The illegal cooperation between the financial institutions located in the Abkhazian territory and some Russian commercial banks was the subject of the letter sent to Victor Zubkov, Head of the Russian Financial Monitoring Service by Roman Gotsiridze, President of the National Bank of Georgia: “The cooperation with some Russian commercial banks with the financial institutions located in the territory not controlled by the central authorities of Georgia, with no appropriate license, is against the decisions of the meetings of the leaders of the CIS countries regarding the prohibition of all relations with conflict regions. Such cooperation creates background for legalization of illicit income and financing of terrorism. This in turn is inconsistent with the commitments assumed by Russia as FATF member country”, said the letter. President Gotsiridze advised the Russian Financial Monitoring Service to study the issue and take appropriate measures. The NBG President sent a similar letter to Sergey Ignatyev, saying that the territorial integrity of Georgia is recognized by the international community, including Russia. Accordingly, it is the prerogative of the National Bank to exercise its jurisdiction on the entire territory of Georgia and regulate banking activities. Thus, the interference of the Russian banks in the banking activities on the Abkhazian territory in any form is illegal. To solve the problem, the Bank is ready to undertake effective mutual measures, including sending of the NBG specialists, as well as FATF and MONEYVAL experts to the Central Bank. President Gotsiridze will participate in the 13th annual meeting of the Central Bank Governors’ Club of Middle Asia, Balkan and Black Sea basin countries in St. Petersburg on May 27-28, where he will fix his position on the illegal activities of the Russian banks in the Abkhazian territory. If then Russia does not use appropriate tools, the National Bank will address the international anti-money laundering organizations to ask to impose sanctions against Russia. Currently, the banking institutions operating in Abkhazia have activated the electronic settlements mechanism with Russia. They are incorporated in Zolotaya Corona, Russia’s financial-credit system, which allows for any transfer from/to Russia and Abkhazia. Commission fee is 1-2%.The so-called ‘National Bank’ of the breakaway region has several accounts with ‘Kraiinvestbank’ in Krasnodar. The state companies of the de facto authorities of Abkhazia undertake operations mainly through ‘Kraiinvestbank’ and the Sochi branch of the Moscow Bank. Intercoopbank JSC operating in Moscow makes money transfers through the Interexpress system, on the basis of the agreement made with the Abkhazian Savings Bank. Besides, Abkhazia’s state and commercial agencies use the services of: “Donbank, South-West Bank (Rostov-on-Don), Kavkazpromstroybank (Cherkessk), Vneshagrobank (Kolomna), Ugbank (Krasnodar), Ural Foreign Trade Commercial Bank (Ekaterinburg), Smolensk Bank (Smolensk), Moskomprivatbank (Sochi), Moscow Private Bank (Moscow), North-West Bank (St. Petersburg), North Caucasus Bank (Stavropol), North Treasury Bank (Ekaterinburg), Sviazbank (Moscow), Rosbusinessbank (Moscow), Atton, the independent investment bank (Moscow), Mezhprombank (Moscow), and Uniastrumbank (Moscow).The Guarantbank operating in Sukhumi has an account, and is cooperating with, the Moscow’s SDM Bank and Russlavbank. Besides, the Guarantbank is cooperating with Asiauniversalbank operating in Bishkek and Novosibirskvneshtorgbank operating in Novosibirsk. Notably, the commercial and government agencies in Russia are implementing modern technologies in Abkhazian banks. The Russian corporation ‘Financial Technologies Center’ made an agreement with the Abkhazian Guarantbank on cooperation in various issues.