Georgian Dream Party Further Tightens Grants Law, Introducing Up to 6 Years in Prison

"Under the current circumstances, financing unrest, violence, and revolutionary processes in Georgia from abroad is significantly complicated. However, in practice, we see that certain mechanisms and ways to circumvent laws still remain, the use of which may cost our country the loss of peace, economic progress, and prosperity that has been maintained with great effort. Therefore, we are introducing amendments to the legislation so that in the future no one can find an alternative way to finance unrest and violence in Georgia from outside the country's borders," Kirtskhalia explained following the parliamentary majority session, which was attended by Irakli Kobakhidze, the head of Ivanishvili's government.

Amendments will be made to the Law of Georgia on Grants. The definition is clarified, and it is determined that

a grant is considered to be funds transferred by any person to any person in cash or in kind, which are used or may be used with the belief or intention of exerting any influence on the government of Georgia, state institutions or any part of society, for activities carried out or to be carried out, which are aimed at the formation, implementation or change of the domestic and foreign policy of Georgia.

Additionally, grants can be used for activities associated with the political or public interests, approaches, or relationships of a foreign government or political party. A person can only receive such a grant with prior permission from the Government of Georgia.

The law will define the concept of a legal entity of another state whose activities essentially include activities on issues related to Georgia. It will be determined that such a legal entity may receive a grant only after the prior consent of the Government of Georgia. For example,

an organisation registered abroad that essentially operates in Georgia will have to apply to the Georgian government for funding. Otherwise, it will be held criminally liable.

Grants are also considered to be funds transferred in cash or in kind, in exchange for which the grantee provides technical assistance in the form of technology, specialised knowledge, skills, expertise, services and/or other types of assistance. Accordingly, if a foreign power hires experts in Georgia in exchange for money, this money will be considered a grant, and the issuance of this grant will require the prior consent of the Government of Georgia.

If a representative office, branch, or division of a non-resident legal entity receives a grant, including one from its parent legal entity, that branch must obtain prior consent from the Government of Georgia to accept the grant. The draft law specifies that receiving a grant without this consent will lead to administrative penalties, including a fine equal to twice the amount of the illegally received grant.

According to the amendments to be implemented in the Criminal Code, criminal liability will be established for violation of the rules established by the Law on Grants. The relevant violation will result in a fine, community service for a term of 300 to 500 hours, or imprisonment for a term of up to 6 years.

An aggravating circumstance will be added to Article 194 of the Criminal Code, namely, money laundering for the purpose of carrying out activities on political issues of Georgia will result in imprisonment for a term of 9 to 12 years.

The draft law will also impose criminal liability on a leading official of a political party who violates the Organic Law “On Political Unions of Citizens”, in particular, accepts foreign funding. This violation will result in a fine, community service for a term of 300 to 500 hours, or imprisonment for a term of up to 6 years.

External lobbying will become punishable under criminal law. In particular, the direct or indirect transfer of money, securities, other property, property benefits, or any other advantage to a citizen of another state or legal entity in exchange for carrying out activities on political issues related to Georgia will result in a fine, community service for a term of 300 to 500 hours, or imprisonment for a term of up to 6 years.

The draft law defines the grounds for inadmissibility of membership in a political party. In particular, a person who is employed under an employment contract in an organization that receives more than 20% of its annual income from a foreign power is prohibited from being a member of a political party for 8 years. The State Audit Office will monitor the financial activities of a political party member.

“With a declared electoral goal” will be replaced by the term “With a declared party-political goal”, which, according to the assessment of the Georgian Dream, will provide for the clarification of the content of legal regulation, expansion and increase in its effectiveness.

The restrictions provided for by the legislation that are defined for a political party will also apply to an entity with a declared party-political goal.

In the case of receiving foreign funding, the criminal liability of the head of the political party and the entity with a declared party-political goal will be determined.

The Code of Administrative Offences establishes a new administrative offence for an entrepreneurial entity to engage in public political activity that is not related to its main entrepreneurial activity. In case of committing this offence, the State Audit Office will fine the entrepreneurial entity in the amount of 20,000 GEL, and in case of repeated and subsequent commission of the action, in the amount of 40,000 GEL.

The spring session of the Georgian Dream parliament will open on February 3. Kirtskhalia said that the draft laws will not be considered in an expedited manner.