Transparency International - Georgia has expressed concerns on Friday over the potential ramifications of the offshore bill passed by the parliament earlier during the day, warning it may open the floodgates for the influx of capital with origins tied to Russia. 

The organization suggested that while the changes might serve the interests of Bidzina Ivanishvili - the founder and the honorary chair of the ruling party - they could simultaneously heighten the risk of criminal and Russian capital entering Georgia.

TI has raised suspicions regarding the timing and expeditious consideration of the offshore bill, especially alongside what it terms the "Russian law” - in reference to the ruling party’s foreign transparency bill. The simultaneous push, it said, raised doubts about whether the real intent behind the legislative changes was to ease the transfer of assets held by Ivanishvili's offshore entities into Georgia.

"The prevalence of Russian businessmen and oligarchs utilizing offshore entities must not be overlooked. With the proposed legislative changes, they could exploit the opportunity to shift their assets to Georgia, potentially enjoying tax benefits in the process. Moreover, the broad scope of tax relief, extending to non-business-related imports, including high-value luxury items like artwork, raises additional concerns," TI Georgia remarked.

According to a 2021 study by Transparency International - Georgia, Ivanishvili was linked to 20 offshore companies, highlighting the opacity surrounding offshore entities. The organization has long advocated for the creation of a beneficial owners register for offshore companies to mitigate risks associated with anonymous ownership, such as corruption and tax evasion.

"The absence of arguments justifying the expedited review of the legislative changes is conspicuous in the explanatory note. While initially bundled with an initiative for individual tax debt write-off, the rationale for accelerated processing pertains solely to the debt write-off component, rather than the offshore companies aspect," TI Georgia observed.

TI Georgia emphasized the need for Georgia to maintain a high standard of transparency if it intended to facilitate the transfer of assets from offshore entities, stressing the importance of publicly disclosing the identities of individuals transferring assets into the country.

The offshore bill, which grants tax exemptions to offshore assets, sailed through the Parliament with 73 deputies in favor and nine against. Deliberations on the draft law were expedited, taking place over April 17 and 18, and it now awaits the President's signature to become law.