Foreign Agent Law: Georgia SpecialREPORT

Risks to NGO's from the Foreign Agent Law

Source: OC Media

Date: 24 JUN 2024
Analysts & Contributors: TW,MF,DS


Key Points

  • Since gaining independence from the Soviet Union in 1991, Georgia has sought closer ties with the EU and NATO to reduce Russian influence and integrate into Western frameworks.

  • Georgia's journey has been challenging, marked by internal political turmoil, territorial conflicts, and external pressures from Russia.

  • The ruling Georgian Dream party, in power since 2012, initially positioned itself as pro-Western but has recently faced criticism for actions that undermine democratic principles and European integration.

  • Modeled after a similar law in Russia, Georgia's "Law on Transparency of Foreign Influence" requires NGOs and media receiving over 20% of their funding from abroad to register as "organizations serving the interests of a foreign power," raising concerns about authoritarianism.

  • The introduction of the law sparked large-scale protests in Tbilisi, with demonstrators fearing it could suppress civil society and media freedom. The government's response included the use of tear gas, water cannons, and stun grenades.

  • Despite domestic and international condemnation, the Georgian Parliament approved the law on May 14. President Salome Zourabichvili vetoed it, but the Parliament overrode the veto, leading to further protests and demands for political change.

  • The EU and the US have condemned the law, arguing it contradicts European values and hinders Georgia's EU membership aspirations. The US imposed visa restrictions on Georgian officials involved in the law's enactment and protest suppression.

  • The law threatens civil liberties in Georgia, particularly freedoms of expression and association, by stigmatizing NGOs and media as "foreign agents," potentially suppressing dissent and weakening civil society.

  • The law could lead to increased self-censorship among journalists and activists, erode democratic freedoms, and undermine public trust in government institutions, deepening societal divisions and reducing political engagement.

  • The law aligns with Russian policies, suggesting a shift in Georgia's geopolitical orientation towards Moscow. This could impact regional security dynamics and hinder Georgia's aspirations to join the EU and NATO, affecting its democratic trajectory and international standing.

Summary

Since gaining independence from the Soviet Union in 1991, Georgia has actively sought closer ties with the European Union (EU) and North Atlantic Treaty Organisation (NATO) as part of its strategy to reduce Russian influence and integrate more deeply into Western political, economic, and security frameworks. However, Georgia's path has been fraught with challenges, including internal political turmoil, territorial conflicts, and external pressures from Moscow. Of particular significance is the activity of the ruling Georgian Dream party, which has held power since 2012. Initially positioning itself as pro-Western, recent actions, such as controversies surrounding the so-called foreign agents law, have raised doubts about its commitment to democratic principles and European integration. This is particularly notable given that Russia's invasion of Georgia in 2008 resulted in Moscow-backed separatists occupying 20 percent of its territory, fostering deep anti-Russian sentiments among the Georgian people. With 79 percent of its population — and a comparable number of its politicians — staunchly pro-European, there is a prevailing sentiment of opposition to Russian influence in current Georgian discourse.

Support remains broad for Europe over Russia in Georgia. Source: NDI.

First enacted in Russia in 2012, this law requires organizations that receive foreign funding and engage in political activities to register as "foreign agents," a term with negative connotations used to suppress civil society and dissent. In Georgia, it is known officially as the "Law on Transparency of Foreign Influence," mandating that non-governmental organizations (NGOs) and media outlets receiving over 20% of their funding from abroad register as “organizations serving the interests of a foreign power,” signaling a worrying shift towards authoritarianism.

Although there was a previous attempt to adopt a similar law in 2023 initiated by the People's Power party, the Georgian Dream party formally introduced an updated version of this legislation to the Georgian Parliament in early April, sparking large-scale protests in Tbilisi. Demonstrators expressed fears that the legislation, resembling Russia's restrictive "foreign agents law," could suppress civil society and media freedom in Georgia. Opposition groups and protesters voiced concerns that the law would target government critics, independent media, and anti-corruption activists​​. To suppress the protests, riot police responded with tear gas, water cannons, and stun grenades​​. Despite escalating domestic and international condemnation, including from the EU, the United Kingdom (UK) and the United States​ (US)​, the Georgian Parliament approved the law on May 14 with 84 votes in favor and 30 against. Georgian President Salome Zourabichvili vetoed the law on May 18, citing threats to democratic values and European aspirations​​. However, the ruling Georgian Dream party-dominated Parliament overrode the veto 10 days later with a vote of 84 to 4, officially adopting the law. Opposition MPs walked out in protest, further fueling demands for political change​​​. Across Tbilisi and other parts of the country, tens of thousands of people, including students, journalists, and activists, joined demonstrations against the law, leading to clashes with riot police, numerous arrests, and reports of excessive use of force​​. Following the signing of the bill into law by Georgian Parliamentary Speaker Shalva Papuashvili on June 3, Georgian NGOs announced plans to challenge the legislation in the constitutional court and to submit a case to the European Court of Human Rights.

Protest over the foreign agent law. Source: BBC.

International reactions to the law have been notably strong and varied. While Russia has denied any involvement in supporting the bill, both the EU and the US have expressed serious concerns, arguing that the legislation contradicts European values and could hinder Georgia's aspirations for EU membership. UN officials and human rights experts have also condemned the law, warning that it threatens freedoms of expression and association and urging its repeal​​. On June 3, Georgian Prime Minister Irakli Kobakhidze dismissed international criticism, asserting that the law is necessary to counter what the government perceives as harmful foreign influence aimed at destabilizing the country. However, many Georgian journalists and activists argue that the true aim of the law is to suppress dissent ahead of the October parliamentary elections. The US responded by imposing visa restrictions on numerous Georgian officials on June 6, signaling a strained bilateral relationship​​. State Department spokesperson Matthew Miller reiterated the US stance, expressing hope that Georgia's leaders would reconsider their actions in light of their democratic and Euro-Atlantic aspirations, but also indicating readiness for further measures if necessary.

The situation in Georgia remains dynamic, with reports indicating that NGOs and media organizations are beginning to feel the practical implications of the law, prompting concerns. They are disquieted that the new registration requirements under the 'foreign agent' law stigmatize them and impede their operations. Tensions remain elevated as the government maintains its position, amidst ongoing developments that will significantly influence Georgia’s political and social landscape in the coming weeks and months. The outcome will depend heavily on both domestic government actions and international responses​.

Future Outlook 

Physical Security

The passage of the "foreign agents" law in Georgia has already triggered significant internal unrest, and this instability is likely to persist. The law's enactment has mobilized a wide array of opposition groups, including students, activists, civil society organizations, and independent media. If the protests continue, there is a high probability they will lead to sustained civil disobedience, which might provoke harsher government crackdowns. Such a scenario is likely to exacerbate tensions between the government and its citizens, potentially leading to more violent confrontations and further destabilization.

Democratic Institutions

Further implementation of the law threatens to curtail civil liberties in Georgia, particularly freedoms of expression and association. By stigmatizing NGOs and media outlets as "foreign agents," the government could effectively suppress dissenting voices and weaken the country's civil society. This suppression is expected to not only stifle democratic engagement but also increase self-censorship among journalists and activists, thereby undermining transparency and accountability within the country​​. Moreover, the implementation of the law is likely to erode democratic freedoms and further strain public trust in government institutions. If the law continues to be enforced, it is highly probable that it will deepen societal divisions and reduce social cohesion. A population that feels disenfranchised and oppressed is less likely to engage constructively in political processes, potentially leading to long-term disillusionment and apathy​. Insisting on the implementation of the law also holds high potential to entrench the ruling party's power, reduce political pluralism, and lead to more authoritarian governance practices​​. Additionally, it is likely to deepen the political divide between the ruling party and the opposition, potentially influencing the upcoming parliamentary elections in October 2024 and shaping voter sentiment by mobilizing opposition support against the ruling party.

Geopolitics

Regarding external geopolitical implications, Georgia's aspirations to join the EU and NATO could be significantly impacted by the "foreign agents law." Both organizations have stringent requirements regarding democratic governance and human rights. The EU, in particular, has expressed that such legislation is incompatible with European values, which could derail Georgia's EU membership aspirations. Similarly, NATO's emphasis on democratic norms and stability may be at odds with Georgia's current trajectory, potentially stalling its integration into the Western security alliance​​. The international backlash against the law has already begun to manifest in tangible consequences. The US has imposed visa restrictions on Georgian officials involved in the law's enactment and the suppression of protests. Continued international criticism and sanctions could further isolate Georgia diplomatically and economically. This isolation might compel the Georgian government to either double down on its policies or reconsider its stance to restore its international standing​​. However, it is important to note that not all EU member states uniformly oppose such legislation, nor does the entire US political landscape.

Although the current US administration has taken a firm stance against Georgia's foreign agents law, this position may not be sustained in the long term. Within the EU, there is also a notable divide between proponents of liberal democracy and nationalist governments, such as those in Poland and Hungary. For instance, Hungary adopted a similar law in 2017 named the Law on the Transparency of Organisations Supported from Abroad. As Europe experiences a rightward shift, particularly evident in recent EU elections, the European Conservatives and Reformists (ECR) group within the European Parliament and nationalist-led governments like Italy under Prime Minister Giorgia Meloni might also be more lenient towards such legislation. This division within the democratic world indicates that while current US and Western European administrations might condemn the law, future political shifts could lead to more nuanced or divided stances on this issue.

The EU moved to the right with the recent elections. This could impact how the organization views Georgia's law. Source: Reuters.

Regional Security Dynamics

Additionally, the foreign agents law in Georgia is widely seen as mirroring similar legislation in Russia, which has been used to suppress civil society and dissent. This alignment with Russian policies could be interpreted as a signal of a shift in Georgia's geopolitical orientation towards Moscow. Such a shift would have profound implications for regional security dynamics, potentially increasing Russian influence in the South Caucasus. This could destabilize the broader region, particularly if Georgia's Western-oriented neighbors perceive a weakening of their own security environment as a result​​.

Conclusion

Overall, the "foreign agents law" represents a critical juncture for Georgia. The government's handling of the law and the public response will significantly influence the country's democratic trajectory, international standing, and internal cohesion in the coming period. In other words, the resolution of this crisis will determine whether Georgia can maintain its democratic aspirations and international alliances or if it will drift towards greater authoritarianism and instability.

Recommendations

Given the critical provisions of the "foreign agents law" as well as recent developments, NGOs and other International Development entities operating in Georgia should consider implementing the following recommendations to navigate this complex environment and ensure the safety and security of their operations and staff:

CATEGORY

RECOMMENDATIONS

Legal Compliance and Documentation

  • Understand the Law: Thoroughly review the specifics of the "Law on Transparency of Foreign Influence" to understand its implications. Ensure that your organization complies with all legal requirements to avoid penalties or forced closures.

  • Document Preparation: Ensure all required documents are prepared for registration in compliance with the law, including detailed financial records to fulfill annual declaration requirements.

  • Compliance Strategy: Develop a clear strategy for complying with the new law, including designating a compliance officer or team to manage these requirements.

  • Legal Guidance: Engage local legal experts to provide guidance on compliance, registration processes, and potential legal challenges. Stay informed about any changes or updates to the law.

  • Maintain Transparency: Be ready for increased scrutiny and potential audits. Maintain transparent and detailed records of all funding sources and expenditures.

  • Internal Audits: Conduct regular internal audits to ensure compliance with the law and prepare for potential inspections by The Ministry of Justice (MoJ). Document all activities and maintain detailed records.

  • Policy Revision: Review and revise grantmaking and procurement policies to adapt to the new law. Be prepared to switch from grants with NGOs to contracts with LLCs and individual entrepreneurs.

  • Simplified Agreements: Create simplified agreements for local partners to present to banks and tax authorities.

  • Transparency with Beneficiaries: Inform final beneficiaries about the origin of funding to maintain transparency.

Security and Risk Management

  • Risk Assessments: Conduct comprehensive risk assessments to identify potential threats to your organization's operations and staff. Develop mitigation strategies for identified risks.

  • Secure Communication: Implement secure communication channels to protect sensitive information. Use encrypted email services and messaging apps to safeguard discussions about funding sources and activities.

  • Physical Security: Enhance physical security at your office locations. This could include installing surveillance cameras, alarm systems, and controlled access points to prevent unauthorized entry.

Staff Safety and Training

  • Safety Protocols: Develop and disseminate safety protocols for staff, especially those involved in protests or high-risk activities. Ensure that all employees are familiar with emergency procedures.

  • Security Training: Provide regular training sessions on security awareness, including how to handle potential harassment or threats. Emphasize the importance of digital security and data protection. Regularly follow up on security training sessions.

  • Mental Health Support: Recognize the psychological toll of operating under stressful conditions. Offer mental health support services to staff to help them cope with anxiety and stress related to their work environment.

  • Digital Security: Invest in digital security by ensuring that local partners utilize licensed, up-to-date software, as well as newer computers and equipment.

  • Police Protocols: Create protocols for dealing with police stops, signing police protocols, and preparing for police station visits as witnesses.

  • Government Inspections: Ensure that staff and partners know their rights and obligations during government inspections.

  • Contingency Planning: Develop contingency plans in case an NGO must close its office.

Advocacy and Collaboration

  • Strengthen Alliances: Strengthen alliances with other NGOs, local civil society organizations, and international bodies. A united front can amplify your advocacy efforts and provide mutual support.

  • International Communication: Maintain regular communication with international bodies such as the EU, UN, and human rights organizations. Keep them informed about the challenges faced and seek their support in applying diplomatic pressure on the Georgian government.

  • Public Education: Educate the public about the implications of the "foreign agents law." Use media campaigns to highlight the importance of civil society and the potential negative impacts of the law on democratic freedoms.

Community Engagement and Support

  • Local Community Engagement: Engage with local communities to build support and demonstrate the positive impact of your work, which can mitigate negative perceptions fostered by the "foreign agent" label.

  • Human Rights Monitoring: Support monitoring of human rights violations and harassment against activists. Provide training and financial support to local partners.

  • Legal and Financial Support: Offer legal advice, accounting, tax advice, business planning, and psychological support to partners.

  • Relocation Funds: Provide funds for relocation, including financing, visa support, and legal informational support.

  • Strategic Litigation: Support strategic litigation, although this may be limited by the independence of the judiciary.

Contingency and Strategic Planning

  • Crisis Management Plans: Develop detailed crisis management plans to address potential scenarios such as office raids, staff detentions, or violent protests. Assign roles and responsibilities to ensure a coordinated response.

  • Data Backup: Regularly backup important data and documents. Store backups securely, preferably in multiple locations, to prevent data loss in case of raids or confiscations.

  • Office Closure Plans: Develop contingency plans in case an NGO must close its office.

  • Support Strategic Litigation: Support strategic litigation, although this may be limited by the independence of the judiciary.

Financial Management

  • Financial Systems: Implement robust financial management systems to track and report foreign funding accurately. Regular audits can help maintain transparency and compliance.

  • Legal Defense Fund: Establish a legal defense fund to cover potential fines and legal costs associated with non-compliance or challenges to the law.

  • Simplify Reporting: Simplify reporting requirements to minimize the transfer of personal data of local partners and beneficiaries and reduce the number of required reports to ease the administrative burden.

  • Monitor Transactions: Monitor thresholds for bank transfers and limitations on transactions, especially in foreign currencies.

  • Risk Assessment Methodologies: Understand the risk assessment methodologies used by national and private banks.

  • Diversify Funding: Invest in diversifying the funding sources of local partners to reduce dependence on foreign funding.

Operational Flexibility and Efficiency

  • Flexible Amendments: Allow for quick processing of amendments and flexibility regarding changes to agreements.

  • Secure Communications: Adopt secure communications protocols between USAID, implementing partners (IPs), and local partners/beneficiaries.

  • Risk Awareness: Consider existing risks with local partners and beneficiaries. Ensure they understand these risks before implementing activities.


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