U.S. State Department Investment Climate Statement on Georgia
The U.S. State Department’s 2023 Investment Climate Statement on Georgia positively assessed the business, trade, and investment-related regulatory framework and legislation, but highlighted shortcomings in the judiciary.
According to the report, “overall, business and investment conditions are sound, and Georgia favorably compares to regional peers”. Nevertheless, “there is an increasing lack of confidence in the judicial sector’s ability to adjudicate commercial cases independently or in a timely, competent manner…”.
The report underscored concerns raised by companies regarding inefficient municipal level decision-making, shortcomings in enforcing intellectual property rights, the lack of effective anti-trust policies, and alleged political interference. Despite these challenges, “Georgia ranks high in the region as a good place to do business”, and the government was recognized for its efforts to address the aforementioned issues.
The U.S. State Department’s designation of three current and one former, judges of the High Council of Justice as individuals engaged in significant corruption, with them and their immediate family members barred from entering the United States, was also emphasized in the report.
- 05/04/2023 – BREAKING: US Department of State Sanctions Four Georgian Judges for “Significant” Corruption
Regarding the banking system, the document states that “the banking system is stable, well capitalized, liquid, and profitable”. It further notes that in response to Russia’s invasion of Ukraine, international sanctions were imposed on Russian banks, including VTB, which has a subsidiary in Georgia.
- 26/07/2023 – Georgian Banks Cease Money Transfers Through Unistream
- 25/02/2022 – VTB Bank Georgia Hit with Int’l Sanctions
Regarding the sanctions related to the war in Ukraine, the report noted that the National Bank of Georgia and Georgian financial institutions act fully in accordance with the financial sanctions imposed by the United States and others on the Russian Federation. “Compliance with international financial sanctions is systematically checked during the onsite inspections of financial institutions,” it added.
While Georgia has made progress in combating visible, low-level corruption, the report pointed out that it remains vulnerable to what Transparency International refers to as “elite” corruption. This involves high-level officials exploiting legal loopholes for personal enrichment, status, or retribution. The report also highlighted corruption in public procurement, administration practices, and the judicial system, as well as perceptions of elite corruption, all of which pose risks to public and investor confidence in Georgia’s institutions and the investment environment.
In addition to the corruption issues, the document comprehensively discusses Georgia’s capital markets, banking system, investment incentives, property rights, regulations and other issues.
Also Read:
- 29/07/2022 – U.S. State Department Investment Climate Statement on Georgia
- 22/07/2021 – U.S. State Department Investment Climate Statement on Georgia
- 10/09/2020 – U.S. State Dept Investment Climate Statement on Georgia
This post is also available in: ქართული (Georgian) Русский (Russian)
