‘Foreign Agent’ bill and Tax Code reform compromise Georgia’s freedoms

ahaliparty @ahaliparty
In Tbilisi, tens of thousands of people have been protesting for weeks.

On Tuesday, May 14, Georgia’s Parliament passed the third and final reading of a “foreign agents” bill, a Russian-inspired law restricting the country’s political and civil rights. The law would require organisations receiving more than 20% of their funding from abroad to register as agents of foreign influence, imposing onerous disclosure requirements and punitive fines for violations. However, inside Georgia, due to the pro-Moscow government led by the Georgian Dream (G.D.) party, Russian agents interfere in political matters, spread disinformation, and incite violent sentiments against the democratic opposition and civil rights activists. 

Opponents have dubbed the bill “the Russian law,” comparing it to Russian legislation used to target critics of President Vladimir Putin‘s Kremlin. Georgia’s government says the bill is needed to promote transparency, combat “pseudo-liberal values” promoted by foreigners, and preserve the country’s sovereignty. 

The bill passed with 84 members of Parliament out of 150 voting in favour. In the current Parliament, the ruling G.D. has 75 seats. Mass protests across the capital city of Tbilisi show society’s concerns about the future of democracy in Georgia. The E.U., U.S., and the Council of Europe warned the Georgian government that this legislation prevents the country from meeting the E.U. standards and eventually leads to a review of its relations with them. 

After passage on the third reading, the bill now goes to President Salome Zourabichvili. She has said she will veto it. But, another vote in Parliament, which the ruling party and its allies control, can override her decision.

In Tbilisi, tens of thousands of people have been protesting for weeks. The police used force against the protesters. Public opinion polls show strong support for E.U. integration. Many Georgians are hostile toward Russia due to Moscow’s support for the breakaway regions of South Ossetia and Abkhazia. However, the European Parliament resolution of December 14 2022, on the implementation of the E.U. Association Agreement with Georgia, found that Russia is continuing its ‘creeping’ annexation process of Georgia’s occupied territories. It also highlighted continued ethnic discrimination and severe human rights violations against Georgians in the Russian-occupied territories, the erection of barbed wire fences and other artificial barriers, the lengthy closure of so-called crossing points along the occupation line, and the illegal detentions and kidnappings of Georgian citizens by the Russian occupation forces, which destabilise the situation throughout the country.

The E.U. warns the law will undermine freedoms

The European Council has granted Georgia the status of a candidate country, with the condition that Georgia takes the nine steps outlined in the Commission recommendation of November 8 2023. These steps involve protecting human rights and allowing civil society and media to operate freely. They also address the need for depolarisation and the fight against disinformation.

“Nevertheless, and despite large protests and unequivocal calls by the international community, the Georgian government ruling majority adopted the law “on transparency of foreign influence” in Parliament in the third reading. The E.U. has clearly and repeatedly stated that the spirit and content of the law are not in line with E.U. core norms and values. It will undermine the work of civil society and independent media while freedom of association and freedom of expression are fundamental rights at the core of Georgia’s commitments as part of the Association Agreement and of any E.U. accession path,” High Representative Josep Borrell stated today. 

Borrell emphasised that adopting this law “negatively impacts Georgia’s progress on the E.U. path. The choice on the way forward is in Georgia’s hands. We urge the Georgian authorities to withdraw the law, uphold their commitment to the E.U. path and advance the necessary reforms detailed in the 9 steps.” 

The E.U. stands ready to continue supporting Georgians working towards a European future and supports the Georgian people and their choice in favour of democracy. 

“The intimidation, threats and physical assaults on civil society representatives, political leaders and journalists, as well as their families is unacceptable. We call on the Georgian authorities to investigate these documented acts,” stated HR Borrell.

The U.S. could impose financial and travel restrictions

U.S. Assistant Secretary of State for European and Eurasian Affairs, Jim O’Brien, visiting Tbilisi, stated that Washington could impose financial and travel restrictions. 

“If the law goes forward without conforming to E.U. norms and this kind of rhetoric and aspersions against the U.S. and other partners continue, I think the relationship is at risk,” he said.

“If this legislation passes, this will compel us to fundamentally reassess our relationship with Georgia,” White House press secretary Karine Jean-Pierre said.

On May 12, Jake Sullivan, White House National Security Advisor to the U.S. President, posted on X: “The Georgian people are making their views known. Undeterred by intimidation tactics, tens of thousands of peaceful protestors turned out in rainy Tbilisi today to demand Georgian Dream withdraw the legislation.”

The Georgian Dream’s pro-Kremlin stance 

The Georgian Dream and its coalition partners have been in power in Georgia since 2012. The party also won the majority in the 2016 and 2020 general elections. The Georgian Parliament has 150 seats, with 76 seats needed for a majority. 

Founded by the oligarch Bidzina Ivanishvili, a friend of Putin, the Georgian Dream lacks a clear ideology. Despite being labelled by some European media as a “centre-left” party, its leadership has adopted far-right ideas. Members of the party have expressed opposition to the “LGBTI ideology” and press freedom. Gender-based and domestic violence, as well as discrimination against LGBTQI+ individuals, remain significant concerns. Despite claiming to be pro-EU and pro-NATO, the party uses anti-Western rhetoric and has a solid pro-Russian stance, which is leading the country towards authoritarianism. Additionally, the party has close ties with Hungarian Prime Minister Viktor Orbán.

A new Tax Code for oligarchs?

However, such pro-Russian sentiment and anti-democratic actions may be driven by economic interests linked to Georgian oligarchs. In April, the Georgian Parliament swiftly passed tax legislation that critics warn could be equally concerning. According to Radio Free Europe, opponents of the law argue that the changes to the Tax Code, approved by the G.D. party majority on April 19, might not only attract illicit foreign funds but also enable Bidzina Ivanishvili to evade potential Western sanctions if relations continue to deteriorate. A 2021 report from Transparency International Georgia revealed that Ivanishvili owns 20 offshore companies and that his name was implicated in the Panama Papers. Additionally, Georgian Prime Minister Irakli Kobakhidze recently disclosed that the U.S. had frozen Ivanishvili’s $2 billion, effectively imposing sanctions on him.

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