WT/TPR/S/224 Trade Policy Review 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since independence, the overriding objective of Georgia's economic policies has been to 
create and develop a market economy through privat ization of state-owned commercial enterprises, 
deregulation of prices, and liberalization of its trade and investment regimes.  Much of this had been 
achieved by Georgia's accession to the WTO in 2000;   Georgia had established the legislative basis 
for competitive markets by liberalizing prices, resci nding exclusive rights granted to certain economic 
agents, abolishing restrictions on competition in cer tain activities, and cutting subsidized credits to 
state-owned enterprises.  Trade and trade-related policies pursued during the review period have built 
on these achievements, helping to harmonize Georgia's trade and related legislation with international 
norms, by introducing or amending legislation in areas such as customs administration and tariffs, 
import licensing, intellectual property protection, standardization and certification, government 
procurement, privatization, competition, and business legislation.  
2. Georgia has streamlined its customs procedures and continued to liberalize its trade regime. 
Import tariffs were significantly reduced in 2006, making Georgia's applied MFN tariff rate – at 
1.5% – one of the lowest worldwide, and the num ber of tariff bands was reduced from sixteen to 
three;  nearly 86% of imported goods currently enter Georgia duty free.  As a consequence, the contribution of tariffs in trade tax revenues d eclined from 32% to under 3% between 1998 and 2008, 
although excise taxes and VAT ensured that taxes co llected on imports maintained a significant share 
(around one third) of total tax reve nue.  There is effectively no tariff escalation nor any evident tariff 
peaks, and Georgia has no quantitative restrictions on trade.  The import licensing system was 
simplified in 2005 when the number of licences re quired for import and export was substantially 
reduced, with licensing required only to protect pub lic health and the environment and ensure national 
security.  Georgia does not apply contingency meas ures and has no relevant legislation for such 
measures.  There are minimal export restrictions in terms of export taxes or licensing, no export 
subsidies nor any government financi ng for exporters other than bank loans at market interest rates.   
3. Government procurement, which accounts for about one sixth of GDP,  has been further 
liberalized with the phasing out of preferenc es for domestic bidders. Legislative amendments 
currently under consideration aim to increase tr ansparency through the introduction of electronic 
procurement. Regarding standards and SPS requireme nts, Georgia has made major legislative and 
institutional changes in its transition from a cent rally planned to a market economy  but faces a 
number of implementation problems particularly in regard to food safety.  Although Georgia has 
adopted a number of new basic laws over recent years covering food safety, veterinary, and plant 
protection issues, minimum international standards for food safety have not yet been achieved, and 
the sector lacks funding to ensure adequate nationwide food-safety structures.   
4. The business environment has undergone a sea ch ange in recent years with the number of 
business activities subject to licences and permits reduced by over 80% since 2005, a feature that has 
been important in attracting foreign investment .  There are also special taxation regimes for 
international financial companies, international co mpanies operating in free industrial zones, and free 
warehouse companies, which exempt them from prof it and property tax. Significant privatization of 
formerly state-owned enterprises has been achieve d in recent years, and the Government received 
over US$1.4 billion in revenue betw een 2005 and 2008, mainly in te lecommunications, energy, large-
scale real estate assets, and the health sector. 
5. Competition law was overhauled in 2005 with the focus on the prohibition of state aid and 
subsidies although, in the view of some observers, the law does not apply sufficiently to agreements Georgia WT/TPR/S/224 
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restricting competition, concerted practices, a buse of dominant position, and state enterprises. 
Intellectual property legislation exists across sev eral IP areas including patents, trade marks, 
copyright, and geographical indications,  but continui ng resource and capacity constraints appear to be 
the main hindrances to effective implementation.   
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs documentation and administration 
(a) Documentation 
6. According to the Customs Code (Article 15,  paragraph 2),  the documents required for 
customs control and/or customs supervision are define d by Orders of the Minister of Finance.  Under 
Order No. 1760 import documentation must include :  the Cargo Customs Declaration, and the 
appropriate transport document (for motor transp ort: TIR Carnet, CMR, or vehicle registration 
document;  for air transport: airway bill; for sea tran sport: bill of lading, consignment note, letter of 
conveyance; and for carriage via rail transport: railway bill of lading, waybill).  The contract, or commercial invoice is also required, but if importer does not have this document, the declared goods 
are allowed into the country but are subject to 100% physical inspection.  If the importer wishes to 
claim tax exemption based on the origin of the good s, a preferential certificate of origin needs to be 
presented.  Importers of goods subject to non-tari ff measures must present relevant documentation 
(such as permission, licence or certificate of confor mity).  According to Order No. 1770 the same 
procedure applies for export, although a contr act  or commercial invoice is not obligatory. 
(b) Administration  
7. After Independence, Georgian Customs had to overcome a number of serious problems:  the 
need to build a post-Soviet sy stem from scratch, the absence of de facto Georgian jurisdiction over 
South Ossetia and Abkhazia, poor management, and rampant bribery and corruption in the customs and tax administration.  Customs reform was theref ore an important priority on the reform agenda, 
and radical changes have been made to customs and tax legislation in recent years.  A new tax code 
entered into force on 1
 January 2005 and a new customs code on 1 January 2007 following a far-
reaching review of tax and customs policies with a vi ew to introducing a more liberal regime.  Out of 
21 taxes under the previous regime, only six still exist,  of which three – customs tax, excise tax, and 
VAT directly affect imports.1  Administration has also been helped by a simplified tariff.   
Legislation 
8. The Customs Code of Georgia (CCG) regulates customs procedures.2  It defines various 
customs regimes under which goods are brought in or ta ken out of the customs territory of Georgia.  
The revision was aimed at simplifying customs pr ocedures and harmonizing both customs legislation 
and procedures with the European Community Cust oms Code and the revised Kyoto Convention on 
the Simplification and Harmonisation of Customs Procedures.  Significant changes between the 
revised code and the previous regime include3: 
                                                      
1 Five (personal income tax, corporate income tax, VAT, excise tax, and customs duties) are state-wide, 
and one (property tax) is a local tax.   
2 Customs Code of Georgia (unofficial English tran slation by the American Chamber of Commerce).  
Viewed at: http://www.amcham.ge/res/Bullets_ on_1stPage/CUSTOMS_CODE_OF_GEORGIA_ENG.doc. 
3 Georgian Law Review (2005). WT/TPR/S/224 Trade Policy Review 
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- Explicit definition: customs procedures from the time of crossing the border up to the 
release of goods are unambiguously defined;  also incorporation of customs implementing provisions (definitions relati ng to customs tariffs, classification of 
goods, determination of origin and cust oms valuation), previously scatted over 
different regulations, etc. 
- Reduction in the number of customs procedures from 15 to 7.  The revised list of 
customs procedures, based on international b est practice, comprises:  release of goods 
for free circulation (import);  transit of goods;  customs warehousing of goods;  
inward processing of goods;  temporary ad mission of goods;  outward processing of 
goods;  and export.
4  
- Reduction in the number of documents n eeded for export and import registration. 
- Provision for the importer to amend particulars of a customs declaration, in case of 
minor technical mistakes, without having to pay, as well as possibility to defer the payment of a customs debt for one month. 
- Introduction of a bond/guarantee system, to a llow officials to suspend the payment of 
duty and taxes pending the completion of an authorized activity.  
- Provisions on free zones and free warehouses in contrast to the previous customs 
code;  provision for customs appeals and pe nalties were brought into line with the tax 
code, including definition of customs violations. 
9. In 2008, a number of important amendments were  made to the Code, dealing with issues such 
as valuation, nomenclature, post clearance audit, simplified customs procedures for authorized 
operators, binding tariff and origin information, and warehouses.  The authorities state that further 
legislation required for the correct implemen tation of the Customs Code  is under way.
5 
Procedures 
10. Procedures for importing goods have been signi ficantly simplified and improvements are on-
going.  The European Commission’s assessment of cu stoms in Georgia noted that there had been 
positive developments since 2007 in the customs decl aration system and on coordination of technical 
regulations as well as in the clarification of the cu stoms code to tackle co rruption in the areas of 
valuation, post-clearance audit, and warehouse approvals.6  However, in the Commission's view, the 
lack of clear implementing provisions to the code  has complicated the implementation of valuation 
rules as well as of post clearance controls.  In res ponse to this view, the authorities noted that new 
detailed secondary legislation has extensively re vised customs valuation regulations and the 
implementation of post-clearance customs audit.  
                                                      
4 The term "Customs-approved treatment or use" was also introduced in the CCG and refers to: the 
placement of goods under a customs procedure; entry of goods into a free zone or free warehouse; re-
exportation of goods from the customs territory of Georgia; destruction of goods under customs supervision, and 
transfer of goods into th e ownership of the State. 
5 On the basis of the latest amendments of the CCG , which entered into force in 2009,  a number of 
additional acts need to be adopted:  the Decree on the Georgia Integrated Tariff;  the  MoF Order on National 
Commodity Nomenclature of Foreign Economic Activity (in order to switch to HS2007);  Mof Order on rules of 
implementation of post-clearance customs audit;  the MoF Order on Advance Customs Ruling;  and the Joint 
Order (MoF and Ministry of Interior) on Rules of Entrance, Movement and Leaving in Customs Control Zone of 
Border Crossing Points Open to International Movement. 
6 EC Commission (2009), p. 5. Georgia WT/TPR/S/224 
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11. Tax and customs were consolidated into a single department in 2007:  the Revenue Service of 
the Ministry of Finance of Georgia (RS).  The RS has begun developing risk-based customs control 
and tax audit systems and, since March 2008, a risk -based checking system is operational at customs 
check-points.  The risk assessment is performed on the basis of ASYCUDA and its supplementary 
software using the price discrepancy and importers /exporters risks analysis.  The risk-based checking 
system significantly reduces the time taken for customs clearance procedures, as well as administrative resources. 
12. In 2009, according to the Georgian authorities, the RS will complete finish the 
implementation of the risk-management system and will initiate risk-assessment -based tax audits.  To 
facilitate the full implementation of risk-based cust om controls, a post-clearance system has been 
introduced in 2009.   
(ii) Tariffs and other charges affecting imports  
(a) Overview of trade taxes 
13. In 2008, taxes collected on imports accounted fo r nearly 38% of tax revenues compared with 
around 32% in 2004 and 1998 (Table III.1).  The contribution of customs duties (tariffs) has 
decreased both in nominal and relative terms, in line with a decline in the e ffective import tariff rate, 
and by 2008 accounted for under 3% of total trade taxes, down from 32% ten years earlier.  Excise taxes on imports have maintained a relatively c onstant share of around 22% whereas VAT on imports 
now accounts for the lion's share of taxes on imports. 
Table III.1 
Taxation of imports, 1998, 2001, 2004 and 2008 
 1998 2001 2004 2008 
Total taxes on imports as percent of  total tax revenues 32.3 29.3 32.6 37.6 
Composition of trade taxes (as percent of total)     
Custom duties 32.0 19.8 15.9 2.9 
Excise tax on imports 20.1 24.5 26.0 22.7 
VAT on imports 47.9 55.7 58.1 74.4 
Share of taxes on imports in total co llection of the given tax (%)     
Excise tax 92.7 76.2 69.6 76.4 
VAT 44.9 43.6 58.1 76.4 
Source:  Figures for 1998 and 2001 cited in Word Bank (2003), Georgia – An Integrated Tr ade Development Strategy, 
 Report No. 27264-GE, p. 20, November.  Figures for 2004 and 2008 supplied by the Georgian authorities. 
(b) Tariffs 
14. Under 2006 amendments to the customs system, import tariffs were significantly reduced  
making Georgia’s tariff rates among the lowest in th e world.  The low tari ff reduces the need for 
exemptions and drawbacks to mitigate the adverse e ffect of tariffs on exports, insofar as tariffs are 
levied on intermediate inputs used to produce goods fo r export.  In addition to combating corruption,  
the most obvious impact of the unilateral improvement s in access to the Georgian  market was to make 
business, and particularly importing, easier.  According to the World Bank,  Georgia has made 
exceptional progress in simplifying the documentation requirements for import and export and 
decreasing the cost of trade (Table I.3).7 
15. Until 2006, the tariff was characterized by re latively high rates (up to 30%) and numerous 
(16) bands, which was not competitive in the regi on and not supportive of an attractive business 
                                                      
7 World Bank (2009a). WT/TPR/S/224 Trade Policy Review 
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climate in the country.  High tariffs, inter alia,  increased prices on products of common consumption, 
and the 16 different rates made customs procedures difficult and open to corruption.  As a result of a 
revised law on customs tariffs (Law of Georgia No . 3509, subsequently moved into the Tax Code), 
the tariff system was substantially changed in September 2006, and the number of tariff bands was 
reduced to three.  The changes lowered tariff ba rriers substantially, with the simple average MFN 
tariff estimated at 1.5%, down from 7.2%. 
16. In March 2009, Georgia acceded to the Ha rmonized Commodity Description and Coding 
Systems (HS 2007);  it already applied the HS 2002.  The tariff classification of goods was previously based on the Foreign Economic Activity Commodity Nomenclature (FEACN).  
Tariff structure  
17. The tariff comprises three bands  (0%, 5% and 12%) with a maximum tariff of 12% 
(Table III.2).  Most imported goods currently ente r duty free;  the higher rates apply mainly to 
agricultural goods and construction  materials produced  in Georgia (Chart lll.1).  Over 98% of tariff 
lines have ad valorem  rates;  183 lines are subject to specific duties, mainly on alcoholic beverages, 
excluding beer. 
Table III.2 
Georgia tariff bands of ad valorem rates,  2005 and 2009  
2005 2009 
Tariff rate No. of lines Tariff rate No. of lines 
Duty free (%)          2,757  Duty free 9,346  
4             248  5% 63  
5          1,828  12% 1,303  
6             613    
7                 1    
8             415    
10             261    
12          3,741    
14                 6    
15             110    
16                 6    
17               26    
18               39    
20             149    
25               86    
30               80    
Total number of ad valorem  rates:        10,366   10,712  
Note: The 2005 tariff schedule is based on HS96 nomenc lature;  and the 2009 schedule is based on HS02. 
Source:  WTO calculations, based on data provided by the Georgian authorities. 
18. Exemptions from the customs tariff include good exports;  re-exports;  goods in transit;  
imports of goods produced in a Free Industrial Zone ;  goods intended for offici al use of diplomatic 
representatives in Georgia;  goods intended for oil and gas operations under th e Law on Oil and Gas;  
and imports of certain tobacco products and raw ma terials (until 1 January 2008).  Exporters using 
imported inputs for export production can obtain tari ff exemptions on imported inputs mainly through 
the temporary import regime for inward processing. Georgia WT/TPR/S/224 
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4.8%35.5%
12.3%17.4%26.2%
2.4%12.0% 
0.6%85.8%
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
Duty free >0-5 5 >5-12 12 >12MFN 2005
MFN 2009Number of tariff linesChart III.1
Distribution of MFN tariff rates, 2005 and 2009
Tariff rates (%)
Calculations exclude specific rates.  Percentages denote the share of total lines.  Totals do not add to 100% as no 
tariff rates are available for 1.5% of lines in 2005 and 1.7% in 2009 (representing specific lines).
WTO Secretariat calculations, based on data provided by the Georgian authorities.Note:
Source :
 
Bound MFN rates 
19. Georgia has bound all its tariffs.  The averag e bound MFN rate is 7.5% compared with an 
average applied MFN rate of 1.5%, which affords onl y limited latitude to Georgia to raise its tariffs 
within existing bindings (Table III.3).  The majority of tariff lines at the 12% applied rate are bound at 
12% (although tobacco is bound at 30%, the highest rate ).  The authorities state that applied rates have 
not been raised during the review period.  
Table III.3 
Georgia's tariff structure, 2005 and 2009 
(Per cent) 
    MFN 2005 MFN 2009 Final bounda 
1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 
2. Simple average applied rate 7.2 1.5 7.5 
    Agricultural products (HS01-24) 10.9 6.2 11.1 
    Industrial products (HS25-97) 6.2 0.2 6.6 
    WTO agricultural products 12.6 6.9 13.0 
    WTO non-agricultural products 5.9 0.2 6.2 
    ISIC 1 - Agriculture, hunting, fishing 10.0 3.6 10.0 
    ISIC 2 - Mining 12.8 7.5 12.7 
    ISIC 3 - Manufacturing 7.0 1.3 7.3 
    First stage of processing 8.8 2.9 8.6 
Table III.3 (cont'd) WT/TPR/S/224 Trade Policy Review 
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    MFN 2005 MFN 2009 Final bounda 
    Semi-processed products 5.9 0.5 6.1 
    Fully processed products 7.6 1.7 8.0 
3. Tariff quotas (% of all tariff lines) 0.0 0.0 0.0 
4. Domestic tariff "peaks" (% of all tariff lines)b 1.6 12.5 1.8 
5. International tariff "peaks" (% of all tariff lines)c 3.7 0.0 3.8 
6. Overall standard deviati on of tariff rates 5.8 3.9 5.8 
7. Coefficient of variation of tariff rates 0.8 2.6 0.8 
8. Duty free tariff lines (% of all tariff lines) 26.3 85.8 24.9 
9. Non- ad valorem  tariffs (% of all tariff lines) 1.5 1.7 1.7 
10. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 1.5 1.7 1.7 
11. Nuisance applied rates (% of all tariff lines)d 0.0 0.0 0.0 
.. Not available. 
a Implementation of the U.R. was achieved in 2006.  Calcul ations for final bound rates are based on 2009 tariff schedule. 
b Domestic tariff peaks are defined as those exceeding three time s the overall simple average applied rate.  This includes line s at 
5% and 12%. 
c International tariff peaks are defined as those exceeding 15%. 
d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: Calculations exclude specific rates (all of which are unde r HS Chapter 22 (alcoholic beverages)).  The 2005 tariff schedu le is 
based on HS96 nomenclature, consisting of 10,524 tariff lines;  2009 schedule is ba sed on HS02 nomenclature, consisting of 
10,895 tariff lines. 
Source:  WTO calculations, based on data provided by the Georgian authorities. 
Applied MFN rates  
20. As noted, Georgia's current average applied MFN rate is 1.5%, down from 7.2% in 2005.  
Currently 86% of tariff lines are duty free compared with 26% in 2005.  Above average applied rates 
concern live animals and products, vegetable products , prepared foods, minera l products, and articles 
of stone (Chart III.2).  The 5% tariff rate is a pplied on 63 lines, consisting mainly of cheese products 
and certain vegetables;  1,303 tariff lines carry the 12% applied rate, the main product groups being 
live poultry, meat, dairy  products, edible vegetables,  fruits and nuts, products of the milling industry, 
sugar and sugar confectionary, non- alcoholic beverages and beer, salt, plastering materials, and lime 
and cement.  
Tariff escalation 
21. There is effectively no tariff escalation nor any evident international tariff peaks.  
Tariff quotas 
22. Georgia does not maintain tariff quotas. 
(c) Other charges affecting imports  
23. In addition to the customs tariff, the Geor gian authorities apply VAT and excise taxes on 
imported goods.  These taxes apply equally to domestically produced and imported goods.  The 
authorities state that excise tax on tobacco is an ex ception but that the Government intends to equalize 
the excise tax on imported and domestically produced t obacco products.  A customs fee also applies.  Georgia WT/TPR/S/224 
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0.02.04.06.08.010.012.014.016.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Per centChart III.2
Average applied MFN and bound rates, by HS section, 2005 and 2009
Averages for 2005 are based on HS96 nomenclature, consisting of 10,524 tariff lines, and for 2009 on HS02, consisting of 
10,895 tariff lines.    Exlcuding specific rates.
WTO Secretariat calculations, based on data provided by the Georgian authorities.Note:
Source :01   Live animals & products        
02   Vegetable products03   Fats & oils      04   Prepared food, etc.05   Mineral products06   Chemicals & products07   Plastic & rubber
08   Hides & skins09   Wood & articles10   Pulp, paper, etc.11   Textiles & articles12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.15   Base metals and products16   Machinery17   Transport equipment18   Precision instrument19   Arms & ammunition
20   Miscellaneous manuf.21   Works of art, etc.MFN 2005
MFN 2009Average applied rate 
2005 (7.2%)Average applied rate 
2009 (1.5%)
 
Value-added tax  
24. The new Tax Code, effective from January 2005,  reduced the rate of VAT from 20% to 18% 
on imported goods and services.  Exports of goods from th e territory of Georgia are zero rated.  The 
VAT paid on imported or domestically produced inputs for export production is subject to reimbursement. In the case of imported inputs, a tax cr edit is given to the extent that such inputs are 
incorporated in the exported product;  the VAT is refunded on domestically produced inputs. 
Excise tax 
25. Imports that are subject to excise duty are defined by the Tax Code of Georgia.  The number 
of such products has been reduced from 23 to 20, including the following goods: alcoholic drinks;  condensed natural gas (except for pipeline);  oil distillates; goods produced from crude oil;  tobacco 
products;  and automobiles.  Excisable exports ar e zero rated, with the exception of ferrous and 
non-ferrous metal scrap.  Excise tax rates are fixe d per physical unit of excisable goods (litre, cm
3, 
kilogram, tonne, etc).  
Customs fees  
26. Customs fees are payable at th e time of declaration of the goods to Customs and are due on 
import and temporary admission.  The rates on im ports are:  60 euro equivalent in GEL per 
declaration, and for goods with a customs value of less than GEL 3,000, 5 euro equivalent in GEL per WT/TPR/S/224 Trade Policy Review 
Page 42 
 
 
declaration.  The fee for customs procedures related to temporary admission  varies according to 
weight.   
(iii) Customs valuation, rules of origin, and preshipment inspection 
(a) Customs valuation  
27. Customs valuation for imported goods is admini stered in accordance with chapter 6 of the 
revised customs code. Apart from a limited number of  products subject to specific duties, Customs 
collects duties on the c.i.f. value of the imported goods . For this purpose, the general rule is that the 
customs value will be the price actually paid or pa yable (the transaction value) for the goods when 
sold for export to Georgia.  However, a number of additions are made to the price paid or payable if 
those elements have not already been included in the selling price, including:  transportation costs, 
commissions and brokerage, loading and handlin g charges, warehousing charges, royalties and 
licence fees related to the goods being valued, insura nce charges, other simila r charges incurred with 
respect to the goods before their cu stoms clearance.  Provided that certain costs are shown separately 
from the price actually paid or payable, the custom s value does not include:  charges for the transport 
of goods from the Customs; buying commissions; charges for the right to reproduce imported goods 
in Georgia and other similar charges. 
28. When the transaction value of the imported goods  cannot be used, the importer must rely on 
the following alternatives in the order specified below,  except that the last two options can be reversed 
at the request of the declarant:  the transaction value of identical  goods;  the transaction value of 
similar goods;  the unit price of goods;  the computed value;  and the reserve method.  The authorities 
note that over 90% of all goods (except cars, which are cleared according to fixed rates) are cleared 
using the transaction value.  
(b) Rules of origin  
29. The criteria for determining the country of origin are defined in Chapter 5 of the revised code 
of Georgia.  For goods of non-preferential origin, Georgia adheres to WTO rules on determination of 
country of origin.  Regarding preferential origin, Ge orgia issues three different  types of certificate of 
origin:  for the CIS free-trade area, in accordance wi th the rules of origin defined by the Decision of 
Council of Governments of CIS countries, 30 Novemb er 2000;  for  products covered by the scheme 
of Generalized System of Preference (GSP);  and for application of the preferences provided for under 
the FTA between Georgia and the Republic of Turkey. 
(c) Preshipment inspection 
30. In accordance with the revised Customs Code  of Georgia, effective January 2007, pre-
shipment inspection has been abolished.   
(iv) Import prohibitions, restrictions and licensing 
31. Georgia prohibits the import of goods that pose a th reat to the health and safety of Georgia or 
its citizens, including narcotics, pornography, nuc lear materials, and goods that may not be in 
compliance with Georgia's obligations under certain international conventions such as the Montreal 
Protocol and CITES.  According to the authorities,  Georgia has no quantitative restrictions (quotas) 
on trade. 
32. The import licensing system was simplified when the Georgian  Parliament adopted the new 
Law on licences and permits in June  2005.  Accordingly, the total number of business licences and Georgia WT/TPR/S/224 
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permits required was cut to 144 (92 licences and 52 permits), representing only 16% of previous 
requirements.  Licences and permits for export/import were reduced from 14 main groups to 8, with 
licensing limited to protecting public health, the en vironment, and national security.  Weapons and 
ammunition have complex licensing requirements, administered by the Ministries of Justice 
(Table III.4).  Other imports requiring licensing include  those subject to phytosanitary and veterinary 
control, materials of limited circulation, dual-pu rpose goods, therapeutic agents subject to special 
control, and endangered species of flora.   
Table III.4 
Overview of the import licensing system, 2009 
Licensing body  Products Objective 
Ministry of Agriculture Products of floral origin subject to phytosanitary control 
Products subject to veterinary control 
Non-iodic salt Food safety and 
public health  
Ministry of Environmental Protection and Natural Resources  Endangered wild flora or fauna specimens 
Nuclear and radioactive objects, nuclear materials, radioactive 
substances, radioactive wastes, mine rals (subsoil) from which it is 
practically possible to extract nuclear materials, all that is made of 
nuclear materials or radioactive s ubstances or contains them as a 
component, also nuclear technologies Environmental 
protection  
Ministry of Justice, according to the 
recommendation of the Permanent 
Commission on Military-Technical Issues of 
the Ministry of Defence of Georgia  Military and surveillance equi pment  National security 
Ministry of Health and Social Affairs of 
Georgia, taking into account the 
requirements of the existing UN Convention Medicines and pharmaceuticals subject to special control Public health 
Ministry of Economic Development Dual  purpose products National security  
Source:  WTO document G/LIC/N/3/GE O/3 of 4 September 2006.  
(v) Contingency measures 
33. Georgia does not use anti-dumping, countervaili ng or safeguard measures, and no relevant 
legislative basis has been elaborated. 
(vi) Government procurement 
34. Georgia is an observer to the WTO Agreement on Government Procurement and, in principle, 
welcomes membership.  A new Law on State Procurement (LSP) was approved in April 2005 and entered into force in January 2006, replacing the LSP of 1998.  The law applies to the procurement of 
all goods, works, and services funded from stat e and local budgetary resources by about 
3,500 procuring entities. Based on figures provided by the State Budget Department of the Ministry of 
Finance, the authorities estimate that total governme nt procurement expenditures in 2008 amounted to 
16.4% of GDP;  three quarters of this was account ed for by central budget expenditures and the rest 
by the budgets of territorial units.
8  They also note that the participation of foreign companies was not 
restricted. 
35. Foreign and local companies have equal access to the Georgian procurement market.  To 
promote the development of domestic contracting an d manufacturing industries, until 2006, they were 
granted a 15% margin of preference in the eval uation of bids offering i nputs (material and labour) 
                                                      
8 Central budget spending in terms of GDP broke down as follows: goods and services 7.9% and non-
financial activities 4.7%. Of the total number of tenders  (2,791) conducted in 2008, 82% were for goods and 
services and the rest for construction/reconstruction works.   WT/TPR/S/224 Trade Policy Review 
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from Georgia when foreign and domestic bidders par ticipate in the tender.  Under the 2006 law, all 
such preferences were abolished. Guidelines a nd manuals are only available in Georgian.  
36. The regulating and monitoring body that en sures compliance with the LSP is the State 
Procurement Agency (SPA), which develops norma tive regulations and standard bidding documents 
and is responsible for dissemina ting information about procurement,  including  through the launching 
of its website (www.spa.ge).  Previously unde r the auspices of the Ministry of Economic 
Development, under amendments made in 2007, the SPA  is now accountable to the Prime Minister in 
order to avoid any conflicts of interest given that the MoED is a significant procuring entity.  Legislative amendments currently before Parliament  aim to:  increase transparency in the procurement 
process by introducing electronic procurement, and establish a dispute review body to conduct 
independent reviews of complaints. 
37. The national threshold for small purchases is GEL 120,000 for works and GEL 50,000 for 
goods and services.  Above these thresholds, open co mpetition should be used, although, according to 
the World Bank, data on the amount of procuremen t and the number of contracts awarded by open 
competition and other methods are not available.
9  Furthermore, emergency provisions for sole 
sourcing (Article 10.1 of the LSP) are applied wide ly;  the World Bank estimates that more than 50% 
of all signed contracts are single sourced.10  According to the same source, the ratio of contracts 
procured through tenders is 12%, the remain ing 88% being conducted through other (less 
competitive) methods, such as request for quotations and single source.11  However, this may be 
changing:  after the adoption of the new frame work, public tenders increased from 796 in 2005 to 
over 3,500 in 2007 and the number is expected to rise higher as the monitoring capacity of the SPA 
increases.  There are mechanisms to contest procur ement decisions and, according to the authorities, 
companies found guilty of corruption in procurement processes are placed on a special list and are prohibited from participating in future bids for up to two years.   
(vii) State trading and other measures 
38. Georgia has notified the WTO that it does not maintain any state-trading enterprises in 
accordance with Article XVII:4(a) of the GATT 1994.
12  According to the aut horities, Georgia applies 
no trade sanctions, other than those endorsed by th e UN Security Council.  It does not engage in 
countertrade or barter. 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Documentation 
39. Documentation requirements applying to exporters are stipulated in Order No. 1770 of the 
Ministry of Finance (see section (2)(i)(a)). 
                                                      
9 World Bank-European Commission (2008), p. 27.  Overall, the World Bank-EU Commission report 
notes that while the legislative framework is partially aligned with international practice, weaknesses remain, 
e.g. in over-reliance on single so urce procurement, and poor workin g of the complaint mechanism.   
10 World Bank (2008), p. 27. 
11 The Georgian authorities note that the breakdown cited is according to  the number of tenders and not 
to the volume of business.  In value terms, the biggest share of  public procurement is accounted for by tenders 
and not by single source. 
12 WTO document G/STR/N/7GEO, 16 September 2002. Georgia WT/TPR/S/224 
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(ii) Export taxes, charges, and levies 
40. In accordance with the customs legislation of Ge orgia, no tariff duty is applied to exports or 
re-exports.  The VAT rate on exports is zero. Exporte d goods are not subject to excise duty, except for 
waste and scrap of ferrous and non-ferrous metals. 
(iii) Export prohibitions, restrictions, and licensing  
41. Georgia does not use export quotas or minimum export prices.   
42. Export licensing restrictions are applied only for reasons of healthcare, environmental 
protection, national heritage, and security, on:  goods of cultural value (Ministry of Culture, 
Monument Protection and Sport);  means of electr onic surveillance (Ministry of the Interior);  
materials of limited circulation (Ministry of Envi ronmental Protection and Natural Resources);  arms 
and ammunition (Ministry of Defe nce);  dual-purpose goods (Ministry of Economic Development);  
therapeutic agents subject to special control (Minis try of Health and Social Affairs);  and endangered 
species of flora and fauna (Ministry of Envi ronmental Protection and Natural Resources). 
(iv) Export subsidies, export promotion, and export finance 
(a) Export subsidies 
43. In accordance with its WTO commitments, Geor gia does not apply any prohibited subsidies, 
including export subsidies, within the meani ng the WTO Agreement on Subsidies and Countervailing 
Measures. 
(b) Export promotion and finance 
44. The authorities state that the Export Promoti on Department under the MoED is responsible 
for providing advice to exporters on trade- a nd market-related issues. There is no government 
financing for exporters.  Other than ordinary bank loan s at market interest rates, no official or other 
financing facilities are available for exporters.  
(v) Free industrial zones  
45. In June 2007, Parliament adopted the Law of Georgia on Free Industrial Zones13, which sets 
out the terms and conditions for establishing and operating free i ndustrial (or economic) zones in 
Georgia.  According to Article 1, the law aims to  create an attractive climate for economic activities 
and to promote the inflow of capital, technology, and know-how.  Financial ope rations in such zones 
can be carried out in any currency and there is  a special taxation regime for companies.  
46. The law defines rules for the creation, liquida tion and management of free industrial zones, 
and for the creation and functioning of administ rative and service/supervisory bodies;  it also 
determines additional terms and corporate tax pref erences for the free industrial zone enterprises and 
other issues related to the functioning of the zones.  In 2008, two sub-legislative acts were adopted by 
the Government:  the Rules on Establishment, A rrangement and Operation of Free Industrial Zones 
(Government’s Resolution #131);  and the act on De termining the Amount of the Guarantee to be 
Submitted for Creation of Free Zones, Conditions for Creation of Free Zones, their Operation, Storage 
of Goods and Customs Control Rule " (Government’s Resolution No. 157). 
                                                      
13 Law on Free Industrial Zones (unofficial  translation by USAID).  Viewed at: 
http://www.georgia.gov.ge/pdf/ 200903272229041.pdf. WT/TPR/S/224 Trade Policy Review 
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47. The Ministry of Economic Development allocated  400 hectares adjacent to the Black Sea port 
of Poti for the first such zone, where construc tion work is under way. In 2009, the Kutaisi Free 
Industrial Zone was created on a 25-hectare site wh ere the Kutaisi automotive factory was previously 
located. 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Legal framework for businesses  
48. The business environment in Georgia has change d substantially in recent years.  Regulation 
of business entry has been streamlined:  the num ber of business activities subject to licences and 
permits has been reduced by 84% since 2005;  licen sing procedures have been simplified;  and the 
"one-stop shop" approach to business regulation has b een adopted.  Further, entry barriers in the form 
of minimum capital requirements were  lowered and subsequently abolis hed.  As regards regulation of 
ongoing business, operational licensing, permits, inspections, and other compliance systems, 
including taxes and customs, have become more business-friendly.  Contract enforcement has been 
strengthened by reforming court procedures for commercial disputes.  The new Labour Code eases 
restrictions on duration of contracts and overtime,  and simplifies regulations on severance pay and 
labour dispute resolution. 
(a) Business registration 
49. In 2005, business registration procedures were si mplified.  Paperwork and fees were reduced, 
and the processing time was shorte ned initially to a week and now  to about one day  from the 
submission of documents.  All companies are required to register with the Ministry of Finance, and 
must provide founders' and principals' names, da tes and places of birth, occupations, and places of 
residence;  incorporation documents;  area of activity ;  and charter capital.  This information is made 
public and available on request by any person.  Busi ness registration and tax registration are separate 
procedures handled by the same department within the Ministry of Finance.   
50. The main laws regulating business are:  th e Law on Entrepreneurs (1994), which defines 
types of legal-organizational form for enterprises, terms of registration, internal structure of the 
entities;  the Law on Supervision on Entrepreneurship  (2001), which sets general rules for supervision 
activity by the state controlling authorities;  and the Law on Insolvency (2007), which regulates insolvency proceedings of entities.  As a result of  changes to the Law on entrepreneurs in 2005 and 
2006, business registration is simpler and more effi cient, taking only one day for legal entities and 
individuals; state and tax registration of companie s is now carried out by tax inspectorates under a 
single procedure.  There are no restrictions on fore ign ownership of companies in Georgia.  Foreign 
participation is allowed in:  sole proprietorship, limited partnership, general partnership, cooperative, 
limited liability company, joint-stock company.  A foreign company may also open a branch or 
representative office in Georgia.  Most foreign inv estors set up limited liability companies, joint-stock 
companies or branch offices to do business in Georgia. 
51. Provisions regarding access to information on co mpanies and protection of shareholder rights 
were also strengthened in amendments made in 2007.   Auditing of financial statements of Georgian 
business entities is obligatory only for banks, insu rance companies, companies whose stock is 
accepted for trade on the stock exchange, and some other businesses.  
(b) Licensing 
52. According to the Georgian authorities, a licensing and permit system is one of the most 
significant preconditions for ensuring the proper func tioning of a liberal market economy.  Generally, Georgia WT/TPR/S/224 
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the business licensing system plays a decisive role in creating a business-friendly regulatory 
environment that is aimed at creating jobs and supporting investments. 
53. By adopting the 2005 framework Law on Licences and Permits , the Government initiated one 
of the most important reforms for liberalizing th e business environment and combating widespread 
corruption.  The reform eliminated licences and pe rmits that could not be  properly e xplained or 
justified, and as a result, decreased the total numbe r of licences and permits from 909 to 137.  Two 
major principles were declared mandatory :  the "Silence is Consent Principle"14, and the "One Stop 
Shop" mechanism;  these essentially changed the pr ocedures for obtaining a licence/permit, and made 
them clear, transparent, and predictable.  Another major achievement of the reform was the 
introduction of a 30-day time limit to issue a licence  and a 20-day period for a permit, thus cutting off 
opportunities for bribes and misuse of state authority.  However, an International Finance Corporation 
analysis of progress in implementing the framework law notes, inter alia,  that the "silence is consent" 
principle has not been fully implemented15 (Table AIII.1).  Although the framework law contains an 
exhaustive list of licences and permits, it lacks any i ndication of the corresponding issuing bodies and, 
coupled with frequent changes to the la w, this has hampered implementation. 
54. Under the law, the following activities are subj ect to licensing:  producing and packing baby 
foodstuff;  producing and packing children’s food;  nuclear activity and activities related to nuclear 
materials and installations;  production of biologi cal pesticides;  production, repair, and sale of 
weapons; production, buying, impor t, and export of electronic surveillance equipment; local 
broadcasting; producing, transferring, dispatchi ng, and distributing electricity;  distribution and 
transportation of gas; oil and gas processing;  transp ortation of oil;  educati onal activity;  insurance 
and re-insurance;  banking;  non-ba nking credit-deposit activity;  security register activity;  stock 
exchange;  brokerage;  central depositor activities;  specialized depositor activities;  management of 
assets;  medical activities;  mining;  use of subsurface  area;  use of oil and gas resources;  use of wood 
resources;  keeping hunting farms;  fishing; regular  international air transportation;  use of numeric 
resources;  use of radio frequencies.   
55. Around 50 other types of activity, including impor t and export of weapons, are subject to 
special permission.  The issuing body is required to grant a licence within 30 days after an application 
is filed or a permit within 20 days after an appli cation is filed.  The licence or permit is granted 
automatically if the administrative body does not respond to the application within  the time limits.  In 
some areas of business activity, the mandatory timeframe for issuing licences and permits is shorter.  
(ii) Incentives 
(a) Special taxation regimes 
56. According to the authorities, no specific incen tives are currently envisaged under Georgian 
tax legislation.  There are, however, special taxa tion regimes for international financial companies, 
international companies operating in a free i ndustrial zone and for free warehouse companies 
(Table III.5).  Under the Law on free industrial z ones and the Tax Code of Georgia, companies 
registered and operating in free industrial zones are exempted from VAT and property tax.  The 
import of foreign goods into free i ndustrial zones is exempted from  VAT and customs duties.  The 
term International Financial Company (IFC) is defined in the Tax Code as a financial company 
receiving no more than 10% of total revenue from activities in Georgia.  Under the Code, profits 
gained by an IFC from its financial opera tions are exempted from profit tax.   
                                                      
14 Means that if a licence/permit is not issued within the timeframe set by the law, the licence/permit 
shall be deemed granted. 
15 International Finance Corporation (2008). WT/TPR/S/224 Trade Policy Review 
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Table III.5 
Special taxation regimes, 2009 
Type of tax International financial 
company International company 
operating in a free industrial 
zone Free warehouse company 
Corporate income tax 0% 0% 0% 
Value added tax 0% 0% 0% 
Customs duties 0%, 5% or 12% 0% 0% 
Property tax up to 1% 0% up to 1% 
Personal income tax 20% 20% 20% 
Source:  Georgian authorities. 
(b) State aid 
57. According to the Law on Free Trade and Compe tition, state aid is one-time aid conferred by 
the Government for a definite period;  it tak es various forms (exemption from taxes or deferred 
payment, clearance of debts, restructuring, cr edit remittance with preferential conditions and 
guarantees, acquisition of immovable property with special conditions, preferential conditions during 
state procurement, revenue guarantees, or  granting other exclusive rights).   
58. The authorities note that government economi c programmes, including those aimed at 
industry assistance, are open and transparent and selection is on a competitive basis.  The "Cheap 
Credit" programme, implemented in 2008, allocat ed GEL 62 million to 117 projects to develop 
activities in  agriculture, food processing, handicraft s, and tourism.  The number of new jobs and 
indirect beneficiaries from the projects exceeds 32,000 persons.  The "100 New Agro Industry 
Enterprises" programme was launched in 2007-08 to  stimulate establishment of new agricultural 
processing enterprises and support job creation in rural areas.  Under the programme an entrepreneur 
may purchase state-owned land at below market price with obligation of creating processing infrastructure and employment.  One of the selection cr iteria is the number of new jobs to be created;  
ten projects have been developed under the programme. 
(c) Pricing policies 
59. Policies adopted in the early 1990s had led to  a broad-based liberalization of prices, and 
removed virtually all government administrative c ontrols on prices for energy, transport, and other 
social services.  Price controls had been replaced by tariff regulation by local governments or, in the 
case of electricity and natural gas, by indepe ndent regulatory commissions established for the 
purpose.  Apart from price controls for natural gas, electricity, water, and urban transport, prices for 
all other goods and services were determined by the market.  According to the Georgian authorities, 
price regulation is currently in place only in regulat ed spheres, such as the electronic communications, 
energy and water sectors. Prices of local (municipa l) passenger transportation are regulated by the 
municipal authority, according to Presidential Decree No. 104. 
(iii) State-owned enterprises and privatization 
60. Since Independence, Georgia has undergone econom ic transition from a centrally planned to a 
market-based economy, with major reforms of it s trade regime, services sectors, and extensive 
privatization of state property.  The privatizati on programme launched in 1993 involved mostly small 
and medium-scale entities (commercial, household servicing establishments, retail stores, etc).  According to the authorities, from 2003 to 2008, the sh are of the public sector in total output declined 
from 32% to 10% and during the same period the number of persons in public-sector employment Georgia WT/TPR/S/224 
 Page 49 
 
 
declined from 47% to 26% of total employment.16  No statistics are available on the share of imports 
or exports accounted for by state-owned compani es although the authorities maintain that there are no 
export-oriented state-owned enterprises.   
61. The Government restarted the privatization process in 2004 focusing on large-scale 
enterprises.  Between 2005 and 2008, the Government  received more than US$1.4 billion in revenue 
from the privatization process (Chart III.3)17, mostly from:  telecommunications, energy (hydropower 
generation plants and energy distribution companies) , large-scale real estate assets and, more recently, 
hospitals.  In the ports and mining sectors, licenses are issued to operators.   
01,0002,0003,0004,0005,0006,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080100200300400500600Million lari Number of enterprisesChart III.3
Privatized units and income from privatization, 1995-2007
Source :   UNDP, Human Development Report 2008, 2008 data provided by the Georgian authorities.Number of enterprises
(Left-hand scale)
Income from privatization(Right-hand scale)
Number of enterprises:
Income: 
(Million lari)1995
4,977
   1642002
   673
   24.52000
1,009
     131999
1,492
     532001
   661
   5.61998
1,972
     731997
1,568
   
     261996
2,399
     302003
   761
    242004
   267
   72.72005
   776
   4192007
   286
   
512.92006
   139
 527.82008
   654
   
    551
 
62. According to the authorities, in the first seven  months of 2009,  a further 384 entities were 
privatized generating over GEL 117 million.  Georgia intends to continue its policy of  privatizing 
state-owned assets;  by the end of 2009, privatized at least two thirds of the shares of the Georgian 
                                                      
16 The Georgian public sector comprises:  central government units, local governments, legal entities of 
public law (generally subordinated to sector ministries), and SOEs. 
17 Revenue in U.S. dollars according to the Department of Statistics:  2005:  232; 2006:  317; 2007:  
385;  2008 (est.):  468; 2009 (6 months):  71. WT/TPR/S/224 Trade Policy Review 
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State Electricity Company;  it expects to have Geor gian Post;  about 100,000 hectares of agricultural 
land;  several regional airports;  and numerous othe r SOEs.  The Government has privatized, or is in 
the process of privatizing, most of the largest SOEs.18 
63. So far, more than 15,500 enterprises ha ve been privatized.  However, around 
1,300 enterprises remain with significant governme nt ownership, including some strategically 
important enterprises, according to the World Bank.19  SOEs are monitored, on a dividend-oriented 
basis, by the State Enterprise Management Agency  (SEMA), which replaced the Ministry of State 
Property Management in 2003, and reports to the Minister of Economic Development. The state 
budget no longer subsidizes the SOEs. 
64. The privatization process is regulated by:  the Law of Georgia on State Property Privatization 
(revised in 2008);  Regulations on Privatization of State Property through Auction (revised 2008);  
and Regulations on Privatization of State Propert y through the Direct Sale Method (also revised 
in 2008).20  On October 2007, the Parliament adopted am endments to the Law on Privatization of the 
State-Owned Agricultural Lands in order to simplify procedures regarding leased land privatization.  
A number of privatization methods are used: auctio n, tender, lease, and direct sale, and there is 
provision for investor-initiated privatization.   
(iv) Competition policy  
65. The basic law regulating competition policy is the Law on Free Trade and Competition 
adopted in June 2005, replacing the 1996 Law on Monopoly Activities and Competition.21  The new 
Law aims to protect, maintain, and stimulate competi tion but, in the view of some observers, its scope 
is limited as it does not regulate restrictive ag reements, concerted prac tices, abuse of dominant 
position, or mergers .  According to Transparency Internationa l Georgia, for example, the new law 
concerns primarily state aid to industry but does not  "touch the traditional fields of competition law, 
such as agreements restricting competition, con certed practices, abusing dominant position in the 
market, takeovers and mergers,  state en terprises and so called natural monopolies".22  According to 
GEPLAC (the Georgian-European Policy and Legal A dvice Centre),  the main effect of the law has 
been to create "a competition-law-free country with  the exception of the general prohibition of state 
aids or subsidies".23 
66. In parallel to the legislative changes,  instituti onal restructuring led to the establishment of the 
Agency for Free Trade and Competition, the body charged with overseeing the law, although its 
powers are restricted to giving recommendations.  It se ems that special attention is needed to increase 
the institutional power, administrative capacity and the independence of the Free Trade and 
Competition Agency which is still a structural unit of the Ministry of Economic Development with 
only an advisory role; in addition, it lacks  legal mechanisms to  assure the enforcement of the its  
decisions.   
                                                      
18 See Ministry of Economic Development online information.  Viewed at:  www.privatization.ge. 
19 World Bank (2008), p. 15. 
20 See Ministry of Economic Development online information.  Viewed at:  http//www.privatization.ge. 
21 The Law on Monopolistic Activity and Competition prohibited agreements or decisions which 
restrict competition, the abuse of a monopolistic position and unfair competition.  The Government was also 
subject to a number of prohibitions, including the granti ng of fiscal or other privileges, which afforded  
economic agents advantages over their competitors, and on state monopolization which could lead to a 
restriction of competition. 
22 Transparency International Georgia (2008a), p. 2. 
23 Georgian Law Review (2006). Georgia WT/TPR/S/224 
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67. As noted by some observers, the law on Free Trade and Competition is mainly focused on 
state aid.  Any form of state aid that distorts or  threatens to distort competition is prohibited, except 
when stipulated by the law, e.g. force majeure , development of certain economic activities.  The Law 
defines state aid as any form of assistance by the Government on a one-time basis, including:  tax 
exemption or prolongation;  cancelling of debts;  rest ructuring;  granting of concessionary loan terms;  
favourable loan guarantees;  providing special conditions for buying immovable property;  
preferential conditions in the process of state proc urement;  profitability guarantees;  and the granting 
of other exclusive right to certain economic agents or production of certain commodities.   
68. State authorities establish the procedures for gr anting state aid, specifying the necessity for 
state aid, the forms it takes, and the beneficiarie s, and submit the information to the Agency. The 
Agency prepares recommendations and may rais e any state aid infringement issues with the 
Government.  The Agency has the right to provid e directions and recommendations to the state and 
local authorities when illegal decisions have been  made, and in case of infringement of competition 
law, may raise the question of disciplinary, administ rative, and criminal liability.  With respect to 
economic agents, it has the right to require any documentation from the economic agent regarding any 
actions that infringe the provisions of competition la w, and demand that any illegal actions be brought 
into conformity. 
69. Some sector-specific anti-monopoly regulations are enforced through independent national 
regulatory commissions in key sectors – energy, water supply, communication, transport, and 
financial sector.  Electronic communications are re gulated by the Georgian National Communications 
Regulatory Commission in accordance with the Law on Electronic Communications (2005, 
No. 1514);  the financial sector (commercial banks , insurance companies) is regulated by the 
Financial Supervision Agency (FSA), as governed by the Law on Commercial Banks Activity (1996, 
#121);  and energy and water supply is regulated by  the Georgian National Energy and Water Supply  
Regulatory Commission, in accordance with the Law on Power Industry and Natural Gas (1997, 
No. #816). 
70. Regulations, and related sanctions against m onopolistic activity and other violations of 
Georgian law are provided in the Criminal Code and Administrative Code of Georgia.  According to 
the authorities, regulations on protection of competition are provided in several normative acts of Georgian legislation and adequately reflect a comp rehensive and targeted approach to anti-monopoly 
regulation in specific sectors.  
(v) Standards and SPS requirements  
(a) Standards and certification 
Main developments since accession 
71. During the course of its transition to a market  economy, Georgia has made major changes in 
this area.  Mandatory standards, such as the Soviet -era GOST standards, were used in the past to 
ensure that products conformed to the directives i ssued by central authorities.  Upon entering the 
WTO, Georgia agreed to ensure that the applica tion of these standards would be made voluntary and 
that they would only be mandatory if they became technical regulations adopted by a public authority 
in accordance with legitimate objec tives such as health and safety.  Georgia's acceptance of the TBT 
Code of Good Practice has helped to change its  standardization and certification procedures by 
encouraging the transition to voluntary standardizat ion as well as the application of international 
standards.  During a transitional period, GOST and ot her regional standards continue to apply on a  
mandatory basis but only on products produced in Georgia or imported from non-WTO CIS states.   WT/TPR/S/224 Trade Policy Review 
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72. In 2005, the Government carried out legislativ e and institutional reforms to the standards 
infrastructure to enable Georgia to transition to a system of  voluntary standards and certification, 
whereby the importer may choose to align his products to Georgian standards, international standards 
or the standards of any EU or OECD member state.   If foreign standards are chosen, they must be 
registered by the importer in the National Agency for Standardization, Technical Regulations and 
Metrology, the main standards organization.  Georgia acknowledges the standards of 36 countries, 
whose products may enter the Georgian market without any further conformity assessment or 
legalization procedures;  the share of these count ries in Georgia's total imports amounted to around 
35% in 2008. 
73. According to the principle of voluntary standard ization, local entrepreneurs are free to use a 
variety of standards:  international standards, GOS Ts, and even their own standards. ISO standards are 
available to local producers through the Agency, wh ich has access to the ISO standards database.  
Each standard applied by the produ cer should be registered with the Agency.  The Agency also carries 
out the registration of international standards (mai nly ISO standards) as national standards.  The 
authorities maintain that GOST standards do not have the status of national standards, and that they 
are applied, mostly in the field of testing met hods, because the equipment used in the manufacturing 
process and in testing laboratories is outdated. 
74. Adoption of new national standards – based on international and European Norms (EN) 
(under Article 51 of the PCA24) – is making progress;  as of 1 July 2009, over 2,500 international 
(mainly ISO) and European standards had been adopt ed and registered as Georgian national standards 
(Table III.6).  Of the 1,765 international standard s adopted in 2008-09, 22% were on foodstuffs and 
agricultural products, 20% on power engineering and fuel, 14% on industry products and machinery, 
and 6% each on building materials and chemicals.  Of the 113 European standards adopted in the 
same period, 64 were for building materials and 49 for industry products and machinery. 
Table III.6 
Georgian standards, 2006-09 
Standards 2006 2007 2008 2009 Total 
Georgian national standards 18 8 3 2 31 
International/European standards adop ted as Georgian standards 275 357 893 872 2,397a 
Standards of foreign countries adopted  as Georgian national standards, 
that are developed on the basi s of international standards .. 12 27 .. 39 
Standards of foreign countries adopted as  Georgian national standards 77 43 50 .. 170 
GOST standards 0 0 0 0 0 
Total 370 420 973 874 2,637 
.. Not available. 
a Of which:  ISO, 1,949;  EN standards, 113;  Code x Alimentarius, 224;  Oil pr oducts (ASTM, IP), 111. 
Source: Georgia authorities. 
Legal and institutional reforms 
75. Upon acceding to the WTO, Georgia committed itself to adopt a new standards system 
comprising voluntary and mandatory international tec hnical regulations replacing the Soviet system of 
mandatory standards.  The Law on Standardization,  adopted in 1999, introduced the principle of 
voluntary standardization although, in practice, obs olete Soviet standards were still being used.  
Under the 2005 reform, in order to meet the re quirements of the WTO and align the system to 
                                                      
24 The article states, inter alia,  that "the required actions in quality assurance infrastructure will 
facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement 
of the quality of Georgian products". Georgia WT/TPR/S/224 
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international practice, legislative changes were made to three laws:  the Law on Standardization 
(transposition from mandatory to voluntary standard ization system, introduction of the concept of 
technical regulation, establishment of GEOSTM, the standards agency);  the Law on Ensuring 
Uniformity of Measurements (simplification of syst em of legal measuring instruments);  and the Law 
on Certification of Production and Services" (provision that line ministries and other state authorities 
use respective EU directives to elaborate technica l regulations, abolition of list of products and 
services subject to mandatory certification, creation of national accreditation body, and establishment of unified national system for approving competence of conformity assessment bodies).     
76. Until 2005, the main standardization body w as Sakstandardi, the State Department for 
Standardisation, Certification and Metrology.  A ll goods and products produced in, imported into or 
exported from Georgia had to meet Georgian standard s and receive certification from Sakstandarti.  In 
2005, its metrology, accreditation, certification, and market supervision functions were restructured 
between  two separate legal entities (of public law) under the Ministry of Economic Development of 
Georgia:  the Georgian National Agency for St andards, Technical Regulations and Metrology 
(GEOSTM), and the Georgian National Accreditation Centre. 
77. GEOSTM is divided into the Institute of Metr ology, which develops and maintains standards 
and related reference materials, and the Department for Standards and Technical Regulations, which 
is responsible for registration of standards and main tenance of the register of standards.  Among its 
functions, GEOSTM ensures the availability of intern ational and European standards for all interested 
parties, is responsible for the WTO TBT enqui ry point, and represents Georgia in various 
international and regional organizati ons in the field of standardization and metrology.  It became a 
corresponding member of the ISO (International St andardization Organization) in 2006, and an 
associate member of CEN (European Committee fo r Standardization) in 2008, from which it has 
received full versions of all European standards.   
78. The National Accreditation Centre accredits pr ivate laboratories to conduct testing;  
certification is performed by accredited bodies primarily in the private sector;  and market supervision 
is by the national service for food safety, veterinary  and plant protection, and by the Georgian State 
Inspection for Technical Supervision.  
(b) Sanitary and phytosanitary measures 
79. According to the authorities, Georgia's sanita ry and phytosanitary standards are intended 
solely to protect the health of human, animal, and plant life, and not to create technical barriers to 
trade or to protect domestic producers.  In order to prepare for accession to the WTO, Georgia had 
revised its quarantine requirements and adopted ne w legislation, including the Law on protection of 
plants from harmful organisms (1994), the Law on ag ricultural quarantine (1997), and a veterinary 
law reflecting the standards established by the Wo rld Organisation for Animal Health (OIE).  A 
Presidential Decree on SPS Measures was drafted to meet the requirements of the SPS Agreement, 
and issued in 1999.
25  
                                                      
25 The decree provides for observance of the requirements of the SPS Ag reement, which includes:  the 
establishment of the SPS Enquiry Point (notified officially to WTO in  1999);  that  SPS measures to be applied 
only to the extent necessary to protect human, animal, or plant health, and be based on scientific principles and 
supported by adequate scientific evidence; that SPS measures should be based on international standards;  that 
they be based on risk assessments, and that they should  not discriminate unjustifiably between countries; that 
SPS measures of countries exporting pr oducts to Georgia be accepted as equi valent, even when different from 
SPS measures adopted in Georgia, wh en the exporting country can demons trate that its SPS measures achieve WT/TPR/S/224 Trade Policy Review 
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80. Georgia is a member of, inter alia,  the Food and Agriculture Organization (FAO), the World 
Health Organization (WHO), the World Organisation fo r Animal Health (OIE), the International Plant 
Protection Convention (IPPC) since 2006, and has been a member of the joint FAO/WHO Food Standards Programme-Codex Alimen tarius Commission since 1998.  
81. An important SPS-related legislative developm ent occurred in 2005 when Georgia adopted a 
new law on "Food Safety and Quality"
26 which, unlike the former Soviet GOST food safety system, 
emphasizes controlling the production process rather th an only end-product testing.  Central to the 
new law is the OECD-based Hazard Analysis and Critical Control Points (HACCP) food safety 
system, which consists of checks at all stag es of the food production and packaging process. 
However, due to lack of funding, insufficient ins titutional capacity, and fear of factory closures in the 
food industry because of financial inability to m eet the legal requirements, the law was amended 
twice (in 2006 and 2007), resulting in the suspension of its  core articles;  accord ing to the authorities, 
these will be reinstated gradually between 2010 and 2012.  According to Transparency International 
Georgia, the country now "effectively has no legisl ation governing food safety because of institutional 
incapacity and the food industry it self is either incapable of  or has no incentive to adhere to it".27   
82. Until 2006, compliance with Georgia's regulations  was determined by the State Sanitary 
Service and Department of Hygiene under the Ministry  of Health and Social Affairs;  the Sanitary, 
Quarantine and Supervision Department of the St ate Inspection on Plant Quarantine;  and the 
Veterinary Department under the Ministry of Agricu lture and Food.  As part of a broader regulatory 
reform of agriculture, in 2006 the regulatory bodies were consolidated into a single structure called 
the National Service (NS) of Food Safety, Veteri nary and Plant Protection (in the Ministry of 
Agriculture), which is responsible for food safety s upervision and control.  The Ministry of Health 
and Social Affairs sets food safety parameters and norms, and the MoF's Revenue Service is 
responsible for SPS border controls, where offici als performing SPS controls are hired by the 
Customs Department. 
83. The National Service of Food Safety, Veterina ry and Plant Protection is responsible for 
inspections and controls.  However, consecutive am endments to the Food Sa fety Law have deferred 
the start of inspections to the end of 2009 or beyond.  The NS is due to become fully functional from January 2010, when it will have  sole responsibility for food safety, excluding border controls. 
84. Prior to 2006, the State Border Veterinary Supe rvision Inspection checked all imports of live 
animals, meat, and fish;  animal and fish pro ducts;  animal fodder and feed supplements;  and 
veterinary preparations.  A licence from the Stat e Inspection of Plant Quarantine was required for 
import, re-export or transit of goods covered by plant quarantine regulations. 
85. Traded goods covered by quarantine regulations  include agricultural products, timber, seeds 
and seedlings, plants and plant parts, and plant prod ucts that could carry infectious diseases;  hides 
and unprocessed wool;  mushrooms, bacteria, vi ruses, nematodes, and insects on living cultures; 
collections of insects, which could bring plant di seases;  herbaria and seed collections;  agricultural 
                                                                                                                                                                    
 
the same or a higher level of protection; that complia nce measures be consistent with the SPS Agreement, and 
for a right of judicial review of ad ministrative decisions in this area. 
26 According to the authorities, all normative acts regarding food safety were elaborated on the basis of 
EU regulations and notably:  EC Regulation No. 178/2002 on the general principles and requirements of food 
law, establishing the European Food Safety Authority and laying down procedures in matters of food safety;  
EC Regulations Nos. 852 and 853/2004 on the hygiene of foodstuffs;  and EC Regulation No. 882/2004 on 
official controls performed to ensure the verification of  compliance with feed and fo od law, animal health and 
animal welfare rules. 
27 Transparency International Georgia (2008c). Georgia WT/TPR/S/224 
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machinery, aggregates for land development, vehicl es, vessels, packaging materials, and industrial 
plants;  and soil samples that could carry plant di seases.  Imports of commodities of plant origin and 
other items subject to quarantine require a phytosan itary certificate issued by the quarantine service of 
the exporting country, as well as a certificate on the condition of the commodity, delivered by the 
relevant division of Georgia's Ministry of Food and Agriculture.  Infested or infected shipments that 
cannot be disinfected are returned to the country of origin or destroyed with the owner's consent.   
86. Currently, responsibility for SPS controls at the te rritorial borders and ports rests solely with 
the Customs Department, based on rules defined by the Ministry of Agriculture.  The 2007 Customs 
Law regulates phytosanitary and veterinary borde r-quarantine control with the aim of ensuring 
efficiency of quarantine control at Customs checkpoints.  Customs, inter alia,  carries out documentary 
checking and examination of imported car gos subject to quarantine regulations.  
87. Georgia's SPS system is not compatible with the EU, and this restricts the capabilities of the 
Georgian food industry to export its products to the EU market.  Only products that do not require 
official health certification and for which the expo rting industries in Georgia can ensure conformity 
with EU food safety criteria are currently exported to the EU;  most important are wine and hazelnuts 
(where the producer can prove conformity).  In or der to comply with EU regulations on imports of 
food products of animal origin28, Georgia is preparing to introduce a system for the approval and 
licensing of slaughterhouses, dairies, meat cutting plants, etc.  Lack of official controls and 
inspections poses significant health risks for humans, animals, and plants in Georgia and countries 
importing Georgian agricultural products.  The 2007 outbreak of African swine fever, which revealed 
inadequate Government response capacity, is an ex ample of Georgia’s vulnerability regarding animal 
health safety. 
(vi) Intellectual property rights 
(a) Overview 
88. Georgia acceded to the WTO and the TRIPS Agreement in 2000;  it did not negotiate 
transitional period.  Georgia has joined a full range of international conventions:  it is a member of 
WIPO and a party to the Paris Convention for the Prot ection of Industrial Property (1994);  the Patent 
Cooperation Treaty (1994);  the Berne Convention fo r the Protection of Literary and Artistic Works 
(1995); and the Protocol Relating to the Madrid Ag reement Concerning the International Registration 
of Marks (1998).  In 2004, the Georgian Parliame nt ratified the Rome Convention for the Protection 
of the Rights of Performers, Producers of Phono grams and Broadcasting Organizations, and the 
Lisbon Agreement on Denominations of Origin.  Georgia has been a member of the UPOV 
Convention for the Protection of New Varieties of Pl ants since November 2008.  It is also a member 
of the WIPO Copyright Treaty and the Performance  and Phonograms Treaty, the Hague Agreement, 
and the Nice Agreement on the International Classifi cation of Goods and Services for the Purpose of 
Registration of Marks (2003). Georgia is under ob ligation in the Partnership and Cooperation 
Agreement (PCA) with the EC to provide IPR protec tion at a level similar to that of the Community.29  
                                                      
28 Two regulations are particularly relevant:  Regulation 178/2002/EC (regarding parts of animals and 
plants or plant products identification and traceability systems; hygi ene in food proce ssing) and "General 
Guidance for third country authorities on the procedures  to be followed when importing live animals and animal 
products into the European Union", DG SANCO/FVO, Oc tober 2003 (EU requirements on animal health and  
the processing of animal products). 
29 Article 42 of the PCA states that "Georgia shall continue to improve the protection of intellectual, 
industrial and commercial property rights in order to provide,  by the end of the fifth year after entry into force of 
this Agreement, for the level of protection similar to that existing in the Community, including effective means WT/TPR/S/224 Trade Policy Review 
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The authorities state that Georgian legislation re garding copyright, geographical indications and 
trade marks is harmonized with EU standards a nd requirements and draft amendments have been 
prepared with respect to the protection of industrial designs and patents.  
89. The implementing agency for policy formulation and implementation is the Georgian 
National Intellectual Property Centre (Sakpatenti).  Initially founded as a patent office, it acts as an 
industrial property office, a copyright office, and an agency for the protection of new plant varieties and breeder rights, which means that it deals with all intellectual property areas.
30  Sakpatenti has 
responsibility for WTO compliance on legislative issu es.  Responsibility for enforcement of IP rights 
is shared between the Ministry of Interior, the financial police and the Customs Department of the 
Ministry of Finance for  enforcement at Georgia’ s borders.  The Customs Department has developed 
Register to assist in identifying counterfeit goods at the border;  up to 60 intellectual property objects have been registered and relevant  information is published online.
31 
90. The European Neighbourhood Policy (ENP) Action Plan is an important driver of progress in 
the IP field.  The main priorities are to: ensu re full conformity of IPR legislation with PCA 
obligations and TRIPS requirements and its effici ent enforcement; ensure proper functioning of the 
judicial system to guarantee access to justice fo r right-holders, and ava ilability and effective 
implementation of sanctions; consolidate the relevant institutional structures, as well as of the offices 
for industrial property rights, copyright protection,  and collecting societies; extend cooperation with 
third-country authorities and industry associations;  establish an effective system of protection for 
geographical indications; take measures to incr ease public awareness of intellectual and industrial 
property protection; establish an efficient system for use of patent information for enterprises and 
improve enforcement of the re levant conventions provided  for by PCA Article 42(2). 
(b) IPR legislation   
Law on patents 
91. Under the 1999 Patent Law, Sakpatenti grants pa tents for inventions that are considered 
novel, involve an inventive step, and are industriall y applicable.  The term of protection is 20 years 
from the date of filing of the application.  The pate nt owner has the exclusive right to use or dispose 
of an invention at his discretion, to make a product protected by the patent, to place the object in commerce, and to derive income from its use.  Th e patent owner can sell or otherwise alienate a 
patent, or grant a licence.  Non-exclusive compulsory licences can be granted after 4 years of patent issuance upon the request of any interested persons (Article 61), provided that the proposed user has 
made efforts to obtain a licence from the right holder on reasonable terms. The law also protects 
inventions for 20 years, utility models for 8 years, and industrial designs for 15 years from the date of 
filing of the patent application.  
92. For further harmonization of Georgian IPR legi slation with EU standards, Sakpatenti is 
currently drafting amendments to the law on pate nts, concerning in particular lengthening the 
protection of utility models to 10 years, extension of patent protection by 5 years for pharmaceutical 
                                                                                                                                                                    
 
of enforcing such rights".  Official Journal of the European Communities  (1999) L 205/3.  Viewed at:  
http://eur-lex.europa.eu/LexUriServ/LexUriSe rv.do?uri=OJ:L:1999:205:0003:0038:EN:PDF. 
30 Previously Sakpatenti was responsible for matters in volving industrial property rights, layout designs 
of integrated circuits, and appellations of origin.  Th e Copyright Agency dealt with copyrights and neighbouring 
rights, and the Ministry of Agriculture was responsible for plant variety protection.  The Cultural Department 
within the Ministry of Foreign Affairs was responsible for copyrights on literary, artistic, musical, photographic, 
and audiovisual works. 
31 Ministry of finance online inform ation.  Viewed at:  www.mof.ge. Georgia WT/TPR/S/224 
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products, and streamlined procedures related to granti ng rights, expertise and o pposition.  In addition, 
work is under way on the preparation of a separate draft law on industrial designs, hitherto regulated 
by the patent law.  
Law on trademarks   
93. The 1999 law defines a trade mark as a sign or a combination of signs that can be expressed 
graphically and is capable of distinguishing the goo ds and/or services of one enterprise from those of 
another.  Trade marks are protected through re gistration with Sakpatenti.  The substantive 
examination of a trade mark should be effected w ithin eight months from the date of filing with 
Sakpatenti.  Decisions on registration can  be cha llenged in the Chamber of Appeal, and the decision 
of the Chamber can be appealed before a court. 
94. Registration does not depend on use, but a trad e mark registration can be cancelled after 
five years of continuous non-use in Georgia.  Se rvice marks are protected in the same way as trade 
marks, and Georgian legislation protects well-known ma rks.  A trade mark certificate is valid for an 
initial term of ten years from the date of registrati on, and can be renewed indefinitely for additional 
periods of ten years.  Agreements to transfer or licence a trade mark must be registered with 
Sakpatenti to have juridical force.  Amendments  to the Law on trademarks, in 2005, strengthened 
enforcement procedures, helped to combat pr oduction and distribution of counterfeit goods, and 
harmonized legislation with the re levant EC Council Directive on trade marks.  It implemented the 
recommendations of the Caucasian Brand Protection Group on legal practice in anti-counterfeiting measures.  
Law on copyrights and neighbouring rights  
95. Georgia provides copyright protection under the Civil Code, supplemented by the 1999 law 
on copyright and neighbouring rights, which accord ing to the authorities, was based on the WIPO 
model law. In case of conflict, the provisions of the copyright law prevail. 
96. Under Article 1017, the Civil Code  protects th e moral and economic rights of authors, and 
neighbouring rights connected with performer s, producers of phonograms, and broadcasting 
organizations.  The term of protection begins fro m the moment of creation of the work and lasts 
50 years beyond the death of the author according to the Civil Code.  Copyrightable material is defined as: (i) literary works (books, brochures, artic les, computer programs, etc);  (ii) drama or 
musical-dramatic works, choreographic, mime, and ot her theatrical works;  (iii) musical works, with 
or without text;  (iv) audio-visual works;  (v ) sculptures, paintings, and architectural, graphic, 
lithographic, and other work of visual art;  (vi)  pieces of decorative-applied and monumental art;  
(vii) pieces of theatrical-decorative art;  (viii) photographic works, and works created by means 
analogous to photography;  (ix) maps, plans, sk etches, illustrations, and other three-dimensional 
works belonging to geography, photography or other sciences;  (x) derivative works;  and (xi) collection of works or data representing results of intellectual creative activity.  
97. There are specific provisions on economic rights, rights of producers of phonograms, rights of 
producers of videograms,  the distribution of pho nogram and videograms, and rights of broadcasting 
organizations, as well as certain provisions on re ntal rights in respect of computer programs, 
cinematographic works, and phonograms.  A cour t can order confiscation of copies of counterfeit 
works and phonograms, and the materials and equipment needed for their reproduction, which would be handed over to the right-holder or destroye d.  Counterfeit copies of works and phonograms, 
obtained by third parties in good faith, are not subject to confiscation. WT/TPR/S/224 Trade Policy Review 
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98. Amendments to the Law on Copyright and Neighbouring Rights, adopted in June 2005, 
introduced and updated terminology in line with th e WIPO Copyright Treaty and the Performance and 
Phonograms Treaty, regulated copyright and neighbour ing rights on the Internet , the intellectual rights 
of authors of audio-visual works, intellectual right protection of databases, rules on collecting 
societies, and lending rights.  These changes brough t the Georgian copyright law into line with a 
number of EU Directives.32  
Law on appellations of origin and geographical indications  
99. The 1999 Law on the protection of appellations of  origin and geographical indications is  
based on Articles 22 to 24 of the TRIPS Agreemen t, and European Communities Council Regulation 
(EC) No. 2081/92 of 14 July 1992.  In a related ma tter, Georgia is negotiating an agreement with the 
EU on the protection of geographical indications  of agricultural products and foodstuffs.    
Law on topographies of integrated circuits  
100. The Law on Topographies of Integrated Circuits was enacted by Parliament in June 1999.   
Law on IP-related border measures 
101. The law provides for measures to prevent the import and export of goods infringing 
copyrights or trade marks protected under Georgian law, specifically that goods infringing copyright 
on trademark could, upon order of the court based on an application of the copyright or trade mark 
holder, be detained for up to ten days.  Within th at time the right holder needs to initiate proceedings 
on the merits against the alleged infringer.  Th e law was  prepared specifically to implement 
Articles 50-60 of the TRIPS Agreement.  A number of amendments to the law were made in 2005 to 
better meet TRIPs requirements, including introduction of ex officio  procedures and suspension 
procedures and establishment of a product registry. 
Other matters 
102. Parallel imports are not prohibited in Georgia.  There is no specific law on trade secrets. 
Under Article 1105 of the Civil Code, an entrep reneur who possesses a trade secret (know-how), 
which consists of technological, organizational or commercial information of extraordinary 
importance that justifies the taking of necessary a nd adequate measures for keeping it secret, has the 
exclusive right to this information. At present th ere is no express provision in Georgian legislation 
protecting test data for pharmaceuticals and agricultural chemicals. 
(c) Implementation  
103. The 1999 Code of Civil Procedure stipulates that intellectual property cases are under the 
jurisdiction of district/city courts, which can  orde r a party to desist from an infringement.  The Law 
on Trademarks allows a trade mark owner to file  a civil suit seeking cessation of infringing activities, 
destruction of all materials carrying an infringing trade mark, and damages.  The infringer could also 
be fined or imprisoned.  The pate nt law and the copyright law provide  equivalent protection to patent 
and copyright owners.  Similar protection is provi ded by the laws on geogra phical indications and on 
                                                      
32 On the legal protection of computer programs (91/250/EEC);  on rental right and lending right and 
on certain rights related to copyright (92/100/EEC); on the term of protection of copyright and certain related 
rights (93/98/EEC and 2001/29/EC);  on the resale right fo r the benefit of the author of an original work of art 
(2001/84/EC); on copyright applicable to satellite broa dcasting and cable retransmission (93/83/EEC); and on 
the legal protection of databases (96/9/EC). Georgia WT/TPR/S/224 
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topographies of integrated circuits.  The Criminal Code stipulates criminal penalties with respect to 
violation of intellectual property rights, restri ction of monopolistic activities and competition, 
misappropriation of trade marks, including well-know n trade marks, false advertising, and illegal 
provision or distribution of information containi ng commercial or banking secrets.  Penalties range 
from a fine of GEL 500 and between six m onths and two years' imprisonment.   
104. However, despite  the body of protective legi slation, actual enforcement of intellectual and 
industrial property rights in Georgia remains weak,  thus creating little incentive for foreign 
companies to enter the Georgian mark et.  This is especially true in the areas of computer software and 
audio- and video-tapes.  According to anecdotal evidence, the circulation of counterfeit goods  is 
widespread on Georgian markets, use of unlicensed software has b een common in government offices 
and businesses, and internet service providers hos t websites loaded with unlicensed content. 
Nevertheless, the authorities say that the situa tion has improved in recent years with government 
offices and certain private-sector businesses (like banking) now using more licensed software. 
105. There is a generally acknowledged lack of capacity in law-enforcement bodies and the 
judiciary system to deal with IPR infringements , which is not uncommon for post-Soviet (and many 
developing) countries.  There is no special IPR unit in the police and there is a lack of coordination 
among the different enforcement agencies.  The aut horities do not have ex officio powers to enforce 
IPR protection, except for Customs regarding IP obj ects in the Customs Register.  A lack of data 
makes it difficult to assess the volume of pirated and counterfeit products in ci rculation in Georgia, 
although the Government, with the assistance of UNDP, is carrying out a study.