The Foreign Relations Committee deliberated on international agreements for ratification.

The Loan Agreement between Georgia and IBRD (Project Log-In Georgia, extra funding), envisages the allocation of the loan of 35,400,000 EURO for the period of 25 years, where 10 years are preferential; the assets shall be consumed by 2027.

“These resources will ultimately enable all the settlements in Georgia, home to over 1,000 citizens, to access high-speed internet. Consequently, we intend to provide internet connectivity to all such settlements,” - the First Deputy Finance Minister, Giorgi Kakauridze, clarified.

The Deputy Economic and Sustainable Development Minister, Guram Guramishvili, introduced the Letter-Agreement of Change N2 to the Loan Agreement between Georgia and the IBRD, dated August 31, 2020, (Project Log-In Georgia).

The updated reservations and notices to the Convention “On Establishment of the Measures related to the Tax Agreement in order to Eliminate the Reduction of the Taxable Base and Shifting of Profit” were introduced by the Deputy Finance Minister, Mamuka Baratashvili. As he noted, the document pertains to the international commitment of Georgia and aims at the application of the diverse tax convention to the agreements on evading double taxation that fall beyond the scope of the convention.

“The Multilateral Tax Convention has been developed with the objective of eliminating the artificial relocation of profits to the taxable base and low-tax jurisdictions. Georgia accessed the Convention on June 7, 2017, which was later ratified on December 28, 2018, and subsequently enacted on July 1, 2019. Consequently, the reservations and notices document addressed solely the countries that were signatories to the Convention during the specified period. Currently, the Convention unifies 58 countries, 22 of which are not subject to the reservations implemented in accordance with the multilateral agreement. As per the introduced document, the Convention will now encompass the aforementioned 22 countries, including Austria, Denmark, Germany, Switzerland, Poland, Azerbaijan, and others.”

As per the reporter, the document also envisages the prevention mechanism of the misuse of the agreement, specifically, the preferencies shall not apply to the revenues and transactions, the primary objective of which implies the use of the preferencies only.

The amendment shall not also apply to the dispute effective initiation procedures, namely, the resident of the country acquires the right to appeal to the competent bodies in case of his/her confidence about the misuse of the agreement by the country.

The Committee deliberated on the Protocol on the Replacement of the Protocol II to the Free Trade Agreement between Georgia and Turkey, concerning the specification of the concept of the “origin of goods” and the administrative cooperation methods based on the Decision of the Joint Committee N1/2025 under the Free Trade Agreement with Turkey.

According to the reporter, the Deputy Economic and Sustainable Development Minister, Genadi Arveladze, the amendment envisages the formation of the Protocol II in a novel edition, referring to the updated edition of the Convention on Preferential Origin Regulations as a rule of determination of the preferential origin of goods.

"The update was necessitated by the decision of the Joint Committee on the Pan-Euro-Mediterranean Convention December 7, 2023, thus, introducing an amendment to the Convention of, thus, introducing an amendment to the Convention. A new edition of the Convention aims at modeling the rules of the preferential manufacturing of goods between the trade partners under the convention, ensuring higher flexibility and business orientation thereof. For instance, the business criteria for most of the products of the commodity groups are far flexible, allowing options at the 4-digit code level between the criteria of changes and the 50% adval criteria.

The amendment also pertains to the cumulative principle. The alternative rules, along with the diagonal cumulation, envisage the additional so-called full cumulation, which allows the contracting parties to sum up the recycling processes”, - the reporter noted.

In accordance with the document: the value limit envisaged under the so-called tolerance rules increased from 10% to 15%; the prohibition on the refund ot the customs taxes or the exemption therefrom has been annulled; the origin certificate shall be issued in a sole form with the validity term of 10 months instead of 4 months; the e-certification under the alternative rules are now available.

“The change is necessary to maintain the access to the market in a diagonal cumulation mode with the EU member states, the DCFTA states, Ukraine (after the realization of the amendments to the Free Trade Agreement with Ukraine) and Turkey”, - the reporter stated.

The Committee approved the documents.