Authors: Prof. Levan Izoria, Irakli Kobakhidze, Paata Turava

1. Georgian Development Research Institute
Review of the Amendments (29.12.2011) in the Organic Law of
Georgia on Political Unions of Citizens
Levan Izoria, Irakli Kobakhidze, Paata Turava
January 26, 2012
Tbilisi

2. CONTENTS
I. Amendments in the Organic Law of Georgia on Political Unions of Citizens
and the Principle of Democracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II. Amendments in the Organic Law of Georgia on Political Unions of Citizens
and Human Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
III. Amendments in the Organic Law of Georgia on Political Unions of Citizens
and Rule of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
IV. Review of the Legal Norms in the Amendments in the Organic Law of
Georgia on Political Unions of Citizens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
V. The Chamber of Control of Georgia as a Monitoring Body According to the
Amendments in the Organic Law of Georgia on Political Unions of Citizens . . . . . . . . . 12
VI. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Appendix (Amendments to the Organic Law of Georgia on Political
Unions of Citizens) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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3. I. Amendments in the Organic Law of Georgia on Political Unions of
Citizens and the Principle of Democracy
The aim of any legislation on political status and the activities of political parties should be
to facilitate the development of political pluralism and democracy within a country. Legislators
should establish such a law that will support competition and institutionalize a multi-party
system. Thus, strengthening pluralism on a legislative level is timely in Georgia. Thanks to a
political heritage of 70 years of totalitarian rule, Georgian society is not yet capable of
supporting a stable electoral environment. This hampers the current development of national
political parties and a functioning democratic system.
Unfortunately, Georgian legislation since 1995 has not facilitated the institutionalization of
parties in a pluralistic political system. Moreover, it has created extra barriers to that goal,
namely: a) In Georgia, established forms of governance have created a situation in which major
players become figurehead politicians rather than found sustainable political parties based on
ideas rather than personalities; b) The electoral system does not ensure proportional
representation of political parties in legislative and administrative institutions; c) The
significance of political movements is diminished by the excessive commercialization of the
political process; d) Current legislation does not provide substantive guarantees for securing
the objectivity of the mass-media, which has resulted in polarization and radicalization of
political processes; e) Legislation has not established effective guarantees to avoid the misuse of
administrative resources for partisan political interests.
As a result, a sustainable multi-party system was not established in Georgia. The above
legislative issues developed in an environment of weak socio-political dialogue and regular
political crises, impeding the emergence of healthy political parties, and contributing to the
political polarization of society (see the 2003 “Rose Revolution”, crises of 2007 and 2009).
Within this context, it has been incredibly difficult for Georgia to establish a pluralistic
political system, which would have promoted the appearance of a real political competitor for the
governing party. As such, ineffective legislation and a lack of standard political processes have
contributed to the already-daunting challenges faced by political movements. The sudden
appearance of Bidzina Ivanishvili into the political arena prompted many to suggest he holds a
unique potential for forceful and motivated pluralistic development. However, the recent
restructuring of the state electoral code, especially in the realm of campaign finance and non-
party political organization, has restricting the permissible political activity of Georgian society.
The purpose of the amendments to the Organic Law of Georgia on Political Unions of
Citizens is to improve the financing of political parties, prevent corruption, secure transparency
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4. and accountability, and to promote political competition. The authors of this paper share these
goals. However, our analysis of the amendments shows that methods used by legislators to
achieve the above-mentioned goals are inappropriate to Georgia’s democratic needs, as well as
being fundamentally unconstitutional. It is worth mentioning that the recommendations of the
Venice Commission and other international organizations were deliberately misinterpreted or
concealed in the drafting of the legislation. For instance, severe restrictions on article 261 were
not mentioned in draft versions submitted to the Commission. Article 261 was adopted1 by the
Parliament of Georgia only after the Venice Commission published its report.
The amendments adopted do not match the fundamental constitutional principle of the
democratic state, particularly with regards to the concepts of self-expression and freedom of
association. The former can be implemented individually (through the right of freedom of
expression and electoral participation), as well as collectively (through participation in political
organizations). Such forms of individual expression secure competition between interests and
support the existence of a multi-party political system. This competitive environment is a
necessary pre-condition for the democratic development of society, and the creation of such an
environment is the responsibility of any democratic state.
Yet the amendments made to the law do not promote the establishment of this necessary
political environment. On the contrary, certain articles of the adopted amendments hinder the
development of democratic processes, such as the imposition (in article 261) of excessive
restrictions on those non-party entities which may be generally related to the political process.
Active participants (whether they are private individuals or legal entities) now fall under the
special control of the state. The above-mentioned regulation has a purely punitive and repressive
character, intimidating the expression of political opinions and creating an atmosphere of state
control, limiting legitimate political activity.
1
Article 261
1. Restrictions provided by this chapter also apply to:
a) A judicial entity if it directly or indirectly is related to a political party, otherwise is under the control of a
political party, or openly states its political objectives and goals;
b) A judicial entity, which through its representatives or other person encourages voters to support a particular
political party or refrain from supporting a particular political party;
c) A person, who openly states political and electoral objectives and goals, or a person who is related to the above-
mentioned person, and also to the person who has a business relationship with the person who has political and
electoral goals or who carries out such activity that influences the will of those Georgian citizens who participate in
elections, plebiscites and referenda, and those actions are carried out to avoid the regulations provided by this law.
2. A judicial entity, which directly or indirectly is related to a political party, with expenses directly or indirectly
connected to the activities and goals of the party.
3. Restrictions established by this article should not be applied to restrict freedom of expression and civil activity.
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5. II. Amendments in the Organic Law of Georgia on Political Unions of Citizens
and Human Rights
These amendments not only violate the principle of democracy, but also allow state bodies
to legally violate fundamental human rights – such as the right to free development of his/her
personality (article 16 of the Georgian Constitution); right to private life (article 20); right to
property (article 21); freedom of expression (article 24); right to form and join public
associations (article 26); right to free entrepreneurship (article 30); and right to confidentiality of
information (article 41). Georgian citizens, entitled to the above-mentioned constitutional rights,
are potentially victims of the vague regulations found in the amendments, as the legislation does
not precisely define who falls under the scope of the new law. Such legal norms deprive citizens
of the legal certainty that is the essential pre-condition for personal freedom and safety.
The amendments also violate guarantees of informative self-determination and the
confidentiality of personal data. These rights are essential for an unencumbered development of
self; therefore the protections of those rights require a subtle approach. Information about the
private life of an individual should be accessible to government officials only in exceptional
cases. Even in such circumstances, this information should not be widely available and should be
accessed with discretion and security in mind. The amendments to the political union law grant
government officials practically unlimited rights to obtain personal data – in particular,
information regarding bank transactions.
This clearly contradicts the rights to free development, private life, freedom of expression
and the right to form or join associations, all of which are guaranteed by the Universal
Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the
European Convention on Human Rights.
III. Amendments in the Organic Law of Georgia on Political Unions of
Citizens and the Rule of Law
The changes made to the political union law contradict the rule of law as a fundamental
principle of the Constitution. According to this principle, each legal norm should clearly and
exactly define its subjects. Those requirements specially apply to legislative norms capable of
restricting civil rights. Legislators must accurately determine the circumstances and criteria
which could become the basis for the restriction of rights, ideally before a law is passed. Vague
legal norms could be applied randomly in practice, and violate constitutional rights.
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6. IV. Review of the Legal Norms in the Amendments in the Organic Law of
Georgia on Political Unions of Citizens
The restrictions enacted by article 261 apply to both individuals and legal entities; however,
the amendments do not define who exactly falls under its scope, leaving it open to an
unnecessarily wide interpretation. Potentially, restrictions pertaining to the functioning of a
political party could also be applied to a legal entity which directly or indirectly is related to the
party, or is otherwise under the control of the party – or openly declares political goals and
objectives. Such a legal entity could be a non-governmental organization, commercial
organization, mass-media outlet, or similar civil society group, as the law merely defines the
entity as “having [an] indirect relationship with the political party”. Similarly, the meaning of
“under the control of the political party” is unspecified, as it is not clear what is meant by a
“statement of political goals and objectives”.
This raises innumerable questions. How can one identify the indirect relation of a legal
entity to a political party? Does a scope “under the control of the political party” mean that a
legal entity is under the institutional subordination to the political party, or also commercial or
familial association? What is “the statement of political goals and objectives” for a legal entity
that is not a political party? The goal of any political party is to gain enough electoral power to
form a government. Are activities associated only with parties (such as control of political
processes, participation in democratic elections etc.) the same as a declaration of political goals
and objectives, and participation in a nation’s political life? Is there a civil (rather than explicitly
political) method of making such a statement? How does one differentiate between political and
civil activities, so as to prevent regulations intended for parties from being applied to any civil
society organization?
It should be noted that phrases similar to the one in article 261 can also be found in the
recommendations of international organizations, which are generally based on common practice
in Europe. According to these norms, restrictions on political parties can be applied to a “legal
entity if it is directly or indirectly related to a political party.” However, these recommendations
do not also apply the litmus test of a “statement of political goals and objectives”, as in the
Georgian legislation. Those organizations generally accepted as being subject to similar laws are
foundations that engage in fundraising for a political party, and often receive regular subsidies
from the state budget (as in Germany2). Accordingly, the same restrictions are applied to these
funds as those imposed upon political parties. Such legislation is vital to the enforcement of a
fair and open political system (one free from corruption), and it operates in concord with
2
Adenauer Foundation, Ebert Foundation, Naumann Foundation, Boell Foundation etc.
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7. established legal certainty principles. Although accepting legal recommendations from
international organizations does not require the drafting of identical legislation, the spirit of the
text provides an excellent guideline for those transformative societies such as Georgia.
Article 261 contains more vague language in its second paragraph. It reads, “[a] legal entity
is directly or indirectly related to the political party when its expenses directly or indirectly are
connected to the activities and goals of the political party.” This note allows multiple
interpretations, some of which may contradict constitutional principles.
It should be mentioned that in many traditionally democratic countries, numerous
influential groups have close relationships with political parties. In Germany for instance, trade
unions support and provide funding for left-wing parties, while employers unions assist right-
wing parties. The ties between these unions and political parties are so tight that they are placed
under consideration when the government establishes monitoring bodies or similar institutions.
For example, during the distribution of seats on the Board of Trustees for Public Broadcasters in
Germany, parity between political parties and their foundations was addressed. A similar
practice is exercised in most democratic states that have a history of influential cooperation
between political and social organizations. However, legislators do not expose non-party
organizations to the same financial restrictions in place for parties, as they remain entirely
different political beasts.
Together with legal entities, restrictions on political parties could also be applied to
individuals – Georgian citizens or foreigners. Legislators distinguish three categories of relevant
individuals: first, a person who has openly stated his/her political and electoral goals and
objectives; second, one who is related to the above-mentioned person, and third, anyone who
engages in commercial activity with that particular person, expresses political goals or
objectives, or who carries out activities that have an impact on the political will of those
Georgian citizens participating in elections, plebiscites, and referenda.
It is difficult to define what is precisely meant by “political goals and objectives” with
regards to an individual. Unambiguously, it does not merely refer to a willingness to seek formal
political power as, according to established legislation, only Georgian citizens are eligible to be
elected to higher office, whereas the above-mentioned regulation is also applied to citizens of
other countries. Therefore, the regulation creates a basis for broader interpretation. It may apply
to the expression of personal political views, as well as public participation in political
discussion, both of which are necessary for personal engagement in civil society and the political
process. The notion of “electoral goals” appears in the same regulation. Any Georgian citizen
who practices his/her right to vote can be said to have electoral goals, even if they are not
members of a political party. The circle is further enlarged by the inclusion of a “person who is
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8. related to the above-mentioned person,” capturing an indefinite and undefined number of
people3.
Thus, our analysis reveals that article 261 contradicts articles 16, 26 and 30 of the
Constitution, and their commitment to the principles of democratic legal certainty and
proportionality.
The Chamber of Control of Georgia is the body authorized to define which legal entity is
related to a political party, controlled by that party, or has openly stated its political goals and
objectives. It also identifies any individuals who have openly stated his/her political and electoral
goals and objectives, as well as their relations to relevant political figures and parties. According
to sub-paragraph “g” of the second paragraph of article 341, the Chamber of Control is
authorized to demand information regarding the origin of property given or received from the
persons defined according to article 261. Therefore, identification of the persons already vaguely
enlisted by legislators is carried out by a government-appointed body, which can, according to its
own bias, establish the precise limitations for all involved parties.
It is unclear how an individual can be subject to the same financial restrictions as political
parties. The law as written leads us to believe that, for example, a party member or his/her family
can receive income only from sources allowed by law for political parties. This may complicate
the acquisition of personal funds through salaries, entrepreneurial activities, or gifts (especially
from foreign citizens). This suggests negligence in the formulation of this legislation.
The first paragraph of article 251 is a confirmation of the absurd vagueness of these
regulations. According to that paragraph, the total amount of the state finances, donations and
other type of income received by a political party or related individuals and legal entities should
not exceed 0. 2% of the previous year’s GDP of Georgia. Therefore, an individual that conducts
commercial activities and is somehow connected (either as a relative, or an associate, or a
donator) to a political party is limited in the total amount of income earned from his/her own
commercial activities. Even more absurd is that fiscal restriction on legal entities, such as
corporations, which cannot make political contributions but could be assessed as “related” to a
political party thanks to commercial or familial ties.
An attempt to enforce this law as written could raise serious concerns. We can illustrate the
problem with one simple example: Imagine two political parties have separately mobilized
0.15% of GDP each before the September of an election year. In September, they create a
political bloc and in November they submit a financial declaration stating that the total income of
the members of the bloc exceed 0.3% of GDP. In this case, the majority of the declared income
3
Those individuals could be family members, relatives, friends, neighbors etc.
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9. mobilized by the parties would be considered illegal. Hence, article 25 1 contradict article 30 of
the Constitution.
Paragraph six of article 27 is also vague, stating, “Donations on behalf of the other person
or by the evasions of restrictions of the law will result in transferring those donations to the state
budget. The violator will be charged according to the Georgian legislation.” For instance, if
several members of one family contribute donations to a political party, officials can consider
these donations as on behalf of a third person, or an attempt to evade the established restrictions
of the law. The law should not allow such vague interpretations.
According to paragraph seven of the same article, “If donators receive income wholly or
partially from one source (individuals/ legal entities or from the persons affiliated with them),
then the total annual amount of those transactions to one electoral subject should not exceed
500 000 GEL.” It is impossible for a political party to control whether their donators share the
same source of income or not. Similarly, it is impossible for a donator to determine whether
he/she violates the established margins of the law or not. Considering the fact that there are very
strict sanctions imposed for contributions which breach the law, the above-mentioned legal norm
should be severely criticized. Paragraphs six and seven of article 27 contradict the principle of
legal certainty.
According to article 32, political parties are obliged to provide in their financial declaration
the expenses of those legal entities which are directly or indirectly under the control of the party.
As mentioned above, the phrase “legal entities which are directly or indirectly under control of
those political parties” can be interpreted arbitrarily by the government. It is unreasonable to ask
parties to provide a list of expenses of those legal entities not subordinated to them. Doing so
would contradict the principle of legal certainty and the freedom of public association guaranteed
by article 26 of the Constitution.
According to article 51 of the new law, political parties are prohibited from providing
finances (directly or indirectly) to a citizen of Georgia. It is not clear from the law whether a
political party can pay for services provided by Georgian citizens. This leaves a gap for the
government to use multiple interpretations, benefiting one party while impairing another.
According to the same article, political parties are prohibited from buying goods or services
at higher than market price. This regulation also gives the government room for arbitrary
interpretation. At the very least, there should not be a radical difference between the market price
of goods and services and their agreed-upon price, but there is no mention of acceptable price
gaps in the law.
According to paragraph two of article 51, political parties have the right to operate on
political and electoral “promise,” meaning a pledge given to the electorate which is related to the
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10. future distribution of budgetary means. The above-mentioned rule does not provide effective
guarantees to avoid the use of administrative resources for subjective political gain.
Unfortunately, the law does not impose limits on such corrupt practices, and so it may be
necessary to ban such explicit political promises that are related to budgetary expenses. This also
contradicts the principle of legal certainty.
According to article 33, a political party is obliged to carry out a financial audit of its
activities. Moreover, the political party should apply only to those independent auditors who
satisfy the established standards approved by the Chamber of Control. This regulation may give
the Chamber unencumbered power for manipulation, such as the use of biased auditors. Article
33, therefore, also contradicts the principle of legal certainty.
According to article 341, the Chamber of Control is authorized to obtain information related
to the finances of political parties through commercial banks. In addition, the Chamber is
authorized to receive information about the origin of property transferred or received by both
parties and any entities directly or indirectly related to them. These regulations provide the
government with total access, and thus total control, over the finances of parties and, potentially,
those organizations and individuals associated with them. Therefore, the law gravely violates the
rights of free development of individuals, informative self-expression and right to secure
personal data, contradicting articles 16 and 20 of the Constitution.
Furthermore, that same article is authorized to establish strict sanctions for violating the
requirements of law. Three of these sanctions are worth deeper analysis:
a) “Receiving or concealing prohibited financial or in kind donations determined by
Georgian legislation will cause a seizure of illegal donations and their transfer to the state
budget, and the political party will pay a fine of ten times the received financial and in kind
donations. “A party may be unaware of a donation or service received, based on the wide-
ranging definition of their “relationship” to individuals or legal entities. Parties may accidentally
conceal this financial information because they were unaware of its relevance.
b) A transaction of financial and material donations prohibited by Georgian legislation,
from physical and legal entities for a political party’s benefit, will cause a fine of ten times the
amount of received financial and material donations. The meaning of the term “donations for
political party’s benefit” is not defined in the text, leaving it open for misuse.
c) ”The Chamber of Control of Georgia sequestrates property of physical or legal entities
(including bank accounts). This can be appealed to the court together with the resolution of an
offence. The appeal does not suspend the sequestration. “The law does not identify in which
cases the Chamber may sequestrate the property of a party, or natural (individual) and legal
entities. The seizure may be a disproportionate interference, violating the fundamental
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11. constitutional principle of proportionality (article 21). In fact, article 342 clearly contradicts the
principles of legal certainty and proportionality as well as article 21 of the Constitution.
These sanctions contradict the principle of proportionality as they seek to gather ten times
the amount of the offending financial or material donations as a fine for poorly-defined illegal
actions. What is of special concern is that these sanctions are imposed by the Chamber of
Control rather than by a court. The harshness of the sanctions suggests that the law is based on
repressive rather than preventive norms, potentially having a negative impact on the political
process.
As illustrated below, the recent amendments to the Criminal Code of Georgia gravely
violate the principles of proportionality and legal certainty. They do so by leaving a possibility
for a broad interpretation of the legal norm, and, though vague and poorly-drafted language,
potentially criminalize the financial relationship between political parties and citizens. In
addition to a fine, in some circumstances three years in prison is mentioned as a possible penalty
(article 1641 of the Criminal Code).
Bribing the voter (article 1641 of the CCG)
Offer, promise, transaction, service, with intentional knowledge to request and receive
and/or by evading the established requirements of law to deal ostentatious, hypocritical or
other type agreements is penalized up to 3 years imprisonment or administrative fine.
Notice:
1. Property such as small value of accessories, shirts, caps, flags and other items for the
electoral campaign of political parties do not fall under the scope of this article;
2. Persons will not be charged for a political and electoral promise related to the future
distribution of the budgetary means and future implementation of the state policy;
3. Legal entities (except political party which will not be penalized) committing criminal act
envisaged in the article 1641 of the CCG will be liquidated, deprived from the right to conduct
activities and/or will be charged to pay fine.
Special attention should also be paid to a sanction envisaged by article 1641 of the Criminal
Code of Georgia – liquidation of a legal entity, which is applicable to both civil and political
associations. This sanction unequivocally contradicts article 26 of the Constitution, which clearly
defines a basis for suspension and prohibition of such groups. (They themselves do not include a
basis determined by the Criminal Code of Georgia). Implementation should be in accordance
with the strictly determined circumstances of law; yet the Criminal Code of Georgia is an
organic law.
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12. V. The Chamber of Control of Georgia as a Monitoring Body According
to the Amendments in the Organic Law of Georgia on Political
Unions of Citizens
The amendments made to the law governing political unions establish the Chamber of
Control of Georgia as a controlling body, which contradicts the Constitution.
The need to establish an independent mechanism4 for monitoring the finances of political
parties and electoral campaigns was identified by both the Venice Commission and the Group of
States against the Corruption (GRECO) in their recommendations to the Georgian government.
The Chamber of Control was selected as the monitoring body. Doubtless there is a need for an
effective monitoring system; however, the selection of the Chamber of Control by Georgian
legislators did not meet the requirements of the Constitution.
The legal and constitutional status of the Chamber is determined by article 97 of the
Constitution. This norm establishes following essential requirements:
1. The Chamber of Control as an independent body is removed from the system of the
legislative, executive and judicial branches of the government, and operating separately.
2. It supervises state expenses, and the usage and expenditure of other materials.
3. The authority, organization, procedure activity, and guarantee of the independence of the
Chamber of Control shall be determined by law.
The establishment of legal norms for the Chamber, determined within the scope of the
Constitution, exists within article 1 of the Law of Georgia on the Chamber of Control of
Georgia.
It should be noted that other controlling bodies have been established according to this law,
which determines that if the necessity of state control overlaps the authority envisaged by the
Constitution, control should be exercised by some other body. Article 3 of the Law of Georgia
on the Chamber of Control of Georgia accords this status, naming it as the highest body capable
of carrying out state financial audits.
Auditing power is granted in article 6, in a form envisioned by the Constitution.
Article 17 of the Law on the Chamber of Control of Georgia defines the scope of its
auditing powers; according to paragraph 21, “The Chamber of Control monitors financial
activities of the political unions of citizens based on the Election Code of Georgia and the
Organic Law of Georgia on Political Unions of Citizens.”
The compliance of the new amendments to the latter legislation must be compared with
article 97 of the Constitution. In particular:
4
See the explanatory comments to the above-mentioned amendments.
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13. 1. What does “monitoring” mean?
The monitoring institution determined in paragraph 21 of article 17 of Law on the Chamber
of Control of Georgia should not be understood as a new institution. On the contrary, the above-
mentioned monitoring institution is identical to the institutions of “Supervision” (article 97 of the
Constitution) and “financial economic control” (article 3 of the Law of Georgia on the Chamber
of Control). Such an approach corresponds to the system determined by the Law of Georgia on
the Chamber of Control. The goal of article 17 is identification of those who fall under the scope
of Chamber powers, rather than determining the content of those powers.
2. What can be regulated by the Election Code of Georgia and the Organic Law of Georgia
on Political Unions of Citizens?
It should be determined what rights and powers are delegated by the Organic Law of
Georgia on Political Unions of Citizens and whether the scope of these rights is protected by this
law.
If paragraph 21 of article 17 of the Law on the Chamber of Control of Georgia would have
been understood as a norm for determining the rights of the Chamber of Control it would have
contradicted the above-mentioned law as well as article 97 of the Constitution. Once again, it
should be mentioned that according to article 17 of the Law, its objectives are not determining
the rights of the Chamber of Control, but rather exercising these powers over the political unions
of citizens.
It could be concluded that paragraph 21 of article 17 of the Law on the Chamber of Control
of Georgia would have not contradicted article 97 of the Constitution had it been understood that
the Chamber of Control would monitor the financial activities of political unions covering the
usage, expenditure of the administrative resources and other material values of the state.
It should be checked whether the amendments of the Organic Law of Georgia on Political
Unions of Citizens correlate with paragraph 21 of the article 17 of Law on the Chamber of
Control of Georgia and article 97 of the Constitution.
According to the Organic Law of Georgia on Political Unions of Citizens, a new power has
been established – there are new rules for the Chamber of Control to monitor the financial
activities of political parties. These new responsibilities should be compared to paragraph 21 of
article 17 of the Law on the Chamber of Control of Georgia and article 97 of the Constitution.
According to the updated Organic Law of Georgia on Political Unions of Citizens, what
does “financial monitoring” mean? Article 341 of the Organic Law of Georgia on Political
Unions of Citizens defines the authority to monitor the legality and transparency of the political
parties’ financial activities, and interprets “monitoring” more broadly than in previous
legislation. It means not only “supervision” (article 97 of the Constitution of Georgia) but also
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14. management functions (“consulting interested persons about the finances of political parties”)
and audit powers – financial audit, conformity audit and effective audit. The usage and
expenditure of state funds and other state material values are identified in article 6 of the Law on
Chamber of Control of Georgia.
The law does not provide any other legal tools. Additional instruments provided by the
Organic Law of Georgia on Political Unions of Citizens contradict the Law on the Chamber of
Control of Georgia. According to paragraph 2 of article 1, the authority, rules and organization
of activities have to be specified. It is inadmissible to form the framework of one law by another,
as each bill has its own objectives, principles and interests. Article 1 of the Law on the Chamber
of Control guarantees that that law can not become a “victim” to the objectives and interests of
any other law. So the amendments also contradict article 97 of the Constitution.
What authorities have been delegated to the Organic Law of Georgia on Political Unions of
Citizens? Is their scope protected by this law? As discussed above, delegation of authority was
drafted incorrectly in the Organic Law of Georgia on Political Unions of Citizens, granting the
Chamber of Control new powers which differ from those provided by article 97 of the
Constitution of Georgia.
How justified is omitting the words “and the political unions of citizens” from the sub-
paragraph “g”, paragraph 2 of article 17 on the Organic Law of Georgia on Political Unions of
Citizens? And is it proper to identify the authority to conduct audit activities according to the
article 341 (sub-paragraph “d”, paragraph 1) of the Organic Law of Georgia on Political Unions
of Citizens?
A financial audit of a political party should be divided into two parts:
1. An audit of the usage and expenditure of state funds and other state material at a party’s
disposal.
2. An audit of other funds and materials belonging to a party.
The old version of sub-paragraph “g” of paragraph 2 of article 17 of the Law on the
Chamber of Control of Georgia did not allow an audit on the usage and expenditure of state
funds and other state materials at the disposal of political parties. Why was that? This restriction
emerged because the legal nature of an audit (meaning a financial, conformity, and effectiveness
audit) means the monitoring of expenditures according to legal necessity. In the case of funds
transferred between the government and a party, the latter has broad discretion and the Chamber
of Control could not have managed to monitor all such transactions.
Distribution of the authority for conducting financial audits on political parties, according
to the Organic Law of Georgia on Political Unions of Citizens, contradicts the Law on the
Chamber of Control of Georgia and article 97 of the Constitution of Georgia. Similarly, the
14

15. extension of financial auditing rights to other property held by a political party as stipulated by
the Organic Law of Georgia on Political Unions of Citizens, contradicts the Law on the Chamber
of Control and article 97 of the Constitution.
Furthermore, article 261 of the Organic Law of Georgia on Political Unions of Citizens
grants authority over property held by individuals and legal entities indirectly related to political
parties to the Chamber of Control. Having “direct or indirect” and “business” relations with
political parties are such general concepts that this could lead to an unreasonable violation of the
constitutional rights of the above-mentioned entities.
The Organic Law of Georgia on Political Unions of Citizens also expands the authority of
the Chamber of Control and grants it administrative functions apart from mere supervision
functions, which contradicts the Law on the Chamber of Control of Georgia and article 97 of the
Constitution. Paragraph 2 of article 341 of the law on political union refers to the right to
conducting monitoring activities. Most of those rights are represented not only by supervision
powers, but administrative functions (sub-paragraphs “b”, “c”, “h”, and “i” of the above-
mentioned law). It should also be noted that a special department of financial monitoring for
political parties was established within the Chamber of Control, with specific administrative
functions. That does not correspond neither to the functions envisaged by the Constitution nor to
the supervisory functions stipulated by the law. The functions of the Chamber are identified in
various articles of the law:
- According to article 271, political parties should provide information about donations to
the Chamber of Control of Georgia within three days of their receipt;
- According to article 30, written consent on receiving state monies should be submitted to
the Chamber;
- According to article 32, a political party should submit a financial declaration for the
previous year together with an auditor’s report to the Chamber;
- According to article 322, the Chamber establishes rules for the transparency of financial
data for political parties.
These authorities are limited by article 17 (sub-paragraph “k”, paragraph 2) of the Law on
Chamber of Control of Georgia. According to that law, the Chamber should monitor the legality
of the utilization of funds granted for elections according to the Election Code of Georgia.
VI. Conclusion
The authors of the amendments in the Organic Law of Georgia on Political Unions of
Citizens aimed to improve the system of financing for political parties, prevent political
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16. corruption, secure transparency and accountability, and promote political competition. Although
we share those goals, our analysis clearly reveals that the methods used by legislators to achieve
the above-mentioned goals were disproportionate, vague, poorly-drafted and in contradiction to
Georgia’s Constitution. The recommendations of the Venice Commission and other international
organizations were interpreted arbitrarily, with some of their suggestions excluded from the
legislation entirely. Of particular concern were the restrictions found in article 261, which were
adopted after the Venice Commission published its final report.
The adopted amendments also radically complicate the development of a pluralistic and
competitive political environment in this country. The law not only limits the freedom of the
party system, but also the political and civil activity of individuals and society.
Furthermore, the amendments lack certainty in their definitions, and contain the threat that
their legal norms may be arbitrarily and selectively implemented. All individual and legal
entities with tangential links to the political process are restricted by law in the same manner as
political parties, without nuance to protect them. Legal certainty is one of the basic requirements
for the rule of law; without which citizens may become victims of unpredictably repressive acts.
In addition, granting broad financial monitoring powers of political parties and those
arbitrarily linked to them to the Chamber of Control of Georgia contradicts the Constitution and
the Law of Georgia on the Chamber of Control. The Chamber of Control is authorized only to
supervise the usage and expenditure of state funds and other state resources, not the private
financial records of any political association. Due to a conflict between the new amendments and
established law, the powers granted to the Chamber can give it grounds to act subjectively.
Moreover, the amendments establish disproportionate sanctions that express a repressive
spirit of the law, rather than one of preventive goodwill. Especially alarming is the fact that such
sanctions are imposed by the Chamber itself, and not by the court system.
Finally, the majority of the population is now subject to greater government control thanks
to vague interpretations possible from the new law. The amendments clearly contradict the rights
to free development, private life, freedom of expression and the right to form or join
associations, as guaranteed by the Universal Declaration of Human Rights of the United Nations,
the International Covenant on Civil and Political Rights, and the European Convention on
Human Rights – as well as human rights explicitly named in the Constitution of Georgia. A
legitimate reason for such restriction is not conceivable in a free and open democratic state.
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17. Appendix5
Amendments to the Organic Law of Georgia on Political Unions of Citizens
Article 51
1. It is prohibited for a political party (for its candidate, representative or any other person) to
give money, gifts and other material or immaterial values (except low cost accessories – shirts,
caps, hats, flags and other similar items), to sell or provide any goods or services with discount;
to buy goods or service at higher than its market price; to give or distribute goods or service
gratis (besides exceptions ruled by this law) to citizens of Georgia. Additionally, attracting a
citizen of Georgia to provide and promise money, securities, material and immaterial values or
services (including establishment of fictional employment or other type of relations).
2. The rule determined in the first paragraph of this article (prohibition of the promise) does not
operate on political and electoral promise, which is related to the future distribution of budgetary
means and future state policy implementation.
Chapter III
Property and Finances of Political Party, Financial Monitoring of Political Party
Article 25
1. The property of a political party includes:
a) Membership fees;
b) Donations;
c) In certain cases established by legislation - amounts allotted by the state;
d) Amounts received by the purveyance and distribution of a political party’s symbols,
organizing lectures, exhibitions and other similar events; additionally, sums received from
editorial and other activities, which do not change the status of a political party as a non-profit
judicial entity, its character and donations received by public events/activities. According to this
sub-paragraph, the total amount of the income of a political party should not exceed 60,000 GEL
per annum.
2. A donation is a transaction of money by citizens of Georgia to a political party’s bank
account; also in kind values and services received with discount/favorable terms or gratis by a
political party (except a job done by a volunteer) and a bank loan taken with favorable terms.
3. A political party is not allowed to take a loan/credit from a physical or judicial entity. A
political party or political bloc may take a loan from a commercial bank, but for not more than 1
million GEL after being registered as electoral subject according to paragraph “g” of article 2 of
the Organic Law on Georgian National Bank.
Article 251
1. The total amount of state finances, donations and other type of income received by a political
party or a physical and judicial entity connected with this party, should not exceed 0.2% of the
previous year’s GDP of Georgia; the total amount of expenses of a political party should not
exceed 0.2 % of the previous year’s GDP.
2. According to the first paragraph of this article, a political party is obliged to transfer the total
amount of money (which exceeds the threshold) to the donators’ bank account within three days
of receiving those sums. In case of non-compliance with these commitments, the above-
mentioned amounts will be transferred to the state budget.
5
The amendments are highlighted in the law.
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18. 3. Expenses for a political party’s expert and/or consulting services should not exceed 10% of
the threshold established in the first paragraph of this article.
4. A political party is allowed to distribute, during celebration events, items as gifts with a total
cost of 5000 GEL.
5. The total amount of expenses and income of political parties enlisted in a political bloc should
not exceed the thresholds established in the first paragraph of this article.
6. Unless it is not defined differently by this law, “year” means the period from 1 November to 1
November of the following year.
Article 26
1. It is prohibited to receive financial or in kind donations from:
a) Physical and legal entities of foreign countries, international organizations and movements,
except organizing lectures, seminars or other similar public events;
a1) Legal entities, their unions and other organizational entities;
b) State bodies, state organizations, public law legal entities, or from an organization
established with state share (except the cases foreseen by this law);
c) Non-profit organizations and religious organizations, except organizing lectures, seminars
and other similar public events;
d) An individual having no citizenship;
e) In anonymous form.
2. During the donation, a person should identify their name, surname, address, ID number (or
passport number) and personal number.
3. Money donated without providing the information determined in paragraph 2 of this article is
considered anonymous. Anonymous donations should be immediately transferred to the state
budget by the authorized person of the political party who is responsible for its financial activity.
4. Requirements provided in paragraphs 2 and 3 of this article do not apply to the donations
received via public events. The amount received during public events should not exceed 30,000
GEL per annum.
5. The authorized person responsible for a party’s financial activity is obliged to transfer money
received by public event donations to the party’s bank account within seven days.
6. Information about donations to a political party, including the information defined by
paragraph 2 of this article, is publicly available. The availability of this information is provided
by the Chamber of Control of Georgia according to the established rules.
Article 261
1. Restrictions provided by this chapter also apply to:
a) A judicial entity if it directly or indirectly is related to a political party, otherwise is under
the control of a political party, or openly states its political objectives and goals;
b) A judicial entity, which through its representatives or other person encourages voters to
support a particular political party or refrain from supporting a particular political party;
c) A person, who openly states political and electoral objectives and goals, or a person who is
related to the above-mentioned person, and also to the person who has a business relationship
with the person who has political and electoral goals or who carries out such activity that
influences the will of those Georgian citizens who participate in elections, plebiscites and
referenda, and those actions are carried out to avoid the regulations provided by this law.
2. A judicial entity, which directly or indirectly is related to a political party, with expenses
directly or indirectly connected to the activities and goals of the party.
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19. 3. Restrictions established by this article should not be applied to restrict freedom of expression
and civil activity.
Article 27
1. The total amount of the financial and in kind donations received by a political party from any
citizen of Georgia should not exceed 60,000 GEL per annum. The annual membership fee for
one member should not exceed 1,200 GEL.
2. The donator cannot be a citizen of Georgia with 15% of his/her annual income received by
him/her or received in favor of the company created by his/her participation with the simplified
government procurement.
3. A citizen may donate to different political parties throughout the year; however the total
amount of those donations should not exceed the established threshold - 60,000 GEL according
to this law.
4. The restriction established in paragraph 1 of this article applies to all donations, including for
a party’s goals and services performed on behalf of it.
5. Membership fees and financial donations for political parties should be received through bank
transfers from the citizens. Donations should be made only via Georgian licensed commercial
banks or via the donator’s or member’s own bank account.
6. Donations on behalf of another person or by evasion of restrictions of the law will result in a
transfer of those donations to the state budget. The violator will be charged according to
Georgian legislation.
7. If donators (physical entities) receive income wholly or partially from one source (physical/
legal entities or from the persons affiliated to them), then the total annual amount of those
donation transactions to one electoral subject should not exceed 500,000 GEL. However, the
total amount of a single donation should not exceed 60,000 GEL.
Article 271
1. A political party should provide information about donations to the Chamber of Control of
Georgia within three days of their receipt.
2. In a case of receipt of donations in violation of the requirements of this law, a political party is
liable to return the received amount to the donor within three days of the date of the donation. In
case of a violation of this obligation, the money will be transferred to the state budget.
3. If an authorized person of the political party will not comply with these obligations, this
person will be accountable to Georgian legislation.
Article 28
1. This paragraph has been removed.
2. If the total amount of the annual financial and in kind donations received by the political party
through breaching the law is:
a) From 2,000 GEL up to 15,000 GEL, the political party will lose state financing for one
year;
b) From 15,000 to 50,000 GEL, the political party will lose state financing for two years;
c) More than 50,000 GEL, the political party will lose state financing for four years;
3. If political parties have no right of state financing, the sanctions envisaged by paragraph 2 of
this article will be applied after obtaining such a right.
Article 30
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20. 1. This article defines the rule for direct distribution of sources from the state budget to political
parties.
2. The amounts to be distributed directly from the state budget are received by those political
parties that received more than 4% of the vote in the last parliamentary election, or received
more than 3% of the vote in the last local self-governance election.
3. The amount earmarked in the state budget for financing political parties is determined by an
equation, calculated per parliament member elected through the proportional system and the
respective components of received votes.
4. The state budgetary finances are calculated according to the following formula:
Z= B+ (M*600*12) = (L*100*12) + (V*1, 5) + (W*1)
Z is the amount of state budgetary finances for a political party; B is the amount of basic
finances; M refers to 30 or up to 30 members of parliament elected by proportional system; L is
the number of more than 30 parliament members elected by the proportional system; V is the
amount of votes received up to 200,000 voters; W is the number of votes of more than 200,000
voters.
5. The amount of basic financing is 1,500 GEL annually.
6. If an electoral subject (political party/electoral bloc) receives more than 8% of the vote in the
last parliamentary election or more than 6% of the vote in the last local self-governance election,
the amount of basic financing will be 300,000 GEL. According to the Law on State Budget of
the current year, the amount of basic financing from the state budget may be increased.
7. According to the formula determined in this article, M and L are equal to 0, if the authority of
members of parliament elected by the proportional system has been suspended according to the
rule established by Georgian legislation. M and L also may change (decrease or increase) to an
appropriate amount if within three months members of parliament elected by the proportional
system, after receiving authorization, leave or join another political party which is also financed
from the state budget according to the rule established by this article.
71. The electoral subject receiving finances according to this article will receive an addition 10%
if the political party is represented with a gender diversity of at least 20% out of 10 candidates on
the party list (in all party lists during the local self-governance elections).
8. In order to calculate the formula detailed by this article, the overall results of the last
parliamentary and last local self-governance elections will be used according to the political
party’s compliance with the conditions of this article.
9. If the results shown by the electoral bloc of the appropriate elections are applied to the letter of
this article, the total numbers of received votes are divided on the number of parties forming the
electoral bloc.
10. Basic financing is equally divided among political parties forming an electoral bloc.
11. A political party will receive state budget finances based only on preliminary written
consent. The latter should be submitted to the Chamber of Control of Georgia no later than the
25th November of each year. If written consent on receiving state budget finances for the next
year is not submitted by a political party by this date, the Chamber of Control of Georgia will
notify them in writing the day after the deadline. Within three days of receiving a written
notification from the Chamber of Control of Georgia, a political party has to send the consent to
receive state funds. If a political party will not submit a written consent in due time, it looses the
right to receive financing from the upcoming year’s state budget. The Chamber of Control of
Georgia will notify the political party of this in writing. The Chamber of Control of Georgia is
obliged to transfer the money to the state budget within five days of the party’s loss of a right to
state funds.
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21. Article 301
1. With the exception of budgetary financing determined in article 30 of this law, money is
transferred from the Georgian state budget into a Fund which aims to facilitate the creation of a
healthy every year, compatible political system for the development of the political parties and
the NGO sector.
2. Financing of the political parties and non-governmental organizations from the Fund is
regulated by the rules of this article.
3. The function of the Fund determined by this article is performed by a Center for electoral
system development, reforms and training.
4. According to article 30 of this law, money transacted into the Fund from the Georgian state
budget should be half of the amount directly distributed to political parties.
5. Amounts should be transferred quarterly into the Fund from the Georgian state budget.
6. Amounts to the Fund may be attracted from the other sources as well.
7. 50% of the amount transferred into the Fund should be distributed to political parties and 50%
to the NGO sector.
8. The assets of the Fund are distributed proportionally according to the received basic finances
for political parties.
9. Assets of the Fund will be distributed to finance only research, studies, conferences, business
trips, regional projects and for financing civil and electoral educational projects.
10. Grants for non-governmental organizations should be distributed only on the basis of
submitting appropriate projects in order to facilitate the development of political parties and
improving civil education of the electorate. The amount granted for one non-governmental
organization should not exceed 10 % of the grants distributed for the NGO sector. While
discussing the distribution of grants from the Centre, a minimum of three representatives with a
right of advisory vote should participate from the NGO sector, or an appropriately experienced
representative of a foreign Fund.
11. A political party should submit an annual report to the Fund about the reasonable expenditure
of the received amounts. Financing of a political party will be suspended for one year if the party
fails to submit the report or does not use funds according to the goals determined by this law.
12. If political parties and the NGO sector will not utilize the assets of the Fund provided to
them, this amount will be transferred back to the Fund for distribution the next year.
Article 32
1. A political party should submit an annual financial declaration together with an auditor’s (or
auditing company) concluding report to the Chamber of Control of Georgia by February 1 of
each year. Copies of the declaration together with the auditor’s report should be sent to the
appropriate local taxation office. The financial declaration must contain information on a
political party’s annual income (amount of membership fees and donations, names of citizens
who donated, data about citizens who donated, funding from the state budget, also amounts
received from the publishing activities of political parties and amounts received as a result of
various events), expenses (elections, financing events, salaries, business trips and other
expenditures), and property (information about owned real estate and cars, including makes and
models, total cost and amount of bank deposits).
2. Income and expenses of political parties used for elections must be listed separately in the
financial declaration.
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22. 3. The Chamber of Control of Georgia is obliged to provide information about the financial
declaration of a political party to all interested persons and also guarantee that financial
declarations will be published on its website within five days of receiving them.
4. A political party is obliged to provide in its financial declaration information about the
expenses of legal entities which are directly or indirectly under the control of those political
parties.
5. The Chamber of Control of Georgia must design a form for financial declaration as well as
financial audit standards for political parties.
6. A political party is obliged to keep financial declarations and all related documents for six
years, and to follow the duties established by tax law, which are related to the production and
storage of tax documents.
Article 321
Once every three weeks after an election date is set, all political parties that intend to participate
in the election either independently or within a political bloc should submit a financial
declaration to the Chamber of Control of Georgia in an appropriate form established by the
Chamber of Control of Georgia.
Article 322
The Chamber of Control of Georgia in accordance with this law sets rules related to transparency
of party finances and data related to donations.
Article 331
Any deal which aims to avoid the rules and limits established by the chapter (Chapter III
Property and Finances of Political Party, Financial Monitoring of Political Party) of this law is
void. The property distributed and received on the basis of such a deal will be transferred to state
ownership.
Article 34
If a political party will not submit a financial declaration to the Chamber of Control of Georgia
before the deadline, the Chamber of Control of Georgia will notify in writing a five-day window
to submit the declaration. If a political party will not submit a financial declaration to the
Chamber of Control of Georgia after five days, according to article 30 of this law the political
party loses the right to receive financial support from the state budget for the next year.
Article 341
1. The Chamber of Control of Georgia monitors the legality and transparency of a political
party’s financial activities.
2. The Chamber of Control of Georgia is authorized to:
a) Develop an annual financial declaration form for the political parties;
b) Establish standards for audits of political parties;
c) Verify completeness, accuracy and legality of the financial declarations of political parties
and the report of their election campaign’s fund;
d) Conduct auditing of financial activities of political parties;
e) Ensure transparency in the financing of political parties;
f) In case of need, request information related to the finances of political parties from their
administrative authorities and commercial banks.
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23. g) If necessary, request information about the origin of transferred and received property
belonging to political parties from the persons determined in article 261.
h) Consult interested persons about the finances of political parties;
i) Respond to violations of the law regarding the finances of political parties and apply
appropriate sanctions according to the law.
j) Appeal to the Office of the Prosecutor if criminal activity is suspected.
3. If state authorities have reasonable ground to believe that the requirements of this law have
been violated, they may inform the Chamber of Control of Georgia.
Article 342
1. Receiving or concealing prohibited financial or in kind donations determined by Georgian
legislation will cause a seizure of illegal donations and their transfer to the state budget, and the
political party will pay a fine of ten times the received financial and in kind donations.
2. A transaction of financial and material donations prohibited by Georgian legislation, from
physical and legal entities for a political party’s benefit, will cause a fine of ten times the amount
of received financial and material donations.
3. Receiving and concealing information about financial and material donations prohibited by
Georgian law for a political party’s benefit will penalize those persons to pay ten times the
amount of the fine.
4. Avoiding liability determined by the law will result in a fine of 5,000 GEL for the political
party.
5. Avoiding liability determined by Georgian legislation on providing information requested by
the Chamber of Control of Georgia will result in a fine of 5,000 GEL for the political party.
6. Accountability determined by this law may be applicable for six years after committing the
offence.
7. In case of repeated violations of the rules determined by this article, or deliberate failure to
comply with a legal request of the Chamber of Control of Georgia, or an offence causing serious
damage, the Central Election Committee upon a recommendation of the Chamber of Control of
Georgia is empowered to suspend registration of the electoral subject if the violation involves an
offence committed during a one-year period prior to an election.
8. The Chamber of Control of Georgia sequestrates property of physical or legal entities
(including bank accounts). This can be appealed to the court together with the resolution of an
offence. The appeal does not suspend the sequestration.
9. The Chamber of Control of Georgia compiles a report about the offence determined by this
article and takes a decision on imposing an appropriate penalty. For such a case, litigation rules
determined by the Georgian Code on Administrative Offences are applied.
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