
In a defiant move, the National Bank of Georgia (NBG) has stated that it will not enforce US Treasury sanctions against Georgian government officials and extremist figures unless they are convicted by a Georgian court. This announcement comes in response to recent sanctions imposed by the US Treasury Department on individuals linked to brutal crackdown on demonstrators and the Kremlin-linked violent extremism in Georgia.
Among those sanctioned are Zviad Kharazishvili, head of the Special Task Department at the Ministry of Internal Affairs, and his deputy, Mileri Lagazauri, for their roles in cracking down on protests against the controversial Foreign Influence Law earlier this year. Also sanctioned are Konstantine Morgoshia and Zurab Makharadze, leaders of the extremist group Alt Info, which has ties to pro-Kremlin and Georgian Dream factions and has been involved in violent attacks on journalists and minority groups.
None of the sanctioned individuals face prosecution in Georgia, and Georgian Dream (GD) officials have publicly defended Kharazishvili and Lagazauri. This stance has sparked fierce criticism from opposition figures and civil society.
The controversy surrounding Georgia’s adherence to international sanctions is not new. Last year, the NBG amended its regulations in a haste right after the US sanctioned Otar Partskhaladze, a former prosecutor general and close ally of Georgian Dream founder Bidzina Ivanishvili. Despite being a Russian citizen with the US Government claiming he was part of the Russian FSB and pushed Russian interests in Georgian politics and economy, Partskhaladze was shielded by top Georgian officials. In the wake of these amendments, most major Georgian banks, including Bank of Georgia and TBC, announced their compliance with international sanctions. However, Cartu Bank, founded by Ivanishvili, aligned with the NBG’s refusal to enforce the sanctions.
NBG governor Natia Turnava, a known Ivanishvili loyalist, insisted that her guidelines were mandatory for all banks which were allowed to apply sanctions only if their targets were convicted by Georgian courts which in turn, according to many The decision prompted the resignation of three highly respected deputy governors—Papuna Lezhava, Archil Mestvirishvili, and Nikoloz Gagua—as well as senior official Giorgi Bakradze, leaving the NBG board in turmoil.
The National Bank's stance has had significant economic repercussions. The Georgian Lari (GEL) devalued following the announcement, forcing the NBG to sell millions of dollars to stabilize the currency. Roman Gotsiridze, an opposition MP with the United National Movement (UNM), claims that the NBG’s refusal to clearly support US sanctions has further destabilized the economy. Gotsiridze also alleges that the NBG has secretly sold large sums of dollars to counteract the currency's devaluation, just as it did last year.