US to pause $95 million assistance to Georgian government over 'foreign agent' law

WASHINGTON/TBILISI (Reuters) -The United States is pausing more than $95 million in assistance to Georgia over a law on "foreign agents" that Washington considers anti-democratic, dealing a further blow to already-strained relations between the two countries.

The law, passed by Georgia's parliament in June, requires groups that receive more than 20% of their funding from abroad to register as "agents of foreign influence".

Georgian and Western critics call it a draconian measure to stifle dissent, inspired by similar legislation in Russia, although the Kremlin denies any connection to Tbilisi's move. The ruling Georgian Dream party says the measure is necessary to protect the sovereignty of the South Caucasus country.

The pause on U.S. assistance is the result of a review of bilateral cooperation that was announced, along with visa restrictions, in May, U.S. Secretary of State Antony Blinken said on Wednesday. The Georgian Dream at the time called those actions evidence that Washington was pursuing a policy of "threats and blackmail".

"The Georgian government's anti-democratic actions and false statements are incompatible with membership norms in the EU and NATO," Blinken said in a statement. Washington will continue assistance that benefit the Georgian people, he added.

Georgian officials did not immediately comment.

The introduction of the "foreign agent" bill this spring kick-started mass protests in Tbilisi and threw the country of 3.7 million into political chaos, threatening its hitherto relatively warm relations with the West.

The controversy - which has pitted Georgia's various opposition parties and its president against the prime minister and the ruling party - has come to be seen as a key test of whether Georgia, among the most pro-Western of the Soviet Union's successor states, would maintain its Western orientation, or pivot instead towards Russia.

The crisis also poses a threat to Georgia's aspirations to join the European Union. The EU has frozen the country's integration process, as well as 30 million euros ($32.5 million) in military aid.

($1 = 0.9227 euros)

(Reporting by Ismail Shakil in Ottawa and Felix Light in Tbilisi; Writing by Lucy Papachristou in London; Editing by Doina Chiacu and Gareth Jones)