Issue #836 Business

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Issue no: 836/23

• APRIL 19 - 21, 2016

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Perennial Crop Areas Increase by 24 thousand ha in Two Years PAGE 2

XXI Century Arrives to Kakheti, with soplidan.ge

FOCUS

The Google Business Group in Georgia to improve digital business- and women's involvement in it!

ON GBG Waste Management to Cost Georgia EUR 130 Million GeoLab lecturer and web developer, Ani Asatiani, who delivered a special lecture within the framework of the GBG Tbilisi 2016 'Women Tech'

BY ANA AKHALAIA

A

ccording to Georgia’s National Waste Management Strategy, measures to be taken from 2016-2030 will cost approximately EUR 130 million (USD 13 million), paid for by donors and the European Union.

According to the strategy, 900,000 tons of municipal waste is generated every year in Georgia, which amounts to 200 kg waste per person in an average year.

Though the average EU citizen produces 475 kg of waste per year, Europeans recycle 44 per cent of their waste product.

Georgia currently only has four landfills in the country that meet international standards. Of the 60 total landfills in the country, 13 have been closed and 28 were renewed and put back into service.

Continued on page 2

PAGE 7-9

ISET PAGE 4

User Experience Expert Helps Georgians in Web and Mobile Application Developments PAGE 7

Government Promotes Georgia’s Filming Potential in India PAGE 11

Ambitions High at Tourism Festival PAGE 13 Prepared for Georgia Today Business by

Markets As of 15ͲAprͲ2016

STOCKS Bank of Georgia (BGEO LN) GHG (GHG LN) TBC Bank (TBCB LI)

COMMODITIES Crude Oil, Brent (US$/bbl) Gold Spot (US$/OZ)

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GT Index (USD)

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2

BUSINESS

GEORGIA TODAY

APRIL 19 - 21, 2016

Perennial Crop Areas Increase by 24 thousand ha in Two Years

BY ANA AKHALAIA

P

erennial crop areas, including fruit trees, citrus, grapes, tea, hazelnuts, now cover an estimated 226,143 hectares, according to the data of 2015, which is 24,000 ha more compared to the previous year.

According to Georgia’s Ministry of Agriculture, the increasing trend of perennial crop areas was significantly influenced by the Ministry of Agriculture's initiative ‘Plant the Future’.

The main goal of the project, which is carried out by the Agricultural Projects Management Agency, is to decrease the volume of import and increase

the use of arable land, enabling farmers and businessmen to create higher quality products.

The farmers who decide to create perennial plant orchards and nursery gardens receive both financial and technical support from the government.

Plant the Future’s two independent components, perennial gardens and nursery gardens, will be cofinanced. Potential beneficiaries may take advantage of both components of the program, according to the established rules and conditions.

The amount of state co-financing within the program ‘Plant the Future’ is: if setting up a garden, 70% of the value of seedlings, 50% towards a drip irrigation system and 50% for the nursery itself.

The Plant the Future project already has 213 beneficiaries.

EU May Add New Conditions to Visa-Free Travel for Turkey, Georgia and Ukraine, Die Walt Reports

BY TAMAR SVANIDZE

T

he European Union (EU) is considering adding a so-called suspension revision to the visa-liberalization agreement with Georgia, Ukraine and Turkey, German national daily newspaper Die Walt reports.

Based on information provided by an unnamed diplomat in the Euro Commission, Die Welt reports that the special paragraph implies suspension of visa-free travel with Turkey if Ankara cannot fulfil commitments over refugees.

As unspecified source said similar conditions might be put in place for Georgia, Ukraine and Kosovo.

According to Die Walt, the final decision has yet to be made but the topic will be discussed in Luxembourg within the frames of the meet-

ing of EU interior ministers on Thursday.

“Georgia’s Foreign Minister has not received any official or unofficial information that the EU may add new conditions to the visa-liberalization agreement with Georgia,” Georgia’s Foreign Ministry informed Inter Press News service.

Gigi Gigiadze, Georgia’s Deputy Foreign Minister, emphasized that Georgia has fulfilled all visa-liberalization requirements and expects the achievements to be recognized.

‘We have not received any official information and cannot imagine how the European Union can introduce any new conditions concerning visa liberalization,” Gigiadze said.

Georgia expects its visa-free regime with the EU to come into force by June. The European Commission has already proposed that the Council of the European Union and the European Parliament lift visa requirements for Georgian citizens within six months.

Waste Management to Cost Georgia EUR 130 Million

Continued from page 1 Nearly all of the rural settlements have one or more natural landfills that are often located dangerously close to the local population or near fresh water resources.

The new waste management code came into force in 2015, but for its full operation, it is necessary to adopt EU standard regulations on the disposal practices of the mining industry.

According to the strategy, two different systems for fully recovering waste management costs from the population and the private sec-

tor in the municipalities will be developed by 2020 and will be gradually implemented in 2025-2030.

A so-called “Polluter Pays” mechanism will be adopted and force the party responsible for the waste to cover the collection, transportation and processing costs.

By 2025, a paper, glass, metal and plastic waste separation system will be developed, with 8 -90 per cent of all waste recycled by 2030.

An extended producer responsibility bill will come into force in 2019, thus requiring a manufacturer to collect and process its own waste.

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

3

Developed in Georgia: Jumpstart Makes Sharing Your Data Easy Eric Barrett, Executive Director at Jumpstart Georgia

BY TATIA MEGENEISHVILI

A

n information session and a demonstration of Xtraktr was held on April 13th at the IREX Multimedia Education Center.

According to the creators, Xtraktr is a tool developed in Georgia which makes survey data accessible, explorable, sharable, and usable, as data is meant to be in the 21st century.

According to the Executive Director at Jumpstart Georgia, Eric Barrett, Xtraktr makes it easy to share and visualize survey data in any language- and it is free.

“Xtraktr allows anyone to easily upload

data files and to explore the data using visualizations that are shareable and embeddable. Extract your data into bar charts, pie charts, time-seried line graphs, maps and then share them easily using social media, export them into Raster and Vector formats for further design, or embed them into other online web pages using the built-in embed feature,” Barret said.

Xtraktr makes sharing your data easy.

“Xtraktr exposes your data so people can find it, explore it, use it, and ensure it has value long after your project has ended. Is your data in a language that makes it truly accessible to your audiences? If not, use Xtraktr to translate it into as many languages you need. It provides a useful framework, supported by

an easy-to-use administration panel, to translate the questions, answers, and content of your dataset so anyone can use it,” Barret told the audience.

And, once translated, it can be downloaded into that language.

“We've tried to make the administration panel as easy to use as possible so far, though a lot of work remains to be done. Editing a dataset, questions, and answers is straightforward. You can edit one thing at a time, or make mass edits via exportable templates, as with the languages. Adding weights and making variables mappable is straight forward.

Finally, for programmers, every dataset and its analysis results are accessible as raw, structured data via the application programming interface (API). This is most useful for panel data, as programmers can write programs or create their own interactive visualizations that update automatically when a new dataset is added to the WMS, for example,” he said.

According to Jason Addie, Operations Director at Jumpstart Georgia, at JumpStart Georgia, a lot of time is spent on searching for and analyzing data in order to create infographics, interactives, stories, and helpful tools.

“Luckily, a solution presented itself when UNICEF Georgia approached JumpStart with the desire to put their survey data online in a way that allowed anyone to easily analyze, visualize, share, and embed their survey data. We saw this as an opportunity to not only build a tool for UNICEF Georgia, but to build

one that anyone with survey data could use,” Addie said.

According to Addie, the solution was Xtraktr, a FREE online tool that allows anyone with survey data to upload their data, easily analyze, and visualize the results.

“We used the Xtraktr framework to generate UNICEF Georgia's data portal

site, which currently has 13 surveys and over 3,300 questions that can be analyzed by anyone with an internet connection,” he added.

Xtraktr is open-source software that anyone can use for free. However, one can also use, free of charge, JumpStart's existing online version at xtraktr.jumpstart.ge.

Xtraktr makes sharing your data easy

4

BUSINESS

GEORGIA TODAY

APRIL 19 - 21, 2016

THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS

www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

XXI Century Arrives to Kakheti, with soplidan.ge

BY IA KATSIA

H

ave you ever had a problem buying healthy products or been lazy to go shopping in an open air bazar?

Wouldn’t it be wonderful to be able to order natural and fresh food that gets delivered straight to your door that is not of the fast-food, take-away variety? There might just be reason for optimism with the story of soplidan. ge (“from the village”).

This is a story of a small-business with an innovative idea. Soplidan is the first Georgian internet portal to offer online shopping for agricultural products. Consumers can choose goods they want to buy and it will take one day to reach the buyer. It offers a great way to get fresh, healthy, organic fruit and vegetables delivered straight to your door. Indeed, “Soplidan” was named as the best startup of 2015.

Two young ladies are behind this beautiful business idea. Nino Mgebrishvili and Natia Ninikelashvili from the Kakheti region have been friends for 10 years. As young mothers, both Nino and Natia faced the common challenge of shopping for healthy food products for their children. To find natural and healthy products they often had to travel to different villages or bazars—a time consuming exercise. They soon realized that not everyone has the opportunity to travel for a couple of hours and buy products from villages. They thought that if people can shop and buy clothes online, then why

not to do the same for agricultural products? Thus their business idea was born.

Nino and Natia started with market and price research. They had contacts in various Kakhetian villages and could easily buy local products from different small and family farmers. They then registered soplidan.ge, created a very beautiful website for online shopping, and organized a delivery system that would bring orders directly to customers.

Understanding how important the appearance of their products is to consumers, Nino and Natia ensure that everything is washed, packed and branded properly. This gives them a distinct advantage over the option of bazar shopping, where there

is a very little assurance as to the quality and origin of most food items. Despite this, the prices offered on soplidan.ge are not very different from those found in the bazars. This is because Nino and Natia are buying directly from the small farmers and not from intermediaries.

THIS IS NOT A GEORGIAN INVENTION! Not surprisingly, online shopping for agro products has a relatively long history in Europe. In Germany, Veggie/Organic Boxes have been offered since the early 1990s by various regional suppliers. Nowadays this is a very popular business that supplies not only households, but kindergartens, schools, businesses and restaurants with organically-grown products.

There are more than 110 such suppliers in Germany, with most of the products coming from regional farms. This is a popular business in India as well.

1.4 million farmers in India are selling their produce online – without worrying about middlemen.

In the US, in addition to the usual Veggie Boxes, there is a system called Community Supported Agriculture (CSA). This is a concept designed to encourage direct relationships between consumers and growers and for consumers to become more knowledgeable about the way their food is grown.

Unlike many Veggie Box models, CSA involves consumers who support a farmer financially by paying for a share of the farm's production prior to each growing season. This arrangement allows farmers to buy the seeds, plants, and other inputs they need for the growing season, and pay their farm labor without waiting for the harvest to generate revenue.

WIN-WIN FOR FARMERS AND CONSUMERS A central issue in food marketing is the so-called “value chain”, a multitude of parties standing between the farmer and the final consumer. A value chain may consist of many “value-adding” parties performing such functions as collection, lab testing, (cold) storage, transportation, packaging, processing, wholesale and retail sales. In most cases, farmers, who only sell raw materials, stand at the lowest stage of the chain, and consequently have the lowest share of value added among all other actors.

The majority of Georgian farmers are smallhold-

ers who have a hard time bringing their products to the lucrative Tbilisi market. In many cases these farmers have no choice but sell their products in local bazars. The cost of transporting small quantities of agricultural products to Tbilisi may be prohibitively high. Moreover, the option of selling to Tbilisi-based wholesale traders is not all that great either.

Online shopping offers Georgian farmers the opportunity of capturing a higher share of the value by cutting out most middlemen and selling directly to the final consumers. The internet can be the key to marketing produce instantly, and directly connecting consumers with farmers. When farmers hear the online shopping or “web marketing,” they usually think of large businesses and fancy websites. However, many of Europe’s online selling system are run by small farmers or group of farmers without the help of any intermediaries.

If expanded, the opportunity to directly market agricultural products to households, kindergartens, restaurants or supermarkets should incentivize many Georgian farmers to engage in commercial operations (and become real farmers in the process). For many of them becoming real farmers would indeed by a long process of learning how to improve both product and service quality, how to communicate properly, as well as getting used to the idea of delivering on time. The option of online marketing may also encourage farmers to create formal or informal cooperatives in order to cobrand their products, invest in critical pieces of equipment, and reduce post-harvest losses and transportation costs.

There are lots of people in Tbilisi who don’t always have the time to make a weekly trip to a mall or an open air market to pick up fresh items for their kitchen. The advent of online agro shopping will save them the hassle of shopping, while providing access to healthy locally-produced goods.

By connecting consumers with their food sources and vice versa, Nino and Natia from soplidan.ge, and other Georgian pioneers of online agro shopping, make all parties win: farmers, rural communities, urban consumers, and the Georgian nation as a whole. Better life starts with better, healthy food from the village.

Bon Appétit!

Table 1

Source: APRC (Tbilisi supermarket price data); Ministry of Agriculture (agricultural retail market price data); and soplidan.ge

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

Technical Regulations on Hazelnut Approved

BY ANA AKHALAIA

T

echnical regulations on hazelnut products initiated by the Ministry of Agriculture and approved by Georgian Government are set to regulate hazelnut export, import, quality and labelling related issues.

“Hazelnut production has become a strategic direction in the agricultural sector. We have developed technical regulations on hazelnut products and a national program to promote the development of the hazelnut industry in Georgia,” said Otar Danelia, Minister of Agriculture of Georgia. “Moreover, hazelnut regulations are in absolute compliance with internationally accepted marketing standards.”

Sales revenue of Georgian hazelnut products reached USD 184 million in EU countries in 2014-2015, almost 30% of the total agricultural export sales figure.

According to the new regulations, hazelnut products will be under strict quality control, which includes not only laboratory tests, but also storage, pack-

Demand for Georgian Wine on the Up and Up in China

BY ANA AKHALAIA

aging, and transportation control rules.

The Georgian National Food Agency will undertake the inspection and quality control of hazelnut products itself.

“One of the most important aspects of these regulations is to avoid falsification of products, which has been reported on several occasions,” said Alexandre Motserelia, Executive Director of Hazelnut Producers and Exporters Association of Georgia. “At the same time, each step of production is determined; start-

ing from the field, taking hazelnuts to the processing plants, transportation and export.”

The regulations are expected to promote the hazelnut industry in Georgia, contribute to the sale of high quality hazelnut products in the international markets and protect the image of Georgian agro production as meeting the requirements of the most demanding applications and complying with the highest standards.

5

A

ccording to the National Wine Agency, a further Georgian Wine Center will be opened in Nanchang city of China’s Jiangxi Province.

The construction of the Center on 1600 sq.m. has already been completed and includes a wine-tasting room, exhibition hall, museum, cellar, restaurant and offices of Georgian companies.

The head of the Georgian National Wine Agency (GNWA), Giorgi Samanishvili, says that it is especially important to open Georgian wine centers in China's major provinces, such as Jiangxi, where the population exceeds 40 million.

The GNWA and Nanchang’s Georgian Wine Center have already signed a

Memorandum of Cooperation which envisages coordinated activities, joint educational programs and other events in order to increase the popularity of Georgian wine.

Head of Nanchang’s Georgian Wine Center, Jimin Liu, says that in recent years the demand for Georgian wine has significantly increased in China.

Georgian wine centers have already been opened in different Chinese provinces and it is planned to open more.

In 2015, 2,672.154 bottles of wine (0.75 L) were exported to China, putting it at 4th place in the list of top five Georgian wine-exporting countries after Russia, Kazakhstan and Ukraine. The tendency of growth is being maintained in 2016.

In the first quarter, China exported 372,000 bottles of wine, which is 2% higher compared to the same period last year.

6

BUSINESS

GEORGIA TODAY

APRIL 19 - 21, 2016

Georgian Wineries Take Part in Tokyo Exhibition

BY ANA AKHALAIA

E

ight Georgian wineries are currently being showcased at the “2016 Wine and Gourmet Japan” exhibition in Tokyo.

Giorgi Tevzadze, the chairman of the National Wine Agency, hosted a Georgian wine tasting and seminar.

This is the fifth time in the last two years that Georgian wines have taken center stage at Japan’s most prestigious viticulture exhibition.

“Presenting Georgian wine at Wine and Gourmet Exhibition is the best way to promote and bring products to the Japanese market and to find local distributors,” the National Wine Agency said in a prepared statement. “Last year, Wine and Gourmet Japan had more than 75,000 visitors. It is one of the most promising exhibitions in (East) Asia and the participation of Georgian wines is a

main priority. This year the exhibition will bring together leading wine experts, importers and buyers from Asia.”

Georgia’s Ambassador to Japan, Levan Tsintsadze, and representatives of National Wine Agency attended Wednesday’s opening of the event.

This year’s Wine and Gourmet Japan exhibition ran from April 13-16.

Last year, Wine and Gourmet Japan had more than 75,000 visitors

Georgia to Join Four Party Unified Electricity Market

BY ANA AKHALAIA

G

eorgia, Iran, Armenia and Russia have agreed to create a joint electricity market by 2019, according to reports from various Armenian news agencies.

The decision was made at a Thursday meeting in Yerevan , said Georgia’s Deputy Minister of Energy Ilia Eloshvili, who attended the meeting with his counterparts from the pact’s three other countries.

According to preliminary reports, the parties signed a road map agreement that outlines all the necessary legal

agreements and terms for the NorthSouth energy corridor in 2019.

Armenia’s Deputy Energy Minister, Areg Galustyan, said the joint electricity market could increase the electricity transmission capacity. It hopes to construct a 400 kW transmission line between Iran and Armenia, as well as an analogue between Armenia and Georgia, and a 500 kW transmission line between Georgia and Russia.

“The Georgian side will build 500 kW transmission line in Marneuli, where the substation capacity will be increased from 220 to 500. There are also plans to build a 500 kW line from the Ksani substation to Kazbegi. In the end, after the end of negotiations the Russian side will construct a line from Mozdok

for its network,” Galustyan said.

Galustyan also noted that the realization of these projects would make it possible to launch a 1000 MW energy corridor and joint electricity market.

Consumers will later be able to choose who to buy electricity from and help to stimulate competition in the national electricity producing companies.

“The market should be opened up for large-scale users who use high-voltage networks during the first stage of the project. If it is implemented successfully, we will be able to talk about the liberalization of networks for small and medium power users. Right now it is too early to talk such things before we create a regional market,” said Galustyan.

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

7

User Experience Expert Helps Georgia’s Georgians in Web and Mobile Schuchmann Application Developments Winery to Open Spa

often understand little about the developer side of things. Google Business Group (GBG) tries to get them together and encourages them to work together.

At the end of the two-day initial event, they were successfully project marketing. GBG then tries to collect information from all three parties to use for the common good.

WHAT POTENTIAL DO YOU SEE IN GEORGIA WITH REGARDS TO GLOBAL TRENDS AND DEVELOPMENT?

BY MERI TALIASHVILI

BY ANA AKHALAIA

G

eorgia’s Schuchmann Winery will open a new spa at its flagship vineyard-hotel complex near Telavi in eastern Georgia.

The winery’s USD 100,000 spa will offer wine-based massages as well as sauna and pool facilities with prices topping out at 100 GEL, Company Director Roland Burdiladze said.

Schuchmann expects its wine tourism business to increase this year once the season begins in May, with reservations

already up 10 per cent compared to 2015.

“60 per cent of our guests are foreigners, with Europeans still making up the bulk of our visitors,” stated Burdiladze.

German-born Burkhard Schuchmann originally opened the winery in 2008.

The company owns vineyards in eastern Georgia’s Kakheti region and produces a variety of indigenous Georgian wines that are exported mainly to Europe and East Asia.

Since investing more than USD 8 million into the development of its wine tourism with the construction of a showcase chateau complex, Schuchmann has become one of Georgia’s leading wineries.

I

n the framework of the Google Business Group visit to Georgia, GEORGIA TODAY spoke with R. Caner Yildirim, User Experience Expert from Istanbul, Turkey, about Georgia’s potential in global mobile and web application development.

TELL US ABOUT THE GOOGLE BUSINESS GROUP AND ITS AIMS IN COMING TO GEORGIA The Google Developer Program is open for everyone. Google collect experts from around the world who are good in their own fields in different categories:

Web, technology, Android, marketing, user experience and so on. User experience is very important for Start Ups as, if you don’t understand your users, you’re going to fail. There are numerous applications on the market and you have to be among the best of the best; you have to be different and also to meet modern standards.

WHAT WAS YOUR ROLE IN THE LATEST EVENT? I’m here to deliver information about User Experience to Georgian Start Ups. The event aims to bring businessmen to developers and designers- developers and designers who tend to work alone, unsupported and uninvolved in the business side of things and businessmen who

Georgia is a small market to produce new products in but it has potential. If you want to test your product in a small market before going to the international market, then Georgia is an ideal place. But if you want to make money with your product, then no, due to its population. We will teach Georgian Start Ups the key points to improving their quality and how to be more competitive. Nine Start Ups have already come to me asking me to review their web and mobile applications and advise them what their products need in order to improve. One of them is an education program, another deals with how to sell traditional items in hotels and another is a cool virtual reality company whose existence here surprised me- it being the latest trend in the world.

DO YOU HAVE HIGH EXPECTATIONS? Some of the Start Ups really have huge potential to head out to the global market and we are very happy to be helping them in this endeavor. We’ll be working together over the next month and later we’ll see the results.

8

BUSINESS

GEORGIA TODAY

APRIL 19 - 21, 2016

Why We Should All Ditch Traditional Advertising

Google Business Group Helping Georgia with Web Potential

BY MERI TALIASHVILI

G

oogle Business Group (GBG) came to Georgia for the first time to hold an innovative two-day meeting at the Geo Lab in the Georgian American University.

Google Business Group, a non-profit community, is visiting Georgia to help advise local businessmen and developers to work together to improve the country’s web and mobile application offerings. GBG presents the opportunity for small and medium-sized companies to accomplish success with the help of modern technologies and with the advice of the employees it brings from around the globe who consult local companies as to what modern standards and basic requirements are necessary for the web and mobile applications that Google is naturally drawn to.

GBG experts first looked into the Georgian system before consulting Georgians

what to refine. They then intend to present those Georgian Start Ups they consider as relevant to the market in Istanbul this summer where they will be meeting foreign investors for fundraising.

Google’s development experts are so influential that they can give Google HQ a list of consulted companies to highlight on the featured list, meaning that a particular application will be at the top position of the Google Play List, for which companies usually have to spend a lot of money. In the United States you need 95,000 installations to be put in this position, but in Europe less is required– 45,000.

The Google representative says: “If you want to succeed, you have to get a huge amount of users. Google helps post and share absolutely everything concerning web and mobile application and at the same time we can use mechanisms such as Google Analytics, Google AdSense etc. that will ultimately be a guarantee of success.”

Sadly, Georgia has yet to create a saleable application. Vakho Vakhtangishvili,

Read. Learn. Enjoy.

Pick up a copy of Georgia Today Education at any BIBLUS shop or phone 229 59 19

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GeoLab representative, attributes this to the low involvement of Georgians in the process.

“It is very sad that on the Google Play List there is no Georgian product. This is a result of lack of activity in the Georgian community. Strengthening Georgia’s involvement will help us to get Google to notice us. We have to show Google that the vast majority of Georgians are actually interested. We have also failed to persuade Google to take on the Georgian font for Google catalogues but we’re still negotiating with them in this regard,” Vakhtangishvili told GEORGIA TODAY. GBG is an open community, not an organization; it is a group of people connected by the same interests who share their ideas and experience and help each other to succeed. The ideal place for such meeting and sharing in Georgia is Geo Lab. Further, Google has set up the ‘Google Auditorium’ in Tbilisi, offering a permanent space for Google representatives to come to Georgia and deliver workshops.

BY BEQA KIRTAVA

I

n a world where everything is going digital, advertising serves as the pacesetter. The basics of PR has moved from TV channels and radio networks to Google, Instagram and Facebook. Why has digital advertising been so successful? What makes a great online ad? How often should we advertise via social media?

These and numerous other questions were answered by GeoLab’s Information Manager, Lika Moshiashvili, during her lecture within the framework of GBG Tbilisi 2016.

“The main advantage of online advertising is the two-way communication with your customers, which is practically non-existent when it comes to television, radio and other media platforms. While one may get a live phone call feedback during transmission, the quantity will be much lower compared to the amount of comments and likes a social media post could get. Thus the advertiser knows who saw their advertisement and how they reacted,” explained Moshiashvili.

This argument is convincing enough to understand why huge corporations like Dell and AT&T annually spend over a billion dollars on online campaigns.

However, content needs to be up to par in order to create stability. “You can’t only rely on advertising. Ideally, your total organic reach should bring about as many viewers as your ads,” she added.

Moshiashvili also placed special emphasis on the importance of choosing an audience and explained how social media targeting has benefited many companies by delivering their message to a compatible listener. “The text should always be grammatically correct, short and easy to understand. You should always focus on what sets your product apart from the competition and whatever you do, always adjust it to local culture,” she concluded.

Visitors at GBG Tbilisi 2016 had the opportunity to find out even more about digital marketing, Google AdWords and project planning within the Tech Talk part of the event. While it ended on April 17, you still have the chance to further your knowledge in that direction by signing up to one of GeoLab’s courses, which include programming, 3D design, graphic design and much more.

Geo LAB is an innovation Laboratory for smart minds. It is open 24/7 for the development of different, interesting, useful and at the same time innovative ideas. Geo LAB is equipped with the latest technology and boasts the qualified help of the Geo LAB team.

The Information Technology Institute (an educational center) is a part of Geo LAB. Anyone who is interested in learning of programing a new product, or in creating a web or mobile application design can apply for three-month program at ITI. Geo LAB has been functioning since May 6, 2015 and has already hosted 23 events and presentations.

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

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Women Tech at GBG 2016 Exclusive with Ani Asatiani

BY BEQA KIRTAVA

G

BG Tbilisi 2016 was divided into several sections; one of which was “Women Tech” – a series of lectures delivered by successful female programmers who have shattered many stereotypes and are now paving the road for future generations.

GEORGIA TODAY obtained an exclusive interview with GeoLab’s lecturer, web developer Ani Asatiani, who delivered a special lecture within the framework of Women Tech and also served as the division’s organizer.

WHAT IS THE MAIN GOAL OF WOMEN TECH? Women Tech aims to clear up the stereotype that men code better, and to encourage motivated students to pursue a career in computer sciences. You don’t have to get a major in programming to become a web developer; the message

that we send to the youth of today is that it’s never too late to change directions and do what you’re truly interested in. I am a vivid example of this, I studied foreign languages and accidentally ended up in tech, but was so blown away by it that I decided to stay.

WHAT ADVICE WOULD YOU GIVE THOSE WHO ARE INTERESTED IN PURSUING A CAREER IN COMPUTER SCIENCES? Hard work and dedication is necessary. Web developing is not exactly one of those professions which you can combine with another job. However, if you’re truly enthusiastic about it, then you have a chance to learn independently.

I think it would be a smart decision to start by learning about the history

Women Tech aims to clear up the stereotype that men code better

10 Galaktion Street

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge

of the worldwide web. After that, there are numerous webpages where you can get hold of the basics, video tutorials are a great help as well. Don’t forget about theory either – knowing the exact terminology is important when it comes to problem-solving, as you’ll have the ability to quickly find solutions with the right keywords. And last but not least, there’s Codecademy.com where you’ll manage to gradually learn and create a website as the final step.

Overall, contrary to the popular belief, learning programming is not an extremely lengthy process. For example, here in GeoLab, students have the opportunity to learn all the basics in about three months and while you won’t become a true professional is such a short amount of time, you’ll get the knowledge you need to build upon.

The biggest pro of web programming is that the result is always quick and

clear, when you write a code you have the chance to instantly see the outcome and assess it, which positively affects one’s motivation.

HOW WOULD YOU EVALUATE THE GENERAL STATE OF COMPUTER SCIENCES IN GEORGIA? I believe that right now Georgia is taking a gigantic step forward. The interest in this field is on the rise and there are many more possibilities today than ever before. I have a positive outlook on the local web world and I think that in about 5 years, our websites will be just as good as any foreign ones.

Although there may not be a windfall of supreme Georgian websites, several local webpages have earned international accolades and are featured on many “best websites” lists, so the expectations are high.

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BUSINESS

GEORGIA TODAY

APRIL 19 - 21, 2016

Surviving the Crisis: Khvedelidze on the Georgian Ferro-Alloy Sector

BY IRINE KHIZANISHVILI

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n recent months the Ferro-alloys Producers and Manganese Miners Association has been talking about the crisis in the field, precisely about the decrease of silico manganese prices on the global market and high costs of production in Georgia. We spoke to Sulkhan Khvedelidze, Head of Ferro-alloys Producers and Manganese Miners Association, to find out more.

WHAT IS THE CURRENT SITUATION? The heavy industry sector is still in crisismode. Although some progress can be observed in terms of price increase for the silico-manganese products globally, the situation is still quite difficult. We’ve been negotiating with the Government of Georgia for four months already and have created a mutual project within which we’ve presented detailed information about production and costs. The Government has been working on it but the process has been dragging out. We’re waiting for a specific answer from them every week.

THIS IS NOT THE FIRST TIME THAT THE HEAVY INDUSTRY HAS EXPERIENCED SUCH A CRISIS. GENERALLY, IS THE PRODUCTION AND SALES OF SICILO MANGANESE PRODUCTS CHARACTERIZED WITH FREQUENT PRICE FLUCTUATIONS?

The price decrease begins the moment there is excess in the supply of Ferro-alloy products on the global market. Although we’ve experienced a few similar periods in the past, the industry did survive them.

Today, we continue working and hoping that the situation will be resolved, especially considering that Georgia has great potential. Three more factories have been built which can start production if the prices stabilize, meaning more people will be employed and the share of export will increase.

DOES THE ASSOCIATION ASK FOR SUPPORT DURING EACH PERIOD OF CRISIS OR SHOULD THE GOVERNMENT ALLOCATE LONG-TERM PREFERENTIAL BENEFITS? The Association does not ask for permanent support. The current crisis began a long time ago and we decided to ask the government for support only after every company had already used up all of its resources. We are large exporters and I believe that the government should also be interested in the correct functioning of our business, and in the development of the field overall.

challenges together and ensuring the development of the field. A few days ago Kutaisi City Court imposed a 200 million GEL fine on Georgian Manganese. In my opinion, this is a completely unfair and biased decision. I attended the court hearings and listened to the arguments of both parties and I can unequivocally state that the judge was biased.

Georgian Manganese presented audit reports made by audit companies recognized globally, such as Ernst and Young, PriceWaterHouseCoopers and BDO. The issues in dispute are relevant to all companies working in this field and the position of the Revenue Service is incorrect and even illegal.

THE ASSOCIATION IS AWARE OF THE ONGOING COURT DISPUTE BETWEEN GEORGIAN MANGANESE AND THE REVENUE SERVICE. WHAT IS YOUR POSITION REGARDING THE CASE?

ONE OF THE ISSUES BEING DISPUTED CONCERNS RECOGNIZING THE WASTE LEFT FROM THE PRODUCED PRODUCTS AS MATERIAL ASSET. COULD YOU EXPLAIN THIS PART OF THE DISPUTE IN MORE DETAIL?

About seven months ago, the Association was created with the aim of resisting the

Georgian Manganese was fined not because it was hiding revenues or paying

taxes incorrectly, but because the Revenue Service believes that Georgian Manganese should have recognized the waste left from production as income. To clarify, the waste for the utilization of which the company takes on additional costs was labeled by the Revenue Service as material asset and was equalized with its value in raw materials and given the existing market value. According to the law in force globally, if a company registers such substances as material asset, which in reality do not have any value, it is considered as an attempt to artificially increase assets. This is a crime.

YOU MENTIONED THE AUDIT REPORTS MADE

BY INTERNATIONAL ORGANIZATIONS FOR GEORGIAN MANGANESE WHICH WERE NOT TAKEN INTO CONSIDERATION BY THE COURT. WHAT DID THESE REPORTS SUGGEST? As paradoxical as it may sound, there is an audit report by BDO which suggests that there is a 20 million GEL error in the calculation made by the Revenue Service.

It was submitted to the court; however, the judge did not take this report into consideration either.

WHAT IS THE NEXT STAGE? WILL GEORGIAN MANGANESE BE ABLE TO PAY THIS AMOUNT? As the Head of the Association, I would like to emphasize that such precedents should not be allowed in this field. I’m very well aware of the work that each of

the companies do and I know that the problem that Georgian Manganese is facing might become a problem for any of the other similar companies. If such cases emerge, the companies operating in the field will have to stop working.

Georgian Manganese will appeal this decision in the Court of Appeal and I hope that, unlike City Court, the Court of Appeal will study the case thoroughly and make the decision in favor of Georgian Manganese.

WHAT IS THE CURRENT SITUATION FOR OTHER MEMBERS OF THE ASSOCIATION? Several enterprises have stopped operating; others continue to work, though not at maximum capacity. We hope that the government will take specific actions and we are also waiting for prices to stabilize on the global market.

THE ASSOCIATION WORKS CLOSELY WITH THE GOVERNMENT, NONGOVERNMENTAL SECTOR, AND SPECIALISTS IN THE FIELD. DO YOU ALSO COOPERATE WITH INTERNATIONAL ORGANIZATIONS? Our Association has been working with the European Ferro-alloys Producers and Manganese Miners Association for a couple of months now. We have business correspondence with them and are planning to hold a meeting with them in the near future in order to talk about future perspectives.

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

Ketevan Bochorishvili, Deputy Minister of Economy and Sustainable Development of Georgia, met representatives from 25 Indian film producing companies that each make about five films per year

Government Promotes Georgia’s Filming Potential in India

BY EKA KARSAULIDZE

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eorgia’s Deputy Economy Minister Ketevan Bochorishvili visited India to present the ‘Film in Georgia’ project to leading local directors, producers and film-produced companies.

The meetings were held to attract the big international player to Georgia’s film industry and to offer them favorable privileges and conditions.

During her visit, Minister Bochorishvili met representatives from 25 Indian film producing companies that each make about five films per year with a combined budget of more than 100 million USD. According to statistics, Bollywood produces about 500 films a year, while in the whole country various companies overall release about 3000 works.

Indians already considers Georgia a main potential partner for its ‘Film in Georgia’ initiative. At the end of 2015, Georgian authorities hosted Bollywood producer and director Abbas Mastan, who planned to start filming in the Kakheti, Adjara, Svaneti and Samtskhe-Javakheti regions.

After learning about the program, another renowned Bollywood filmmaker RajKumar Hirani is said to be “seriously considering” Georgia as the location of his new venture. He said he will visit the country soon to learn about the feasibility and potential Georgia offers as a filming location.

In addition, after meetings with Georgia’s Deputy Minister of Economy, Indian filmmakers said they were glad Georgia had launched the ‘Film in Georgia’ program and they would gladly work in Georgia in the future.

The Government launched the ‘Film in Georgia’ initiative, to develop the local film industry and get Georgia on the map as an international filming location, in July 2015. The initiative is part of the state program ‘Produce in Georgia’ which supports entrepreneurship and works to increase the country’s export potential. The program scheme offers international producers a cash rebate of 20-25 percent of expenses incurred in Georgia.

As well as enjoying financial benefits, the Government of Georgia aims to create a favorable working environment for producers by removing any bureaucratic obstacles that may occur during the production process.

Ketevan Bochorishvili, Deputy Minister of Economy and Sustainable Development of Georgia, and David Pipinashvili, Ambassador of Georgia to India, with Indian producers and directors

UK Company Geopower to Build Dzegvi HPP in Georgia

BY ANA AKHALAIA

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UK investment company Geopower is to invest USD 24 million to build a new Hydro Power Plant (HPP) on the Mtkvari River in Dzegvi village, Georgia’s Mtskheta-Mtianeti region.

The Government of Georgia approved the draft Memorandum of Understanding (MoU) that will be signed between the Georgia’s Energy Ministry and Geopower, a company which finances and operates energy projects around the world.

After signing the MoU, Geopower will have the right to start technical and economic feasibility studies within 12 months. The company should

prepare a report about the HPP’s impact on the environment, conduct public discussions and present the results to the Government. If approved, the contract to build the Dzegvi HPP will be signed.

Geopower must obtain a construction permit within three months of signing the contract, and build the power plant and make it operational 30 months after receiving the construction permit.

Total installed capacity of the Dzegvi HPP is expected to be 15.7 MW, according to Georgia’s Ministry of Energy.

For the first 15 years of operation, electricity generated at the HPP between September and April will be supplied only to Georgia. However, Geopower will be allowed to export the electricity generated in other months.

Contact: www.edelbrand.ge Phone: 599 461908

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BUSINESS

GEORGIA TODAY

APRIL 19 - 21, 2016

Caspian-Persian Gulf Channel Project under Consideration by Russia and Caspian States

BY DIMITRI DOLABERIDZE

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y the end of 2016, Iran intends to begin construction of a navigable water channel of approximately 600 km in length that will link the Caspian Sea to the Persian Gulf and Arabian Sea. As a result, it will become possible to travel between the Arctic seas and the Baltic region through a Russian water transport system to the Persian Gulf and the Indian Ocean. Russia and many Eastern European countries for the first time will be able to choose an alternative route to the traditional Bosporus - Dardanelles - Suez Canal - Red Sea. Russia needs this project for peace, for income and even for war, if it happens.

This project needs to be done urgently, before war blocks the Suez. And its instigators should also consider inviting investors from NATO countries to take a share in its development and protection, for if Russia specifies its own protective status over the trans-Iranian Channel, it will have the right to act as the United States can in Panama.

The history of the project ‘Caspian Sea - Persian Gulf’ dates back to 1889-1892

but it wasn’t until the beginning of the XXI century that an agreement was signed on the establishment of a transport corridor "North-South", which will link Russia to India through Iran. Yet this project has so far remained on paper despite the fact it is rightly considered to be a strategically important project, passing as it does through international waters. It could even mean the potential restriction of US military ships in the Persian Gulf- this Channel having strategic importance for Russian-Iranian relations in the current geopolitical reality.

The position of the Russian side is to ensure that the new Channel, the whole of which passes through the territory of Iran, is able to provide the shortest access to the Indian Ocean basin from the North Atlantic, the Baltic, Black and Azov seas, the Danube and the Volga-Caspian basin.

The route is needed not only as a transportation corridor, but also to provide desalinated water to the central drylands of Iran.

According to experts, the fact that the Channel will connect the south-western regions of the Caspian Sea, Abadan and Horremshahr (on the border with Iraq) and the Persian Gulf seems most financially agreeable. However, the concept of a transfer of water from the Caspian

Another important point is the logistics. In order for this Channel to actually be navigable, it needs great depth, and width, for the free movement of ships.

As such it will be no mean feat, what with the vast difference in heights between the Caspian Sea and the Persian Gulf regions.

For Iran, this project is vitally important. They call it the “Iranian River,” a transport corridor crossing the entire country, north to south. If the project is financed, Iran will gain an unprecedented national transport network which will upgrade and optimize, accelerate and simplify passenger and cargo shipping, among which will be the crucial transportation of energy resources - oil and gas. But the final word on this project is for specialists, politicians and diplomats, which, through an integrated approach, can give Iran a new life.

Without doubt a series of very deep and accurate studies need to be arranged, technical calculations made and the economic and environmental risks considered.

Sea to the central areas of Iran to address the problems of water scarcity in agriculture may carry with it negative con-

sequences - such as a violation of the ecological system or environment changes.

Dimitri Dolaberidze, Deputy Director of the Center of Research for the Study of Georgian Complex Development Issues of the Tbilisi State University, is an expert on political geography.

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

13

Ambitions High at Tourism Festival of the Georgian National Tourism Administration (GNTA) said that it is of interest not only for foreigners, but also for locals.

Within the framework of the CTF was also held a ‘discount festival,’ whereby everyone had the opportunity to pre-plan his or her vacation – to consult directly with company representatives, and to choose the most suitable tour for exclusive prices for both domestic and non-domestic travel.

The importance of the involvement and the development of tourism in Georgia was also noted at the conference ‘Tbilisi is a Meeting Place’ which also took place in the framework of the Fair. Mayor of Tbilisi, Davit Narmania, said that the capital’s City Hall is undertaking a number of projects with the aim of expanding the tourism potential of Tbi-

BY EKA KARSAULIDZE

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eorgia continues to promote tourism as one of the leading areas of economic development. The growth in the number of tourists by 15 percent in the first quarter of 2016 confirms the trend’s positive direction. Moreover, the Minister of Economy and head of the National Tourism Administration of Georgia have no plans to stop –actively supporting the idea by organizing another tourist festival with a focus on domestic tourism.

The 18th International Tourism Fair of the Silk Road countries- the Caucasus Tourism Fair (CTF), held in Tbilisi on April 14-16, gave a platform for local and foreign tourism representatives of 68

foreign companies. At 80 stands, eight foreign delegations, among which Indonesia and Thailand participated for the first time, were introduced to the different regions of Georgia, tours, opportunities, equipment, cultural facilities and commodities. They were also welcomed to present their own destinations and tourism hotspots.

“We have a strategy, according to which the number of visitors should be increased from the current 5,900.00 to 11 million. Accordingly, each exhibition and activity like this will contribute to achieving our goals,” said Dimitry Kumsishvili, Minister of Economy and Sustainable Development of Georgia.

Moreover, organizers of the Fair talked not just about the usual tourism, but highlighted a variety of companies offering specific tourism optionssuch as medical site visits, attending cultural events, and inspection of Protected Areas. Representatives

lisi and representing it on the international stage.

“Tbilisi is the tourist center of the region, while at the same time going far beyond it. The Ministry of Economy, GNTA and City Hall work a lot on this issue, so today we are gathered once again and are ready to discuss the outstanding issues with our colleagues and guests from other countries,” said the Mayor.

“Only in this way will the economy’s growth and development see greater heights. We are carrying out a large number of projects together with other institutions in order to attract more and more tourists and to let our cultural heritage go beyond the borders of the country. However, at the same time, we are pleased to welcome guests who will also talk about their countries,” he added.

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BUSINESS

State Security Service of Georgia Detains 6 for Sale of Nuclear Material Uranium

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s a result of the joint operative-searching and investigative activities of the Counter-Intelligence and Special Operations Departments under the State Security Service of Georgia, members of a criminal group were detained for the illegal handling of Nuclear Material. The officers of the State Security Service of Georgia detained three citizens of the Republic of Armenia and three Georgian citizens.

The group members were said to be planning to sell Nuclear Material Uranium (U238) for USD 200 million, when they were detained on the fact of the crime. The law enforcers found a pre-

fabricated container meant for the transportation of U238 (Urine 238).

Given the gamma ray emission, the identity of the source and radiological expertise report, the seized substance is dangerous to both life and health.

The investigation into the fact of illegal handling and selling of nuclear material is underway. Article 230, Part I, of the Criminal Code of Georgia, envisages from 5 to 10 years of imprisonment for this crime. On April 16th, all six defendants were sentenced to imprisonment

by Tbilisi City Court. Investigation is being carried out by the Counter-intelligence Main Investigative Division under State Security Service of Georgia.

GEORGIA TODAY

APRIL 19 - 21, 2016

POLITICS

The Hopes of a US Senator: 21st Century Georgians Standing Together

BY IA MEURMISHVILI, VOICE OF AMERICA GEORGIAN SERVICE

I

n an exclusive interview with the Voice of America Georgian Service, US Senator James Risch expressed hope that in the aftermath of the upcoming parliamentary elections, Georgian political forces will accept the results and find ways to make Georgia a more democratic country. Among the many committees in the US Senate of which Senator Risch is a member is the Select Committee on Intelligence and the Committee on Foreign Relations.

FOLLOWING THE INVASION OF GEORGIA IN 2008, WE SAW NO PUNITIVE MEASURES AGAINST RUSSIA FROM THE WEST. SOME EXPERTS CLAIM THE ONGOING AGGRESSION IN UKRAINE AND THE RUSSIAN MILITARY OPERATION IN SYRIA IS A RESULT OF THIS. WHAT IS YOUR TAKE ON THIS ASSESSMENT? It’s common sense that if a naughty kid does something bad and no-one does anything about it, he is going to continue to misbehave. Unless somebody does something, you can expect the same thing to happen over and over again. That is what history teaches us and that is exactly what happened here. Particularly with the administration that we have – which will soon change. There were no sanctions for what Russia did. As a result, why would they hesitate when they look at Crimea, Ukraine or anywhere else?

DO YOU THINK IT IS AMERICA’S ROLE TO ACT

IN SUCH INSTANCES? I think the US cannot be involved in every activity in the world, nor should we be or want to be. Having said that, obviously, the United States is a counterbalance to a country that has substantial assets and is able to bully smaller countries. In that regard, I think the United States cannot turn a blind eye to this. By doing nothing, or doing very little, in essence, the United States is condoning it.

THE NATO SUMMIT IS COMING UP IN WARSAW. DO YOU EXPECT ANY BOLD STEPS TOWARDS EXPANSION, PERHAPS WITH US SUPPORT? SHOULD THERE BE TALK OF FURTHER ENLARGEMENT? We already have the “Open Poor” policy which allows any country that can meet the standards for admission to be admitted. I think in and of itself, it’s a pretty bold thing.

I do not expect that there will be a large newsworthy event from the Summit.

However, there is the question of Georgia, which has quite a way to go due to its internal concerns.

GEORGIA IS THE LARGEST CONTRIBUTOR TO THE NATO MISSION IN AFGHANISTAN [AFTER THE UNITED STATES]. SOME EXPERTS BELIEVE GEORGIA IS READY MILITARILY TO JOIN THE ALLIANCE. DO YOU THINK GEORGIA’S INTERNAL POLITICS CONCERN NATO? I think it is a concern– maybe not for all the countries of the Alliance, but certainly for some. From a personal standpoint, I have some reservations. It’s not the hallmark of a first world country to,

in the 21st-century, carry out political prosecutions. You can argue about how widespread or how strong it was in Georgia, but it happened, and it was very disappointing to me personally. I was there for the elections in 2012 and was very impressed with what I saw. I thought it was handled very well, but I was disappointed after the fact because of those prosecutions.

THERE IS ANOTHER PARLIAMENTARY ELECTION COMING UP. DO YOU HAVE ANY EXPECTATIONS, RECOMMENDATIONS, OR HOPES FOR THE ELECTIONS IN OCTOBER? I wouldn’t make recommendations, because, obviously, that is for the Georgian people. My hopes are that they will continue to make progress. They have the 25th anniversary [of Independence] coming up and they should be very proud of the progress that has been made. The last election was a robust election and was free and fair. I look forward to seeing that again.

My hope is that after the election all the political parties and the citizens of Georgia will do what other people do in the 21st century; that is to accept the election results and not begrudge the winners. If they don’t like the way it comes out, they should start making plans for the next election. But in the meantime, live together and live together peacefully. Georgians are like other people around the world - they want what is best for Georgia. The best way they can do that is, after the elections are over, have everybody come together and say, “OK, what are we going to do to make Georgia a better place us, for our children and grandchildren?”

BUSINESS

GEORGIA TODAY APRIL 19 - 21, 2016

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Dechert OnPoint: Trademark Protection in Georgia

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echert Georgia, through the contribution of partners Archil Giorgadze and Nicola Mariani, joined by senior associates Ruslan Akhalaia and Irakli Sokolovski, as well as Ana Kostava and Ana Kochiashvili, is partnering with Georgia Today on a regular section of the paper which will provide updated information regarding significant legal changes and developments in Georgia. In particular, we will highlight significant issues which may impact businesses operating in Georgia.

TRADEMARK PROTECTION IN GEORGIA March 2016 marked an important development in the sphere of intellectual property protection in Georgia, especially with regard to the elaboration of trademark protection. The Supreme Court of Georgia (the “Court”) issued a key judgment clarifying the legal status of the burden of proof principle with regard to counterfeited trademarks in Georgia. The legal status of trademarks is governed by the Georgian Law on Trademarks (the “Law”), which was passed in 1999. Accordingly, the LEPL National Center of Intellectual Property (“Sakpatenti”) was entrusted with the administration of trademark regulatory matters. Georgia is party to major international conventions in the field of trademark protection, e.g. the Paris Convention for the Protection of Industrial Property signed in France on 20 March 1883 (revised in Stockholm, Sweden on 14 July 1967 and amended on 28 September 1979) (the “Paris Convention”); and the Madrid Protocol Treaty for the international registration of trademarks signed in Spain on 27 June 1989 (the “Madrid Protocol”), among others.

This week’s edition of OnPoint provides an overview of regulations related to trademark protection in Georgia, devoting particular attention to recent Court practice in the field.

LEGAL DEFINITION OF TRADEMARK In Georgia, a trademark is defined as a graphical sign or combination of geographical signs that is capable of distinguishing the goods and/or services of one company from those of another. A sign may be: a word or phrase, including personal names; letters; numerals; sounds; images; 3D figures, including shapes of goods or their packaging; and any other decoration on the goods that uses a color scheme or any combination of color schemes. Trademarks are protected based on their registration with the Sakpatenti or based on the relevant international agreements. Well-known trademarks in Georgia are protected without registration in accordance with Article 6bis of the Paris Convention and the Madrid Protocol. A trademark is defined as “wellknown” upon the request of the persons concerned and by the decision of the Chamber of Appeals of the Sakpatenti or by a court acting under its jurisdiction.

GROUNDS FOR DENIAL OF REGISTRATION Sakpatenti will not register a sign or a combination of signs as a trademark if: (i) it is a single non-styled letter or numeral or color; (ii) it is not capable of distinguishing appropriate goods or it is a descriptive mark of goods; (iii) it has come into universal use as a generic concept for a definite type of goods; (iv) it is a universally-accepted term or sign characteristic to the goods included in the course of trade, the registration of which is required; (v) it abuses or contradicts

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national values, religion, traditions or moral standards; (vi) it is of such a nature as to deceive consumers with regard to the properties, quality, geographical origin or any other characteristic of the goods; (vii) it coincides, fully or in one of its constituent elements, with the national coat of arms, flag, emblem, or full or abbreviated name of a foreign country or an international or intergovernmental organization; or (viii) the current or historical name of Georgia or its territorial unit, its coat of arms, flag, emblem or monetary symbol. The above symbols can be included in a trademark as an unprotected component with the consent of the Ministry of Culture and Monuments Protection of Georgia or the consent of its proprietor for use of the symbol.

In addition, a trademark will not be registered by Sakpatenti if it is identical or similar with the trademark of goods that have been registered earlier or are universally accepted as a trademark belonging to a third person.

RIGHTS OF THE TRADEMARK HOLDER The exclusive rights of a proprietor to a registered trademark begin from the date of registration of the trademark.

The trademark proprietor can prevent a third party from using a trademark without his/her permission if the trademark is identical to a protected trademark and the goods are identical or so similar that there is a likelihood of confusion due to that similarity, including the likelihood of confusion as a result of association, and when the trademark is not identical but is similar to the protected trademark and the use of the trademark undeservedly creates favorable conditions for the third party or damages the reputation or distinctiveness of the trademark. Without the permission of the trademark holder, third parties are prohibited from: (i) affixing a trademark to any goods or to the packaging thereof; (ii) offering the goods, making them available in the course of trade, stocking them for purposes of trade or importing or exporting the goods under the sign; (iii) offering or providing services using the trademark; and (iii) using the trademark in advertising or on business papers, among others.

*** Note: this article does not constitute legal advice. You are responsible for consulting with your own professional legal advisors concerning specific circumstances for your business.

usage of the trademark is unauthorized.

The Court noted that a certificate of registration is sufficient to prove the claimant’s exclusive rights over the trademark. The respondent bears the burden of proof to confirm that it had authorization to use the trademark. According to the Decision, the claimant shall not be responsible for proving a non-existent fact, such as the absence of authorization.

The Decision also explained that the Court is responsible for comparing registered trademarks and counterfeit goods in order to rule on their similarity. Moreover, the Court discussed a claim regarding the destruction of counterfeit goods.

The Decision underlined the importance of proportionality and noted that the destruction of goods is permitted in cases when separation of the goods and the trademark is practically impossible.

The Decision should be considered a positive step forward for Georgia’s legal system with regard to trademark law. By establishing a more clear definition of counterfeit goods and establishing practices for hearing trademark cases, the Court has elaborated Georgia’s legal framework for trademarks in a constructive manner.

Dechert’s Tbilisi office combines local service and full corporate, tax and finance support with the global knowledge that comes with being part of a worldwide legal practice.

Dechert Georgia is the Tbilisi branch of Dechert LLP, a global specialist law firm that focuses on core transactional and litigation practices, providing worldclass services to major corporations,

SUPREME COURT DECISION ON COUNTERFEITED TRADEMARKS The Court delivered a decision on 18 March 2016 regarding the holders of exclusive rights to trademarks and the notion of counterfeit goods (the “Decision”). The Decision notes the fact that registration is constitutive and decisive for the protection of trademarks in Georgia.

Furthermore, the Decision interpreted and outlined three conditions for defining goods as counterfeit: (i) the goods are identical to goods under a trademark that is legally registered in Georgia; (ii) the goods bear identical trademarks; and (iii) such

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EDITORIAL DEPARTMENT:

Editor-In-Chief: Katie Ruth Davies

Journalists: Tony Hanmer, Tamar Svanidze, Zviad Adzinbaia, Beqa Kirtava, Meri Taliashvili, Eka Karsaulidze, Zaza Jgharkava, Maka Bibilashvili, Karen Tovmasyan, Dimitri Dolaberidze, Maka Lomadze, Tim Ogden, Ana Akhalaia, Robert Isaf, Joseph Larsen, Will Cathcart, Vazha Tavberidze, Nugzar B. Ruhadze

Photographer: Zviad Nikolaishvili Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava

ADDRESS

1 Melikishvili Str. Tbilisi, 0179, Georgia Tel.: +995 32 229 59 19 E: info@georgiatoday.ge F: GeorgiaToday ADVERTISING & SUBSCRIPTION

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The author is responsible for all material. Rights of authors are preserved. The newspaper is registered in Mtatsminda district court.

Reg. # 06/4-309