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Political factors affecting AML/CFT efforts in post‐communist Eurasia: The case of Georgia

Elias Götz (Institute for Security and Development Policy, Nacka, Sweden)
Michael Jonsson (Institute for Security and Development Policy, Nacka, Sweden)

Journal of Money Laundering Control

ISSN: 1368-5201

Article publication date: 2 January 2009

640

Abstract

Purpose

The purpose of this paper is to provide an overview of anti‐money laundering (AML) efforts and high‐risk sectors in Georgia, and explain changes in this field over time.

Design/methodology/approach

This case‐study draws on a political economy‐approach, based on the argument that “political will” provides the best explanation for the quality of AML efforts in transitional economies, as opposed to “technical assistance” or the sophistication of the domestic financial system.

Findings

The study finds that AML efforts have drastically improved in Georgia following the Rose Revolution, even though significant high‐risk sectors remain and a certain tendency towards “selective implementation” of AML regulations can be detected.

Research limitations/implications

Implies that the “political will” of the ruling elite and the promotion thereof should be increasingly incorporated into research on AML, especially as regards explaining the quality of implementation and enforcement of existing laws.

Practical implications

Implies that technical peer evaluations resulting in “naming and shaming” of jurisdictions that do not live up to international AML standards may not in and by themselves be enough to further efficient implementation, but need to be complemented by policies creating incentives for the domestic political elite to encourage de facto implementation of de jure regulations.

Originality/value

Provides the first comprehensive overview of AML efforts in Georgia and points to important explanatory factors underlying changes in this field.

Keywords

Citation

Götz, E. and Jonsson, M. (2009), "Political factors affecting AML/CFT efforts in post‐communist Eurasia: The case of Georgia", Journal of Money Laundering Control, Vol. 12 No. 1, pp. 59-73. https://doi.org/10.1108/13685200910922651

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

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