What resources and riches is Georgia possessing

“Invest in minerals” – is entitle of new project of the Ministry of Environment Protection and Natural Resources that envisages the development of the country’s natural resources.

For this purpose the Spatial Information Office was founded at the Ministry of Environment Protection and Natural Resources of Georgia, aiming creation of a single national full-fledged information fund concerning minerals and provision for its organizational management, record keeping and registration of all industrial, scientific and geological activities that have been implemented or are currently underway in the territory of Georgia, its territorial waters and continental shelf, creation of a single system of spatial information and placing in the Internet the information on Georgia’s minerals, forests, protected territories, soils, etc.
On January 29 at “Courtyard Marriott” hotel the Ministry of Environment Protection and Natural Resources of Georgia held a presentation of the resources prepared for privatization. Georgia’s natural resources bearing huge importance and that attraction of large investors in this sphere will positively effect on the economy, including the deposits of cement and manganese, the Prime Minister Zurab Noghaideli reported.
The Minister of Environment Protection and Natural Resources – Mr. David Tkeshelashvili pointed out that the project’s purpose is attractive investment environment creation for a wide range of Georgian and foreign investors. The minister mentioned enabling of the currently stopped enterprises and opening of new ones, the budget complementary profits, employees` number increasing economy developing stimulation and environment protection new technologies inculcation as the main task of the project and said that the ministry schedules new projects presenting in up- coming month. Georgia’s 14 deposits presentations also provided, while presenting each` s value, description, conditions, prices, and the auction schedule. The Minister emphasized that a world famous enterprise Cement came to Georgia after carrying out of similar works.
At the presentation the Regional Director of Cement – Reihard Trunm shared the enterprise’s work essay and told about he was occupying Regional Manager position at Germany based international company. The company is constantly developing and has worldwide branches. In 1990s the companyentered the East European countries and in 2005-2006 –Kazakhstan, Russia and Georgia. The company’s coming to Georgia will have a positive effect on the economy and contribute to its development. Currently the company is cooperating with two Georgian companies – “Saqcementi” and “Georgian Cement”. Two cement plants are functioning – in Kaspi and Rustavi, while repair works are being carried out in one of Rustavi branches. By 2008 the company may produce 2 million tons of cement in Georgia.
The auction for selling of these deposits will be announced in up –coming future and we believe that the proposal deserves attention.
The order of investment
Investment is a proprietary and intellectual value or right of any kind, making and application of which is possible with the purpose of receiving of profit in entrepreneurial activities implemented in the territory of Georgia. Such value or right can be:
– Monetary means, share, stocks and other securities;
– Movable and immovable property – land, buildings, constructions, equipment and other sort of material values;
– The right (including concession) to use land or other natural resources, patent, license, “know-how”, experience and other intellectual values;
– Other material or intellectual values recognized by the law;
While investor is an individual or legal person, as well as an international organization, that makes investments in Georgia.
Those considered as foreign investors – a foreign citizen; a stateless person that is not permanently residing in the territory of Georgia; a citizen of Georgia that is permanently residing abroad; a legal person that is registered outside Georgia; an enterprise in which a foreign investor’s share makes up no less than 25% enjoys the same rights as a foreign investor.
Investments in the territory of Georgia can be made in any property form that is not prohibited by the law “On investment”.
Without a permission or license issued by a corresponding body an investor has no right to make investments to the following activities:
– Production and sale of arms and explosives;
– Production and sale of the rapeutic agents and substances that are liable to special control;
– Use of forest resources and minerals;
– Setting up of casinos and other gambling houses that provide for organization of games and lotteries;
– Banking activities;
– Issue of securities intended for public distribution;
– Wireless communication service and creation of television and radio channels;
– Land and other natural resources.
With the purpose of starting investment activities, an investor should, first of all, get registered. For that he should submit the following – full names of investment units; a short description of the basic directions of investment activities; a copy of a document confirming registration of the corresponding enterprise; a document confirming the cost of investment; a special permission, including the license.
State and tax registration of an enterprise takes place on the basis of the application and the documents determined for an enterprise of the corresponding organizational-legal form. According to the mandatory order, an application for all enterprises should include:
– Firm name (firm);
– Organizational-legal form;
– Location (legal address);
– Name, surname, place of residence, citizenship, name of the identity document, its number, personal number of all founding partners, and if the founder is a legal person – its firm name and registration data;
– Representation authority;
Persons that represent a company are obliged to present the specimens of signature that they use in business relations.
As for the procedure of a preliminary license’s issue, any person has the right to require it. A preliminary license/permission is the right for implementation of particular activity or action conferred to a person by an administrative body on the basis of an administrative-legal act. Any license/ permission, except for the use license, can be issued in advance.
For obtaining of a license/permission, an applicant should submit to the corresponding administrative body a technical project of the activity, for the implementation of which he requires a license/permission. The project should be as detailed as possible. It can include the kind of activity, the amount, order and types of investments, location, technological processes, description and types of applied machinery, schedule of implementation as well as other data according to the investor’s decision. The issuer of a license/permission has the right to require specification of a technical project with the purpose of establishment of terms. The period determined for specification of a technical project cannot be less than 15 days.
An investor has the right to apply to the authorized state body expressing his interest in purchasing state property and offering the terms. As far as state property is concerned, an investor cannot be denied except for the cases when, according to the legislation, the property is not liable to privatization or when property privatization order different from this law is determined; an investor needs the property for the purposes, the implementation of which contradicts the territory’s division into zones or causes the breach of the property’s unity.
With the purpose of provision for fulfillment of privatization terms, an investor is obliged to present a bank guarantee or place on the deposit the sum equivalent to no less than 10% of the cost of the property liable to privatization. If the cost of the investment application exceeds the cost of the property liable to privatization, the mentioned sum is calculated based on the application’s cost. In case of non-fulfillment of the terms, the sum is transferred to the state budget.
State property is liable to direct selling on the basis of competitive selection. Direct selling is allowed under the determined terms and only in the event that the necessity of selling in accordance with this order is well founded and its publicity is ensured.
Within 30 days from the moment of submission of an application for purchasing of property, the authorized state (local government) body announces an auction or a conditional auction according to the conditions proposed by an investor, then it applies to the government of Georgia concerning the solution of the concrete direct selling issue according to the selection order.
An investor investment realization scheduling, the total amount of which exceeds 8 million GEL or has a significant effect on the country’s economy or infrastructure from a functional or strategic point of view, has the right to require from the government of Georgia that the special importance investment status should be conferred to the investment that he is going to make.
The special importance investment status is conferred by an order that is issued by the government of Georgia. An investor can require the mentioned status either before the implementation of the investment or after it. With the purpose of its obtaining, he should present to the Government of Georgia the investment application enclosed with a detailed investment implementation plan. The government of Georgia takes a decision on conferring of the corresponding status to the investment no later than one month after the submission of the application.
In case of conferring the special importance investment status, a memorandum is concluded between the government of Georgia and the investor, by which the terms of the investment are determined.
After conferring of the special importance investment status, with the purpose of provision for the fulfillment of the obligations envisaged by the memorandum, an investor can be charged with depositing of the guarantee sum that makes up 2% of the total amount of the investment, or will be obliged to present the corresponding (5 percent) bank guarantee.
The special importance investment status is conferred by an order of the government of Georgia and is effective during a specified period of time. The status is cancelled if an investor fails to fulfill the terms envisaged by the memorandum. However, cancellation of the special importance investment status does not entail cancellation of the already issued license/permission.
State support of investments is provided for by the National Investment Agency of Georgia. The Agency is the state’s representative in relations with investors. It is entitled to be an investor’s representative in relations with administrative bodies and other persons. For this purpose, a contract, which determines the framework of representation, is concluded between an investor and the Agency. According to the mentioned contract, the Agency renders assistance to an investor in receiving of all licenses and permissions necessary for investment activities and implementation of other representative authority. Implementation of the mentioned authority is chargeable. (Contact information of the National Investment Agency – Tel.: +995 32 93-33-95; + 995 32 93-30-96).
An investor is entitled to require property creation and implementation of all procedures related to it through the mediation of the Agency, as well as require any information that is related to his personal rights and the procedure of the issue of a license or a permission.
As for an investor’s rights and obligations, he is obliged to implement his activities in accordance with the Georgian legislation, including the laws related to environment and health protection.
In implementation of investment and entrepreneurial activities, the rights and guarantees of a foreign investor cannot be less than the rights and the guarantees that are enjoyed by Georgian physical and natural persons.
An investor is entitled to open current and other types of accounts in any currency in bank establishments existing in the territory of Georgia. He has the right to raise loans from bank and financial establishments existing in the territory of Georgia and outside it, as well as from physical and legal persons. He also has the right to purchase shares, bonds and other securities. A foreign investor, after paying of taxes and mandatory dues, has the right to convert in Georgian bank establishments the profits received from investments as well as other monetary funds according to the market exchange rate and to repatriate them abroad without limitations.
An investor can employ a foreigner in accordance with the Georgian legislation. The minimal number of Georgian citizens in an enterprise’s mandatory elective or appointive administrative bodies cannot be introduced. After paying of taxes and mandatory dues, a foreigner that does not permanently live in Georgia has the right to freely transfer or take abroad the incomes received by him.
Constitution of Georgia Article 21 says, “the right of property and succession” is recognized and ensured. Cancellation of the right of property, its purchasing, alienation or succession is not permitted. If it is required by public necessity, its confiscation is possible in cases that are directly determined by the law, according to the court’s decision or in case of urgent need determined by the organic law, but only with the appropriate compensation.
Today this constitutional requirement is unanimously recognized by the government’s leaders, opposition representatives, offenders and innocents. In the case of recent events overview recent it will appear that neither party observes the requirements of the law.
When the government started the revision of legality of handing over of apartments carried out on the initiative of the then Premier of Tbilisi Gia Sheradze it, with a stroke of the pen, decided to take away flats from 70 families. However paradoxical it may be, most of these families learnt about it by means of television or heard it in a shop or at the market. The fact that the City Administration of Tbilisi did not present the information to the citizens in good time is the evidence of the fact that their rights were harshly violated.
But for the present moment Tbilisi Mayor officials tell that the current decision is not a final one and could be repeatedly reviewed – those people to whom the living space really belongs will retain it. It is interesting whether the government, if it were not for such activity on the part of the society and media, would have changed the decision and left the without flats the people that have no alternative space and, what is most important, have made a big contribution to the development of Georgian culture and art. However, we also should not forget the fact that among these families there are the ones, for which handing over of flats did not represent any necessity.
The citizens that are on the list for receiving a flat have already brought a legal action to the civil court. The administrative collegium of will be considering their complaint during two months and there is a hope that it will be decided on the basis of an equitable investigation – whose flats will be left in possession and whose ones will be taken away. It is possible that during the period of intensive corruption and bribe-taking citizens “bought for money” construction permits or received flats, but it cannot be applied to everyone. Both offenders and innocent people live in all countries at the same rime. All offenders try to disguise their actions by a lawful decision and, by doing so, they also jeopardize the people that receive what they deserve. That is why representatives of the authorities and the corresponding bodies should individually approach each citizen’s case and take appropriate decisions.
Beached can be also appeared concerning illegal constructions issue. It is interesting what the corresponding bodies are guided by when they decide to take away citizens’ property. According to the Head of the Department of Law and Social-Economic Affairs of the Ombudsman’s Office – Mrs. Salome Vardiashvili, “their arguments often lack legal base and they have no permission for dismantling a building being in possession of other people, which must exist in the form of the court’s decision. Let us remind you that destruction, taking away or limitation of private property is not allowed, except for the cases envisaged by the law. That is why, when owners apply to us and say that have received a verbal warning from the corresponding services, we start to examine the case. To this day it is established in almost all cases that these people are real owners, which is also confirmed by the corresponding documents. So far, there has not been a single case when somebody’s documents were not in order. When we make sure that in due time construction was implemented with observance of all norms, or they also have a project agreed upon with an architect, an order, or an act confirming the acceptance into operation, we apply to the City Administration and indicate that it is a property that is protected and guaranteed by the Constitution of Georgia and that encroachment upon it is inadmissible. In the event that the Service establishes that the particular building was constructed with violation of the law, it has its own procedure and order, which is expressed in passing of a decision. It should be handed over to the party within 24 hours. The owner, on his part, has the right to appeal this decision in the court within the period of 15 days. However, in the recent period this procedure has been harshly violated in the course of dismantling of the so-called illegal constructions. The constructions` owners are not handed the decisions on dismantling passed with respect to them and, correspondingly, they are deprived of the right to take the case into court and protect their rights. Here it should be also pointed out that not long ago amendments to the law on “Supervision over architectural activities” were introduced, but this procedure remained unchanged, i.e. the final decision is still taken by the court.”
According to Mrs. Vardiashvili, in spite of the fact that the units were not built illegally and their owners had the documents in order, dismantling of these constructions was implemented all the same. These constructions are as follows: the shop in front of Ortachala prisons (owner – Marina Bochorishvili); café-bar in Pushkin square (owner – David Asatiani); the building in Nadzaladevi next to the transition bridge; the shopping centre next to Tsereteli underground station; blue glass house in Vake district (owner – Irina Nergadze), etc.
Several days recent the city’s Supervision Service carried out the dismantling of the two units located in the territory adjacent to Gotsiridze underground station – “Champion” and “Sakhinklao”. According to the representative of the mentioned service – Mr. Levan Ekhvaia, “the dismantling of these units was carried out within the framework of the program of putting in order the premises and constructions adjacent to underground stations. In case of “Champion”, there was a temporary permission issued by the local Gamgeoba (administration). Those persons who wished it could temporarily arrange light pavilions in this territory, on condition that they would be removed at the state’s request. Proceeding from the fact that the territory adjacent to Gotsiridze underground station was included in our program, we applied to the owner of “Champion” with a request to voluntarily dismantle the building. It was in November, but he did not consider our warning and in December we passed a decision on dismantling of the building, which the citizen did not accept. In January we carried the decision into effect.”
As for “Sakhinklao” located over Gotsiridze underground station, its owners, as distinct from the owners of “Champion”, had the land in their property, which is confirmed by an extract from the Public Register. The construction permit was issued to the owners in 2002 by “Architecture and Construction Inspection” of Tbilisi and the Architecture Service, the project was agreed upon with the city’s Chief Architect. There is also the act confirming the acceptance into operation.
According to MP Manana Nachkebia, “in spite of the fact that on January 30 the National Agency of Public Register issued a document to the unit’s owners confirming that this building, along with the land, is the property of the concrete person, on the same day the city’s Supervision Service pulled down the building as an illegal one. No documents or acts of any of the City Administration’s services, in this case the ones issued by the Supervision Service, confirming that this property was not registered in the Public Register, i.e. that it is an illegal one, were presented to the owners of the property since, as it can be seen, this kind of documents does not exist at all. We have officially required such document and I am absolutely convinced that if it is presented by the corresponding services, it will be the one forged later on and not the one passed before. In general, the property right is one of the most protected and recognized ones by the Constitution of Georgia, international charters and various international documents. This kind of harsh facts of its violation indicate that we, unfortunately, live in an unstable, undemocratic country, in which an owner’s rights, in the broad sense of the word, are not protected. Such country has no prospects for economic development either.”
“since the territory adjacent to Gotsiridze underground station was in private possession, the City Administration took care that another space having the same market value would be offered to them, but in some other place. However, it will be investigated by the competent authorities how the mentioned land was handed over to these citizens. The mentioned unit (Ltd. “Meritaimsi”) has eight owners. We have met six of them and they agreed with our proposed terms. However, this land remains in their possession and in future they can build a modern pavilion in this territory, but the one having a light construction. I believe the mentioned project will, on the one hand, contribute to the city’s decoration and, on the other one, the people will not remain in the street since they will receive a compensation,” Levan Ekhvaia said.
Everything is going well, but it would be better firstly determining who and under which legal frames carried out the territories for the citizens. It is also a fact that some of them were passed into possession by the previous authorities, others – by the current ones, and even with a perfunctory look it can be seen that some of the places should not have been sold and that buildings should not have been constructed on the sidewalks.
Thus, it is interesting – should taking away of the misappropriated property be considered as promotion of private property?