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Georgia to target Russian cash in rebel regions
06 Jul 2007 15:26:00 GMT
Source: Reuters
TBILISI, July 6 (Reuters) - Georgia's central bank is to ask foreign banks to close down the accounts of Russian firms and individuals that buy assets in the breakaway Georgian region of Abkhazia, its chief told Reuters on Friday.

Abkhazia, a strip of land on the Black Sea coast, broke away from Tbilisi's control in a 1990s war. It has no international recognition, but Georgia accuses its giant neighbour Russia of flouting its borders and propping up the separatists.

"We must go to the banks with a request that they should not cooperate with, or open accounts for, those organisations that are operating on the territories not under (Tbilisi's) control," central bank chief Roman Gotsiridze told Reuters.

"These transactions are not controlled, and they contradict international law covering money-laundering and the financing of terrorism," he said.

The central bank chief was speaking after Georgia's Minister for Refugees and Internally Displaced Persons Georgy Kheviashvili -- responsible for thousands of people who have fled the conflict in Abkhazia -- said senior Russian officials and ministries had bought property in Abkhazia.

Kheviashvili said Russian organisations had bought a total of 31 major assets, including a wine factory and holiday villas.

"This is an attempt to legalise ethnic cleansing (in Abkhazia)," the minister said.

Russia's Foreign Ministry said it had no comment and referred queries to the Russian ministries Tbilisi alleged had bought assets in Abkhazia.

Georgia's pro-Western President Mikhail Saakashvili has vowed to restore Tbilisi's control over Abkhazia.

Abkhazia's economy depends on ties with Moscow. It sends its agricultural exports to Russia, Russians holiday on its beaches and investors buy homes there because they are cheaper than in Russia.

Saakashvili has tried in the past to put economic pressure on Abkhazia, as well as South Ossetia, another Russian-backed breakaway region of Georgia.

Several years ago he threatened his navy would sink Russian ships bringing tourists to Abkhaz ports, but he has since toned down his rhetoric. He has also clamped down on trafficking of diesel, cigarettes and alcohol through South Ossetia.

Russia and the breakaway regions accuse Saakashvili of brinkmanship they say could lead to a new war in the region.


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Last updated:Fri Jul 6 15:28:00 2007