193 transactions to or from Georgian banks were flagged as potentially suspicious, according to the data posted online by the International Consortium of Investigative Journalists (ICIJ) on September 20.
The data are based on the newly leaked FinCEN Files – suspicious activity reports filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Transactions from or to Banks in Georgia
Out of 193 reported suspicious financial transactions, 167 involved the TBC Bank, one of the largest banks based in Georgia, with USD 17,884,899 in sent amounts and USD 1,012,080 received. Another outgoing transaction worth USD 2,489 was carried out by JSC [Joint-stock company] TBC-Bank. Bank of Georgia (BoG), another Georgian banking giant, was involved in 25 suspicious transactions, having sent in total USD 81,000 and received USD 8,042,752.
As for the overseas destinations/senders, 161 of the 193 reported transactions totaling USD 16,084,899 were directed from TBC Bank to Habib Bank A G Zurich, a Swiss commercial bank, from October 18, 2007, to October 11, 2011, and two more transactions to the same bank amounting to USD 81,000 were executed by BoG in 2011.
Also, 13 transactions from Raiffeisenbank (the banking group with branches in many countries), in the amount of USD 7,628,334, were received by BoG in the period from October 3, 2016, to December 28, 2016.
Other notable transactions include USD 1,012,080 received by TBC in 5 transactions from the National Bank of Ras, based in the United Arab Emirates, between October 1, 2012, and January 15, 2013; USD 1,800,000 transferred from TBC to Sberbank of Russia on December 10, 2012; and USD 414,418 sent from Bc Procredit Bank S.A. (Moldova) to BoG between February 2, 2016, and Mar 22, 2016, in 10 transactions.
The transactions were processed via three U.S.-based banks, which filed suspicious activity reports with FinCEN. The highest number of transactions (191 – worth USD 16,165,899 in sent and USD 9,054,832 received) was processed by The Bank of New York Mellon Corporation. Deutsche Bank AG and JP Morgan Chase & Co processed one transaction each.
The databases do not yet reveal any additional data with respect to the Georgia-related suspicious transactions.
According to a disclaimer on the ICIJ website, “suspicious activity reports reflect concerns by watchdogs within banks and financial institutions and are not necessarily indicative of any criminal conduct or other wrongdoing.”
Georgian Banks’ Response
On September 22, the Banking Association of Georgia, uniting the country’s all major financial institutions, released a statement, stressing that only 0.08% of total transactions in the ICIJ report were carried out via Georgian banks.
The Banking Association highlighted that Georgian banks strictly observe local and international regulations, as well as provide the Financial Monitoring Service of Georgia with information on all transactions.
The Association noted that banks are unable to release any details about said transactions due to client confidentiality, but are willing to fully cooperate with the law enforcement.
What Exactly Are FinCEN Files?
FinCEN Files are leaked documents that include more than 2,100 suspicious activity reports filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), “an intelligence unit at the heart of the global system to fight money laundering.”
The records were obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists (ICIJ), which engaged 400 journalists from 88 countries to trace and investigate suspicious transactions.
The files revealed how “big banks have supported shadowy characters and criminal networks by moving huge sums of illicit cash,” even after some of these the financial institutions were fined “for earlier failures to stem flows of dirty money.”
“The documents identified more than USD 2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity,” ICIJ said, adding that the files represent less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017.