The ruling Georgian Dream party has submitted a legislative package to Parliament proposing an expansion of how ‘grants’ are defined under Georgian law, particularly in cases involving political activity and foreign influence.
The explanatory note stated that a grant would encompass not only financial support but also in-kind contributions provided by foreign states, foreign citizens or foreign legal entities to Georgian citizens or organizations registered in Georgia. The defining criterion is whether such resources are used, or could potentially be used, to influence government decisions, state institutions, public opinion or the formation and implementation of Georgia’s domestic or foreign policy. The proposal also connects grants to the political or public interests and relationships of foreign governments or political parties.
The draft further enlarges the scope of what qualifies as a grant. It explicitly includes funding or material support provided in exchange for technical assistance as well as free-of-charge support such as the transfer of technologies, expertise, skills or services. In addition, funds transferred by a foreign legal entity to its Georgian branch or representative office would be treated as a grant unless they are strictly used for commercial business purposes. Branches that receive such funding without authorization would face administrative penalties equal to twice the amount of the unlawfully received grant.
A new legal concept of a ‘sham grant’ is also introduced. This refers to funds that are effectively grants in nature but are disguised through fictitious or deceptive transactions. Receiving or using such resources would carry criminal liability, with penalties ranging from fines and 300–500 hours of community service to imprisonment for up to six years.
The proposed rules would also apply to foreign individuals and legal entities that transfer money, securities, property, or other benefits to Georgian citizens or organizations in exchange for activities related to political issues concerning Georgia. Unauthorized transfers could result in fines, compulsory community service or prison sentences of up to six years.
Under the draft, foreign-registered entities whose core activities involve political matters related to Georgia would be required to obtain prior approval from the Georgian government or a designated official before receiving any grant funding. The explanatory note argues that such measures are necessary to address cases in which financial arrangements are used to influence Georgia’s sovereignty through indirect political engagement.
The legislative package has been referred to the relevant parliamentary committees for consideration and has been initiated by the Georgian Dream faction.
