Overall determination on the legal framework: In Place But Needs Improvement
Georgia’s domestic legislative framework is in place and contains most of the key aspects of CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the scope of Financial Accounts required to be reported (SR 1.2) and the framework to enforce the requirements (SR 1.4). Most significantly, Georgia’s domestic legislative framework does not provide for sanctions on Reporting Financial Institutions for failing to carry out the due diligence procedures or failing to keep records in all cases.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Georgia has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Georgia has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and has incorporated the due diligence procedures that must be applied to identify them in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically Georgia has provided for a jurisdiction-specific Excluded Account that does not meet the requirements. The scope of Financial Accounts, including the provision of Excluded Accounts, is material to the proper functioning of the AEOI Standard.
Recommendation:
Georgia should amend its domestic legislative framework to revise or remove the exclusion for Dormant Accounts in its jurisdiction-specific list of Excluded Accounts as they do not meet the requirements of the AEOI Standard, as the exclusion is defined more broadly than permitted under the AEOI Standard.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Georgia has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Georgia has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Georgia’s legislative framework:
does not include rules to prevent all relevant persons or intermediaries from adopting practices intended to circumvent the reporting and due diligence procedures as required;
does not include sanctions on Account Holders and Controlling Persons for the provision of a false self-certification;
does not impose sanctions for failing to carry out the due diligence procedures required under the AEOI Standard, where it does not impact reporting;
does not impose sanctions for failing to keep records in accordance with the requirements; and
does not include an explicit legal basis to impose or enforce a sanction where a Reporting Financial Institution is a legal arrangement.
These are the key elements of the required enforcement framework and are therefore material to the proper functioning of the AEOI Standard.
Recommendations:
Georgia should amend its domestic legislative framework to include rules to prevent all Financial Institutions, persons and intermediaries from adopting practices intended to circumvent the due diligence and reporting procedures, rather than just those on whom the AEOI Standard imposes an obligation.
Georgia should amend its domestic legislative framework to include sanctions on Account Holders and Controlling Persons for the provision of a false self-certification.
Georgia should ensure that it has sanction provisions applicable to Reporting Financial Institutions that fail to conduct the due diligence requirements in accordance with the AEOI Standard, regardless of the impact on reporting.
Georgia should ensure that it has sanction provisions applicable to Reporting Financial Institutions for failing to keep all of the records required to be maintained.
Georgia should amend its legislative framework to ensure that it is able to sanction non-compliance by any legal arrangement that is a Reporting Financial Institution.