Purpose and scope of the law
The Georgian law on national regulatory organs creates a single legal framework for the status, powers and accountability of every national regulatory organ operating in the country. Its declared purpose is to build a firm legal foundation and a complete institutional environment for the stable functioning of these organs, so that the interests of licence holders and consumers are balanced across the various spheres of the economy and services and goods are priced and delivered efficiently. In practical terms, the statute is the regulator's rules of engagement: it defines what every regulated business may demand from its regulator — independence, publicity and accountability — and how the regulator's decisions can be challenged before the courts.
The law applies to every organ that is a national regulatory organ under this law and other legislative and sub-legislative normative acts of Georgia. The law defines such an organ as a public-law legal entity of special legal capacity, created to regulate a sphere defined by the state, which has no state supervisory organ, is independent of state organs and acts within the limits of the authority established by law. The statute also supplies working definitions that matter in practice. Improper influence and unlawful interference means an action by a person — pressure, interference, obstruction or other impact upon the results of deliberations inside the organ, upon its decision-making, upon free and independent reasoning, or upon the work of the organ's staff — carried out in a way that does not comply with the legislation, with the aim of obtaining a benefit or special treatment. A member of the commission is a person appointed to the organ by the procedure established by law and by the organ's relevant law, on the basis of an appropriate act. The relevant law, in turn, is the law of Georgia defining the basic functions and powers of the given organ.
Independence and the ban on interference
In its activity the organ is guided by the principles of independence, publicity and accountability. Interference in the organ's activity, control over that activity and demands for reporting are inadmissible unless they are directly provided for by the relevant law. The organ and each member of the commission are independent within their mandate and obey only the legislation of Georgia. The core principles defining independence are formulated as follows:
- no control of any kind may be exercised over the organ; reports are submitted only to the President of Georgia, the Government of Georgia and the Parliament of Georgia, in the manner established by the relevant law;
- the responsibility of the organ and of a commission member is determined through the court, unless Georgian legislation provides otherwise;
- commission members are appointed only by the procedure established by the relevant law;
- public functions conferred by the relevant law — including the function of balancing the interests of licence holders and consumers — may not be transferred to other organs or to private-law persons;
- the organ is legally separated from, and functionally independent of, any public institution and any private-law legal entity;
- when exercising regulatory authority in the regulated sphere, the organ's members and the persons employed in its apparatus are independent of any public or commercial interest, including influence from governmental or other public institutions and private-law legal entities;
- the organ is entitled to take decisions independent of any political body, to have its own separate annual budget and to dispose of it independently, and to possess adequate human and financial resources for performing its functions.
The law adds a strict qualification test: if an organ does not apply all of these principles simultaneously, or operates under different rules and procedures, it does not count as a national regulatory organ at all. Only the organ itself may exercise the full authority delegated to it under the relevant law: dual, overlapping regulatory authority is impermissible, and any attempt by a person to exercise jurisdiction over the organ's sphere of authority is unlawful and produces no legal effect. At the same time, the organ may join international organisations (associations) and funds, receive consultations and otherwise cooperate with international bodies and local non-commercial legal entities having the same or a similar sphere of authority — but it may not conclude a contract that imposes obligations on Georgia, except in the cases provided for by the legislation.
Creation of the organ and its financial independence
Members of the organ are elected by the Parliament of Georgia; the candidates are presented to Parliament for election by the President of Georgia upon the submission of the Government. The financial foundation of the organ is the regulation fee: its expenses are financed from that fee and from other income provided for by Georgian legislation. Every person who carries out, or intends to carry out, activity within the organ's sphere of authority is obliged to pay the regulation fee.
The fee must be set at a level sufficient to cover the expenses defined by the organ's budget. It is transferred to a separate bank account for the use of the organ, which holds full authority to spend it for its designated purpose. Funds unused in the current year pass to the following year's account and are taken into account when the regulation fee is changed. Notably, the receipt of the regulation fee by the organ is not treated as economic activity.
Regulatory powers: normative acts, licences, tariffs and disputes
Within the limits of its competence, the national regulatory organ holds the following powers:
- to adopt generally binding rules of conduct of a legal nature — normative acts;
- to exercise full licensing and permitting authority: to issue licences and permits, to suspend their validity, to extend their validity period, to modify them and to revoke them;
- to set and regulate tariffs within its sphere of competence, within the limits provided by law;
- to decide disputes related to matters within its competence, between holders of licences and/or permits issued by this organ, or between such holders and consumers.
The exercise of the licensing and tariff powers is subject to a procedural safeguard: the organ is obliged to hold public hearings on the exercise of those powers, in the manner established by the General Administrative Code of Georgia. A decision adopted without such a procedure is void; the requirement does not reach decisions adopted before the law entered into force. Decisions adopted on disputes may be appealed in court under the procedure established by the same law, and the right to review the organ's decisions belongs, as a general rule, only to the court.
Consumer protection and the public hearing
Supplying consumers with public information and considering and deciding their applications and complaints is one of the organ's principal functions; applications and complaints are received every working day. As a rule, a consumer's application or complaint is examined through a public hearing, with the exceptions established by the General Administrative Code of Georgia and the cases where resolving the disputed issues does not require organised procedures. The organ is obliged to invite the interested parties at least 7 days before the public hearing is held. The invitation notice may be published by any means, and it must indicate the issue to be heard at the hearing together with the date, place and time of the hearing.
The public hearing is chaired by an authorised official, who must ensure that circumstances significant for the case are investigated, that documentation connected with the matter is requested, and that attending persons can exercise their right to express their own opinion; a protocol of the hearing is drawn up in the manner prescribed by the legislation. The declared main purpose of the public hearing is the settlement of the disputed issue between the parties through reconciliation. On the basis of the hearing the organ adopts a decision, which is binding on the parties and may be appealed under the established procedure and within the established time limits.
As an additional guarantee for the protection of consumer interests, a public defender of consumer interests operates at the regulatory organ, formed independently of the apparatus of the regulatory commission. Other procedural questions of examining and deciding consumer applications and complaints are determined by the organ's own decision.
Sessions, records and reporting
The organ's sessions are public, except for the cases provided for by the relevant law, and its decisions are published in the established manner. The organ must keep the minutes of its sessions and other appropriate documentation for at least 7 years. A commission member and interested persons have the right to receive, without hindrance, every record and other document existing in the organ; every decision, record and other document of the organ is available for public consideration. The rules for protecting the confidentiality of information held by the organ are determined by the organ itself, in accordance with Georgian legislation.
On the reporting side, the organ prepares an annual report on its activity and conducts a financial audit of its expenses and accounting reports in accordance with International Standards of Accounting. The audit of the organ's administrative and capital expenses is carried out by the State Audit Office, under the procedure established by the relevant organic law. The organ then publishes its activity report and the results of the financial audit publicly — so a regulated business and any consumer can see how their regulator operates and what it spends.
Appealing the regulator's decisions
A decision of a national regulatory organ may be appealed, according to its adjudicative nature, before the Constitutional Court of Georgia and the common courts of Georgia. In practice this covers the whole spectrum of the organ's output: revocation of a licence or permit, setting of a tariff, a decision on a dispute between licence holders, or an act adopted on a consumer's complaint — each of them is subject to judicial control. The law itself does not fix the appeal deadlines; they are set by the established procedure, so timely action matters when a decision affects your business. For every company operating in a regulated sphere, the guarantees of independence, publicity and transparency written into this law are precisely the instruments for protecting your interests in dealings with the regulator.