A tax squabble between a Czech hydroelectric power producer and the country of Georgia has led the Czech Republic's Foreign Ministry to put Georgia's Association Agreement on hold.

The Czech parliament has postponed the ratification of Georgia’s Association Agreement with the EU over a debt dispute between a Czech company, Energo-Pro, and the Georgian Ministry of Finance; Tbilisi is calling the step a blackmail.

The question of Georgia's association has been withdrawn from the Czech parliament session by the country’s Foreign Ministry, this time until April 1.

The reason is the dispute between Czech company Energo-Pro's and the Georgian Ministry of Finance over the budgetary debt of the Czech company.

The Georgian side intends to obtain about $60 million from Energo-Pro, according to Georgian mass media reports, with reference to the Czech media.

Czech Foreign Minister Lubomir Zaoralek has confirmed that his ministry had withdrawn the issue and claimed that otherwise the deputies would have failed to ratify it, according to Russia’s newspaper Kommersant. The three-week suspension gives the respective parties the chance to settle the dispute before the ratification.

A former advisor to Georgian Prime Minister Georgy Huhashvili complained that the Czech Republic is resorting to what he called indecent means.

“It is simply blackmail, the gravest interference into [the country’s] internal affairs, and [signifies] absolute disrespect towards our country,” Kommersant quotes him as saying.

The former head of the Georgian Diplomatic Academy, Iosif Tsintsadze, has said that in the event of any complaints against Georgian tax authorities or the country’s Foreign Ministry, the Czech company should seek international arbitrage instead of manipulating the agreement with the EU.

Czech Energo-Pro is the biggest foreign investor in Georgia; it runs 15 hydroelectric power stations and distribution companies there and has about one million customers. The Georgian tax office has imposed a special tax, equivalent to up to $60 million. Negotiations about the payment of the sum are currently underway, with the Georgian tax office ready to give up 70 to 80 percent of its claim, according to Jiri Krusina, one of Energo-Pro's owners.

The European Union Association Agreement is a treaty between the EU member states and a non-EU country. According to the EU charter, the treaty comes into force only after being ratified by all the EU member states.