On September 14, 2023, the US State Department (DOS) issued a press release regarding the imposition of new sanctions in response to Russia's illegal war against Ukraine. According to the statement, the sanctions included about 150 companies and individuals involved in expanding Russian energy production and exports, working in the metals and mining sector, and helping Russian individuals and companies evade international sanctions.^[1] Among those sanctioned was an officer of Russia's Federal Security Service (so-called FSB) and a Georgian-Russian oligarch, whom FSB used to influence Georgian society and politics in favor of Russia.^[2] In the fact sheet, which included the list of sanctioned persons and companies, Otar Partskhaladze was mentioned as a Georgian-Russian oligarch. The basis of his sanctioning was the activities of Partskhaladze in the management consulting sector of the Russian Federation economy. The statement of DOS also mentioned that Partskhaladze obtained Russian citizenship with the help of FSB Officer Alexander Onishchenko and that he was influencing Georgian society and politics in favor of Russia with the support of the FSB.^[3]

Who is Otar Partskhaladze?

On November 21, 2013, Otar Partskhaladze was appointed as the Chief Prosecutor of Georgia.^[4] His appointment to this position was preceded by the resignation of then head of the Prosecutor's Office, Archil Kbilashvili. According to his explanation, the main reason for his resignation was a strategic disagreement with the future Prime Minister, Irakli Gharibashvili. He shared different views regarding reforms, priorities and challenges in the law-enforcement field.^[5] Before being appointed as the Chief Prosecutor, Partskhaladze was the head of the investigative service of the Ministry of Finance for 8 months, and before that he worked as the head of the southern office of Shida Kartli of the same institutions for 6 years.^[6] Otar Partskhaladze held the position of Chief Prosecutor of Georgia for about 1 month; He resigned from his position on December 30, 2013.^[7] His decision was preceded by several important public questions about his past, including a criminal conviction, an alleged robbery or theft he committed in Germany in 2001, and information about his secondary and higher education, as it seems unreliable in his biography.^[8] Several other alleged crimes are connected with the name of Partskhaladze, which have resurfaced over time. In May 2017, he physically assaulted the Auditor General, Lasha Tordia.^[9] In addition, in October 2018, audio recordings were released in which the former Minister of Sports, Levan Kifiani, also spoke about physical violence from Otar Partskhaladze.^[10] As the Chief Prosecutor, he was involved in the case of the former Minister of Internal Affairs (MIA) of Georgia, Ivane Merabishvili. Merabishvili claimed that on December 14, 2013, he was secretly and illegally taken out of his prison cell and forced to testify against his former political partners. The Grand Chamber of the European Court of Human Rights found Merabishvili's claim credible.^[11] The former Chief Prosecutor drew public attention once again in April 2020. During the state of emergency caused by COVID-19 and restrictions on the movement of vehicles, he used to travel on the city streets with a special pass.^[12]

The State's Response to Partskhaladze's Alleged Crimes

Although the US Department of the Treasury has exposed the former Chief Prosecutor for influencing Georgian society and politics in favor of Russia, the legal steps taken by the state to investigate the alleged crime are still unclear. On the one hand, the State Security Service Georgia (SSSG), dealing with the case, said it has started probing it.^[13] On the other hand, the statement was released by the General Prosecutor's Office of Georgia, from which it is clear that the Security Service has started investigation, not probing.^[14] Despite the high public interest, until now there is no official information about the specific article(s) under which the investigation was initiated, as well as what steps were taken to investigate the alleged crime by the SSSG. The only information was shared by the Executive Secretary of Georgian Dream, Mamuka Mdinaradze on September 22, 2023. He alleged that the SSSG questioned Otar Partskhaladze; Although this is also unclear, how the member of the ruling political team has information about the details of the investigation.^[15]

What does sanctioning Otar Partskhaladze mean?

After Russia launched an unjustified war against Ukraine, the United States, the United Kingdom, and the European Union announced the imposition of economic and financial sanctions. The sanctions would apply to individuals as well as companies and government agencies that supported Russia's war in Ukraine.

Otar Fartskhaladze was sanctioned by the Departments of State and the Treasury on September 14, 2023, based on the executive order of President Joseph R. Biden Jr.^[16] In the US law, this document is a presidential directive to the federal government, binding and based on the country's laws.^[17] Executive Order N14024 was issued by the US President on April 15, 2021, and it restricts access to assets in response to specific harmful actions emanating from the Russian Federation.^[18]

According to the executive order, the harmful actions of the Russian Federation pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and, therefore, require the use of emergency mechanisms to deal with it. According to the Order, any property belonging to a sanctioned person is blocked regardless of how it came into the US jurisdiction. The decision to sanction a person is made by the US Department of the Treasury, in consultation with the State Department and the Attorney General.^[19] The main criteria for sanctioning a person or a company are defined by the Order. According to the document, those who work or have worked in the technology and defense sector of the Russian Federation or other related economic sectors may be subject to the restrictions.^[20] Also, those who participate in or are responsible for directly or indirectly carrying out actions in favor of Russia, such as interfering in elections, undermining democratic processes and institutions, and creating national security threats to the US and its allies, could be subject to sanctions.^[21] In addition to the property issues, the order prohibits any kind of economic activity with sanctioned persons, including the provision of services, as well as any kind of assistance in circumventing the sanctions imposed on them. The person is not notified in advance of the decision to sanction, as this will give him time to fictitiously transfer the property he/she owns to family members or a close circle of persons, which will weaken the effectiveness of the sanctions.

Although Georgia has not imposed its own sanctions against the Russian Federation, it has joined the major financial sanctions imposed by the US, the EU, and the UK.^[22] However, the legislation of Georgia does not contain a unified legal act that defines the policy and enforcement mechanisms of international sanctions. At this stage, there is only one main document that regulates the rules of enforcement of the international sanctions in the financial sector. The order was issued by the Acting President of the National Bank of Georgia (NBG) on August 4, 2023. Nevertheless, it is known that Georgia has also joined the part of the sanctions, which is subject to the re-export of sanctioned goods from the EU countries, the USA and the UK to Russia, and the control of the turnover of dual-use products. Several agencies oversee this process, including the Ministries of Finance, Economy, Defense, and Internal Affairs, the respective LEPLs, and others.^[23] The persons responsible for coordinating sanctions in the European Union, the USA, and the United Kingdom also confirm relevant application of the sanctions.^[24]

Response to the International Sanctions

On March 2, 2023, the term of office of NBG President Koba Gvenetadze expired. Instead of appointing a new president, the Parliament adopted a legislative amendment and appointed the first vice-president, former Minister of Economy and Sustainable Development, Natela Turnava as the Acting President until the position is filled.^[25] NBG is the main body that oversees the enforcement of sanctions imposed in the financial sector since the beginning of the war in Ukraine. According to Turnava's Order of August 4, 2023, which concerns the procedure for the implementation of the sanctions regime, those persons who are under the supervision of the NBG are obliged to comply with all the sanctions imposed on Russia and Belarus by the USA, the European Union and the United Kingdom. In case commercial banks and microbanks do not comply with the established rules, they will be subject to appropriate sanctions, according to the Order.^[26] It should be noted that from February 24, 2022, when Russia invaded Ukraine, until the issuance of the order, NBG implemented financial sanctions without any legislative regulation, through electronic correspondence with commercial banks and other persons subordinate to it.^[27]

Even though international sanctions were enforced in other sectors as well, when studying the issue, the Social Justice Center found it difficult to find specific legal acts from the public sources defining the general rule of sanctions enforcement and, first of all, the areas within which the country joins international restrictions. In addition to customs control and the efforts by financial institutions in their field, another area that the sanctions imposed by the West will affect are real estate and moveable things that have significant value. Respectively, in the framework of similar sanctions, the Russian oligarchs were deprived of their houses, plots of land, cars and other luxury items.

Questions about the Circumvention of the International Sanctions

The primary purpose of the sanctions is to limit as much access to finance for those individuals and companies that fund Russia's unjustified war in Ukraine. Therefore, they will be effective if they do not leave various loopholes for sanctioned persons to maintain access to their capital. In this context, the fact that, probably, even more problematic is that the current legal regime of Georgia probably does not define the rules for spreading sanctions on real estate and movable property. The Social Justice Center could not find any legal acts issued by the Minister of Justice or other competent authority, which would define the limitation of the right to property, for example, to real estate, in the event of sanctioning a person. On the one hand, NBG restricts the sanctioned persons from accessing bank and micro-bank assets; However, on the other hand, the Ministry of Justice allows the sanctioned persons to dispose of their real estate, which may be expressed in receiving income from the sale of property. Under these conditions, Georgia's adherence to international sanctions is fragmented and cannot ensure its complete and effective implementation.

On September 18, 2023, it became clear that within the framework of the Order issued by the NBG, Otar Partskhaladze was restricted from accessing and transferring his assets in the commercial banks.^[28] According to the explanation of the constitutional body, this decision was due to the inclusion of Partskhaladze in the sanctioned list by the USA.^[29] No other agency made a statement about what type of regulation applied, for example, to the real estate of Partskhaladze. The chronology of events also supports the suspicion that Georgia does not join the part of the international sanctions that pertains to real estate. On September 20, at 12:16 - 12:18,^[30] Otar Partskhaladze's son applied to the LEPL National Agency of Public Registry under the Ministry of Justice to transfer 12 real estate based on the gift agreement, for which he paid 4,200 GEL. The service included the registration of ownership on the application's submission day. At this moment, Otar Partskhaladze was already sanctioned by the USA; however, at the same time, the NBG Order had already been amended, according to which, as a citizen of Georgia, sanctions did not apply to him. Although the Order of the NBD is the only special document publicly available on the enforcement of sanctions, it applies only to subjects under its supervision - the financial sector. Accordingly, this Order of the NBG could not apply to the Public Registry, which is responsible for the registration of real estate.

Thus, the gifting of real estate by Partskhaladze to his son, in this period of time, has several explanations: 1. The Ministry of Justice has made an identical change to the NBG in the rule (that is not public) by which the enforcement of sanctions also applies to immovable property and Partskhaladze re-signed the property just when according to the Georgian legislation, sanctions did not apply to him; 2. Georgia did not comply with the requirement stipulated by the international sanctions, which implies freezing the real estate assets. It, therefore, allowed Partskhaladze to alienate the property through evading the sanctions. In case Georgia does not follow the requirement of freezing the real estate assets of a sanctioned person, it is not clear why Otar Partskhaladze needed to alienate the property to his son when he would not have been restricted in gifting the property at all. On the contrary, if Georgia undertakes to join the international sanctions, including the part on freezing real estate assets, it turns out that Otar Partskhaladze gave his son a large amount of property in violation of the international sanctions, with the coordinated work of the Ministry of Justice and the respective LEPLs.

The chronology of events deepens doubts about the work of agencies in favor of Partskhaladze.

In particular, another LEPL - Public Services Development Agency under the Ministry of Justice, which deals with issues of granting and terminating citizenship, started studying the issue of Partskhaladze's possible illegal Georgian citizenship only after the request of the son of Partskhaladze - to obtain ownership rights to 12 real estates based on a gift agreement – as appeared on the website of the Public Registry. On September 20 at 17:44, the Ministry of Justice issued a statement, according to which the Public Services Development Agency started proceedings regarding the legal grounds for deprivation of Georgian citizenship of Otar Partskhaladze. At the same time, between 17:23-18:00, excerpts were uploaded step by step on the Public Registry under the Ministry of Justice website, which confirmed the transfer of ownership rights to 12 immovable items from father to son. The chronology of the events suggests that the public agencies acted in coordination to evade the US sanctions on Otar Partskhaladze, putting the country at risk of further sanctions.

Legal Status of Sanctioned Otar Partskhaladze

A few hours after the publication of the NBG statement on the imposition of financial restrictions on Partskhaladze, at a briefing, the Chairman of the Georgian Dream, Irakli Kobakhidze, said that this decision of the NBG "directly contradicts the Constitution".^[31] According to the member of Parliament, the NBG violated the presumption of innocence of Partskhaladze, while the Constitution of Georgia exclusively protected the legal status of a Georgian citizen.

The Constitution of Georgia determines the procedural rights of a person, which arise during proceedings in court. Among them, the universally recognized principle states that a person is innocent until proven guilty by a legally binding conviction.^[32] The Constitution strictly defines that the presumption of innocence applies to subjects of the process. It cannot be extended to the implementation of such sanctions by state agencies, which do not derive from a conviction, but are subject to the decision of another country and the international obligations undertaken by Georgia.

According to the practice of the European Court of Human Rights, compliance of targeted sanctions with the Convention is mainly considered in terms of a fair trial and is not considered a violation of universally recognized rights, if there is an effective remedy.^[33] According to the European Court of Human Rights practice, compliance of the targeted sanctions with the Convention is mainly considered in terms of a fair trial. It is not considered a violation of universally recognized rights, if there is an effective remedy. The practice of the Court of Justice of the European Union, which has considered numerous cases of sanctioned individuals, testifies that the courts do not discuss the reason and content of the sanction or their proportionality and only check the extent to which the sanctioned person is equipped with adequate guarantees for the protection of their rights.^[34]

In this case, the sanctions are imposed by the US. Under American law, targeted sanctions can be appealed under the Administrative Procedure Act (APA).^[35] The court's decision would automatically affect the decision of Georgia, as well as any other country that enforces the US sanctions, to return or restrict access to the sanctioned person's property.

Accordingly, the argument of presumption of innocence could not be applied to Otar Partskhaladze because it was not a criminal trial in which the former Chief Prosecutor claimed his innocence. However, in compliance with the principles of international law, he could administratively appeal the sanction in the appropriate US court.^[36]

The second argument of the leader of the ruling party, which emphasized the special constitutional status of Georgian citizens, is also problematic. The Constitution of Georgia protects the universally recognized right of a person to a fair trial, including the presumption of innocence. However, it does not connect the use of these rights to citizenship status and extends it to both citizens of Georgia and other countries.

The Issue of Georgian Citizenship

On February 11, 2023, TV Pirveli reported that Otar Partskhaladze received Russian citizenship in 2022 and, later, used his Georgian passport to register a company in Georgia. The issue of his citizenship resurfaced once again when the US sanctioned Partskhaladze.

According to the statement released by the State Department, Otar Partskhaladze obtained Russian citizenship with the help of an FSB agent; however, according to publicly available information, he also held Georgian citizenship at the same time.

According to the legislation of Georgia, it is not legal for a person to have dual citizenship unless it is an exceptional case. A person can have Georgian and other country’s citizenship only in two circumstances: 1. the way of exception - if a person has contributed exceptional merit to Georgia or if citizenship is in the state interest;^[37] 2. Retention of citizenship - a Georgian citizen obtains consent from the Georgian state to retain the citizenship before acquiring citizenship of another country.^[38] In any case, according to the Constitution of Georgia, the decision of the citizenship issue is the prerogative of the President of Georgia.^[39]

After the spread of news about Partskhaladze's acceptance of Russian citizenship, two opinions were formed. According to one theory, he applied to the state agencies before receiving Russian citizenship and requested to retain his citizenship, which was positively resolved. Second, he illegally possessed Georgian citizenship, about which the responsible agencies did not have information or did not react to it.

According to the legislation of Georgia, a person's citizenship will be terminated if he loses it. One of the reasons for the loss of citizenship is obtaining the citizenship of another country. The Public Service Development Agency, which is under the jurisdiction of the Ministry of Justice, receives and prepares an opinion on the application for granting, maintaining, and terminating citizenship. According to the Agency's conclusion, the President makes the final decision.

If the state authorities identify the grounds for the deprivation of Georgian citizenship, it is obliged to submit a request to the Agency. Based on the Agency's conclusion, the President will decide on the loss of citizenship.^[40] In addition, the Agency itself may initiate termination proceedings if, without receiving a notification, it independently becomes aware of grounds for terminating Georgian citizenship.^[41]

Although on September 20, 2023, the Agency started proceedings to terminate the Georgian citizenship of Otar Partskhaladzi, it failed to fulfill the obligations imposed by the law. The news that Otar Partskhaladze had obtained Russian citizenship was first reported in February, creating sufficient grounds, on the one hand, for competent agencies, including those in the security sector responsible for counterintelligence activities and border crossing control, to apply to the Agency for the initiation of proceedings. On the other hand, the legislation gave the Agency the authority to start preparing the report by itself when the grounds for terminating the citizenship of the former Chief Prosecutor - acquisition of foreign citizenship were present.

Such actions of the agencies of executive power deepen the suspicion that the state authorities knew about Otar Partskhaladze's acquisition of citizenship of the Russian Federation from the beginning.

This doubt is strengthened by the fact that the time of the initiation of the proceedings by the agency coincides with the introduction of amendment in the Order on the enforcement of the sanctions by the Acting President of the National Bank and subjecting the imposition of restrictions to Georgian citizens to the judicial oversight. As a result of the amendment, the enforcement of the part of the sanctions that concerned the financial sector no longer extended to those Georgian citizens who were not convicted by the Georgian court. Otar Partskhaladze also became subject to this rule.

Summary

The news on Otar Partskhaladze raised many questions in society.  There are reasonable doubts to assume that the moment it was known that the former Chief Prosecutor was sanctioned, the state bodies had a coordinated effort to help him evade the sanctions. Despite publicly available information, Otar Partskhaladze was keeping Georgian citizenship illegally for 2 years, while the Ministry of Justice and institutions subject to it wouldn’t act upon it. The chronology of events shows that the Agency initiated an investigation only after the LEPL  National Agency of Public Registry approved  the request of the son of Otar Partskhaladze to receive 12 real estate properties as a gift.

There were a number of problems identified with respect to execution of sanctions. From 24th of February, 2022 there is only one publicly available special order of the National Bank of Georgia dated as 4 August 2023, that concerns sanctions imposed during the war.  The state doesn’t have a united systemic policy for executing sanctions, establishing the parts in which the country is joining international sanctions and in fields where the policies would be analogous to those of the partner countries. Besides, it is unclear whether the country extends its sanctions on the sanctioned persons’ real estate and luxury goods. If the country evades the sanctions imposed on real estate, the sanctioned person preserves the right to private property. This evadance significantly reduces the efficiency of such restrictions in achieving their goal and goes against the essence of imposing sanctions on Russia. In case of the state sanctioning policies being extended to the real estate too, then we are witnessing a coordinated illegal work by the Ministry of Justice and institutions subject to it that allowed Otar Partskhaladze to evade international sanctions and rescue his real estate from being seized from him by having gifted it to his son. The government is obliged to establish a state policy for executing international sanctions, which, on the one hand, will protect Georgia from becoming a place for evading sanctions and, on the other, will allow its citizens to know what sanctions the country pursues.

Chronology:

February 11, 2023 - First news about Otar Partkhaladze getting Russian citizenship.        

September 14, 2023 – The US State Deparment announces sanctining Otar Partskhaladze.

18:12, September 18, 2023 - National Bank of Georgia announces that Otar Partskhaladze was restricted access to assets and transactions due to sanctions.

21:23, September 18, 2023 - Irakli Kobakhidze announces that the decision of the National Bank of Georgia is against the Constitution of Georgia.

13:59, September 19, 2023 - the President announces that Otar Partskhaladze has not submitted his request to her to retain the citizenship of Georgia.

14:45, September 19, 2023 - Irakli Kobakhidze announced that Otar Partskhaladze is a citizen of Georgia; the Ministry of Justice started an investigation and stated that it learned from the news that Otar Partskhaladze has been a citizen of Russia for one year already.

20:42, September 19, 2023 - the President announces that once she receives the Conclusion from the LEPL Public Service Development Agency, she will revoke Otar Partskhaldze’s citizenship.

21:09, September 19, 2023  - Acting President of the National Bank of Georgia, Natela Turnava, issues an order according to which the law on the execution of sanctions is amended and establishes exceptions for the citizens of Georgia.

September 20, 2023 - Natela Turnava announces that banks have no right not to comply with regulations by the National Bank.

12:16 – 12:18, September 20, 2023 - Otar Partskhaladze’s son, on the grounds of gift agreement, applies to the LEPL National Agency for Public Registry under the Ministry of Justice to transfer the title from 12 real estate properties. For the service to be completed the same day he pays 4,200 GEL.

17:23 – 18:00, September 20, 2023 - the LEPL National Agency for Public Registry under the Ministry of Justice published information about Otar Partskhaladze gifting his son a minimum of 12 real estate properties on its website.

17:44, September 20, 2023 - the Ministry of Justice and its subject institutions publish a statement that the LEPL Public Service Development Agency  started the process of revoking the citizenship of Otar Partskhaladze.

19:55, September 20, 2023 - the Ministry of Justice publishes a statement according to which the LEPL Public Service Development Agency completed the process, approved revoking Otar Partskhaladze’s citizenship, and sent the Conclusion to the President of Georgia for signing.

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