Georgia fines Russian company for doing business in separatist region

Georgia slapped a giant Russian mobile phone operator with a token fine this week, one of the first follow-throughs to threats of prosecuting companies that do business in its separatist regions.

Russian company MegaFon is illegally using a mobile phone frequency in the breakaway region of South Ossetia, say officials at the Georgian National Communications Commission (GNCC).

GNCC representative Khatia Kurashvili said the commission hunted for violations in Georgian-controlled portions of the breakaway region, which is a small patchwork of separatist- and state-controlled villages.

Residents in at least two of the Georgian-controlled portions were found to be using MegaFon phone accounts, she said. But the monitoring was done to show that MegaFon is doing business in separatist-controlled areas too, and Kurashvili said the GNCC is “certain that MegaFon operates on the whole territory of South Ossetia.”

Citing “serious financial damage” to Georgian mobile operators, the commission fined the Russian company GEL 5 000, the amount provided for by law.

The GNCC representative said the commission contacted MegaFon and the Russian Embassy in Georgia to demand payment within 30 days and an end to the “illegal activity” in South Ossetia, before passing on the case to the Prosecutor General’s Office.

A spokesperson for MegaFon said the company has not received official documentation for the penalty, and will not comment until they do.

This is not the first time Georgia has accused MegaFon of breaking the law. In December 2005, Tbilisi accused the Russian mobile operator of setting up a proxy company in separatist Abkhazia.

MegaFon denied the charge.

Russian businesses are believed to have extensive economic stakes in Georgia’s two separatist enclaves. Tbilisi strenuously opposes foreign commerce without its permission in Abkhazia and South Ossetia, which it says is unlawful, but enforcement measures have been mostly limited to occasionally seizing Russian and Turkish vessels headed for Abkhazian ports.

In April this year, the top Georgian official for conflict issues said the government would redouble efforts to prosecute Russian companies doing business in the country’s separatist enclaves.

“In order to stop economic annexation [of Abkhazia], we are forced to put all offending companies and their owners and top managers on a wanted list [for Interpol],” State Minister for Reintegration Issues Temur Iakobashvili told the newspaper Rezonansi.