Postal Corruption: Changes in Georgian postal regulation law will create a monopoly
09 October, 2014
Postal Corruption: Changes in Georgian postal regulation law will create a monopoly
A new draft law on Georgian postal communication implies the creation of statutory monopoly of the market while it provides no reasonable economic benefit. Such practice opposes the best world practices and international obligations including the Association Agreement with the EU and the World Trade Organization.

The draft makes the state-owned Georgian Post a legal monopoly in four markets such as letters and parcels shipping, customs warehousing services, courier expedition and money transfers If this draft becomes law, around 40
communication companies including global names like DHL, TNT, UPS and FEDEX operating in Georgia for up to 20 years, are expected to quit. Both companies and sector analysts say such practice may leave a black eye on Georgia’s investment image. In fact the world knows only one similar precedent situation in Turkmenistan when international postal companies left the country in 2005.
According to Natia Kutivadze, a legal analysts at Transparency International Georgia, the key concern is that Georgian Post will be directly selected as a national operator handling the universal postal service [that includes access to basic postal services which does not include luxurious services like courier or express shipping] for 5 years while the EU law allows a 2-year term for such an operator and requires selection via open tender. This draft gives an exclusive right to the Georgian Post to handle letters and parcels under 2kg and 30kg respectively while the maximum international cap limit is 100 grams.
“Georgia is committed to impose no restrictions on cross-border provision of courier services under the DCFTA [Deep and Comprehensive Free Trade Agreement]. It seems that the notion of a back-up universal postal service, which the European Commission understands defines the scope of statutory monopoly (i.e. reserved area) covers not only letter mail up to 100 g, but also international parcel mail up to 30 kg,” reads the comments sent by the European Commission to the Economic Ministry on July 27.
Otherwise, once parcels cross the Georgian border, Georgian Post will take control for their final delivery. Other operator companies are expected either hand over their cargos to Georgian Post and pay extra charges for the service, or take huge losses and quit the market. On the other hand, the provision opposes their core business principles: they decline to share responsibility and reputation with any other company. That said, all international companies pledge to leave the Georgian market unanimously if the drafted legislation becomes law.
“This is a matter of reputation and responsibility to the client,” Nino Menteshashvili, CEO of the TNT representative company operating in Georgia for almost 25 years, told Georgian Journal. “Only Georgian companies will agree to operate via Georgian Post. No international company will agree to operate via other operator, we cannot tell our clients that we are not responsible for our services.”
The draft was created by the Ministry of Economy and Sustainable Development of Georgia and was slated for parliamentary discussions even this past May. But the submission process became protracted after the interested business sectors as well as the international community made negative comments and predictions about the draft and called upon the Ministry to implement the changes in line with the international norms.
European Express Association sent a letter to Giorgi Kvirikashvili, vice Prime-Minister and Minister of Economy, on August 25. The EEA reminded Kvirikashvili that the draft infringes Georgia’s obligations against the WTO rules on unlimited market access in courier services. But all to no avail. The ministry did not make any change in the draft and was reluctant to communicate with the European Commission via video-conference. Finally, the Commission set the date for the video-conference on September 26 and asked the Ministry to send a revised draft version in two weeks. Yet it is still unclear whether or not the task was implemented. The Ministry did not meet GJ’s repeated requests for comments or information on the issue. Neither did they explain the purpose of these much criticized changes.
The private sector believes the reason is personal benefit.
“180 million USD is the income of post business per month and if the said changes come into effect, 95 percent of this will go in the pockets of new Georgian companies that are expected to enter the market under the Georgian Post’s umbrella. Some of these companies are already registered and others are being registered and all are in the names of relatives of top officials as far as I am aware. Very likely this money will go into their pockets instead of the state coffer,” Menteshashvili said.
If the statutory monopoly will be authorized all international companies plan to sue the Georgian state at an international level.

Print
Other Stories
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
22.04.2019
23.04.2019
USD
1
USD
2.6935
2.6935
EUR
1
EUR
3.0291
3.0291
GBP
1
GBP
3.5021
3.5021
RUB
100
RUB
4.2126
4.2126
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6935
EUR
1
EUR
3.0291
GBP
1
GBP
3.5021
RUB
100
RUB
4.2126
April 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30