Recently, the Russian commercial banks have more actively communicated with the commercial banks located on the territory of Abkhazia, and have undertook illegal activities. For this reason, the President of the National Bank of Georgia, Roman Gotsiridze, wrote to his Russian colleague on May 16 to express his indignation. “We are indignant at the fact that by entering the electronic settlements and correspondent account systems, a number of Russian commercial banks have been incorporating the Abkhazian banks into their systems. This contradicts with the decisions of the leaders of the CIS countries as well as with the Russian legislation, including the Regulation on Opening the Accounts for Non-residents”, the letter said. The territorial integrity of Georgia is recognized by the international community, including Russia. Accordingly, it is a prerogative of the National Bank to exercise its jurisdiction and to regulate banking activities on the entire territory of Georgia. Thus, the interference of the Russian banks in the activities of the banks functioning on the Abkhazian territory any form is illegal, President Gotsiridze said. In his letter, President paid special attention to money laundering. Such uncontrollable and illegal banking regime, in which the Russian banks are participating, creates a favorable background for legalizing the illicit and criminal income. This in turn contradicts with the commitment assumed by Russia as a FATF member, and may put at risk the reputation of Russia in the international banking circles. President Gotsiridze provided the Governor of the Central Bank of Russia with the materials concerning the illegal activities of the Russian banks on the Abkhazian territory. The NBG president advised his Russian colleague to take appropriate measures to correct the situation. The Georgian party also expressed readiness to undertake effective mutual measures, including sending of the NBG specialists, as well as FATF and MONEYVAL experts to the Central Bank. President Gotsiridze sent the similar letter also to the Financial Monitoring Committee of Russia. The meeting of the leaders of the Black Sea basin countries and ECB will be held in St. Petersburg on May 27-28, where President Gotsiridze will express his view on the illegal activities of the Russian banks on the Abkhazian territory. If then Russia does not use its tools, the NBG will address the international anti-money laundering organizations to recommend the use of 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.