2000: International Narcotics Control Strategy Report: Money Laundering and Financial Crimes – Georgia Review
Georgia is not an important regional financial center, and its economy is too small to cover large flows of illicit foreign funds. Commercial banks are small but capable of clearing and transferring funds electronically. Small-scale money laundering schemes involve funds generated domestically through illegal activities, most of which are not connected with narcotics. Reportedly, some commercial banks have become involved in laundering funds generated by the smuggling of alcohol and cigarettes, but these proceeds are generally held in dollars outside the banking system. Although corruption is an issue in Georgia, no government official has been publicly linked to money laundering. The National Bank of Georgia (the central bank) plays a growing role in regulating the banking industry.
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The Organisation for Security and Co-operation Europe’s Office for Democratic Institutions and Human Rights (OSCE/ODIHR) Election Observation Mission for the 2000 presidential election in Georgia concluded that fundamental freedoms were generally respected during the election campaign and candidates were able to express their views. However, further progress is necessary for Georgia to fully meet its commitments as a participating State of the OSCE. In particular, problems were identified in the following areas: interference by State authorities in the election process; deficient election legislation; not fully representative election administration; and unreliable voter registers.
Georgia is a secondary transit route for narcotics flowing from Central Asia to Europe. The potential for Georgia to become an important narcotics transit route in the future is exacerbated by the lack of control the government exercises over some of its borders and territory. Despite recent efforts at reform and personnel changes, law enforcement agencies remain overstaffed, under-equipped, poorly paid, and have a reputation for corruption. In response to Government of Georgia (GOG) requests, the United States Government (USG) is providing training and equipment for the border guards and customs officials. Georgia is a party to the 1988 UN Drug Convention and is working with the UN Drug Control Program (UNDCP).