The Legal Basis of Trade Sanctions Compliance
National trade control aligned with international sanctions rests on the law that establishes a permit-based regime for the export, import, transit and brokering of products defined by control lists. Under the law, the export of products specified in the control lists is carried out on the basis of an export permit issued in accordance with Georgian legislation. This means that taking sanctionable goods out of the country is not prohibited as such, but it is impermissible without a permit — the law bans not trade but unsanctioned trade. The first step of compliance is therefore always to determine whether a specific product or service falls within the control lists.
Dual-Use Products and Embargoes
Particular attention is devoted to dual-use products. Even the export of dual-use products not specified in the control list requires a permit where the permit-issuing authority has notified the exporter, on the basis of a reasonable assumption, that the product will be used, wholly or partly, in connection with the development, production or proliferation of biological or chemical weapons, nuclear weapons or other explosive devices containing nuclear material, or for military purposes where an arms embargo has been imposed under a United Nations Security Council resolution, international obligations or unilaterally by Georgia. Military purposes within the meaning of the law include the installation of products in military products, the use of industrial, testing or analytical equipment for the development or production of military products, and the use of semi-finished products for such production. A permit is likewise required where the exporter knows or has a reasonable assumption of such use — this constructive knowledge is the principal compliance risk.
Import, Transit and Brokering Services
For imports, the same logic applies: the import of products defined by the control lists is carried out on the basis of a duly issued import permit. As to transit, the transit of military products rests on a transit permit, and the transit of dual-use products marked in the control list with one or two asterisks likewise requires a transit permit. The rules on brokering services provide that brokering in military products is carried out under a permit, while brokering in dual-use products requires one where the broker has received a notification from the permit-issuing authority based on a reasonable assumption, or itself knows or reasonably assumes such end use. Sanctions risk therefore extends beyond the exporter to the intermediary — the broker and the carrier.
The Permit Applicant and the Application Procedure
The procedural framework for applications is set by the corresponding article of the law: the permit applicant must be the direct implementer of the permittable activity, and in the case of transit the applicant may also be the carrier. The applicant addresses the permit-issuing authority defined by the law and submits the documentation required by the Law on Licenses and Permits and by other normative acts. In specified cases the applicant first applies to the Standing Commission on Military-Technical Issues of the Ministry of Defence of Georgia for a recommendation, and only after receiving it to the permit-issuing authority; an application submitted in breach of this procedure does not start the proceedings and is forwarded to the Commission. A subordinate normative act defines the cases where an authority, person or organisation is not obliged to obtain a permit, yet this does not release them from the obligation to obtain the Commission's recommendation.
Export and import of products determined by the control lists proceed on the basis of the respective permit issued under the legislation, and the export of dual-use products not envisaged by the list may also require a permit where the issuer, on reasonable suspicion, establishes a link to a prohibited use. The permit seeker must be the direct implementer of the permitted act, and in transit a carrier may seek the permit as well.
Frequently Asked Questions
Below are concise answers to the questions most frequently raised about trade sanctions compliance.
When is an export permit required?
When the product is defined by the control lists, and also when dual-use products are destined for purposes connected with biological, chemical or nuclear weapons or for military purposes under an embargo.
Whom does the brokering permit concern?
A broker intermediating in military products, or in dual-use products where there is a notification from the issuing authority, knowledge or a reasonable assumption of such use.
Is transit possible without a permit?
No — the transit of military products and of dual-use products marked with one or two asterisks is carried out on the basis of a transit permit.
Who is the permit applicant?
The direct implementer of the permittable activity; for transit, possibly also the carrier; in specified cases a Commission recommendation must be obtained first.
Are there any exemptions?
Yes, cases defined by a normative act exist, but they do not abolish the obligation to obtain the Commission's recommendation.
How We Help on Legal.ge
The lawyers of Legal.ge will help you analyse the control lists, assess the end use of your products, prepare permit applications and supporting documentation, navigate the Commission recommendation procedure and manage sanctions risks in trade contracts. Contact us for a consultation — we will plan a safe and lawful route for your business.