Legal entities to be banned from financing political parties in Georgia

Financing parties in Georgia

Political parties in Georgia will no longer be able to receive financial donations from legal entities. Such changes are being prepared to the law “On Political Unions of Citizens” on the initiative of Georgian Dream deputies.

According to the Chairman of the Georgian Parliament Giorgi Papuashvili, there are risks that through legal entities it will be possible to bypass the limit on donations established for individuals.

“It is easy to create a legal entity, even several, and make donations through them. In general, the volume of donations from legal entities is very low. In 2020, only 3% of total party income/donations came from legal entities,” Papuashvili said.

Another change sets the upper limit of parties’ expenses. According to the changes, the upper limit of the total allowable amount of expenses incurred by a party during a year is reduced from 0.05% to 0.04% of the previous year’s GDP.

Georgian Dream claims that these changes are necessary for “deoligarchization”.

The Government of Georgia has developed a de-oligarchization plan. What does it involve?

Under the plan, legal entities would be prohibited from making campaign donations

The government says it is taking into account the “deoligarchization” recommendation published by the Venice Commission on June 12, 2023, which indicates a ban on the ability of legal entities to fund political parties.

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“Accordingly, political parties will cease to be financed by legal entities and the total amount of expenses incurred by a party during the year will be reduced, which in turn ensures that only healthy competition between parties exists and contributes to the creation of a fair electoral environment and its further development,” an explanation to the bill reads.

Opposition reaction

Opposition politicians, however, believe that with these changes the government is trying to give the West the illusion that it is fighting “oligarchy” in the country.

The opposition also believes that the changes will affect only them, while Georgian Dream will continue to be financed with dark money.

Roman Gotsiridze, Eurooptimists faction: “The goal was to achieve something. It was a recommendation of the Venice Commission and they presented this recommendation as a big step towards de-oligarchization… These changes will not change anything. Legal entities did not finance the opposition because of fear.”

Paata Manjgaladze, MP from “Agmashenebeli Strategy” party: “This is an imitation without a goal. Because the tightening of regulation will affect only the opposition, not the Georgian Dream with their dirty money.”

The opposition satellite of the Georgian Dream, the pro-Russian People’s Power movement, welcomes the mentioned changes, the purpose of which, in their opinion, is to stop the illegal financing of opposition parties.

Financing parties in Georgia