Court Rules in Favor of CSOs

CSOs vs. Ministry of Finance

On June 10, 2003 following the lawsuit by the CSO legislative monitoring group Tbilisi district court suspending the orders of the Minister of Finance, that could complicate the financial transactions and impose state control over grants.

Order of the Minister of Finance # 162, of March 31, 2003 on “approval of instructions on registration and inscription in the Budget of goods received via Grants and Humanitarian Aid”, entered in force on April 1.

According to these instructions, all grants including those of CSOs, their branch offices and departments had to be registered on the state treasury account. The treasury is under the control of the Ministry of Finance of Georgia, and administers only the government finances.

Apart from this apparent blunder, by registering the grants in treasury CSO would have had to deal with burdensome bureaucratic procedures for transactions and could not benefit from the interest accruing to their accounts in commercial banks. The order of the Minister of Finance also lacked any mechanisms for registering the grants on the treasury account, creating suspicions that the Ministry would use non-transparent practices for blocking the accounts of the CSOs that countered governmental policies.

Levan Mosakhlishvili of one of the claimant CSOs, Georgia Young Lawyers’ Association told Advocacy.ge: “The order is also against the principles of civil law, as the legal bodies of the third sector are independent and this type of financial control strictly limits their freedom.”

The recently created CSO legislative monitoring group that consists of seven organizations filed the lawsuit. (For the background see Advocacy.ge archives “CSOs Legislative Monitoring Group Created”). 

The claimants argue the order of the Minister violates the law on the 2003 state budget. The subsection 2 of section 19 of article 21 of the law reads the executive government should adopt the instructions of registrations and inscription of the state grants only, received by state agencies of Georgia from international organizations and other governments. This provision of the law, which was used as a basis for the Ministerial order, say nothing about the grants received by the CSOs.

Tbilisi district court decided to suspend the Ministerial order until the court hearings, where the ministry should present their vision of the issue. The final response of the ministry is yet unknown. 

By Julie Giorgadze, CAP Information Officer