IMF concerned about National Bank of Georgia's decision to impose international sanctions
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IMF on sanctions and the National Bank of Georgia
The International Monetary Fund is concerned about the recent decision of the National Bank of Georgia that a local court conviction is first required to block the accounts of sanctioned Georgian citizens. The decision came after the U.S. imposed sanctions on ex-general prosecutor Otar Partskhaladze for ties to the Russian FSB. According to the BMG publication, the head of the foundation’s mission, James John, gave journalists a written statement to this effect.
“As we have mentioned in the past, the quick and adequate actions of the National Bank of Georgia have protected the financial sector from the impact of Russia’s ongoing war in Ukraine. The National Bank of Georgia has required commercial banks to comply with the relevant sanctions.
However, we are concerned about the National Bank’s recent announcement that it is changing its approach to sanctions. We intend to discuss this issue in detail with the National Bank and commercial banks and, after careful consideration, will make an accurate assessment of its impact, including on the IMF-supported program for Georgia, the reinstatement of which is under negotiation.”
The National Bank of Georgia has amended the rules of the sanctions regime amid a high-profile scandal involving former Georgian Prosecutor General Otar Partskhaladze, who was subjected to international sanctions for his ties with the Russian FSB. At first, the National Bank blocked all his accounts, but then changed the decision.
The National Bank explained that the sanctions regime can be applied to Georgian citizens only if a court in Georgia has issued a guilty verdict. On the same principle, the sanctions regime will be applied to a legal entity, the share of which is owned by a citizen of Georgia, who fell under the sanctions.
This change was preceded by a statement by Georgian Dream Chairman Irakli Kobakhidze, who called the National Bank’s decision to restrict Partskhaladze’s access to accounts unconstitutional and violating the principle of presumption of innocence.
