Shares in Georgia's two largest banks, TBC and Bank of Georgia, dropped sharply on May 15, the day after U.S. Assistant Secretary of State Jim O'Brien warned top Georgian government officials about potential consequences should the controversial foreign agents law be enacted.
London-listed shares in the two banks plummeted to their lowest single-day declines since the spring of 2020, at the height of the Covid-19 pandemic. Some analysts in Georgia believed the drop, which impacted other financial institutions, was directly connected to the passing of the law.
Georgia's parliament passed the controversial "foreign agents" bill in its third and final reading on May 14, but it still has several legislative steps before it becomes an official law.
Pro-Western President Salome Zourabichvili said she would veto the bill, sending it back to parliament, but the ruling Georgian Dream party and its allies likely have enough votes to overrule Zourabichvili's decision.
Western officials have condemned both the law and the government's violent crackdown on the daily protests that have continued for almost a month.
Following a trip to Georgia, where he met with Prime Minister Irakli Kobakhidze and other officials, O'Brien stressed that "there would be consequences if the law is implemented as it now stands."
"If the law goes forward out of conformity with EU norms and it undermines democracy here, and there is violence against peaceful protesters, then we'll see restrictions coming from the U.S., financial and travel restrictions on individuals responsible for these actions, and their families," O'Brien added.
Members of the opposition have urged the West to sanction top government officials, namely Georgian Dream's Honorary Chairman Bidzina Ivanishvili, who is widely seen as the power behind the throne.
Meanwhile, protests against the law have increasingly grown to encompass wider anti-government sentiment and have continued despite the law's passage.
The foreign ministers of Lithuania, Estonia, Latvia, and Iceland, who were visiting Georgia to meet with government officials, also joined the demonstration.
Read also: Explainer: What’s behind ongoing protests in Georgia?