LISTS OF SANCTIONED ENTITIES DELIVERED TO

UNCLAS TBILISI 001265

SIPDIS
SENSITIVE

DEPT FOR EUR/CARC

E.O. 12958: N/A
TAGS: PGOV PHUM PREL GG KDEM
SUBJECT: LISTS OF SANCTIONED ENTITIES DELIVERED TO
GOVERNMENT

REF: A. STATE 61363

B. STATE 62052

C. STATE 65133

D. STATE 65511

E. STATE 68510


1. (SBU) Summary: Poloffs visited the new headquarters of the
Financial Monitoring Service (FMS) and the Financial
Supervisory Agency (FSA) and delivered reftel lists of
sanctioned organizations to Giorgi Kadagidze of FSA. Poloffs
learned little about money laundering in Abkhazia because
neither service has a grasp or insight into the complexities
of Abkhaz banking. The FMS attributes many of the problems
to Russian banks illegally operating in Abkhazia despite the
Russian's outright denial of their presence. The Financial
Action Task Force (FATF) addresses money laundering
internationally but Russia is a member of this organization
and according to FMS, prevents any progress in invesigating
money laundering in Abkhazia. In 2007, FMS identified 17
money laundering cases in Georgia. Related properties were
confiscated and arrests were made. In 2008, four cases have
been reported. End Summary.


2. (SBU) Poloffs visited the new site of Georgia's Financial
Monitoring Service (FMS) and the Financial Supervisory Agency
(FSA). Both offices have been relocated to jailed mafia
member Shakro Kalashov's newly constructed and recently
confiscated mansion in the hills of Tskhneti overlooking
Tbilisi. Kalashov is currently serving a twelve year
sentence in Spain and has an eighteen year sentence in
Georgia pending his return.


3. (SBU) According to Kadagidze, head of the FSA, the FSA is
the financial regulator responsible for disseminating
information and oversight of the financial markets. FMS is
Georgia's financial intelligence unit and responsible for
monitoring terrorist fiances. As requested by the reftels,
Poloffs delivered demarches and the agencies will update
their databases and disseminate the information to the
designated people.


4. (SBU) Poloffs asked FMS if they are able to provide any
information on money laundering in Abkhazia. FMS conveyed to
Poloffs that they have no mechanism to monitor money
laundering in Abkhazia or South Ossetia. Georgia has the
backing of Moneyval - an international oversight mechanism -
that has excused Georgia from obligations to influence these
regions because they are beyond Georgia's control. FMS told
Poloffs they have sent letters to Russia regarding Russian
banks' involvement with Abkhaz banks. Russia officially
denies their involvement in Abkhazia. FMS told Poloffs that
they do not maintain contact with Abkhazia because they do
not want to officially recognize the Abkhaz de-facto
government presence. There is one bank in the Georgian
controlled Kodori Gorge that distributes pensions. There are
no banks in Gali at all.
TEFFT