London-listed Georgian banks pressured to dodge US sanctions by central bank
Two London-listed Georgian banks have been caught in the middle of a sanctions spat after the Georgian central bank told the lenders they don’t need to comply with recently announced US sanctions.
TBC Bank and the Bank of Georgia have been urged to adhere with sanctions announced by the US last week targeting Russian-Georgian oligarch Otar Partskhaladze.
Former prosecutor-general Otar Partskhaladze, who also holds Russian citizenship, became the first Georgian to be sanctioned by the US.
The US announcement, which refers to his “malign influence in Georgia”, says he was being targeted for “having operated in the management consulting sector of the Russian Federation economy”.
But on Wednesday, the acting president of the National Bank of Georgia, the country’s central bank, pushed back against the US sanctions.
Natia Turnava said that while the central bank has been operating in accordance with international sanctions since the invasion of Ukraine, it didn’t agree with Partskhaladze’s assets being targeted.
She said the bank “believes that international sanctions may not be applied to a Georgian citizen, unless there is a guilty verdict in the applicable case against them in the court of Georgia”.
Shortly after the central bank’s announcement, it was reported that three out of four vice-governors of the central bank and an adviser to the bank’s president had resigned in protest.
The Bank of Georgia told City A.M. that it “intends to remain in full compliance with all applicable requirements of the US, EU and UK sanctions regimes”.
It declined to confirm, however, whether it had frozen any of Partskhaladze’s assets, citing bank secrecy and privacy laws.
A spokesperson for TBC told Morning Wire that the central bank’s announcement “does not hinder TBC from adhering to sanctions requirements”.
“TBC maintains a strong compliance program aimed at ensuring strict adherence to sanctions regulations,” they added.
The UK Treasury’s Office of Financial Sanctions Implementation declined to comment, saying the sanctions were a matter for US authorities to enforce, and that it would not comment on individual cases.
The US Department of State was contacted for comment.