2003: International Narcotics Control Strategy Report: Money Laundering and Financial Crimes – Georgia Review
Although Georgia is not considered an important regional financial center, in past years the international community has raised concerns regarding the Government of Georgia’s (GOG) lack of an anti-money laundering regime. In Georgia, the sources of laundered money are primarily corruption, financial crimes and smuggling, rather than narcotics-related proceeds. Smuggling of goods across international borders is one of the country’s most serious problems, given the existence of thriving black markets in Ergneti (near the uncontrolled territory of South Ossetia), Red Bridge (on the border with Azerbaijan), and Abkhazia (breakaway region bordering Russia on the Black Sea coast). Law enforcement officials provide protection to smugglers, instead of prosecuting them, helping maintain the shadow economy which makes up 90 percent of Georgia’s economic activity (based on an estimate by the Transnational Crime and Corruption Center). A new government came into power in November 2003. The new Administration has launched several investigations relating to financial misdeeds undertaken by former members of the Georgian government.
Read the rest of this entry
Georgia remains a secondary transit route for narcotics flowing from Afghanistan, by way of Iran and across the Caspian. The potential for Georgia to become an important narcotics transit route in the future is heightened by the lack of control the government exercises over its borders and territory. Despite numerous efforts of reform and frequent personnel changes, law enforcement agencies remained overstaffed, under-equipped, poorly paid, and with a reputation as highly corrupt. The newly appointed Minister of Internal Affairs began his tenure at the ministry with a fierce anti-narcotics campaign, which has created hopes for positive change in the law enforcement system as well as for the entire country. Georgia is a party to the 1988 United Nations Drug Convention and is also receiving assistance from the UN Office of Drug Control and Crime Prevention (UNODC).
Read the rest of this entry
[*Please note: Georgia was updated to Tier 2 per President George W. Bush, Presidential Determination No. 2003-35, September 9, 2003.]
Georgia is a source country for women trafficked primarily to Turkey, Greece, and the UAE, with smaller numbers trafficked to Israel, Spain, Portugal and the United States for purposes of sexual exploitation, domestic servitude and forced labor. Thousands of children living in the streets and in orphanages are vulnerable to trafficking.The Government of Georgia does not fully comply with minimum standards for the elimination of trafficking and it is not making significant efforts to do so. Georgia is a country with limited resources, exacerbated by 300,000 displaced persons and three breakaway republics outside government control. While the government made some efforts to strengthen law enforcement coordination, and advanced closer to amending its criminal legislation, its efforts were unorganized and lagged behind those of NGOs.