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PF ENG.pdf

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certain types of enterprises only. These restrictions usually prevent political corruption and protectthe shareholder rights. The main purpose of a commercial enterprise is to obtain financial gain.Consequently, there is always a danger that political donations from businesses are aimed atestablishing close ties with some politicians in order to obtain undue advantages.Funding political parties by businesses is always fraught with risks of corruption. Therefore, it isabsolutely essential to have correct legal regulations in place for donations. Complete ban ondonations, on the other hand, would result in unjustified and disproportionate restrictions of the legalentities’ constitutional rights of expression and political activity. The fact that there is no documentdeveloped by any international organization with respect to Georgia recommending the Georgianauthorities to impose a complete ban on legal entities funding political parties is also to be accountedfor.Instead of imposing a complete ban on legal entities to finance political parties, it would be preferableif the legislation included: special regulations to avoid the existing risks in order to prevent oneperson to bypass the donation limit by founding several legal entities; receiving funding from a legalentity whose shareholder may be a foreign national or another state, a company registered in anoffshore zone etc.∎∎∎∎It is necessary to formulate the law in such a way as not to allow one and the same person totransfer more than GEL 100,000 to one party through ownership of different legal entities.The government should restrict or prohibit contributions not only from the enterprises inwhich it has a stake, but also from those enterprises that provide goods or services to a publicinstitution.To reduce the risk of corruption, it is desirable to prohibit businesses winning publicprocurement contracts to make donations in the year preceding elections as well as electionyear, and prohibit the companies financing political parties to participate in publicprocurement throughout the election year and the year after the elections. This requirementis preconditioned by the fact that such enterprises have direct financial ties with thegovernment, which yields a risk of illegal transactions between a political party andbusinesses – the risk of "winning the bid in exchange for a donation," or "Making a donationin exchange for winning the bid"Ban should be imposed on the receipt of donations from such companies whose shareholdersare not Georgian nationals or are off -shore-registered companies24

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