New Focus in Georgia on Limiting Sanctions Evasion Schemes

| News, Politics, Georgia

According to the TASS news agency, on July 26, the Georgian banks "Kartu Bank" and "Terabank", as well as the Georgian branch of the Kazakh "Halik Bank", stopped money transfers through the Russian "Unistream".

Earlier, on July 21, all major Georgian banks - TBC Bank, Liberty Bank, Bank of Georgia, Credo Bank and Bazisbank - stopped using the Unistream system. In addition, Rico Credit, which has several branches in Georgia and is quite popular among foreigners in terms of receiving remittances, announced that it also stopped using this payment system. Germany's Procredit Bank, Azerbaijan's Pasha Bank and Turkey's Isbank, which operate in Georgia, said they had not made any transactions through Unistream.

The decision to impose sanctions followed the U.S. announcement on July 20 aimed at limiting Moscow's access to the global financial system. Along with Unistream, Tinkoff Bank, Locko-Bank, Petersburg Social Commercial Bank (PSCB) and Solidarnost were also sanctioned.

According to Russian media, Unistream is one of the most popular money transfer systems used by Russian citizens. Over the past 1.5 years, $1.775 billion has been transferred to Georgia through Unistream. In the first half of 2023, almost a third (32%) of the transfers came on Unistream. Despite the imposition of sanctions on Unistream, there are still alternative ways to transfer money from Russia, including through the Zolotaia Korona and Contact systems.

This was followed by comments made by Jam O'Brien, head of the US State Department's Sanctions Coordination Office. He found it encouraging news that the Georgian customs authorities were taking real steps to limit the shipment of goods to Russia that would be used on the battlefield, but wanted to make sure that they had full control over the movement of cargo within Georgia's borders, be it air or road borders. O'Brien was asked on the Senate floor if the resumption of flights is something the U.S. is concerned about because it would create the possibility of circumventing sanctions, to which Jim O'Brien replied that they want to be sure what happens to the planes that go back to Russia. "I would say we're concerned, but there's clearly a possibility and we want to make sure we know what happens to the planes that go back to Russia," Jim O'Brien noted.

O'Brien's comments were used by the ruling party to criticize the opposition. First Deputy Speaker of Parliament Gia Volski told reporters that O'Brien mentioned the need for additional attention, but as the deputy explained, this applies not only to Georgia, but to other countries as well, be it in Europe, Asia or the Caucasus.

Volksi specifically said: "Our opposition group in their media is so upset by Jim O'Brien's statements that they are looking for something negative. O'Brien said the system was working at a high level. They probably didn't watch the hearing. He said the system is working, the system is highly organized, the cooperation is at a high level, Russia does not have the means to use Georgia to evade sanctions. Then when asked if there is an additional need for increased monitoring because of the flights, O'Brien said, ‘Yes, there is an additional need for additional monitoring’. It is not just Georgia, but every country from the Baltic region to Asia, Europe, if you like, the countries of the Caucasus region, they all need additional attention, and that attention will be constant, and Georgia is no exception."

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