I. Political Status

The authorities of the Government of Georgia herein declare that it is urgent to take timely and efficient steps aimed at a comprehensive and peaceful solution to the conflict and the commencement of a new era of stable, prosperous and peaceful co-existence.

Whereas the proposal of the Government of Georgia for the population of South Ossetia is based on Constitutional Law, South Ossetia shall be granted broad self-governance, including the right to freely and completely elect self government bodies by the population.

South Ossetia is granted Autonomous Status as a territorial entity of Georgia.

South Ossetia will be led by the head of the Executive Branch of South Ossetia who shall be elected on the basis of general, equal and direct elections, where the sanctity and rights of all voters will be protected thru secret balloting on the territory of South Ossetia.

The supreme legislative body of South Ossetia is the Parliament of South Ossetia which will be freely and directly elected. The Parliament of South Ossetia shall implement legislative activities with regard to such issues as culture, education, social policies, economic policies, public order, organization of local self-governance and environmental protection.

Representation of South Ossetia in the National branches of power shall be guaranteed. The precise representation and participation procedures shall be determined by Constitutional law.

Representation of South Ossetia in the Parliament of Georgia shall be guaranteed. The precise number of representatives and participation procedures shall be determined by Constitutional law.

Participation of South Ossetian representatives at the national level in the activities of judicial and constitutional-judicial bodies shall be guaranteed, in compliance with Georgian legislation.

II. Language and Education

The Georgian state shall guarantee the protection and development of the cultural and ethnic identity, language, and history of the Ossetian people.

On the territory of South Ossetia, the Ossetian language has official status along with the State language.

Education in the Ossetian language shall be guaranteed and educational issues and policies are to be dealt with by South Ossetian authorities.

The State Budget of Georgia will guarantee funding for the broadcast in television, radio and newsprint of Ossetian media.

The State Budget of Georgia will guarantee funding for the preservation of Ossetian culture and history.

III. Social and Economic Compensation

Once constitutional law enters into force a Law on Property Restitution shall be adopted with respect to the population that suffered from the conflict of 1990-1992. Every affected family shall receive a lump-sum monetary compensation.

Additionally, the Government of Georgia is ready to pay pension arrears to the inhabitants of South Ossetia that have accumulated since 1991 as a lump sum, and to give guarantees to all inhabitants that their current pensions and social privileges will remain in force, at a minimum according the current framework of benefits.

With the participation and assistance of international organizations, a special committee will be established to deal with unresolved property disputes.

The Georgian government will guarantee the economic rehabilitation of South Ossetia and will dedicate from the State budget funding for the rehabilitation of critical infrastructure.

The Georgian Government will support the conduct of targeted economic revival programs intended to develop small and medium sized enterprises and create sustainable sources of local employment and revenue.

An Economic Revival Support Fund for South Ossetia will be established. Funding will come from the Georgian State budget along with the international donor community that will be encouraged to contribute. Management and prioritization for Fund usage will be administrated jointly by National and South Ossetian authorities, including members of international organizations.

The Government of Georgia is prepared to discuss preparation for establishment of a special economic zone on the territory of South Ossetia.

Economic development policies and priorities will be determined by local self government authorities.

IV. Legal Issues

During the period of conflict resolution, a 3-year transition period shall be declared.

Implementation of this transition period shall be monitored by the international organizations.

During this period, mixed Georgian-Ossetian police forces shall be established under the aegis of international organizations.

The police in question shall ensure the safety of citizens and the freedom of their movement.

A joint commission is to be established that will thoroughly investigate allegations of crimes against the population, which shall be entitled to make decisions regarding the perpetrators’ fate.

The Government of Georgia guarantees establishment of a simplified border regime for the local population on the South Ossetian portion of the Georgian-Russian border.

The Government of Georgia guarantees the right of return for all individuals who left Georgia due to the conflict.

The Government of Georgia guarantees financial resettlement assistance for all who choose to return.

V. Powers of the Georgian National Authorities

The following shall remain within the powers of the Georgian national authorities:

• National security and defense.

• Control over the armed forces (within the 3-year transition period Ossetian forces shall be integrated into the united Georgian Armed Forces).

• State border protection and custom-related policies.

• National financial including currency and money supply and national taxation policies.

• Foreign policy (The South Ossetian authorities shall be granted certain rights with respect to foreign trade relationships, within the framework determined by law).

• Citizenship issues.