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Georgian Airways Removes Russian Mir Payment System

By Natalia Kochiashvili
Thursday, March 10, 2022
The Russian Mir payment system was removed as a payment method on the website of the major Georgian airline “Georgian Airways” amid harsh criticism.

Since both Mastercard and VISA have left the Russian market after Moscow’s invasion of Ukraine, MIR, a banking system created in Russia and for the Russian market, which operates in several countries outside the country, remains the last option (still highly limited one) for Russian citizens owning Russian-issued cards to conduct online transactions and transfer money abroad. Amid Russian invasion of Ukraine and subsequent unprecedented worldwide sanctions against Moscow, adding the payment system on the website stirred ire in the Georgian public.

In an interview to Radio Liberty’s Georgian service on March 8, the head of Georgian Airway Tamaz Gaiashvili said that the main priority for him is to sell tickets:

“If anything can get the ticket sold, all systems will work. I do not join the sanctions and I have no obligation [to join] . I am not a state, I am a private company. I am interested in selling a ticket, I don’t care at all how it will be sold,” said the company’s director, adding that if booked, he would not refuse to conduct direct flights to Russia.

Gaiashvili added that the Russian “Mir” payment system was not added by the company itself, but by the banks Georgian Airways is cooperating with.

On March 9, the National Bank of Georgia released a statement saying that commercial banks and card processing systems operating in Georgia do not cooperate with the Russian “Mir” payment system, operations with “Mir” are fully carried out in the Russian system and it has no contact with the Georgian financial system. Bank argued however, that it could not pass a judgment on a private company’s decision to cooperate with Mir. NBG further noted that MIR company operated in occupied Abkhazia, possibly violating Georgian law on the Russian-occupied territories.

Then Gaiashvili suggested another explanation, saying that Georgian Airways couldn’t add this payment system, there is a ticket sales company NetSky with which they have a contract and even if Georgian Airways wanted to sell these tickets, they wouldn't have been able to, since they do not have the opportunity to do so through Georgian banks.

One of the company officials also told reporters on Wednesday that their contractor Spanish travel retail company added MIR’s logo to their payment options without their knowledge. He said Georgian Airways asked the Spanish company as early as March 3 to remove MIR.

Shortly, Georgian Airways also released an official statement, claiming they have not sold a single ticket using the Russian MIR. The statement also explained that’s purchase system in Georgia was fully connected to the Bank of Georgia, a private financial institution, rendering MIR payments impossible.

“Georgian Airways and its management can have no influence over the Spanish company, which voluntarily accesses the MIR card system in its sales system. As for Georgian Airways, the company is currently in dire financial straits and is in the process of bankruptcy / rehabilitation.”

The company’s decision was heavily criticized by the opposition, underlining that by joining the Russian payment system, Georgian Airways is helping Russia bypass Western sanctions and Georgian is not a loophole for Russia. UNM even has a small rally in front of the company’s office.

“Maximum effectiveness of financial sanctions against Russia is one of the main guarantees of the security of the Georgian state – the easing of sanctions for the occupier is a betrayal of Georgia’s national interests!”, the European Georgia said in a statement.

On the other hand, Georgian Dream MP Mikheil Sarjveladze spoke of attempts by the ‘radical opposition’ and affiliated media-channels to come up with baseless provocative topics.

The Russian payment system is used in Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, as well as in Abkhazia and South Ossetia, which Russia has illegally recognized as ‘independent states’.

Russia designed Mir in 2014 following the annexation of Crimea to avoid financial sanctions. Since July 2021, the Russian government has switched to Mir to allocate budget funds, including salaries, pensions and scholarships for civil servants.