Tbilisi’s relationship with Tehran is not maintained at the expense of its ties to Washington.

On August 12, the US Treasury announced sanctions on SHPS Shelbit, a Georgia-registered cryptocurrency firm, for moving more than $2 million in digital assets on behalf of Iran’s Islamic Revolutionary Guard Corps (IRGC) and other sanctioned Iranian entities. Georgia’s central bank responded that the firm had never registered as a virtual asset service provider and therefore fell outside its supervision—an answer that was technically accurate but politically did not help its case. In Washington, the designation was received less as an enforcement action than as confirmation of a thesis.

That thesis has been building for two years. Analysts describe Georgian Dream as reorienting the country’s foreign policy toward Tehran. Op-ed writers call Georgia Iran’s sanctions-evasion hub in the Caucasus. Representative Joe Wilson (R-SC), among the loudest congressional voices on Georgia, characterized President Mikheil Kavelashvili’s attendance at Ayatollah Ali Khamenei’s funeral in July as part of a deepening “anti-American pact.”

The underlying facts are undisputed. Georgian Prime Minister Irakli Kobakhidze traveled to Iran twice in 2024, for President Ebrahim Raisi’s funeral and President Masoud Pezeshkian’s inauguration. Kavelashvili went to Tehran this July. Before 2024—the year Georgia’s rupture with Brussels and Washington became structural—engagement at that level was rare.

But these facts answer the wrong question. Whether Georgia is engaging with Iran more than it used to is settled; it plainly is. Whether Tbilisi is prepared to choose Tehran over Washington when the two are actually posed against one another is a different question—and it has been tested before, under three governments with three very different orientations toward the West. Each time, the answer was the same: Georgia chose Washington.

Georgia’s foreign policy is influenced more than anything by its northern neighbor. Russia occupies roughly 20 percent of Georgia’s internationally recognized territory and has spent nearly two decades entrenching itself in Abkhazia and South Ossetia. Iran can offer Tbilisi trade, transit, energy, and a working relationship with a significant regional power. It cannot offer protection against Russian pressure, diplomatic weight on the occupied territories, or a substitute for the Western markets and security relationships Georgia has depended on since independence. In other words, cooperation with Tehran has a ceiling. It has constrained every Georgian government regardless of ideology, and it constrains this one.

The first test came in the 1990s. Iran cultivated early ties with post-Soviet Georgia, including contacts with the Soviet-era nuclear scientists housed at the Sukhumi Institute of Physics and Technology. When Washington raised concerns about Iranian access to that expertise, it pressed Eduard Shevardnadze’s government for intelligence. Tbilisi complied. Georgia did not sever relations with Iran, but it acted unhesitatingly to respect American red lines. 

The second test was sharper. In October 2007, Georgian authorities arrested Amir Hossein Ardebili, an Iranian procurement agent, in Tbilisi at the conclusion of an American sting operation targeting his efforts to acquire sensitive US military electronics for Iran. Georgia held him and extradited him to the United States in January 2008. The decision cost Tbilisi dearly in Tehran and came at the height of President Mikheil Saakashvili’s bid for NATO membership—seven months before Russian tanks reached Gori. When the Russian seizure of Abkhazia and South Ossetia did leave Georgia more reliant on Western support than at any point in its independent history, the calculus only hardened. 

The third test came under Georgian Dream itself. In June 2013, after The Wall Street Journal reported that roughly 150 IRGC-linked front companies were operating in Georgia, Tbilisi revoked the visa-free regime it had extended to Iranian citizens in 2010, froze some 150 Iranian bank accounts, and placed one of the fronts, JSC Investbank, under central bank supervision. 

The following February, the US Treasury designated three Dubai-based Iranian businessmen and eight associated companies under Executive Order 13608 as “foreign sanctions evaders” for using a Georgian bank to move tens of millions of dollars on behalf of Bank Melli and Bank Saderat. During the first Trump administration’s maximum-pressure campaign, Georgian banks again tightened scrutiny of Iranian customers, and residency and border policy grew more restrictive.

Even the recent record shows signs of a similar pattern. Since 2024, Georgia has left its embassy in Tehran under a chargé d’affaires rather than an ambassador. Over the same period, Tbilisi deepened cooperation with Iran’s principal regional adversary: Israel. On October 20, 2025, Interior Minister Gela Geladze signed a law-enforcement memorandum with Israeli National Security Minister Itamar Ben-Gvir.

Whatever Tehran makes of Georgian dignitaries at its funerals, it is unlikely to read a police-cooperation agreement with Ben-Gvir’s ministry as evidence that Georgia has entered its orbit. And Tbilisi has simultaneously courted Washington, much to Tehran’s chagrin. The day after Kobakhidze held a call with Secretary of State Marco Rubio, Iran’s ambassador said, “those who supported Donald Trump yesterday, will pay the price.” Many in Georgia interpreted the statement as a direct threat.

The evidence shows not realignment but hedging. Georgian Dream’s relations with Brussels and Washington have deteriorated to the point where the government has few external relationships left to lose, and it has responded by widening its options—with Tehran, with Beijing, with anyone willing to transact. The 2026 war between Iran and the United States and Israel reinforced that instinct rather than resolving it, demonstrating to small states across the region that proximity to Washington guarantees neither safety nor consultation. At the same time, Tbilisi has every reason not to overcommit. Exposure to US secondary sanctions would threaten the banking access and export markets Georgia still depends on. Hedging is what governments do when they are running out of options—not when they are choosing a new patron.

None of this makes Georgia a reliable partner. Much of its rhetoric toward its former Western partners has turned openly hostile. The sanctions problem is genuine too. The Shelbit designation represents a real enforcement failure, and the continued operation of Al-Mustafa International University branches in three Georgian cities—an institution under US sanctions—is not a bookkeeping oversight. These are legitimate grievances that deserve a response. But they are not evidence of strategic realignment toward Tehran, and treating them as such produces bad policy.

The danger in that conflation is specific. If Washington concludes that Tbilisi has already chosen Tehran, it will act accordingly—further disengagement, fewer channels, less leverage—and in doing so manufacture the conditions that make the prediction come true. Georgia’s opening to Iran stems from its estrangement from the West. Deepening that estrangement would only drive Tbilisi further into Tehran’s hands.

A more useful approach is available, and the historical record points straight at it. Geopolitics rarely offers a clean natural experiment, but three decades of Georgian-Iranian relations come close: three governments, three moments when American and Iranian interests collided directly on Georgian soil, three times Tbilisi chose Washington. Those outcomes stemmed from a clear American demand tied to something Georgia wanted. That mechanism has not expired. Georgia still needs Western markets, investment, diplomatic cover, and a counterweight to Russia, and Iran can supply none of them.

So if the United States wants Tbilisi to close specific doors—sanctions evasion, sensitive technology, financial networks, security cooperation—it should name them, attach consequences, and put something on the other side of the ledger. Shevardnadze, Saakashvili, and Ivanishvili’s party share almost nothing in politics or worldview. What they share is a reading of Georgia’s position that has not moved since 1991: Tehran cannot be a patron, and no Georgian government has tried to make it one. That reading holds only as long as Washington remains a plausible alternative. The surest way to retire it is to decide, prematurely, that it has already expired.

About the Author: Bako Kheladze

Bako Kheladze is a research fellow at the Turan Research Center, specializing in Iran and South Caucasus affairs. He holds a master’s degree in International Security Studies from the University of Leicester. He also served at the Embassy of Georgia in the Islamic Republic of Iran.

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