c) The following risk factors are relevant to the nature and behavior of the client and/or client’s beneficial owner:

• Organization has doubts in relation to correctness and validity of client’s or beneficial owner’s identity data;
• There are the indicators that the client can avoid business relations because of due diligence implemented by Organization;
• Client’s ownership and management structure is not transparent and simply understandable, rather it is complex and unclear, in addition, there are no specific commercial or legal reasons/purposes;
• Client issues bearer securities;
• Client has nominal shareholders;
• The client’s ownership structure includes the trust;
• Client demands unreasonable or unnecessary degree of anonymousness: for example, client discloses identification documentation to Organization only after resistance or attempts to conceal actual nature of its activities;
• The source of property or assets of the client and/or its beneficial owner cannot be simply explained (e.g. by the position, heritage or investments);
• Client is non-entrepreneurial organization whose activities can be abused for the purpose of terrorist financing (e.g. charity organization, religious association etc.);

2. Risk Factors of the Country or Geographical Area

Organization has established the list of high-risk jurisdictionswhich are set forth under the Order N 240/04 of the President of the National Bank of Georgia.

Additionally, in revision of the high-risk jursidictions, attention should be paid to the following risk factors of geographical area;

• According to the information from more than one reliable source, in the jurisdiction, there is low quality of AML/CFT control (among them supervision and monitoring) mechanisms. Examples of sources include:
• FATF Mutual Evaluation Reports(See the Link)
• FATF List of High Risk and Non-cooperating Jurisdictions (see the link)
• International Monetary Fund (IMF) conclusions and Financial Sector Assessment Program (FSAP) reports(see the link)
• OECD Reports(see the link)
• According to the information disseminated by the law enforcement authorities or mass media, the jurisdiction provides assistance to the terrorists (among them financial assistance) or certain terrorist organizations act in said jurisdiction;
• Jurisdiction is subject to financial sanctions, embargo or measures in relation to terrorism, financing of terrorism or proliferation of weapons of mass destruction;
• Jurisdiction is regarded as tax heaven, secrecy heaven or offshore jurisdiction;
• Based on the information from reliable source, in the jurisdiction the levels of money laundering predicate crimes, including corruption, organized crime or fraud is high. The examples include Corruption Index of Transparency International; reports of OECD (Organization for Economic Co-operation and Development) on compliance with OSCD Anti-Bribery Convention and UNODC (United Nations Office on Drugs and Crime) report on world drugs;
• The jurisdiction is politically unstable.

 

3. Product/Service Risk Factors

Transaction risk factors specified below can indicate high risks:

• The Payments are provided by the unidentified persons or unrelated persons;
• Person registered in high-risk jurisdiction desires to exchange large amount in large denominations;

 

Customer Due Diligence (CDD)

In case of necessity of implementation of the full  Customer Due Diligence, after taking minimal identification measures, for both, one-time clients and those in business relations, Organization shall provide additional verification of data (in addition to the identification documents) Based on the documents, data or information from reliable independent source. the above data can be verified based on the following sources:

• Electronic databases of LEPL State Services Development Agency (SSDA)[1]
• If the data verification is impossible through SSDA electronic databases, in case of natural person:
• Address can be checked at SSDA website: (https://intpass.sda.gov.ge/eIDCardHolderaddress.aspx)
• Document status can be checked at SSDA website:

(https://intpass.sda.gov.ge/eIDCardHolderaddress.aspx)

•  
• If the resident and/or non-resident natural person was not presented at Organization though document submitted for identification allows this, verification shall be provided based on SSDA databases;
• If the date of birth (or place, if so required) cannot be cross-checked by the passport of foreign citizen, birth certificate may be requested additionally;

As a result of the Customer Due Diligence the following shall be established:

 

In case of natural person:

KYC data that shall be recorded unconditionally	Other possible KYC data
Job position	Origin of the amounts provided to Organization
Purpose of relations	Purpose of the amounts provided to Organization
expected transaction type	Proposed number / scope of transactions

 

In case of legal entity

KYC data that shall be recorded unconditionally	Other possible KYC data
Source of amounts provided to Organization	Financial standing of legal entity (annual turnover)
Purpose of amounts received from Organization	Origin of the legal entity’s property
Purpose of the relations	Number of employees
Expected transaction type	Proposed number / scopes of transactions

 

In of legal entity, particular attention shall be paid to clarification of its ownership and management structure, this is the necessary condition for proper identification of the beneficial owner.

 

Organization shall identify the ownership and management structure and beneficial owner of the legal entity as follows:

Step 1:

1. a) Natural persons who may have control over the legal entity through participation interests
2. Extreme approach – natural persons holding, whether directly or indirectly the participation interests/shares in the legal entity. According to Georgian legislation, a person holding 25% of more of participation interest or shares in the legal entity shall be deemed as beneficial owner. Legal entity can have more than one beneficial owner (maximum four). In such case, holding of the percentage of the shares/participation interests shall be regarded as the factor with substantial power of evidence, together with the other factors. Here it should be emphasized as well that this approach includes the concept of indirect control as well, that goes beyond the limits of formal ownership and may exist in a form of the chain of corporative means (30% of legal entity A is held by legal entity B while its 100% is held by the natural person and hence, such natural person holds indirectly 30% of the legal entity A).
3. Approach of controlling interest – shareholders exercising control independently or together with the other shareholders, based on any agreement, covenant, relations, intermediate or related person. It is significant to emphasize that this approach includes the concept of indirect control as well, that is beyond legal (direct) control or may exist through the chain of corporative units or nominal owners. Such indirect control can be identified by various means, such as shareholders’ agreement, exercising dominating control or power of appointing of the top management. In identification of the beneficial owner, the organizations should take into consideration various types of shares allowed by the state legislation, taking into consideration the shares with right to vote and economic rights.
4. b) Natural persons having control over the legal entity by any other means.
5. Natural persons controlling legal entities by such other means as personal relations with the persons described in sections (1) and (2) or those owning the title over the legal entity.
6. Natural persons exercising control without ownership through participation in funding of the enterprise or through close or intimate family relations, or due to historical or contractual relations, or if the company is unable to comply with the payment obligations. In addition, control can be supposed also where a person has not exercised actual control yet, i.e. has not used the property held by the legal entity and has not gained any benefits therefrom.

 

Step 2

1. c) Natural persons exercising control through their position
2. Natural persons responsible for the strategic decisions that substantially impact business activities or key orientation of legal entity. Depending on the legislation of the country or the legal entity, the directors can play or do not play significant role in control over the activities of legal entity (e.g. non-executive directors in the single board system). Hence, it is possible that the members of supervisory board were identified as the beneficiary (nevertheless, identification data of the management members shall be established as well).
3. Natural persons exercising executive control over the day to day or regular activities of the legal entity through the top managerial position, such as managing or executive director, president, chief executive officer (CEO), chief financial officer (CFO) etc. Natural persons with significant powers over the financial relations of legal entity (among them with the financial institutions where the legal entity has the accounts) and current financial activities of the legal entity. In addition, if there are no persons specified in sections (a) – (e), the status of beneficial owner should be attributed to the above listed persons, if:

• In the structure of ownership of legal entity, no natural person holds significant participation interest (10% of the authorized capital), for example:
• Legal entities in state ownership;
• International organizations;
• Diplomatic organizations; and
• Other entities where, regarding legal status thereof, no natural person cannot exercise control through holding of participation interest.
• Legal entity is a non-entrepreneurial/non-profit legal entity (association, fund, nongovernmental organization, union etc.) or such organizational entity that was established for ideal purposes (tenants association).

 

Regarding specific ML/TF risks associated with the legal structures (trusts), Organization shall request from the legal structures disclosure of their status, before making business relations with them, Organization provides identification/verification of the beneficial owner of legal structure who can be any person, for whose benefit the trust was founded, for example, this can be:

• Trustee;
• Settlor;
• Protector (if any);
•  

In determination of beneficial ownership, the financial institution shall provide verification as follows:

1. a) Legal entity resident of Georgia – Organization shall check information with the database of the State Registry of Entrepreneurs and Non-entrepreneurial Legal Entities.
2. b) 25% or more of the participation interest / shares of the legal entity is held by the other legal entity – the financial institution should clarify the ownership structure until the end beneficial owner – natural person is found.
3. c) Joint stock company registered in Georgia – extract from the registry of securities:

• Independent registry of securities;
• Own registry of shares;[2]

1. d) Legal entity was founded for the ideal purposes or there is no holder of the significant participation interest– as mentioned above, the status of beneficial owner shall be attributed to the managment of the legal entity and hence, the financial institution shall identify the natural person exercising actual control over the legal entity. For this, the document evidencing representation authorities can be used, as well as the database of the registry, charter, contracts etc.
2. e) Non-resident legal entity – relevant official document is required with the information about company’s shareholders, partners, founders, members. Mostly, such document is the extract from the state registry (Extract from Register of Shareholders and/or Bearer Shares Certificates); charter or relevant document stating the company’s ownership, business, management (control) issues; documents evidencing individual’s authorities of management and representation etc.;
3. f) Branch or representation office of the legal entity registered in the foreign country – is not an independent legal entity (whether it is registered with the Entrepreneurs Registry of Georgia or not). Hence, in case of branch or representation office the information about the beneficial owners shall be verified on the basis of official documents of the head company;
4. g) If the legal entity is an offshore company – it is reasonable that the financial institution, in making business relations with the offshore company, regarding the related risks, made the following package of the identification documents:

• Certificate of incorporation / extract from the company register – from the registers of the offshore countries;
• Copy of any change of name (if applicable);
• Memorandum of association / article of association, partners agreement or any other document specifying the key issues of the company’s ownership by the certain persons, company’s business, its management and control;
• Certificate of incumbency detailing all directors and officers of the company;
• Certified copy of the register of shareholders owning more than 25 percent of shares including ultimate beneficial owner information.

1. h) In case of legal structure (trusts and similar) the trust agreement shall be submitted, specifying the settlor, trustee, beneficiary and protector (if any). If it is impossible to identify these persons from the trust agreement then the financial institution can rely on the trust deed/trust declaration that shall be accompanied with the legal document on dividends distribution.

 

Permanent Monitoring of Business Relations with the Client

In case of customer due diligence any information related to the client and/or its beneficial owner shall be documented and the relevant data shall be entered into the electronic system of Organization.

In addition, Organization provides detailed study of the transactions of its clients to verify the available information about such clients. In particular, it examines, how well the transaction suits to the client’s commercial or personal activities, risk profile, origin of the property and/or money assets.

 

Simplified Due Diligence (SDD)

Simplified due diligence is acceptable if the client is categorized as a low risk client. Data to be collected as a result of simplified due diligence differ for one-time clients and those in business relations.

1. In case of of one-time clients who are natural persons the following shall be established:

• Position;
• Purpose of relations / type of expected transaction.

2. In case of of clients in business relations who are natural persons the following shall be established:

• Position
• Purpose of relations / type of expected transaction
• Proposed amount/scopes of transactions

3. In case of legal entity, which, regarding the thisPolicy, belongs to the category of clients in business relations, the following shall be established:

• Sphere of activities;
• Ownership and management structure;
• Purpose of relations / expected transaction type
• Proposed amount / scopes of transactions;

In relation to the low risk clients, it is acceptable to double check the purpose of relations and intended nature on the basis of the performed transactions (operations) on the basis of information provided by them. This implies:

1. Double checking of the identity of client and/or beneficial owner after making business relations:

• Initially the business relations are made with the client (borrowing / lending of money, foreign currency conversion) and within no more than two weeks’ verification shall be provided (correctness of identification data shall be examined, for example, passport of the beneficial owner is submitted within 2-week term from the date of making business relations).
• If, after payment the identity of a person cannot be verified within the stated term, report on the suspicious transaction shall be forwarded to Financial Monitoring Service and business relations shall be terminated immediately.
• If, after receiving of the amount the identity of a person cannot be verified within the stated term, report on the suspicious transaction shall be forwarded to Financial Monitoring Service and business relations shall be terminated immediately

2. Reduction of frequency and intensity of detailed studying of the transactions in case of permanent monitoring:

• In each transaction each operation should not be studied in details, rather, the transactions should be selected for examination.

3. Organization provides double checking of the clients’ data and updating of their information annualy.

 

Enhanced Due Diligence (EDD)

Organization provides the list of circumstances in the presence of which the client shall be unconditionally ranked as the high risk client, in particular:

Natural persons are ranked as high risk clients automatically, if such person is:

• Politically exposed person;
• Natural person, citizen whose country of citizenship (double citizenship) is the watch or suspicious zone or if his/her legal or actual address is in watch or suspicious zone;

Legal entity is automatically ranked as high risk client if such entity:

• Is non-resident legal entity whose registration country or country of principal business / contractors is the high risk jurisdiction;
• Is offshore company;
• Has complex ownership structure;
• Has a person with the management / representation authorities, as well as beneficial owner who is:
• Politically exposed person
• Person whose country of citizenship (double citizenship) is in the high risk jurisdiction or if his/her legal or actual address is in the high risk jurisdiction;

Enhanced due diligence is required if the client (both, one-time client and that in business relations) was ranked as high risk client. In such case the staff member of Organization shall:

• Obtain permit of the director of Organization to make business relations with such client (or continuation of business relations, if the existing client was re-classified as the high risk client);
• Collect complete information requested by questionnaire “Know Your Client” for both natural persons and legal entities;
• Re-check the clients’ identification data and update information about them every 6 months.

Enhanced due diligence differs for the one-time clients and those in business relations, in particular:

1. In implementation of enhanced due diligence in relation to the one-time clients, for verification of KYC data organization can rely on the information provided by the clients if the transaction amount is not large or particularly large.
2. In implementation of enhanced due diligence in relation to the clients in business relations, for verification of KYC data organization shall rely on the information in documents from the trustworthy, independent source and also provide:

• Stricter cross-checking of the client’s and/or beneficial owner’s identification data, for example:
• Apostillation of the extract of the legal entity / incorporation certificate;
• For verification of the address not one but several verification measures should be taken (e.g. bill of paid taxes and bank account statement);
• Collection of the additional information about the purpose and intended nature of business relations with the client, including origin of the money assets and property or re-checking of the available information;
• Documents evidencing origin of the property shall be requested from the client, such as the documents of inheritance, remuneration at his/her position, dividend distribution, taxes and other similar additional documents;
• Request the bank account statements;
• Request the client’s letter of reference (if already available, request additionally);
• Visit to the legal entities (if possible);
• Communication with the client by phone or e-mail;
• Enhanced due diligence to the beneficial owner, natural person (among them for clarification of the origin of money assets/property);
• In studying of the transactions, more extensive and detailed enhanced monitoring – collection of additional information on reasons and grounds of transaction.

Organization does not make relations with the shell banks, Organization has obligation to take reasonable measures to find out:

• Whether the person in business relations with it (or the person seeking business relations) belongs to the category of shell banks;
• Whether the client has relations with the shell bank

 

Recording of the Information (Documents) on the Clients Transactions

Organization keeps the information about the deal (operation) electronically (in the relevant databases) and as documents for 5 years from the date of the deal, unless the relevant supervision authority or any other competent authority requests longer term and after expiry of the specified term the mentioned information shall be destroyed.

Information is recorded, systematized and kept so that if required, it was found and retrieved in the shortest time. Only authorized persons specified by this and other internal regulations shall have access to the documents and information.

 

Reporting

The Organization shall submit to the Financial Monitoring Service of Georgia a report on a suspicious transaction or the attempt to prepare, make, or complete such a transaction. Report on suspicious transaction may be submitted to Financial Monitoring Service of Georgia if there is present one or more of indicators listed below.  While the considered cases are not all-embracing and complex, they assist the staff members of Organization to identify, understand possible schemes of money laundering and financing of terrorism. In such cases additional investigation is required. Existence of any one of the indicators, as such, does not comprise the evidence that the action is of criminal nature, General indicators are as follows:

• Identification process is difficult – submitted document is damaged, authenticity of the document cannot be clearly established;
• Photo in the submitted identification document does not correspond to the client’s appearance;
• Signature on the identification document is apparently different from the one on the slip;
• Client’s refusal to communicate with any of the Organization’s staff members for religious, gender or any other similar grounds;
• Use of nicknames by the client, including change of the sequence of elements of the name and surname;
• Client attempts to talk to the employee on various issues to switch his/her attention;
• Client does not show interested to the service commission expenses;
• Client performs several transactions during one-day attempting to deal with with different employees or at different offices of Organization;
• Information provided by the client at request is insufficient, false or suspicious;
• Client or group of clients attempt to convince the staff member or offers him/her the “gift” (bribe) to avoid making records necessary for identification or not to complete the report form;
• Client does not disclose the source of cash and/or purpose of the operation;
• Scale of the activities stated by the client does not correspond to the amounts of his/her transactions;
• Client reduces the amount which he desired to receive/pay or denies the transaction when Organization requested submission of the identity document and making its copy;
• Client shows unusual curiosity to the internal control systems, polities and requirements of reporting;
• Client frequently requests foreign currency in large denominations;
• Client’s relations to the high risk jurisdiction through place of residence or registration, activities etc.;
• Client refuses to provide requested information or expresses his/her dissatisfaction because of this;
• There are some inconsistencies and contradictions in the information provided by the client;
• Actual place of residence of the client does not correspond to the other data of his/her profile, such as activities or job;
• There is reasonable doubt that the residence address is not clearly stated or it is unreal;
• Requested additional documentation does not add any legal evidences to the other information provided by the client;
• Client attempts to perform transaction as soon as possible promising that he/she will provide requested information later;
• Client provides (on different occasions) different identification documents (e.g. documents registered in different countries – identity card (Georgia) and passport of the foreign country with different identification numbers and/or different spelling of the name and surname or states different residence address, phone number each time;
• Client is unable to clearly specify the source of income;
• Frequent change of the residence address’;
• Information disseminated by mass media about suspected or arrested terrorists or group of terrorists.

Organization pays special attention to the unusual transactions and deals (operations) made/implemented using the bank account of the bank located in the high-risk jurisdiction that have no apparent economic (commercial) sense and apparent legal purpose, studies, within the reasonable scopes the purpose and grounds of such transactions and the officer of financial monitoring makes written statement of the findings.

If identification of any of the indicators or unusual transaction resulted in additional investigation, Organization shall document the information collected in the course of investigation and keep it even if the operation was not regarded as the suspicious transaction and no report was submitted to FMS.

Irrespective of the assumption about the suspicious operation (transaction) and amount of the operation (transaction), Organization shall not suspend the operation (transaction) (providing service to the client in business relations with the Organization), with the exclusion of the following cases:

• Identification of the client is impossible;
• Any participant of the transaction is on the list of sanctioned persons;
• If the client and/or its beneficial owner is politically exposed person or due to the other criteria is ranked as the high-risk client and the management refused to commence/continue business relations with this person;
• Financial monitoring officer has reasonable doubt that the transaction may be the fraudulent;
• Other cases, as per decision of the financial monitoring officer.

Any information about reports forwarded to Financial Monitoring Service of Georgia shall not be disclosed to the client or any other third person.

For the purpose of identification of the unusual and fractured transactions (operations) the Organization has electronic database (system).

Providing data to the Financial Monitoring Service of Georgia implies completion of the relevant report form by the Organization, its delivery and confirmation of acceptance by the Service. Reports submitted to the Financial Monitoring Service of Georgia shall be completed through web portal of the Financial Monitoring of Georgia. Notices submitted to the Financial Monitoring Service of Georgia shall be compiled through the web portal of the Financial Monitoring Service of Georgia of Georgia. Report shall be completed and submitted to the Service according to the User Manual published on the website of the Financial Monitoring Service of Georgia (http://fms.gov.ge); Confirmation of receiving of information by the Financial Monitoring Service of Georgia means to assign electronically, through the web portal status “confirmed” to the report.

Reporting forms shall be submitted to the Financial Monitoring Service of Georgia in an electronic form. Hard copies of reporting forms to the Financial Monitoring Service of Georgia shall be submitted only if reporting forms are technically impossible to be sent in an electronic format, hard copy of the reporting form (as well as attached materials if necessary) shall be submitted to the Service in a sealed envelope by the authorized employee of the Organization, or by post as a registered mail. Name and address of the sender – Organization shall be written on the envelope, as well as the addressee – “Financial Monitoring Service of Georgia”. Delivery address: 2 Sanapiro St., Tbilisi 0105, Georgia. The envelope shall be marked as confidential.

Reporting Forms as well as other confidential information on operations (transactions) subject to monitoring shall be submitted to the Financial Monitoring Service of Georgia in electronic form through the relevant web service of the web portal set on the official website of the FMS of Georgia (www.fms.gov.ge);

Reporting form sent to the Financial Monitoring Service of Georgia shall be subject to retaining by the Organization for 6 years. In the event of sending hard copy of the form it is to be printed in two copies, each is to be certified with the signature of the AML officer and by the seal of the Organization. One copy of the report is to be sent to the Service, while the other copy is to be retained at the Organization for 6 years term.

The Organization shall maintain register of reporting forms submitted to the Financial Monitoring Service of Georgia.

In the event of revealing suspicious operation (transaction) and submitting related reporting form to the Service, the Organization shall be obligated to indicate grounds (circumstances) of suspicion and to focus special attention on other operations (transactions), implemented by persons involved in this particular operation (transaction) with the Organization.

 

.

 

Suspension of Transaction on the Basis of FMS Request

Organization shall suspend transaction (operation) for 72 hours (non-working days shall not be included into this term), as well as any other transaction (operation) related to the mentioned transaction (operation) and/or its participants if the Head of the Financial Monitoring Service of Georgia instructs the Organization to suspend the transaction. The case materials shall be immediately disseminated to the respective authorities of the Chief Prosecutor’s Service, the Ministry of Internal Affairs and/or State Security Service of Georgia.

 

 

Rights and Duties of Financial Monitoring Officer

Financial monitoring officer of Organization shall be independent in performing his/her duties and shall be responsible for all protection measures and control intended for combating money laundering and financing of terrorism. He/she shall be also responsible for compliance with the requirements of this Regulation and laws against illicit income legalization. Hence, financial monitoring officer shall have unrestricted access to all relevant information, data and documentation available at Organization.

For the purpose of timely identification of the potential risks, financial monitoring officer shall participate in all processes related to management of the risks of money laundering and financing of terrorism, in particular, in planning, development and introduction of the new products and services.

 

Duties of financial monitoring officer are as follows:

• Responsibility for all issues associated with combating of money laundering and financing of terrorism;
• For the purpose of elimination of legalization of illicit incomes and financing of terrorism, development and updating of the relevant protective measures and control mechanisms oriented towards the business and clients, such as: client data, transactions monitoring etc.;
• For the purpose of combating money laundering and terrorism financing, development of the internal service and organization regulations in accordance with this Policy and effective ML legislation. In particular, person responsible for AML function shall develop and regularly update the AML policies of Organization in accordance with the effective AML laws and best practices;
• Permanent monitoring of compliance with the internal regulations and effective laws intended for combating of money laundering and financing of terrorism;
• Evaluation of internal reporting on suspicious circumstances; making decisions on submission of reports on suspicious activities to the relevant authorities;
• Analysis of the detected suspicious cases, change of the clients’ risk categories;
• Collection of Organization internal and external AML/CFT information, e.g. analysis and evaluation of the detected cases, information from the investigation authorities and relevant legislative bodies, materials of mass media and sharing of information with the other institutions. Following of the legislative changes at the national and international levels, regular participation in the internal and external trainings on the issues of illicit income legalization and financing of terrorism;
• Training and briefing of the staff on the methods of combating money laundering and financing of terrorism, for the purpose of providing awareness of the Organization staff members about their duties provided for by this Regulation and relevant regulations;
• In the AML/CFT issues he/she shall act as a contact person for the staff members, Financial Monitoring Service of Georgia, law enforcement authorities and other relevant structures;
• Duties include regular visits to the branch offices of Organization and their random inspection to examine their compliance with their obligations provided for by this Policy, AML laws in relation with the relevant inspection.

While management of Organization is authorized to manage all operation of the Organization, AML function shall be independent from it. Financial monitoring officer shall be authorized to issue the internal directives to the staff members of Organization on AML/CFT issues. In particular, the resolutions on termination of the transactions or such business relations where there is suspicion of gaining money from criminal actions or financing of terrorism.

Organization shall not disclose data of financial monitoring officer to the clients or third parties not to prevent him/her from performing his/her duties.

 

Final Provisions

• This Regulation shall be revised annually and required amendments and addenda shall be made.
• Amendments and addenda to this Regulation shall be made on the basis of the decision by supervisory board.
• This document shall enter into force on the basis of supervisory board decision and shall be mandatory.

[1] Data processing in the mentioned databases is provided if: a) the data subject consent is obtained b) data processing is provided for by the law;

[2] According to the Law on Entrepreneurs, joint stock company with over 50 shareholders shall maintain the registry through independent registrar, on the basis of agreement with him/her. If the number of shareholders is 50 or less, the company may maintain the registry of shares itself or through independent registrar, with the exclusion of the accountable entities specified by Georgian Law on Securities Market, whose share registry shall be maintained by the independent registrar. Similar rules may exist in the other jurisdictions as well (e.g. Germany), hence, in case of non-resident joint stock companies, it should be found out, whether it is entitled to maintain its shares registry itself.