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U.S. State Department Investment Climate Statement on Georgia

Washington DC, the U.S. State Department building. Photo by Alex Wong/Getty Images via US Embassy London

The U.S. State Department’s 2021 Investment Climate Statement on Georgia positively assesses Georgia’s business, trade and investment-related regulatory framework and legislation, but highlights shortcomings in the judiciary.

The report, published on July 21, says indications of “interference in judicial impartiality” remain, while justices are vulnerable to political pressure from within and outside the court system.

“There is an increasing lack of confidence in the judicial sector’s ability to adjudicate commercial cases or in a timely, competent manner,” the document highlights, noting some disputes are languishing for years in courts.

The report says companies complain about inefficient municipal-level decision-making, shortcomings in enforcing intellectual property rights, lack of effective anti-trust policies, selective enforcement of laws, alleged political meddling.

The State Department cites the case of Anaklia Development Consortium, consisting of international investors including a U.S. company, which was awarded a contract in 2016 to develop a deep-sea port in Anaklia town. Noting the authorities terminated the deal with the ADC in 2020, the report says “the investor group alleges government actions against the project let to financial difficulties and eventual contract termination.”

“Despite the government’s claim that it remains committed to the construction of a deep-sea port in Anaklia, investors and local business leaders doubt that commitment,” the report highlights.

In spite of the challenges, Georgia ranks high in the region as a good place to do business, according to the document. The State Department says the country has carried out “sweeping economic reforms” since 1991 that produced a “relatively well-functioning and stable market economy.”

The report also positively assesses Georgia’s openness to investment and its ease of doing business. The lengthy document comprehensively discusses Georgia’s capital markets, banking system, investment incentives, property rights and regulations, as well as the Government’s efforts for privatization and tackling corruption.

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