The scandal of offshore assets and monitoring of property status of office holders in Georgia - საერთაშორისო გამჭვირვალობა - საქართველო

The scandal of offshore assets and monitoring of property status of office holders in Georgia

22 April, 2016

In the recent days, the public’s attention has been drawn to the study of the International Consortium of Investigative Journalists about offshore assets of politicians and high-ranking office holders of various countries (so-called “Panama Papers). The name of the former Prime Minister of Georgia, Bidzina Ivanishvili, also figures in the journalistic investigation.      

According to the study, Mr. Ivanishvili indirectly owned the Lynden Management company (through another company under his ownership). He did not indicate this information in his asset declaration which he filled out while he worked in the position of the Prime Minister.   

It should be noted that in the 2014 report entitled ”Who Owns Georgia’s Media?” TI Georgia pointed out that the family of the former Prime Minister owned a number of companies in Georgia though offshore entities, which had not been indicated in his asset declaration. 

The principle of transparency and accountability of government implies that public office holders should provide the public with as complete information as possible about their assets and commercial interests, which is a key mechanism for preventing corruption in government. As for offshore companies, participation is such a company is not an offense in itself. However, as offshore companies are often used for tax evasion, money laundering, and other criminal activities, the links of office holders and politicians with such companies always raise questions and reflect negatively on their reputation.   

According to the applicable legislation of Georgia, office holders should include information about their and their family members’ participation in entrepreneurial activity in Georgia and abroad in their annual asset declarations. Filling out the declaration incompletely or inaccurately is punishable under Article 355 of the Criminal Code of Georgia.      

In recent years, both TI Georgia and other NGOs have exposed a number of cases where, despite the requirements of law, office holders had not declared their assets or their links with private companies (see, for example, our study about undisclosed business activities of MPs), although none of such cases was followed by an appropriate response.      

The Association Agenda between the European Union and Georgia directly states that it is necessary to “take adequate measures at all levels of society to prevent, detect and address corruption, especially high level corruption.” However, the aforementioned and other similar cases show that, today, Georgia does not have an effective mechanism for detecting and preventing cases of conflict of interest and corruption at high levels of government.            

For this reason, TI Georgia calls on public office holders and the relevant bodies to be attentive and exercise responsibility when dealing with the issue of filling out asset declarations. In addition, our organization supports the establishment of an independent anti-corruption agency that would have the legal mandate and the resources to investigate cases of high-level corruption.