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24.Sep .2020 15:23

"The UK is observing the consequences of the tightened communications regulations in Georgia"

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The Ministry of Foreign Affairs of the United Kingdom is closely monitoring the results of the tightened regulations in the communications sector in Georgia - Parliamentary Secretary of the Ministry of Foreign Affairs, Wendy Morton made a statement. Morton responded to a question from MP Alyn Smith regarding the developments in Georgia. Smith's question was about the accelerated changes in the communications sector and their impact on maintaining freedom of speech in the country.

“Through our Embassy in Tbilisi we are assessing the implications of the Georgian Parliament's recent amendment to the electronic communications law, giving more authority to the communications regulator, on Georgia's media and telecommunications sector.

In our engagement with the Government of Georgia we have raised the importance of continued democratic and economic reforms in Georgia that support freedom of speech and the rule of law, most recently at the 7th UK-Georgia Wardrop Dialogue which took place on 9 September,”- reads the response from Wendy Morton.

This is not the first case when a member of the British Parliament asked a question to the foreign office about the recent developments in Georgia. On September 4, Labour Party MP Catherine West asked a question about the new digital corridor and the communications company "Caucasus Online", to which the Parliamentary Secretary of the Ministry of Foreign Affairs Wendy Morton answered. According to Morton, the British Embassy in Georgia is closely monitoring the developments around Caucasus Online.

In 2019 one of the largest private holdings of Azerbaijan, NEQSOL acquired shares of a parent company of Caucasus Online and paid $61 million. This deal was followed by a sharp response from the Georgian Communications Commission and the government. The commission indicated that the deal was not pre-arranged with them, which should have resulted in a tough sanction for Caucasus Online.

However, according to the representatives of NEQSOL Holding, they have kept Georgian government fully informed about their plans prior to the deal and got blessings for the transaction.

At its August 20 meeting, the Communications Commission imposed a fine of GEL 270,000 on Caucasus Online and ordered the company to change its share purchase deal by September 20. The company has made a proposal to the regulator to stabilize the situation and is currently awaiting a response.

In parallel with the ongoing dispute with NEQSOL, the Parliament of Georgia hastily passed a law extending the powers of the Communications Commission to allow it to appoint a special manager in companies. A special manager has the right to appoint and dismiss members of the board of directors, sever ties with contractors, suspend or limit the distribution of profits, and perform other functions in the management of the company.

NEQSOL Holding plans to create a new digital route that will connect Europe with Central Asia. The fiber-optic infrastructure owned by the ‘Caucasus Online’, notably the undersea cable that connects Georgia to the EU, is very important for the development of a new project. According to the NEQSOL millions of internet users in Central Asia will benefit from this project.

The communications commission may use a new and appoint a special manager in the company. Based on the opinions of several international law firms, such actions might be considered as an expropriation of the private property, causing further deterioration of the investment climate in the country.