Ruling Georgian Dream party proposes new amendments to Law on Grants

Irakli Kirtskhalia, the Chair of the ruling Georgian Dream party faction in the legislative body, on Wednesday announced proposed amendments to the Law of Georgia on Grants aimed at preventing external financing of political unrest, violence, or revolutionary activities in the country.

In his remarks, Kirtskhalia framed the initiative as a response to past attempts to destabilise Georgia through externally funded NGOs and opposition groups, emphasising that similar restrictive measures have been adopted in other countries.

“As is known to the public, over the past five years, there have been several attempts to overthrow the Government elected by the Georgian people. Both the local radical opposition and so-called foreign-funded NGOs were actively involved in these revolutionary processes. Fortunately, the state successfully prevented all attempts at revolution, in which the legislative amendments, especially those related to transparency, played a crucial role”, he said.

“We all clearly remember the resistance from foreign adversaries to the first version of the Transparency Law, which only required foreign-funded NGOs to submit annual financial declarations. It became evident that many foreign donors and their networks had much to hide. Fortunately, Georgian society quickly discerned the truth from false propaganda, and the Government successfully passed this extremely important law. Since then, global political developments have progressed rapidly. Following Georgia, several countries subsequently adopted laws on the transparency of foreign funding, including France, Turkey, Serbia, and others”, he continued.

The official claimed funding for unrest in Georgia came from entities like USAID, NED, and EED, but recent exposures by the new US administration had made such activities harder.

“The public could clearly see that revolutionary processes in Georgia were funded by USAID, NED, EED, and other foreign foundations. The new US administration ultimately exposed this, revealing American foundations’ involvement in revolutions and systemic corruption in various countries, which led to their closure. As of today, funding for unrest, violence, and revolutionary processes in Georgia from abroad has become significantly more difficult. However, in practice, certain mechanisms and legal loopholes remain, the use of which could cost our country the peace, stability, economic progress, and prosperity that have been preserved through great effort”, he noted.

“For this reason, considering our country’s and the Georgian people’s responsibility, we are introducing amendments to legislation so that in the future no one can find an alternative way to fund unrest and violence in Georgia from outside the country”, he noted.

Kirtskhalia further highlighted that a grant now covered any funds or resources - monetary or in-kind - provided by any person to influence Georgian Government institutions, society, or policies, including activities tied to foreign governments or political parties.

“Amendments are being made to the Law of Georgia on Grants, specifically: The definition of grants is clarified. It is defined that a grant also includes any funds or resources provided in monetary or in-kind form by any person to any other person, which are used or may be used to influence the Georgian Government, state institutions, or any part of society, with the belief or intent to carry out activities aimed at shaping, implementing, or changing Georgia’s domestic or foreign policy, as well as activities stemming from the political or public interests, approaches, or relations of a foreign government or foreign political party. [This definition literally mirrors the US FARA law’s definition of political activity]. Receiving such a grant will only be possible with prior approval from the Georgian Government”, he said.

He also said that foreign legal entities substantially involved in Georgia must seek Government approval to receive grants.

“The law establishes the concept of a legal entity of another state whose activities substantially involve matters related to Georgia. Such a legal entity may only receive a grant with prior consent from the Georgian Government. For example, an organisation registered abroad but operating substantially in Georgia will need to apply to the Georgian government for funding; otherwise, it will be held criminally liable”, he noted.

Kirtskhalia emphasised that any foreign-provided funding in exchange for technical assistance, technology, skills, or services was considered a grant and required approval.

“The grant definition is further clarified to include funds provided in exchange for technical assistance, sharing technologies, specialised knowledge, skills, expertise, services, or other support. Therefore, if a foreign power hires experts in Georgia in exchange for money, these funds are considered grants, and prior government approval is required”, he noted.

“If a non-resident legal entity’s representative office, branch, or division receives a grant, including from the parent entity, this branch will need the Georgian government’s prior approval. Receiving a grant without approval will result in administrative liability - specifically, a fine double the amount of the unlawfully received grant”, he continued.

The official further highlighted that violations of the Law on Grants could result in fines, community service of 300–500 hours, or imprisonment up to six years.

“Amendments to the Criminal Code: Violations of the rules established by the Law on Grants will incur criminal liability, punishable by a fine, community service of 300–500 hours, or imprisonment of up to 6 years. Article 194 of the Criminal Code adds an aggravating circumstance: money laundering for the purpose of engaging in political activity in Georgia will be punishable by 9-12 years in prison. Criminal liability will also apply to a high-ranking political party official who violates the Organic Law on Citizens’ Political Associations by receiving foreign funding. Penalties include a fine, community service of 300–500 hours, or imprisonment of up to 6 years. Foreign lobbying becomes punishable under criminal law. Specifically, transferring money, securities, other property, or advantages directly or indirectly in exchange for political activity related to Georgia by a foreign citizen or legal entity will result in a fine, community service of 300–500 hours, or imprisonment of up to 6 years”, he said.

According to the law, individuals employed by organisations that receive more than 20% of their income from foreign powers are barred from political party membership for eight years.

“Amendments regarding political party membership: The Organic Law on Citizens’ Political Associations defines grounds for restricting party membership. A person employed under a labour contract by an organisation that receives more than 20% of its annual income from a foreign power is prohibited from party membership for 8 years. The State Audit Office will monitor the financial activities of political party members. The term declared electoral purpose is replaced with declared party-political purpose to ensure legal precision, expansion, and effectiveness. Restrictions on political parties will also apply to entities with a declared party-political purpose. Criminal liability applies to party leaders or declared party-political entities receiving foreign funding”, Kirtskhalia noted.

He also underlined that entrepreneurial entities engaging in public political activity outside their main business would face administrative fines: 20,000 GEL for a first offence, 40,000 GEL for repeated violations.

“Amendments regarding entrepreneurial entities and political activity: A new administrative offence is established in the Administrative Offences Code for an entrepreneurial entity engaging in public political activity unrelated to its primary business. The State Audit Office will impose a fine of 20,000 GEL for the first offence and 40,000 GEL for repeated or subsequent violations”, he concluded.