Struggle against “money laundering” and Georgia’s economic security

T.Tsomaia

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Money laundering and financing of terrorism remain one of the global problems having a negative effect on economic security.

Both in developed and developing countries this kind of activities jeopardize stability, transparency and efficiency of financial institutions. According to the data of the International Monetary Fund, the volume of monetary funds that are laundered on the world scale makes up 2-5% of the world national product. According to the statistical data, in 1996 this rate made up from 590 billion to 1.5 trillion USD. Thus, this appraisal suggests that this problem has a grandiose scale and requires appropriate attention of all countries. In spite of the fact that money laundering can take place in any country, it has a particular effect on social-economic situation in the developing countries, since their markets, as a rule, are insignificant and more susceptible to criminal influence.
Orientation of a part of the Georgian economy for criminal interests is accompanied by an increasing capital outflow. Georgia is losing investment resources that are necessary for the development of the economy. The possibility of economic stabilization, solidity of the exchange rate, restoration of the financial market and ensuring of the population’s material well-being become dependent on attraction of credit resources from international organizations and other countries. This represents a serious threat for Georgia’s economic security.
We can say without embarrassment that the reform against money laundering is finished from the viewpoint of institutional organization and legislative provision. On 6 June 2003 the Georgian parliament passed the Law on Preclusion to Assistance in Legalization of Illegal Incomes. The group of institutional units is successfully working against money laundering, it includes: Financial Monitoring Service of Georgia, Special Service of Criminal Prosecution for Legalization of Illegal Incomes of the Prosecutor General’s Office of Georgia, Special Operational Service of the Ministry of Internal Affairs of Georgia. Thus, from the institutional point of view, the clear single system of monitoring, supervision, implementation of criminal prosecution and their operational provision, aimed at the struggle against money laundering, has been set up in the country. Georgia, together with other countries of the world community, should get more actively involved in the struggle against money laundering and elaborate additional legislative and statutory acts. Solving of the aforementioned problems related to economic security will accelerate the process of Georgia’s economic development.