Under the amendments to the Criminal Code of Georgia adopted on 4 March 2026, it has become a criminal offense for an entrepreneurial legal entity, as well as for a responsible person of that entity – acting in its name or through the use of its name, to “publicly engage in political activity that is not related to the primary business activities of that legal entity”.[1]

The Note to the same Article adopts the same definition of “political activity” as that provided in Articles 194 and 319¹ of the Criminal Code. However, unlike those provisions, Article 355³ places specific emphasis on “public” political activity, rather than merely “political activity” as such. It remains unclear how the concept of “political activity” under Articles 194 and 319¹ is intended to differ from the “public political activity” prohibited for business entities under Article 355³, particularly given that political activity, by its nature, is inherently public.[2]

1. Activity that does not fall within the enterprise’s primary business operations

Under the new amendment, public political activity undertaken by a business entity is subject to criminal liability where such activity is unrelated to the entity’s primary entrepreneurial operations.

It should further be noted that the purpose of an entrepreneurial legal entity is not, and has never been, the pursuit of political activity; rather, its activities are classically oriented toward profit generation. Public political activity falls outside the sphere of entrepreneurial activity and instead pertains to the exercise of political rights and the public expression or positioning of both natural and legal persons—interests that are recognized and protected as fundamental legal values in any democratic system.

Conflict with the Constitution and applicable law

The Constitution of Georgia, the Civil Code, and the Law on Entrepreneurs guarantee the freedom of entrepreneurial activity, meaning that participants in entrepreneurial relations are entitled to engage in any activity not prohibited by law, including activities not expressly regulated by law. Freedom of action and legal autonomy are the defining characteristics that distinguish private-law entities from public-law entities. A business independently determines all matters relating to its operations and may modify its field of activity based on its own assessment, without requiring prior authorization.

The Constitution of Georgia explicitly recognizes and protects the freedom of entrepreneurship.

The imposition of criminal liability on a business entity solely on the ground that an activity undertaken by the entity or by its representatives is not connected to its “primary business” constitutes an undue and repressive encroachment by the State upon the private autonomy of the business entity, a autonomy expressly safeguarded by law.

Moreover, the imposition of criminal liability on a business entity for an activity allegedly falling outside its “primary activity” is also inconsistent with the Law on Entrepreneurs and the freedom of entrepreneurship guaranteed therein (Article 6), which provides that a business entity is not required to define the scope of its activities with precision.

The Law on Entrepreneurs does not recognize any distinction between a business entity’s “primary” and “non-primary” activities. Under the law, a business entity may simply state in its charter that its purpose is to engage in entrepreneurial activity generally, without specifying or designating any particular activity as primary. Accordingly, all activities undertaken by a business entity that do not require a permit or license are lawful and, in fact, legitimate.

In addition, the imposition of criminal liability on a business entity for an activity alleged to be outside its so-called “primary activity” is also contrary to the Civil Code (Article 10).

It is impermissible for an investigator or prosecutor to determine what constitutes a “primary entrepreneurial activity” for a given business, or to dictate which activities the entity may or may not undertake. A business may lawfully alter the scope of its activities at its discretion, without obtaining consent or amending its charter documents (except where permits or licenses are required for regulated activities).

For example:

• A bank expresses its opinion on elections – is this connected to its primary entrepreneurial activity?
• An IT company criticizes the country’s cybersecurity policy – does this fall within its primary entrepreneurial activity?
• A restaurant issues a statement on media freedom or environmental protection – can this be considered part of its primary entrepreneurial activity?

Therefore, in light of the legal deficiencies in the wording of the relevant Criminal Code provision, it may be concluded that the formulation proposed by the new amendments (Article 355³ of the Criminal Code) effectively prohibits businesses from engaging in political or social positioning, activities, or participation in political discourse, since such activities can never constitute the primary activity of a business. Consequently, any political or social engagement by a business or entrepreneurial entity would invariably be classified as activity outside its entrepreneurial activity.

Article 17 of the Constitution of Georgia and Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms safeguard the right to freedom of expression. This encompasses, in particular, the freedom to hold political opinions, engage in political debate, and criticize government authorities. The case law of the European Court of Human Rights (e.g., VgT Verein gegen Tierfabriken v. Switzerland, No. 24699/94, 28 June 2001) confirms that legal entities also enjoy the right to freedom of expression, especially with regard to matters of public interest.

2. Who is the subject of this new offence?

The subjects of the offence include both (i) the legal entity itself and (ii) its responsible person, acting on behalf of, or in the name of, the entity.

Of particular concern are the potential consequences of the legal entity’s liability, which may include a fine or, in certain cases, both a fine and the entity’s liquidation.

(a) Legal entity as a subject of liability

Under the Criminal Code, the liability of a legal entity arises if a person authorized to manage, represent, or make decisions on behalf of the entity, or a member of its supervisory, control, or audit body, engages in prohibited political activity. In such circumstances, the question of criminal liability arises for both the individual and the legal entity.

(b) Who qualifies as the “responsible person” of the legal entity for the purposes of Article 355³ of the Criminal Code.

The Law on Entrepreneurs does not define a “responsible person” of a legal entity; rather, it specifies the persons authorized for management and representation (Article 9 of the Law on Entrepreneurs).

For example, if the chief accountant of a business entity speaks on television and is identified in the caption as the chief accountant of that specific company, should that be considered acting in the name of the legal entity?

Further, who is to determine who constitutes the subject of the offence under Article 355³ of the Criminal Code — the natural person? And who is to determine which public activity by an officer of the legal entity may give rise to liability of both the individual and the legal entity simultaneously?

The relevant provision of the Criminal Code is defective in this respect, creating clear potential for arbitrariness. This risk is compounded by the fact that the “non-primary activity” prohibited for a business may be determined at the discretion of the investigator, prosecutor, or court, rather than in accordance with the Law on Entrepreneurs.

(c)A legal entity may be a subject of liability even when the natural person who committed the crime is not identified

Under the current Criminal Code (Article 107¹), a legal entity is subject to criminal liability when a crime is committed on its behalf or through it, including through its name, regardless of whether the natural person who committed the offence is identified.

Accordingly, under this provision, if the authorities consider that any protest or public activity has been carried out on behalf of or through a legal entity, the question of liability of the legal entity may arise irrespective of whether the individual responsible for the act is identified.

3. Liquidation of a business as a punishment for a new crime

As a form of punishment, the new provision establishes imprisonment for the responsible persons of a legal entity and either (a) a fine, or (b) both liquidation and a fine, for the legal entity itself.

The criminal legislation of Georgia does not set an upper limit for the fine; rather, it establishes a minimum threshold of 100 000 GEL, leaving the determination of the exact amount to the discretion of the court.

In addition, the criminal legislation allows for the imposition of an ancillary penalty — confiscation of the legal entity’s property — which may be applied by the court irrespective of whether it is expressly mentioned in the sanction under the new Article 355³.

The liquidation of a legal entity, coupled with the criminal liability of its responsible persons for engaging in “public political activity,” constitutes an extremely repressive and disproportionate measure, for which there is no equivalent in the legislation of European states. In the civilized world, legal entities and their representatives are not prohibited from publicly expressing or supporting political positions; rather, regulation is generally limited to the financing of political parties.

The amendment to the Criminal Code, enacted on 4 March and discussed above, is not merely a matter of legal debate. It also sends a clear signal to international markets that, in Georgia, the private autonomy of businesses and the freedom of expression are no longer protected, creating significant legal and practical risks for the protection of investments.

[1] Article 355³ of the Criminal Code of Georgia: “Political Activity of an Entrepreneurial Legal Entity”

[2] For a legal analysis of the new criminal law definition of “political activity,” see BLB’s study “Amendments to the Criminal Code of Georgia – Expulsion of citizens and organizations from political discourse”. Available here: https://shorturl.at/q5g5G