With 82 votes in favor and 10 against, Parliament has adopted, at the first reading, a legislative package initiated by the Georgian Dream parliamentary faction. Once enacted, the package will introduce new restrictions and prohibitions related to grants, political activity, and political engagement.
The amendments affect the following laws: the Law on Grants, the Criminal Code, the Administrative Procedure Code, the Code of Administrative Offenses, the Organic Law on Political Associations of Citizens, and the Law on the State Audit Office.
Under the proposed amendments to the Law on Grants, the definition of a “grant” is significantly expanded. A grant will be understood as any funds transferred in monetary or in-kind form by any person to any other person, which are used or may be used—based on belief or intent—to influence the authorities of Georgia, state institutions, or any segment of society through activities aimed at shaping, implementing, or changing Georgia’s domestic or foreign policy. The definition also includes activities deriving from the political or public interests, approaches, or relationships of a foreign government or a foreign political party.
Receiving such a grant will be permitted only with the prior approval of the Government of Georgia.
The law also introduces the concept of a legal entity of another state whose activities substantially involve issues related to Georgia. Such entities will be allowed to receive grants only after obtaining prior consent from the Georgian government. As explained by the Georgian Dream faction, for example, an organization registered abroad but substantially operating in Georgia will be required to apply to the Georgian government for permission to receive funding. Failure to do so will result in criminal liability.
A grant will also include funds transferred in monetary or in-kind form in exchange for the provision of technical assistance, including the sharing of technologies, specialized knowledge, skills, expertise, services, and/or other forms of support. Georgian Dream faction says if a foreign actor hires experts in Georgia in exchange for payment, such funds will be considered a grant and will require prior government approval.
If a representative office, branch, or subdivision of a non-resident legal entity receives a grant—including from the legal entity of which it is a branch—prior consent from the Georgian government will be required. Under the draft law, receiving a grant without such consent will result in administrative liability in the form of a fine amounting to double the value of the illegally received grant.
Amendments are also introduced to the Criminal Code. Under the draft, violations of the rules established by the Law on Grants will result in criminal liability, punishable by a fine, community service ranging from 300 to 500 hours, or imprisonment for up to six years.
An aggravating circumstance is added to Article 194 of the Criminal Code, under which money laundering carried out for the purpose of engaging in political activity related to Georgia will be punishable by imprisonment for nine to twelve years.
Criminal liability will also be imposed on senior officials of political parties who violate the Organic Law on Political Associations of Citizens—specifically by accepting foreign funding. Such violations will be punishable by a fine, community service of 300 to 500 hours, or imprisonment for up to six years.
External lobbying is also criminalized. Specifically, the direct or indirect transfer of money, securities, other property, property benefits, or any other advantage to a foreign citizen or legal entity in exchange for engaging in political activity related to Georgia will be punishable by a fine, community service of 300 to 500 hours, or imprisonment for up to six years.
Changes related to restrictions on political party membership are introduced in the Organic Law on Political Associations of Citizens. The draft law defines grounds for the inadmissibility of political party membership. In particular, a person employed under a labor contract by an organization that has received more than 20% of its annual income from a foreign source will be prohibited from being a member of a political party for a period of eight years.
The State Audit Office will be responsible for monitoring the financial activities of political party members.
The term “having a declared electoral purpose” is replaced with “having a declared party-political purpose,” and its scope is expanded. All restrictions applicable to political parties under the legislation will also apply to entities with a declared party-political purpose.
In cases of receiving foreign funding, criminal liability is established for both the leadership of political parties and entities with a declared party-political purpose.
The legislative package also introduces amendments concerning the public political activity of business entities. Changes to the Code of Administrative Offenses establish a new administrative offense for business entities engaging in public political activity unrelated to their core business operations. In such cases, the State Audit Office will impose a fine of 20,000 GEL, and 40,000 GEL for repeated or subsequent violations.
At the same time, as decided during the first-reading deliberations, these provisions will be revised so that, in cases of repeated political activity by business entities, criminal liability will be imposed instead of administrative liability.
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