Georgia: New foreign agents’ draft law poses major threat to civic space

Members of the newly established "People's Power" political party (which is, however, part of the parliamentary majority) announced the so-called "Law on Foreign Agents" (also referred to as the "Law on Transparency of Foreign Influence") on December 29, 2022. The draft law was submitted to the Bureau of Parliament for February 20, 2023 and hearings will be scheduled. Statements made by the governing authorities suggest however that they are not only ready to begin discussions on the issue, but also consider it relevant, implying that there may already be a political will to adopt the law. 

The claimed goal of the law is to ensure the transparency of foreign influence, yet the deterioration of the civil society environment and harm to the sector’s reputation are plainly apparent consequences.

The draft law calls for:

• the establishment of a register of agents of foreign influence,
• the inclusion of non-commercial legal entities in this register if they receive a certain amount of money from foreign sources (more than 20 % of their annual revenue),
• the submission of annual financial declarations to authorities, and
• administrative responsibility in the form of extremely high fines if these rules are breached.

Stirring distrust

It should be highlighted that the terminology used in the proposed legislation, such as "agent of foreign influence" and "foreign power," comes with strong negative connotation and therefore helps discredit any groups that may be classified under this description.

An agent of foreign influence, according to the law, can be any non-commercial, non-entrepreneurial legal entity (except those established by an administrative body, which excludes sports federations and organisations established with the participation of the state), a broadcaster, or the legal entity owning media outlets, whose funds from a foreign power exceeds 20% of total income received during a calendar year. A foreign power, in turn, refers to:

1. a constituent entity of a foreign state's government system;
2. a foreign citizen;
3. a legal entity that is not established on the basis of Georgian legislation; and
4. an organisational formation or other type of association of persons that is established on the basis of a foreign state's law and/or international law.

In addition, income for a Georgian legal entity can also be considered to be coming from a foreign power, if the source of the income cannot be defined. That would require CSOs to engage in in-depth research of where their partners get funding from, which normally would not be publicly available information.

Unclear registration process and high fines

Anyone who meets the legal requirements must register as an "agent of foreign influence" on their own initiative by contacting the registration body - National Agency of Public Registry of Ministry of Justice of Georgia – acting as a register of agents of foreign influence (herein referred to as the "Agency") and filling out a special electronic questionnaire (subject to disclosure) with personal information, information about sources, the amount and purpose of the received income.

Upon registration, companies must submit to the agency the necessary annual financial report (declaration), which comprises the same information as provided in the original application. The legislation also authorises the Ministry of Justice to monitor the process and perform appropriate investigation and study of the matter at any moment, as well as request any relevant information, including personal data, for these reasons. The draft law provides little detail on how this process will take place and leaves it to the Ministry of Justice to adopt the procedures for all of these. What is more, the draft law gives the Ministry of Justice the power to monitor whether CSOs and other entities comply with the law. This basically subjects all registered CSOs, not only the ones that are registered as “agents of foreign influence”, to be subject to checks by the Ministry of Justice. The scope of such checks  is again unclear.

All who satisfy the legal description of an agent of foreign influence but do not register their position, do not provide the appropriate information, or repeat the same “wrongdoing” will be fined 25,000, 10,000, or 20,000 GEL, respectively.

Violating international standards

The Georgian civil sector, stakeholders and representatives of international organisations, are united in their opinions: the adoption of the "Foreign Agents" law, and even public debates about it, are detrimental to the environment of civil organisations and harm the process of European integration. The fact that the government intends to begin discussions about the law and shows a favorable opinion about it demonstrates that the existence of such an initiative effectively renders all other ongoing issues irrelevant and currently poses threats to close doors to any cooperation between sector representatives and the government. This may not only have a negative impact on the sector’s future but also render many recent efforts to collaboratively solve political, social, and economic issues futile.

The proposed text does not fulfill international or national human rights standards and contradicts the fundamental principles of a contemporary democratic state, including violation of freedom of association and personal rights.  The rule contradicts one of the primary reasons of European Union’s existence: unrestricted capital mobility.  

These developments will most likely prompt CSO representatives and all stakeholders to convene and develop a future action plan to be ready as events unfold.

For in-depth legal analysis and briefer prepared by ECNL and ICNL, click here.