Loan Issuing Entity submitted the initial registration form to the Financial Monitoring Service late. The Loan Issuing Entity was registered at the National Bank of Georgia on February 12, 2019. Under the article 1, paragraph 2 of the Order No. 1 of Head of Financial Monitoring Service of Georgia dated June 5, 2020 “On the Approval of Rules on Record–Keeping, Storage and Reporting of the Information on the Transaction by Obligated Entities to Financial Monitoring Service of Georgia”, “Insurance Broker, Reinsurance Broker, Loan Issuing Entity, lawer, law firm, which had started its activities before the entry into force of this rule, should have submitted form to the Financial Monitoring Service of Georgia within 1 month from the entry into force of this rule. Loan Issuing Entity submitted the initial registration form to Financial Monitoring Service of Georgia on January 20, 2021. Respectively, has been revealed the delayed submission of the registration form to the Financial Monitoring Service of Georgia. In accordance with article 2¹, paragraph 2, sub-paragraph "a" of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, it envisages fine of 5,000 (five thousand) GEL.

Financial Penalty of 6 000 (six thousand) GEL was imposed on Loan Issuing Entity for 3 (three) cases of failure to submit correct information to the Inspection group of the National Bank of Georgia during inspection, which In accordance with article 2¹, paragraph 3, sub-paragraph "n" of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, it envisages fine of 2,000 GEL for each case, In total – 6 000 (six thousand) GEL.

Loan Issuing Entity did not develop policy/procedures related to internal control during the inspected period, which In accordance with article 2¹, paragraph 3, sub-paragraph "i" of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, envisages fine of 5,000 (five thousand) GEL.

The electronic system implemented in the Loan Issuing Entity operates with significant flaws. Specifically, it lacks the functionality to detect suspicious or noteworthy signs, including the identification of fragmented transactions (deals), and the system of revealing/verifying individuals against the lists of sanctioned and politically exposed persons (during testing the electronic system, it could not automatically reveal/block all persons under the sanctions) as required by the United Nations Security Council resolutions, as well as the instructions provided by the National Bank of Georgia. As a consequence, the system operates with severe failures, which in accordance with article 2¹, paragraph 2, subparagraph “e” of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, it envisages fine of 15,000 (fifteen thousand) GEL.

 

Four cases of failure to provide accurate information (Money Laundering and Terrorist Financing Risk Supervision Report) to the National Bank of Georgia by the Loan Issuing Entity, which in accordance with article 2¹, paragraph 4, sub-paragraph "g" of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, it envisages fine of 1,000 GEL for each case, In total – 4 000 (four thousand) GEL.

Four cases of failure to determine the essence of the client's activity by the Loan Issuing Entity, which In accordance with article 2¹, paragraph 3, sub-paragraph "t" of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, it envisages fine of 2,000 GEL for each case, In total – 8 000 (eight thousand) GEL.

At the beginning of the inspection process, as specified by the legal act of the National Bank of Georgia, two clients had not been assigned a risk level, which in accordance with article 2¹, paragraph 3, sub-paragraph "g" of the "Rules for Determining, Imposing and Enforcing the Amount of Monetary Fines for Loan Issuing Entities" approved by Order No. 218/04 of the President of the National Bank of Georgia dated September 27, 2018, it envisages fine of 2,000 GEL for each case, In total – 4 000 (four thousand) GEL.

In total Loan Issuing Entity LTD “Lombardo” was fined with 47 000 (Forty-seven thousand) GEL.