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

De-oligarchization plan for Georgia

The Georgian government has developed a de-oligarchization plan. One of the important changes concerns the financing of political parties — according to the plan, legal entities will be banned from donating to elections, spending limits for each party will be reduced, and parties will have to publish their spending reports.

“Action Plan to Prevent Excessive Influence of Private Interests on Economic, Political and Public Life of Georgia” is the name of the document, which has already been criticized by the opposition.

The Action Plan has been developed in seven areas, taking into account the recommendations of the Venice Commission.

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What does the action plan include?

• Anti-corruption (strengthening the fight against all forms of corruption and prevention of corruption, coordinating the monitoring process of the Council of Europe’s anti-corruption body;
• Public procurement (protecting transparency and accountability in public procurement);
• Competition policy (formulating and implementing an effective competition policy);
• Justice;
• Combating money laundering and terrorist financing (strengthening anti-money laundering policies, including transparency of legal persons and contracts, timely and effective access to ownership information);
• Monitoring the financial activities of political parties;
• Media (strengthening pluralism as well as transparency of media ownership).

De-oligarchization plan for Georgia

What preceded it?

In the summer of 2022, the European Commission included de-oligarchization among the 12 conditions for granting Georgia EU candidate status.

On June 12, the Venice Commission of the Council of Europe published its final opinion on the draft law on de-oligarchization prepared by the ruling Georgian Dream party. The conclusion states that Georgia should not adopt the draft law on deoligarchization in its current form.

Later, the EU Delegation in Georgia also stated that given the risks described by the Venice Commission, it is better not to adopt the draft law on deoligarchization of Georgia in this form.

On November 8, 2023, the European Commission recommended, with some reservations, that Georgia be granted EU candidate status. Among these nine reservations: “[I]mprovement of the current action plan related to deoligarchization so that deoligarchization is implemented through a multi-sectoral, systemic approach”.

It is the Venice Commission’s recommendations that the ruling party leaders are referring to, saying that the main emphasis is on a “systemic approach” and not on “personalization”, which means that the Venice Commission’s conclusion is not applicable in Ivanishvili’s case.

Comments

Parliament Speaker Shalva Papuashvili stated that the action plan on de-oligarchization was developed in close cooperation with the European Commission, and in the point regarding the financing of political parties, the opinions of the Venice Commission and OSCE/ODIR were also taken into account.

As for the issue that legal entities will be banned from donating to political parties, Papuashvili said there are risks of circumventing the limit set for individuals through legal entities:

“It is easy to create a legal entity, create several, and then distribute the set ceiling and donate. 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.”

“We did not take the de-oligarchization action plan out of thin air. We did not come up with the problems presented. This was the advice of the Venice Commission,” parliamentary majority MP Henri Ohanashvili told reporters.

According to him, the opposition should say what they think should be added or reduced in the plan.

Conservative Party leader and former majority member Zviad Dzidziguri said that “with regulations, laws on deoligarchization, etc., we cannot change the situation in the country”, because Ivanishvili is a smart enough person that no rules apply to him.

“He has been able to do this for many years and will continue to do so in the future,” Dzidziguri says.

Georgian Dream chairman Irakli Kobakhidze said that “it is impossible that the problem of oligarchs will be solved only on the basis of legislative changes – oligarchs are in politics today and will probably continue their political activities.”

According to Kobakhidze, in general, legislation and action plans will not solve this kind of problem, although some progress could be made on the basis of a plan.

De-oligarchization plan for Georgia