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Law on Grants

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Law of Georgia on Grants
Chapter I
General provisions
Article 1. The Scope
This law shall regulate the general principles of donation, receipt and use of a grant in
Georgia.
Article 2. Grant
1. The targeted funds gratuitously transferred, in cash or in kind, from the grantor (donor)
to the grantee, that are used for specific humanitarian, educational, scientific-research,
health care, cultural, sporting, ecological and social projects, as well as for
implementation of the programs of the state or public importance, shall constitute a grant;
2. The funds transferred in order to achieve en trepreneurial or political goals shall not be
deemed to be a grant.
Article 3. The Grantor
The following may be a grantor (donor):
1. International charitable, humanitarian and other public organization (including
international sports associations, federations and committees), financ ial-credit institution,
the government of a foreign country or its re presentation, and also a non-entrepreneurial
legal person (foundation) of a foreign country;
2. Those non-entrepreneurial legal persons (f oundations, programs) of Georgia the main
charter objective of which is to accumulate th e property in order to support charitable,
social, cultural, educational, scientific-resear ch and other activities beneficial to the
public.
Article 3. The Grantee
The following may be a grantee:
1. The state of Georgia in the person of a body (organization) so authorized by the
President of Georgia;
2. A governmental or a local self-governance body of Georgia;
3. A resident or non-resident non-entrepre neurial legal person of Georgia, its
representation, branch or division;
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4. A citizen of Georgia
Chapter II
Principles of Donation of a Grant
Article 5. Legal Grounds for Donation of a Grant
1. A written contract concluded by the grantor (donor) and the grantee, as well as a
written resolution of an international sports organization on the allocation of targeted
material or intangible values (including monetary funds) to a Georgian sports federation
or club, shall constitute the legal grounds fo r a grant. The contract shall include the
purpose of the donation of the grant, its am ount, specific directions of its use, time
periods for its utilization and the principa l conditions set by the grantor (donor) to the
grantee.
2. The grant shall be used only for the purposes stipulated in the contract. Use of the
grant for other purposes shall be allowed only by permission of the grantor (donor).
3. Realization of the values received through the grant shall be allowed only if so
predetermined in the contract on the donation of the grant.
Article 6. Violation of Contractual Terms and Liability
1. In the case of violation of the contractual terns the parties shall be liable in accordance
with the effective legislation.
2. An unsettled dispute arisen between the resi dent legal persons or citizens of different
countries shall be resolved by judicial settlement of that country which the parties
predetermine. If there be no such agreement in the contract, the dispute shall be resolved
in accordance of the legislation of Georgia.
Chapter III
Taxation of a Grant
Article 7. General Procedure for Taxation of a Grant
The procedure for taxation of a grant shall be determined by the effective legislation of
Georgia.
Article 8. Effective Date of the law
This Law shall take effect upon promulgation.

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President of Georgia Eduard Shevardnadze
Tbilisi,
June 28, 1996

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