Transparency International (TI) Georgia, the anti-corruption watchdog, wrote at the time that the change – which allows tax-free transfer of assets from offshore accounts to Georgia – may have been introduced to serve the interests of the country’s richest person and former prime minister, Bidzina Ivanishvili.

He is the founder and honorary chairman of the country’s ruling party, Georgian Dream.

“Now it is clear, those changes were made for him,” says senior economics analyst at TI Georgia, Beso Namchavadze.

With an estimated wealth of $4.9bn (£3.9bn), Mr Ivanishvili made his money in 1990s Russia, in computing, metals and banking. Most of his wealth is believed to be tucked away in offshore companies.

Georgia was plunged into political crisis and daily street protests last May when the country’s MPs passed the contentious “transparency on foreign influence bill”, often dubbed the “foreign agents law”.

Under this legislation, media and non-governmental organisations that receive more than 20% of their funding from abroad have to register as “organisations acting in the interest of a foreign power”, submit themselves to stringent audits, or face punitive fines. It was widely seen as a move to prevent US and other Western influence on the country.

Protests then continued when the Georgian Dream-led government won disputed parliamentary elections in October. Protests were spurred again at the start of December when it said it would be putting EU accession talks on hold.

Hundreds of peaceful protesters were arrested and severely beaten up by the police.

In response to this crackdown, the US government announced sanctions against Mr Ivanishvili at the end of last year.

There is also the possibility of sanctions from the UK. Last month James MacClearly, a Liberal Democrat MP, introduced an Early Day Motion in the UK parliament calling on the government to impose sanctions on Mr Ivanishvili.

The motion expressed “deep concern at the suspension of Georgia’s EU accession process and the increasing use of excessive force against peaceful protesters”.

TI Georgia estimates that if the UK imposed sanctions on Mr Ivanishvili his entire business empire would be affected, because he has holding companies registered in two British Overseas Territories – British Virgin Islands and Cayman Islands.

“All his big business, which he has in Georgia, in the hospitality sector, in the energy sector, all the parent companies of these Georgian companies, the last beneficiaries are registered in these so-called offshore territories,” says Beso Namchavadze.

He adds that TI Georgia believes that Mr Ivanishvili and other family members are continuing to transfer ownership of companies they previously controlled through offshore entities to newly established firms in Georgia.

In January of this year, paintings and other artwork worth nearly $500m were imported into Georgia, according to data published by the Ministry of Finance.

Many believe the artwork was from Mr Ivanishvili’s valuable collection.

“For everybody who knows him it’s pretty clear that this is something that he values the most out of all the assets, and all the wealth, that he has,” says Tina Khidasheli, Georgia’s ex-defence minister and the head of the non-governmental organisation Civic Idea.

“He is going to bring paintings back and he does not want to pay tax on it.”

The head of Georgia’s parliamentary committee on finance and budget, Paata Kvijinadze, recently defended the tax-free transfer of assets from offshore accounts to Georgia.

“If anyone benefited from this law, I am happy about it,” he said in a post on social media. “This is exactly what the law was meant to be: to bring companies from offshore zones and attract more investments into the country”.

In response to the proposed UK sanctions, Georgia’s ruling party issued a statement defending Mr Ivanishvili, saying that a threat of sanctions was “without any foundation” against the party founder who brought “democratic breakthrough to the country”.

Separately, Mr Ivanishvili’s lawyer announced last month that his client is suing Swiss bank Julius Baer for, among other reasons, misinterpreting “the so-called” American sanctions, which the lawyer described as “political blackmail”.

The US sanctions on Mr Ivanishvili call for his assets to be frozen, and place restrictions on US citizens and companies from doing business personally with him, but they do not affect his companies or family members.

For more than a decade Mr Ivanishvili has been involved in legal battles with another Swiss bank, Credit Suisse, over fraud and mismanagement of his money.

Some believe that the billionaire’s mistrust of the West and increased use of conspiracy theories at home, such as accusing adversaries of being part of the “global war party”, or “deep state”, originate in his long-standing financial grievances.

Ever since he became convinced that Credit Suisse was part of a grand conspiracy against him, says Tina Khdasheli. “Bidzina Ivanishvili held Georgia hostage to his personal financial issues.”

Experts say that even though Mr Ivanishvili’s current official position is the honorary chairman of the ruling party, there is a clear understanding that he remains the number one person in Georgian politics. Sanctions against him are therefore seen as sanctions against the entire government.

Nika Gilauri was prime minister of Georgia from 2009 to 2012. He now leads a private company called Reformatics, which advises governments around the world on economic reform.

Mr Gilauri says that Georgia’s continuing political instability and international isolation is negatively impacting the economy. “We are seeing a very negative effect on FDI, foreign direct investment, if you take nine months of 2024 compared to nine months of 2023, we have a 40% drop. So going forward this is going to continue to get worse.”

But the Georgian government paints a different picture.

Last month Georgia’s Prime Minister Irakli Kobakhidze signed a $6bn inward investment agreement with UAE property group Emaar.

Levan Davitashvili, the Minister of Economy described it as the “largest foreign investment deal” in decades, which was expected to contribute 1.5% growth to the economy.

Prime Minister Irakli Kobakhidze has even suggested that 10% growth was now “absolutely realistic” for the Georgian economy.

But recently published research by Policy and Management Consulting Group (PMCG), a Georgian research firm, said that the prospect for the next six months was “extremely negative”.

It highlighted the impact of the continuing political turmoil, and said that the suspension of EU membership talks “was negatively viewed by all surveyed economists”.

Mr Gilauri of Reformatics says their own analysis shows that Georgia’s economic growth this year will be zero.

“Going forward, we will have a budgetary problem, a currency exchange problem. We will have an inflation problem. We will have a jobs problem, a job creation problem, and we will have economic decline problem.

“Having new elections is the only way forward for the country as well as for Bidzina Ivanishvili personally.”

US Secretary of State Antony Blinken said Ivanishvili and his party had “derailed Georgia’s Euro-Atlantic future”, leaving it vulnerable to Russia.

Ivanishvilli is not an elected official but he has been described as the “honorary chairman” of Georgian Dream, which has spent 12 years in power.

The party claimed victory in recent elections amid allegations of fraud and swiftly announced the suspension of EU accession talks, sparking widespread protests.

Opposition MPs have been boycotting the new parliament, alleging fraud.

The inauguration of a new president – former Manchester City footballer Mikheil Kavelashvili of the People’s Power party, who is seen as a Georgian Dream ally – is scheduled for two days’ time.

But outgoing president Salome Zurabishvili, who is strongly pro-European, has said she will not step down until new elections are held.

“We strongly condemn Georgian Dream’s actions under Ivanishvili’s leadership, including its ongoing and violent repression of Georgian citizens, protestors, members of the media, human rights activists, and opposition figures,” a statement from Blinken said.

Blinken accused Georgian Dream of “ongoing and violent repression” of Georgian citizens, protestors, journalists, rights activists and opposition figures”, and said the party’s actions had “curbed the exercise of fundamental freedoms”.

“The result has left Georgia vulnerable to Russia, which continues to occupy more than 20% of Georgia’s territory,” he said.

US state department spokesperson Matthew Miller described Ivanishvili as the “honorary chairman” of Georgian Dream.

In November Georgian Prime Minister Irakli Kobakhidze said his government would not seek EU accession talks until 2028, triggering ongoing protests.

Riot police have used tear gas and water cannon against protesters, who have fought back by throwing fireworks and stones.

The UK has sanctioned five other senior Georgian officials, including the interior minister, for their roles in suppressing pro-European protests.

Last month, the European Parliament backed a resolution describing the election as the latest stage in Georgia’s “worsening democratic crisis”.

It expressed particular concern about reports of voter intimidation, vote-buying and manipulation, and harassment of observers.