Articles

Banking and Securities

Issue II, 2009

Order No. 81/01 of the President of the National Bank of Georgia

On 30 March, 2009 the President of National Bank of Georgia adopted the Order N 81/01 declaring the following normative acts as null and void:

      1. Order  N 132 of the  President  of National Bank of Georgia on Approval of the Rules for Conducting Deposit Operations of Physical Persons by
           the Commercial Banks, dated 28 April 2000;
      2. Order N 51 of the President of National Bank of Georgia on  Approval of the Instructions for Opening Accounts at Georgian Banking Institutions, 
          dated 17 March 2004;
      3. Articles 2, 4, 5, 6 and 7 of the Order N 75 of  the  President  of  National  Bank  of Georgia on Approval of  the Instructions on Opening  the Bank 
          Accounts  (Deposits) for the Non-resident Physical Persons and Legal Entities in Foreign Currency by the Georgian Banking Institutions,dated 19 
          August 1998;
      4. Articles 2, 4, 5, 6 and 7 of the Order N 76  of  the  President  of National  Bank  of Georgia on Approval of  the Instructions on Opening  the Bank 
          Accounts (Deposits) for the Non-resident Physical Persons and Legal Entities in Local and Foreign Currency by the Georgian Banking Institutions, 
          dated 19 August 1998;

The issues regulated by the normative act above, now fall under the competence of the Financial Supervision Agency.

Order No. 16 of the Head of Financial Supervision Agency of Georgia

According to the Order N 16 of the Head of Financial Supervision Agency of Georgia, dated 3 February 2009 Sakartvelos Sakanonmdeblo Matsne is determined to be the national official gazette where notifications regarding convocation of general meetings of joint stock company's shareholders (the General Meetings) shall be published.

Same time shareholder holding less than 1 percent of a reporting enterprise will get acquainted with the notification of convocation of the General Meetings through the above official gazette.

Order No. 17 of the Head of Financial Supervision Agency of Georgia

Pursuant to the Order n 17 of the Head of Financial Supervision Agency of Georgia, dated 9 February 2009 a person carrying out money transfers may be a natural or legal person, other than commercial bank, credit union or micro-financial organization, which renders money transfer services via different systems.

The person carrying out money transfers shall fill in a registration form (the form is attached to the above order), including information about identity and technical equipment of the person and apply to the Financial Supervision Agency of Georgia (the "Agency") for registration.

The person carrying out money transfers has the right to register in case it is in compliance with the following minimal requirements: possesses the respective operational area, computer, the respective printing and copying machines as well as the special software to register money transfer operations.

The Head of the Agency shall issue an individual administrative-legal act on registration of the person carrying out money transfers. A certified copy of such act shall be sent to the person carrying out money transfers.

The Agency maintains a departmental registry of persons carrying out money transfers and enters the information about registration of the person carrying out money transfers within 2 business days from receipt of the registration form.

The person carrying out money transfers shall submit a registration form designed by the Agency of Financial Monitoring of Georgia for such persons to the said agency within 10 business days from the registration.

A natural person, in case of change of address, or a legal person, in case of change of a legal form, legal address, location or an authorized representative, shall submit written information to the Agency. A person carrying out money transfers has a right:

  1. to  render  money  transfer  services  through  any  system  as  well  as  to carry out any permitted by the law after  meeting  the  respective  legal 
    requirements (if any):
  2. do not accept complaint of a client while detecting loss in money or counterfeit money, in case the client has not re-counted money on the spot.

The person carrying out money transfers may not introduce any restrictions on banknotes or coins if they are in compliance with the rules for determining validity.

Registration of a person carrying out money transfers shall be revoked upon:

  1. written application of the person carrying out money transfers regarding revocation of registration to the Agency;
  2. decease, declaring legally incapable, dead or to be missing of a natural person carrying out money transfers;
  3. liquidation of a legal person carrying out money transfers. 

The Head of the Agency issues an individual a administrative-legal act on revocation of registration of a person carrying out money transfers followed up by entering information the departmental registry.

Order No. 18 of the Head of Financial Supervision Agency of Georgia


Order No.18 of the Head of Financial Supervision Agency of Georgia, dated 24 February 2009 approved the Instruction on Opening Accounts with Banking Establishments of Georgia. The instruction extends to resident/nonresident individuals and legal entities as well as to organizational units which do no represent legal entities.

The instruction defines types of bank accounts, Such accounts are:

  1. settlement (current) account;
  2. deposit (savings) accounts;
  3. correspondent accounts; and
  4. cash service account.

Resident as well as nonresident persons (other than commercial banks) may open settlement (current) accounts and deposit (savings) accounts in natural and foreign currency.

Settlement or deposit account may be held and/or disposed of by more than one person. The terms of disposal of an account shall be defined by the co-holders of an account in the account service agreement.

As for correspondent account and cash service account, they may be opened for commercial banks only. Correspondent accounts may be opened for branches of nonresident banks as well.

Head offices of bank may open correspondent accounts with:

  1. the National Bank of Georgia (the NBG) or its branch;
  2. other (head offices of) commercial banks.

It is prohibited to open more than one correspondent account in the same currency and with the same bank.

It should be notes ad well that branches of resident commercial banks are prohibited to open correspondent accounts with each other.

As for cash service account, only one such account in each currency will be opened for a branch or division (service center) of a banking establishment with the NBG (and/or its branch) and/or with commercial banks (and/or their branches).

A person is free to choose independently one or several banking establishment(s) for rendering service. Opening of a bank account as well as rendering service is carried out on the basis of an agreement between the parties. The terms of such agreement are determined by the parties and they shall be in compliance with the applicable legislation.

In the end it should be noted that the above order enumerates documents required for opening of accounts for individuals/various entities. Same time, it addresses the issue of closing accounts.

Presidential Order No. 41

Pursuant to the Presidential Order No. 41, dated 2 February 2009, the Investment Protection Treaty between the Government of Georgia and the Government of the Kingdom of Sweden, as dated 30 October 2008, was approved and enacted.

VARIOUS

Amendments to the Law on State Procurement

On March 27, 2009 amendments were introduced to the law of Georgia on State Procurement thereby removing from its sphere of regulation state procurement related to purchases made abroad. If more specifically, diplomatic representation of Georgia, as well as consular staff, attaché and representatives of the Ministry of Defense stationed abroad are exempted from the requirements provided by the law on State Procurements when purchasing of immovable property or receiving the right to use, as well as procuring vehicles abroad.

Given amendment to the Law on State Procurement furthermore introduced novelty in terms of removing application of the mentioned law to financing healthcare and social protection through vouchers as well as operations related to exchanges of the vouchers into cash.

Order No. 139 of the Minister of Education and Science of Georgia & Order No. 61 of Minister of Justice of Georgia

Order No. 139 of the Minister of Education and Science of Georgia, dated 18 March 2009 incorporated amendments to the list of documents and/or information to be presented by legal persons under the  Minister of Education and Science of Georgia in terms of state procurement. The same type of amendment was carried out by the Minister of Justice by Order N.61 dated March 20, 2009.

Order No. 87/N of the Minister of Labor, Healthcare and Social Protection

Order No. 87/N of the Minister of Labor, Healthcare and Social Protection, dated February 20, 2009 established rules for granting and issuing due to temporal inability to work.

Joint Order No. 109 of the Minister of Education and Science and Minister of Labor, Health and Social Protection

Joint Order No. 109 of the Minister of Education and Science and Minister of Labor, Health and Social Protection, dated March 19 invalidated Joint Order N.42-16/N of the Minister of Education and Science and Minister of Labor, Health and Social Protection, dated January 18, 2007 on 'Approval of Standards of Childcare".

                                                              


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