On December 12, 2023, the European Commission presented the “Defence of Democracy” package, which includes several proposals. Among them is a proposal for a directive “on transparency of interest representation carried out on behalf of third countries.” According to the proposal, the aim of the directive is to harmonize EU-wide laws on transparency and democratic accountability for lobbying campaigns and similar activities for third country governments.
While speaking about the directive presented by the European Commission, Guram Macharashvili, a member of the parliament of Georgia and the member of “People’s Power” movement, equated it with the “Agents’ Law” and said that the draft law initiated by “People’s Power” will protect democracy now in the European Parliament.
Irakli Chikhladze, the host at “Imedi TV”, equated the draft law of “People’s power” with the directive of the European Commission as well, stating that “as it turned out, the European Parliament really likes what some MEPs disliked in Georgia and wants to make a law in Europe similar to the draft law initiated by the parliamentary majority in Georgia.”
In fact, there are significant differences between the “People Power” bill and the proposed EU directive. The definitions of “interests” and “foreign forces” are different, as well as supervisory bodies, requirements imposed on organizations, deadlines and punishment measures in case of their non-fulfilment. In contrast to the “People Power” bill, the European Commission’s directive includes a number of security measures that should ensure the protection of civil society organizations from restrictions, political interference and pressure.
The proposed directive of the European Union entails the following requirements:
- Registration in a Transparency Register: entities carrying out interest representation activities on behalf of a third country will have to register in a transparency register. Member States will be asked to establish or adapt existing national registers for this purpose.
- Public access: key elements of the data on such interest representation activities will be publicly available, allowing for transparency and democratic accountability. This relates, for instance to the annual amounts received, the third countries concerned and the main goals of the activities.
- Record keeping: entities carrying out interest representation activities on behalf of a third country will be required to keep records of the key information or material related to the interest representation activity for a period of four years after the end of this activity.
In case of non-compliance, a proportional fine will be imposed on the organization, which may amount to 1% of the annual turnover for organizations and 1,000 euros for individuals (Article 22). The directive does not provide for the requirements for obtaining licenses or passing authorization for these organizations.
According to the European Commission, the proposal also includes safeguards to prevent gross interference with fundamental rights such as freedom of expression and assembly, and to restrict civil space. These measures include empowerment of independent supervisory authorities to request limited records in duly justified cases only and in a proportionate manner. Authorities need to ensure that no adverse consequences arise from registration; Possibility to derogate from the publicity of information in duly justified cases; The full harmonisation under the proposal prevents Member States from maintaining or introducing additional requirements and practices. (Article 4)
Despite the fact that the directive will affect all organizations and individuals representing the interests of third countries and carrying out economic and other activities, including lobbyists, research institutes, consultants, media and civil society organizations and think tanks, the European Commission states that there is no ground for concern for civil society because the directive does not cover all cases of receiving funding from third countries. For example, the directive does not cover partnerships across EU borders and the receipt of funding such as operating grants. Registration will be ordered only for those organizations whose activities are aimed at pursuing and influencing the interests of the governments of third countries in the political agenda of the European Union. In addition, as stated by the European Commission, the directive should not lead to the attachment of negative labels, discrimination and questioning the legitimacy of the activities of these organizations. According to the directive, the information in the registers should be presented neutrally. The Vice President of the European Commission, Vera Jourova, said that the proposed directive is not equivalent to the so-called “Agents Law” because it does not include criminal sanctions, discriminatory labels and prohibition of any activity.
The “Defence of Democracy” proposal was scheduled to be presented on June 7, but was postponed because the European Commission decided to carry out wide consultations and a full assessment of the potential impact of the directive in light of the concerns and criticism that followed the proposal’s consideration at the time.
You can find below the detailed analysis of the differences between the proposed EU directive and the bills initiated by “People’s Power” in the Georgian Parliament:
| EU proposed directive “on transparency of interest representation carried out on behalf of third countries. | The bill “On registration of foreign agents” initiated by “People’s Power” in the Parliament of Georgia | The draft law “On transparency of foreign influence” initiated by “People’s Power” in the Parliament of Georgia | |
| Who is included in the agent of foreign interests and what activities are covered by the law | (Article 2)
‘interest representation service provider’ means a natural or legal person that provides an interest representation service; ‘interest representation activity’ means an activity conducted with the objective of influencing the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union, which could in particular be performed through organising or participating in meetings, conferences or events, contributing to or participating in consultations or parliamentary hearings, organising communication or advertising campaigns, organising networks and grassroots initiatives, preparation of policy and position papers, legislative amendments, opinion polls, surveys or open letters, or activities in the context of research and education, where they are specifically carried out with that objective; |
(Article 1)
“Agent of a foreign power” is any person acting directly under the control, order or request of a foreign power or directly or indirectly, wholly or substantially controlled or financed by a foreign power, who directly or through another person: in the interests of a foreign power is involved in political activities in Georgia; acts as a public relations advisor, advertising agent, information service employee or political advisor in Georgia based on the interests of a foreign power; Based on the interests of a foreign power, it finances various entities in Georgia, lends money or other types of property; Represents the interests of the foreign power in relations with the authorities of Georgia. “Political activity” includes any activity that aims to influence a Georgian government body, official or any part of society in relation to determining or changing the domestic or foreign policy of Georgia, as well as any activity related to the policy or interest of a foreign government or political party of a foreign country.” |
(Article 2)
1. “Agent of foreign influence” is: a non-entrepreneurial (non-commercial) legal entity that is not established by an administrative body and if more than 20% of the total income received during the calendar year comes from a foreign power; A broadcaster provided by the Law of Georgia “On Broadcasting” and more than 20% of its total income received during the calendar year is from a foreign power; A legal entity that alone or jointly owns a printed medium of mass information operating in Georgia and more than 20% of its total income received during the calendar year is from a foreign power; A legal entity that alone or jointly with another owns and/or uses an internet domain and/or internet hosting intended for internet media disseminating mass information in the state language of Georgia and more than 20% of its total income received during the calendar year is from a foreign power “Income” means Cash and other material goods of property value (any movable or immovable property). |
| What does the term foreign power/interests entail? | ‘third country entity’ means: (a) the central government and public authorities at all other levels of a third country, with the exception of members of the European Economic Area;(b) a public or private entity whose actions can be attributed to an entity referred to in point (a), taking into account all relevant circumstances; |
(Article 1) “foreign power” includes the government of a foreign country or a political party of a foreign country; to a person outside the territory of Georgia, unless this person is a natural person who is a citizen of Georgia and lived in the territory of Georgia, and also unless this person is a natural person, created in accordance with the legislation of Georgia and carries out its activities in the territory of Georgia; A legal entity or any other association of natural persons, which is created in accordance with the legislation of a foreign country or which carries out its main activity in the territory of a foreign country. | (Article 3) “Foreign power” is: a constituent entity of the government system of a foreign state; a natural person who is not a citizen of Georgia; A legal entity that is not established on the basis of the legislation of Georgia; An organizational formation (including a foundat ion, association, corporation, union, other type of organization) or other type of association of persons established under the law of a foreign state and/or international law. |
As demonstrated these wordings, the EU Directive is focused only on those organizations and individuals whose purpose is to influence EU policy and public opinion in order to pursue the interests of non-member countries’ governments or organizations related to them. The issue of financing is not mentioned in it, since, as it can be seen from the European Commission’s explanation, the directive does not cover all types of financing and focuses only on the aspect of pursuing the interests of foreign countries.
The wording of the “People Power” bills is much broader and vaguer, as it also entails foreign power funding. The list of political activities that the draft law will cover is also broader and vaguer, and includes “any activity related to the policy or interest of a foreign government or a foreign political party.” The most important difference is found in the definition of a foreign power, which, unlike the EU directive, does not focus only on foreign governments and entities related to them, and includes all persons who are citizens of a foreign country and all organizations registered in a foreign country.
| EU proposed directive “on transparency of interest representation carried out on behalf of third countries. | The bill “On registration of foreign agents” initiated by “People’s Power” in the Parliament of Georgia | The draft law “On transparency of foreign influence” initiated by “People’s Power” in the Parliament of Georgia | |
Supervision and Authority of Supervisor |
(Article 9)Each Member State shall set up and maintain one or several national registers for the purpose of ensuring transparency of interest representation activities carried out by entities. აMember States may make use of existing national registers where they meet the requirements. These conditions include ensuring the registry’s neutrality, reporting of factual and objective information.
(Article 15) “Competent national authorities” Each Member State shall designate: (a) one or more authorities responsible for the national registers; (b) one or more supervisory authorities that are able to perform their duties independently, free from political and other external influence, and neither seek nor take instructions from government or any other public or private entity. (Article 16) The administration will have the right to request limited information from the organizations based on relevant justification. |
(Articles 3 and 4) An agent of a foreign power must apply to the Prosecutor General for registration.
The Prosecutor General has the authority, taking into account the need to protect state security and public interests, to require the agent of a foreign power to submit the information provided for in the draft law at shorter time intervals than specified in the draft law. |
(Article 4) An agent of foreign influence must apply for registration to the Public Service Hall, specifically to the National Agency of Public Registry.
(Article 8) The Ministry of Justice has the authority to monitor, which includes, based on a written letter to the Ministry, in case of a hint about an agent of foreign influence, to start research and study of this issue, and if it determines that the subject meets the relevant criteria, to register it as an agent of foreign influence. |
| Documents | (Article 7) the identity or name of the third country entity on whose behalf the activity is carried out, as well as the name of the third country whose interests are represented; (b) a description of the purpose of the interest representation activity; (c) contracts and key exchanges with the third country entity essential to understand the nature and purpose of the interest representation activity, including, where applicable, the records of the means and extent of any remuneration; (d) information or material constituting a key component of the interest representation activity. Member States shall ensure that entities referred to in Article 3(1) draw up, on an annual basis, the following: (a) a list of all third country entities on whose behalf they have carried out interest representation activities in the preceding financial year. | (Article 3) The applicant, who applies to the Prosecutor General for registration as an agent of a foreign force, must submit the following data: applicant’s name, surname, personal number, address, information about nationality and citizenship; The name of a legal entity or any other type of association of natural persons, information about each founder and head mentioned in subsection “a” of this clause. The charter of the relevant legal entity or any other type of association of natural persons must be submitted together with the application; the identity of all persons employed in the legal entity or any other association of individuals; the name/name and address of all the foreign forces on whose behalf the applicant acts; description of work performed for the benefit of a foreign power; Information about the funding received from a foreign power, as well as about the controlling and supervisory measures implemented by the foreign power towards the applicant; Information about written and oral agreements signed with a foreign power, as well as information about actions taken by the applicant based on these agreements. Copies of written agreements must be submitted with the application; Detailed information about the spending of money and property that the applicant received from a foreign power.
The organization must submit this information within one month after every 6 months from the last submission. |
(Article 4) The author of the application is obliged to reflect the following information (if such information exists): identification data of the author of the application; address of the author of the application; website address of the author of the application; Information about the source, amount and purpose of any cash and other material benefits received by the author of the application during the previous calendar year; Information about the amount and purpose of any money spent by the author of the application during the previous calendar year;
This information must be submitted annually. |
| Extent of punishment in case of failure to comply with the requirements of the law | (Article 22) A fine of 1% of annual income for organizations and 1,000 euros for individuals. | fine or imprisonment for up to 5 years. | (Article 9) Fine from 10,000 to 25,000 GEL. |
Another important difference between the EU directive and the “People’s Power” bills is who oversees the registry. In the case of the European Union, it is emphasized that the registry should be neutral, and the body that will supervise it should be independent from political influences and free from government directives. In order to request limited information from the organization, this body will need to submit appropriate justification. In the case of “People’s Power” bills, similar security measures are not found, and organizations are required to register with the Prosecutor General in one case, and in the other case with the Ministry of Justice, which may raise doubts about political independence and neutrality. Also, in one case, without any justification, the General Prosecutor will be able to request the organizations to submit documentation earlier than it is stipulated by the law, citing the protection of state security and public interests as the reason. In the second case, on the basis of a written appeal by any person, the Ministry of Justice will be able to investigate any organization and, if it considers that this organization meets the criteria, register it as an agent of foreign influence.
The documents that these organizations will be required to submit are also different. In the case of “People’s power” bills, more detailed documents are requested. In one case, this includes the identity of all employees, and in the other, all income and expenses. In the case of the “Registration of Foreign Agents” draft law, the deadlines for submitting documents are also different. In the case of the European Union, it will be annual, and with this “People’s Power” bill, every 6 months (more often if requested by the Prosecutor General).
The main difference between the two proposals is the size of the punishment provided in case of non-compliance with the requirements. According to the European Union directive, this will only be a proportional fine, while the “People’s Power” bill envisages making changes to the Criminal Code of Georgia and punishing the violation with a fine or up to 5 years in prison.
The story of “Imedi TV” states that the European Union directive does not opt for criminal sanctions, and thus it is similar to the second bill submitted by “People’s Power” ” On the transparency of foreign influence.” However, there is an important difference here in the wording of “foreign influence agent”, since in the definition of “foreign influence agent” in the “People’s Power” draft law, the emphasis was placed on the source of funding, not on the activities of the organization, and it applied to almost all legal entities that have received more than 20% of their income from abroad. In this case, the Ministry of Justice was in charge of monitoring, and the punishment included a fine ranging from 10,000 to 25,000 GEL.
The example of Hungary
Similar to the “Transparency of Foreign Influence” bill, Hungary’s 2017 law “On the Transparency of Organizations Receiving Support from Abroad” focused on NGO funding, requiring registration of all organizations receiving more than 22,000 EUR in funding from abroad. The European Court of Justice ruled that the law violated the free movement of capital and the EU’s fundamental rights to privacy, data protection and freedom of association.
The “Defence of National Sovereignty” law adopted by the Hungarian Parliament on December 12, which criminalizes foreign financing of election campaigns and establishes a new Office for the Defence of Sovereignty, which will be headed by the Prime Minister and which will have broad investigative powers, is radically different from the European Commission’s “Defence of Democracy” package as well. Human rights activists fear that the Hungarian authorities will use this law against NGOs, journalists, companies, civil society groups and others.
MPs of People’s Power, the initiators of the bills registered in the Parliament of Georgia, claimed that their proposed bill “On the Registration of Foreign Agents” was not similar to the Russian law, but to the American law. For more information about the topic, see the articles prepared by “Myth Detector:”
- Why is the “Agent’s Law” Russian and NOT Western? (in Georgian)
- American or Russian Model? Who are the Actors Demanding Governmental Control over the NGOs?
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