ICC Georgia Chairman Warns Foreign Businesses Of Risks Associated With Doing Business in Georgia

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In Summer 2005 my residence was shot at, but I didn’t even bother report it to the police because it was totally pointless.

In 2005 as well, my company was audited 5 times in a row by the Tax Department in an attempt to paralyze our business completely, and to punish me for being an outspoken critics of government pressure on businesses.

We were audited that year for 11 months in a row, which prompted me to send a letter of gratitude to then President Saakashvili thanking him for making sure that our accountants were not making mistakes.

In the years 2009, 2010 and 2011, the government privileged one of our competitors, allowing their company to import food products without paying any customs duties or any VAT. This double standard policy caused us to lose several million Dollars, which prompted me to stop our business operation in Georgia; although we were fit to compete with our competitors we were surely not able to compete against the State budget.

During all those years and due to never-ending pressure on our various businesses in the country, our losses exceeded 20 million Dollars. However despite the never ending pressure I never agreed to pay any bribe, any racket money or any ransom; I never bought the solution to any of our problems with money, I always fought against injustice whether it was directed against our company or directed against any member of our business organization.

During the past 21 years, the business organizations under my leadership defended fiercely both foreign and Georgian businesses; our door was always and still is open to any distressed business, because our mandate is to protect businesses against pressure and against wrong doing.

Our agenda is to strive towards the protection and improvement of the business and investment climates; our mission is to push the country forward towards free market economy, to insure a level playing field for all businesses, and to fight corruption and oppression of the business community.

In the Parliamentary elections of October 2012, as a citizen of Georgia, I voted for the Georgian Dream, and on the 5th of October 2012 in coordination with Irakli Gharibashvili, we organized the first meeting of the Georgian business community with Bidzina Ivanishvili.

During that meeting Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day, as he became thereafter the number one oppressor of businesses in Georgia.

Dear Prime Minister, if I brought to you the past history, is for you to understand that after 21 years of doing business in Georgia, of heading major business organizations in the country, and of being actively involved in solving the problems of hundreds of oppressed and harassed foreign investors and local businesses alike, when I see pressure I recognize pressure, I don’t need a drawing for that nor the confirmation of any third party.

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Over the past 21 years, I have seen everyday governments using systematically the state apparatus to eliminate, weaken, blackmail and racketeer businesspeople.

Upon coming to power in 2012 your government has bankrupted many businesses that you perceived to be close to the Saakashvili’s administration, the names of some of those businesses were released by ICC to the press couple of weeks ago, amongst a sample list of 21 companies that we named, and that suffered at a stage or another during your administration of pressure, harassment, destruction or just total lethargy and disinterest of the government regarding the problems that they were facing.

Having said that, I didn’t find it surprising at all that your government contacted some of the companies that we listed, asking them to issue a statement denying that they were ever under pressure; this made both government and the very few companies who agreed to issue such a statement to look futile and unprofessional, considering that the problems that those companies had faced were public knowledge and extensively covered by the media at that time. This underlines again how much business is terrified in Georgia.

With your retaliatory measures against businesses that you perceive unfriendly to your policies you didn’t set a precedent; the Saakashvili’s administration did harass, punish and bankrupt several businesspeople perceived to be close at that time to former President Shevardnadze or later on to the opposition, and I wouldn’t be surprised at all if the government that will replace you will also retaliate against Bidzina Ivanishvili and his businesses and other businesspeople close to him, since this seems to be unfortunately the culture and the modus operandi of governments in power in Georgia.

As a daily observer of your government since 2013, I notice that there are two powers running the country, an official but impotent power represented by most of the government officials and their teams, who understand how a country should be run and who work round the clock to promote Georgia, encourage foreign investment, fight poverty and improve the business environment in the country, and an unofficial but real power, represented by Bidzina Ivanishvili who is pushing for his own and non declared agenda, that consists of keeping foreign investors out of the country, spreading his tentacles over major businesses, getting rid of business people he dislikes using criminal methods reminiscent of the 1990’s, relying for that on all state structures, that he totally controls, and in particular the Prosecutor office, the Judiciary, and the law enforcers.

Mr. Ivanishvili went public on TV in fall 2018 bragging that he was the one behind the problems of Philip Morris and British American Tobacco in 2017, an episode that cost Georgia its credibility internationally and that brought the country years backward. Mr. Ivanishvili had to backtrack on his plans due to international pressure after triggering with his actions the start of the collapse of the Georgian Judiciary.

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Mr. Ivanishvili’s fingerprints were all over the problems of Georgian American Alloys, an issue that drew terrible criticism of Georgia by US and EU officials and that damaged very seriously the image of the country.

Mr Ivanishvili attacked the Omega Group, threatening the very livelihood of 1500 of their employees and their families in a unique case of collective punishment, a despicable crime against human rights. The whole Omega saga with its human rights grim abuses was clearly mentioned in section 4 of the 2018 Human Rights Report that was issued by the US State Department.

Last but not least is the attack of Mr. Ivanishvili against TBC founders and his attempts to harm them, blackmail them, harm the bank and harm the Anaklia Development that they are currently building.

TBC is the largest and most solid financial institution in the country; it is the responsibility of the government to strengthen this institution and protect it considering that it is one of the pillars of the country’ economic and financial stability; unfortunately your government on instructions from Bidzina Ivanishvili has undermined this institution in every possible way, including fabricating a phony investigation regarding alleged suspicion of money laundering 11 years ago, to destabilize the bank, taint and blackmail the founders and cut the international investors funding for the Anaklia Development.

This government’ sponsored blackmail, has resulted in the bank losing 200 million Dollars of capitalizing in London in one single month, which prompted the founders to resign from the bank’s supervisory board under duress to save their institution from further damages; to add insult to injury and despite the fact that the founders had already agreed to a forced settlement with the National Bank, the government is keeping pressuring and blackmailing them and the Bank through various means despite your vehement public denials dear Prime Minister.

To make it short, Bidzina Ivanishvili has turned into the number one liability and obstacle to the business and investment climates in the country and the FDI figures are self-telling with a 35% decrease year on year.

To illustrate it, I will mention that in 2006 Georgia was ranking No 100 in the World Bank “Ease of Doing Business Report” the country improved its ranking over the years becoming N0 6 in 2018; during those twelve years the income from tourism increased by about 10 folds from 360 million USD in 2006 to 3.2 billion USD in 2018.

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