Members of the Georgian Dream ruling party have drawn parallels between the European Commission’s initiative and the proposed law on the so-called ‘foreign agents’ initiated in February 2023, claiming they are analogous.
1. Introduction
The European Commission published the Defence of Democracy Package on 12 December 2023, featuring a legislative proposal (Directive) titled “establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries and amending Directive (EU)” [1].
Members of the Georgian Dream ruling party assessed the initiative of the European Commission as analogous of the proposed so-called ‘foreign agents’ law initiated in February 2023. For instance, the Chairperson of the parliament of Georgia, Shalva Papuashvili, asserts that “the EU Directive holds the same spirit and substance as the law proposed in Georgia.”
For reference, on March 9, 2023, the ruling party, amid mass protests and international criticism, was made to withdraw the draft law on transparency of foreign influence during its second reading [2]. The aforementioned bill aimed to label non-governmental organisations and media sources, which receive more than 20% of their funds from foreign donors (encompassing practically all civil organisations within Georgia), as “foreign influence agents.” As a result, the draft law aimed to declare US and European donors and international organisations, such as the UN, as suspicious forces.
A year and a month later, following the withdrawal of the “Russian Law,” the ruling party once again reintroduced the same draft law with a revised title in the Parliament [3]. The initiated bill in Georgia closely mirrors the Russian Agents Law adopted in 2012 that eventually put Russian civil society to extinction. Thus, the Georgian people and the country’s international partners call it the “Russian Law.”
It is crucial to note that prior to the initiation of the aforementioned Directive in the EU, the European Commission had commenced procedural processes in 2022. The EU actively negotiated with stakeholders from October 2022 to May 2023, consulting with member states, commercial and civil organisations, etc. Furthermore, the European Commission conducted an impact assessment of the draft law.
We will delve into the context, aims, intentions and contents of the EU Directive in the analysis below. Moreover, we will discuss the key differences between the Georgian-initiated “Russian Agents Law” and the EU Directive.
2. Aims, Intentions and the Necessity of Adoption of the EU Directive
2.1 Harmonisation of Laws Regarding the Transparency of Member States
The aforementioned Directive establishes harmonised requirements for economic activities relating to interest representation activities conducted on behalf of third countries, aiming to improve the functionality of the internal market by ensuring a common level of transparency across the Union [4], [5].
The legislative framework of ensuring the transparency of foreign interest representation is highly fragmented across the Union [6]. “Interest representation activities are regulated in different ways in the Member States. Currently, 15 Member States have a transparency register on interest representation activities, although not always at the national level… 12 Member States do not regulate the transparency of interest representation activities [7].
The explanatory memorandum by the European Commission includes discussions regarding the potential adverse effects of regulating this subject matter with different methods, or even leaving it unregulated: “This fragmentation causes obstacles in the internal market for interest representation activities, including when carried out on behalf of third countries, which undermine the proper functioning of the internal market [8]. The divergences among Member States create an uneven playing field and increase compliance costs for entities seeking to conduct cross-border interest representation activities. The uneven playing field directs cross-border interest representation activities away from more regulated Member States towards less regulated ones. There is, in turn, a risk of forum shopping and regulatory arbitrage; that is, the exploitation of differences in regulatory requirements by entities seeking to evade regulation in certain Member States” [9].
Furthermore, the explanatory memorandum addresses the reasons why third countries might seek to enter the unregulated markets within the EU: “Interest representation activities are increasingly used by third country governments alongside formal diplomatic channels and processes to promote their policy objectives. This situation is recognised by Member States as presenting an opportunity for third-country actors to evade transparency requirements and covertly influence decision-making and democratic processes in the Union. Some Member States are, therefore, considering developing new rules to address foreign influence, including by imposing general obligations on entities receiving foreign funding that would in practice apply to the provision of interest representation on behalf of third countries. The fragmentation described is, therefore, likely to increase specifically in relation to interest representation conducted on behalf of third countries. This would expose entities conducting interest representation to additional obstacles when providing interest representation for third countries in the internal market” [10].
2.2 Preventing the Risks Faced by the EU
The inherent objective of the EU Directive is not transparency per se, but rather the prevention of risks faced by the EU through establishing common standards.
As explanatory memorandum notes: “when presented transparently, ideas from third countries can contribute positively to public debate and are a welcome part of international engagement. However, when carried out covertly, interest representation on behalf of third countries is prone to being used as a channel for interference in Union democracies. By shaping public opinion, this is in turn can influence political choices to the detriment of the political life in the Member States and the Union as a whole….influence and lobbying by foreign interests can have a transformative impact on the political life of a country, not only on domestic policies but also on its foreign policy, its election system, economic interests and its ability to protect its national interests and national security”[11].
Furthermore, the explanatory memorandum reads: “The European Parliament and the Council have underlined the importance of addressing the threat to democracy posed by foreign interference. These concerns have intensified since Russia’s war of aggression against Ukraine.”[12]
2.3 Differences Amongst Objectives of the EU Directive and the Georgian Draft Law
When introducing legislative acts, it is crucial to identify the legitimate purpose and necessity of adopting any new legal framework. Despite both the Georgian draft law and the proposal for the EU Directive emphasising transparency, there is a key difference between the two – transparency serves as a means to achieve the goal for the EU Directive, whereas for the Georgian law, it is the inherent objective.
The OSCE Office for Democratic Institutions and Human Rights (ODIHR) following a request from the Public Defender of Georgia prepared a note of the legislative Initiatives on Transparency and Regulation of Associations Funded from Abroad of so-called "Foreign Agents Laws" and similar legislation and their compliance with international human rights standards. In the note, OSCE concludes [13] that whilst transparency may be utilised to achieve other legitimate objectives, such as public order or combatting crime, including corruption, appropriation, money laundering or financing terrorism, increasing the degree of transparency does not serve as an inherently legitimate aim by itself. It is impossible to claim that transparency is a legitimate goal to justify the violation of human rights without the solid bases [14].
The explanatory memorandum of the proposal for the EU Directive reflects the sentiment described above: “When carried out covertly, interest representation on behalf of third countries is prone to being used as a channel for interference in Union democracies. By shaping public opinion, this is in turn can influence political choices to the detriment of the political life in the Member States and the Union as a whole” [15].
Evidently, the EU underscores the importance of safeguarding its own electoral system, economic and state interests, and national defence. Protection of these values is precisely why the Union urges its Member States to create a transparency register.
Thus, the inherent objective of the proposed EU Directive is not transparency per se, but rather a channel to achieve a broader set of objectives. On the contrary, the Georgian-initiated draft law, lacking identification of specific risks, labels transparency as its inherent aim and the repressive mechanisms within the bill pose existential threats to civil society despite the seemingly “noble” goal. It is worth noting that the ruling party had been campaigning against civil society a year prior to the initiation of the draft law in February 2023, accusing them of undermining peace and stability in an attempt to discredit them. Later, after the withdrawal of the draft law due to large-scale civil protests, the ruling party’s campaign against Georgian civil society and Western partners persisted, eventually resulting in the reintroduction of the bill after a year[17].
3.Responsibilities Outlined within the EU Directive
3.1 Parties Affected/Not Affected by the EU Directive
The EU Directive only applies to organisations and individuals who “carry out interest representation activities.” “A clear and substantial link should exist between the activity and the likelihood that it would influence the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union” [18] – reads the explanatory memorandum of the EU Directive. Thus, the proposal for the EU Directive aims to register organisations not solely because they received funds from third countries but rather due to the activities that they undertake with said funds.
The so-called “Russian Law” [19], [20] or the Law on Transparency of Foreign Influence, initiated in February 2023 in Georgia, introduced the label - “Agents of Foreign Influence.” Any organisation that received foreign funds would have a responsibility to register as an Agent of Foreign Influence. The law intended to label all NNLEs, media outlets as well as media outlets and legal entities owning printed channels or internet publications that receive more than 20% of the total funding (excluding advertising) from abroad as a foreign influence agent, excluding NNLEs established by the administrative body and sports federations from the scope of the draft law. In April 2024, precisely the same law was reintroduced in the Parliament – whilst altering the term “agent” but maintaining discrediting meaning and the mechanisms aimed at restricting civil society.
The EU Directive provides a thorough definition of the term “representation of interests,” identifying the specific activities that give entities the duty to register. The Law on Foreign Influence Transparency does not provide such specificity – it simply defines the term “foreign power”, as well as a responsibility to register as an “Organisation Pursuing the Interests of a Foreign Power,” based solely on a single criterion – whether the entity receives foreign funding. It is evident that whilst the Georgian draft law questions any funds from a “foreign power,” the EU Directive assesses the objectives behind said funds.
Hence, the EU Directive applies to any entity regardless of its location of establishment if it receives funding from an entity established in a third country and, at the same time, if the funds serve representing the interests of that foreign country [21], [22]. Moreover, the EU-initiated Directive project does not require registration of activities implemented under funding from EU Member States (or countries from the European Economic Area).
In the case of Georgia, the “agent law” applies to any organisation that receives funding from any foreign country. Almost all Georgian non-governmental organisations are funded primarily by European and American foundations, suggesting that almost all Georgian NGOs will be declared as “Organisations Pursuing the Interests of a Foreign Power,” irrespective of their actual work, under the proposed law. Hence, as the criterion for registration as a foreign interest pursuer is not determined by the nature of activities conducted but rather only the fact of having received funds, practically the entire civil society will be a subject of the aforementioned law, indicating that the inherent goal is not to regulate foreign interests and ensure transparency but rather to discredit civil society.
3.2. Information to be Registered by Entities
According to the EU Directive Member States are responsible [23] to ensure that data of the entities representing the interests of third countries [24] is accurately registered. This data encompasses: the identification number/title of the third country entity [25] whose interests the organisations are representing, the description of objectives for interest representation activities; contracts, as well as instances of information exchange with third country entities [26], including the amount and volume of salary payments. Furthermore, it requires information and resources that are integral to interest representation processes so to clearly define the nature and objective of interest representation activities.
In contrast to the EU Directive, the Georgian draft law mandates all organisations to register information, specifying that they must register not a specific data related to representation of foreign country interests, but to provide information “about the source, amount and purpose of having received any monetary funding or other material benefits” [27].
The proposed Georgian law allows the government to conduct “monitoring” to identify organisations representing the interests of a foreign power at any time. The prerequisite for starting the monitoring processes can be both a decision of a relevant authority as well as a written statement submitted to the Ministry of Justice containing a “hint.” Such monitoring can occur for a specific entity at most once every six months. Unlike such extensive authority given to the state, the EU-initiated Directive undertakes a more cooperative approach if there is information suggesting that the entity did not register even though its activities represented the interests of a foreign state. Particularly, in contrast to the Georgian law, the EU Directive establishes a mechanism whereby the authorised body must address the relevant subject by letter and request only necessary information to determine whether the activity represents the interests of a foreign state.
3.3. Sanctions
The EU Directive proposal establishes sanctions as a form of administrative responsibility with financial sanctions serving as the most severe type of penalty. The maximum amount of the financial sanction that may be imposed shall be, for undertakings, 1 % of the annual worldwide turnover in the preceding financial year, for other legal entities, 1% of the annual budget of the entity in accordance with the most recent financial year closed and for natural persons, EUR 1 000 [28]. According to the proposed Directive, sanctions should be efficient and proportionate to each particular case. The nature, frequency, and duration of the infringement must be considered as well as, where relevant, the economic, technical and operational capacity of the entity that committed the infringement. Furthermore, before imposing the sanction, the supervisory board must issue a warning to the organisation about the violation. Additionally, the proposal urges Member States to ensure that the exercise by the supervisory authority of its powers shall be subject to appropriate safeguards in accordance with Union and Member State legislation, including the right to an effective judicial remedy and to a fair trial.
Unlike the EU Directive, the Georgian draft Law on Foreign Influence Transparency imposes stringent financial sanctions, not taking into account proportionality criteria or the economic, financial or operational capacities of the entities: “The Draft Law establishes administrative liability for violation of the Draft Law’s provisions which vary from the equivalent of USD 3,700 to USD 9,000, making any citizen engagement in the activities of NNLEs and the mass media extremely risky and undermining the entire non-profit sector and independent media. Such penalties may be considered unreasonable, considering that the activities are identified as administrative offenses” [29].
3.3. Stigmatising Civil Society
The EU Directive does not use terms such as “agent,” “foreign influence agent,” “foreign country agent,” “entity pursuing foreign interest,” etc. The explanatory memorandum of the EU Directive underlines that the Directive substantially differs from other instances of “foreign agent laws:” “This approach differs radically from those observed in certain other jurisdictions (characterised as ‘foreign agent’ laws). Such laws often include measures that unduly restrict civic space by stigmatising, intimidating and curtailing the activities of certain civil society organisations (CSOs), journalists or human rights defenders. The label of ‘foreign agent’ under such laws frequently seeks to undermine both the financial stability and credibility of the organisations targeted” [30]. The explanatory memorandum further notes that the Union consistently condemns any undue limitation on fundamental freedoms and restrictions on civic and political space in violation of international human rights law, including so-called ‘foreign agent laws’ and as an example of the latter, provides links to EEAS statements on Russia’s law on foreign agents, Georgia’s “foreign influence” law’ adopted in March, 2023 and on the initiatives of the authorities in Republika Srpska in Bosnia and Herzegovina (See EU directive proposal footnote 10).
Unlike the EU Directive, the Georgian-initiated law declares organisations as “pursuers of the interests of foreign power.” The previous version of the law, adopted in March 2023, utilised the term “agent.” The aforementioned title takes on a different, more specific meaning in the post-Soviet space, particularly in relation to a spy – a representative of a foreign state whose objective is deliberate hostile action against a nation. Given that the term “agent” carries an inherent stigma, its usage in Georgia, as well as in Russia, reflects a repressive measure aimed at suppressing civil society. Evidently, the EU Directive draft employs the title “activities of representing interests for entities of third countries” which lacks a similar stigmatising connotation. On the contrary, both the initial version in 2023 and the current version in 2024 of the Georgian-initiated draft laws employ stigmatising terms. Notably, the European Court of Human Rights references the conclusions of the Venice Commission in its decision in the case of ECODEFENCE AND OTHERS vs RUSSIA, saying that the title “agent” is stigmatising precisely as it suggests that a particular organisation represents foreign interests, regardless of the nature of its activities [31], [32].
Unlike the current processes in the European Union, the Georgian Dream political party had previously declared representatives of the CSO sector “agents” and attempted to discredit them even a year prior to the initiation of the draft law in 2023. Additionally, the readings of the draft laws were conducted in a tense atmosphere as Georgian NGOs were denied full participation in discussions; moreover, there were reports of violence against opposition MPs who were restricted from attending the discussions of the draft law. Although the ruling party was compelled to withdraw the initial draft law, it, nonetheless, maintained its campaign against and reintroduced the law a year later.
4.Conclusion
Unlike the Georgian draft law, the EU Directive aims to uniformly regulate the existing legislative frameworks concerning the transparency of non-EU states’ interests across different EU member states. Whilst its goal is to ensure transparency in order to achieve other legitimate objectives, the Georgian draft law aim to undermine civil society under the pretext of transparency. The requirement for registering entities under the proposed EU directive is not whether they receive foreign funding, but rather whether they are representing the interests of third countries. The EU Directive solely mandates the registration of specific information related to the representation of third country’s interests. Furthermore, unlike the Georgian-initiated law, the EU Directive avoids using stigmatising language and ensures proportionality of the outlined sanctions as well as the right to a fair trial for the aforementioned entities. Notably, the Georgian draft law grants the state disproportionate authority to conduct investigations of NGOs and media organisations at any time and to get access to any information, even based on an anonymous report, further serving as a disproportionate mechanism of interfering in the activities of civil organisations. These obstacles, both stigmatising and persistent, concentrated in the hands of the state, create a chilling impact, complicating the efficient operation of civil organisations and hindering citizen involvement within the activities of Georgian non-governmental organisations.
Considering the discussion above, there are substantial differences between Georgian-initiated “Russian Law” and the proposed EU-initiated Directive. The aim of presenting the Georgian and European draft laws as analogues, whilst failing to specify these differences, aims to mislead the Georgian population.
[1]DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing harmonised requirements in the internal market on transparency of interest representation conducted on behalf of third countries and amending the Directive (EU).
[2] People’s Power also initiated the second “Foreign Agents” bill, presenting it as an analogue of FARA (Foreign Agents Registration Act) in the USA. The aforementioned draft law was withdrawn by the ruling party after the 8-9 March protests in 2023.
[3]https://info.parliament.ge/file/1/BillReviewContent/359740?fbclid=IwAR0hJZpWEsL-958htA-Xm1ROZIb6eUhLCtiAuvhq_aOGgo0zLZrLZ04GY4g
[4]Interest Representation Activity encompasses activities carried out under the purpose of developing, drafting or enforcing policy or legislation within the European Union, or impacting the process of forming public decisions, that may include organising and participating in meetings, conferences, or events, facilitating or participating in parliamentary hearing and consultations, organising communications or advertising campaigns, as well as organising liaison and fundraising initiatives, preparing policy and position papers, legislative amendments, public opinion polls, surveys or open letters, or engaging in research and educational activities, all within the scope of a specific objective [to represent the interests of third countries] in the development, drafting, or enforcement of policy or legislation, or in the formation of public decisions.
[5]Where the interests of foreign, non-EU Member States are represented.
[6]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 2.
[7]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 2.
[8]This fragmentation causes obstacles in the internal market for interest representation activities, including when conducted on behalf of third countries, which undermine the proper functioning of the internal market.
[9]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 2.
[10]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 3.
[11]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 3.
[12]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 4.
[13] Note of the Legislative Initiatives on Transparency and Regulation of Associations Funded from Abroad of So-called "Foreign Agents Laws" and Similar Legislation and Their Compliance with International Human Rights Standards | OSCE
[14] Note of the Legislative Initiatives on Transparency and Regulation of Associations Funded from Abroad of So-called "Foreign Agents Laws" and Similar Legislation and Their Compliance with International Human Rights Standards | OSCE - pg. 22.
[15]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 3.
[16]The EU-initiated Directive requires the establishment of a register where organisations conducting activities that represent the interests of third countries will be documented. The Directive requires Member States to establish competent national authorities that will oversee the registration processes. Furthermore, the Directive emphasises that Member States must ensure the independence of these authorities.
[17] See GRASS Disinfo Briefs for reference: Brief 12-18 December, 2023; Brief March 12 -18, 2024.
[18]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 29 (Article 17).
[19]a) Georgian Draft Law on Transparency of Foreign Influence; b) Georgian Draft Law on Foreign Agents.
[20] Amidst the Georgian population naming the draft law the “Russian law” in February 2023, the members of the parliamentary majority initiated a second bill, entitled the Law on Registration of Foreign Agents. According to the authors, the bill was purely a translated model of the American FARA (Foreign Agents Registration Act) and hence should not be equated with the Russian law. For reference, the similar law that was passed in Russia was also referred to as a model of FARA.
[21]“This Directive applies to entities, irrespective of their place of establishment, carrying out the following activities an interest representation service provided to a third country entity.”
[22]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 5.
[23] First paragraph of Article 7 of the EU Directive.
[24] First paragraph of Article 3 of the EU Directive.
[25] Non-official translation; referred to as “Third Country Entity” within the document.
[26]Key exchanges - Key exchange is a cryptography process in which cryptographic keys are exchanged between two parties, allowing them to use these keys for sharing encrypted information via a cryptographic algorithm.
[27] The draft Law on Transparency of Foreign Influence – Article 4, paragraph 3.
[28] Article 22, paragraph 2 of the EU Directive.
[29] ICNL Review of the Georgian Draft Law on Transparency of Foreign Influence - pg. 13.
[30]https://commission.europa.eu/system/files/2023-12/COM_2023_637_2_EN_ACT_part1_v4.pdf- pg. 5.
[31]ECODEFENCE AND OTHERS vs RUSSIA, Decision by ECHR, paragraph 131. Available at:https://hudoc.echr.coe.int/fre?i=001-217751.
[32]Venice Commission, OPINION ON THE COMPATIBILITY WITH INTERNATIONAL HUMAN RIGHTS STANDARDS OF A SERIES OF BILLS INTRODUCED BY THE RUSSIAN STATE DUMA BETWEEN 10 AND 23 NOVEMBER 2020 TO AMEND LAWS AFFECTING “FOREIGN AGENTS,” pg. 15. Available at:https://venice.coe.int/webforms/documents/?pdf=CDL-AD(2021)027-e&fbclid=IwAR2DSixjNNevwoYIN3J9g0zH1tg4rf0-A9DapadSeKxlhT7aHllxeCperMQ_aem_AV5evfe6oVzmP10Iyy67qMB_fbs5f7HVZdtC5pQdmUvG6szF5G5AQ03ce64wZMjuh5GbC3ZjaNH2RbkISr4zrsug.
