Armenia, Azerbaijan, and Georgia: Political
Developments and Implications for U.S.
Interests
Jim Nichol
Specialist in Russian and Eurasian Affairs
October 25, 2013
Congressional Research Service
7-5700
www.crs.gov
RL33453
CRS Report for Congress
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epared for Members and Committees of Congress
Armenia, Azerbaijan, and Georgia
Summary
The United States recognized the independence of Armenia, Azerbaijan, and Georgia when the
former Soviet Union broke up at the end of 1991. The United States has fostered these states’ ties
with the West in part to end their dependence on Russia for trade, security, and other relations.
The United States has pursued close ties with Armenia to encourage its democratization and
because of concerns by Armenian Americans and others over its fate. Close ties with Georgia
have evolved from U.S. contacts with its pro-Western leadership. Successive Administrations
have supported U.S. private investment in Azerbaijan’s energy sector as a means of increasing the
diversity of world energy suppliers. The United States has been active in diplomatic efforts to
resolve regional conflicts in the region. As part of U.S. global counter-terrorism efforts, the U.S.
military in 2002 began providing equipment and training for Georgia’s military and security
forces. Troops from all three regional states have participated in stabilization efforts in
Afghanistan and Iraq. The regional states also have granted transit privileges for U.S. military
personnel and equipment bound to and from Afghanistan.
Beginning on August 7, 2008, Russia and Georgia warred over Georgia’s breakaway regions of
Abkhazia and South Ossetia. Russian troops quickly swept into Georgia, destroyed infrastructure,
and tightened their de facto control over the breakaway regions before a ceasefire was concluded
on August 15. The conflict has had long-term effects on security dynamics in the region and
beyond. Russia recognized the independence of Abkhazia and South Ossetia, but the United
States and nearly all other nations have refused to follow suit. Russia established military bases in
Abkhazia and South Ossetia—in violation of the ceasefire accords—that buttress its long-time
security presence in Armenia. Although there were some concerns that the South Caucasus had
become less stable as a source and transit area for oil and gas, Kazakhstan and Turkmenistan are
barging oil across the Caspian Sea for transit westward. Also, the United States and the European
Union still support building more east-west pipelines through Turkey to bring Azerbaijani and
other gas to European markets.
Issues of concern in the 113th Congress regarding the South Caucasus may include Armenia’s
independence and economic development; Azerbaijan’s energy development; and Georgia’s
recovery from Russia’s August 2008 military incursion. At the same time, concerns have been
raised about the status of human rights and democratization in the countries; the ongoing
Armenia-Azerbaijan conflict over the breakaway Nagorno Karabakh region; and ongoing threats
posed to Georgia and the international order by Russia’s 2008 incursion and its diplomatic
recognition of South Ossetia and Abkhazia. Congress has continued to oversee the region’s role
as part of the Northern Distribution Network for the transit of U.S. and NATO military supplies to
and from Afghanistan. Georgia’s aspirations for NATO membership have received ongoing
congressional support. Many Members of Congress have raised concerns about recent political
trends in Georgia following the peaceful transfer of party control in the October 2012 legislative
election and in the wake of an October 2013 presidential election.
Some Members of Congress and other policy makers believe that the United States should
provide greater support for the region’s increasing role as an east-west trade and security corridor
linking the Black Sea and Caspian Sea regions, and for Armenia’s inclusion in such links. They
urge greater U.S. aid and conflict resolution efforts to contain warfare, crime, smuggling, and
terrorism, and to bolster the independence of the states. Others urge caution in adopting policies
that will increase U.S. involvement in a region beset by ethnic and civil conflicts.
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Armenia, Azerbaijan, and Georgia
Contents
Most Recent Developments ............................................................................................................. 1
Background ...................................................................................................................................... 1
Overview of U.S. Policy Concerns .................................................................................................. 1
Regional Responses after the September 11, 2001, Terrorist Attacks on the United
States ................................................................................................................................ 5
Regional Support for Military Operations in Iraq and Afghanistan .................................... 5
The South Caucasus and the Northern Distribution Network (NDN) ................................. 6
U.S. Policy after the August 2008 Russia-Georgia Conflict ............................................... 6
The External Security Context of the South Caucasus .................................................................... 9
Russian Involvement in the Region ........................................................................................... 9
Military-Strategic Interests ................................................................................................ 10
Economic Interests ............................................................................................................ 13
The Roles of Turkey, Iran, and Others ..................................................................................... 14
The Armenia-Turkey Protocols of 2009 ............................................................................ 14
Iran .................................................................................................................................... 15
Other Countries ................................................................................................................. 17
Obstacles to Peace and Independence ........................................................................................... 18
Regional Tensions and Conflicts ............................................................................................. 18
Nagorno Karabakh Conflict .............................................................................................. 18
Civil and Ethnic Conflict in Georgia ................................................................................. 23
Economic Conditions, Blockades, and Stoppages ................................................................... 30
Recent Democratization Problems and Progress ..................................................................... 32
Political Developments in Armenia ................................................................................... 33
Political Developments in Azerbaijan ............................................................................... 36
Political Developments in Georgia .................................................................................... 39
U.S. Aid Overview ......................................................................................................................... 41
The Millennium Challenge Account........................................................................................ 43
U.S. Assistance after the Russia-Georgia Conflict .................................................................. 44
U.S. Security Assistance .......................................................................................................... 44
Security Assistance to Georgia since the August 2008 Conflict ....................................... 46
The Regional States and NATO ........................................................................................ 49
U.S. Trade and Investment ............................................................................................................. 52
Georgia and Russia’s Accession to the WTO .......................................................................... 52
Energy Resources and U.S. Policy .......................................................................................... 53
Building the Baku-Tbilisi-Ceyhan and South Caucasus Pipelines.................................... 54
Other Export Pipeline Proposals ....................................................................................... 55
Azerbaijan’s Announcement of a Gas Pipeline to Europe................................................. 57
Implications of TAP .......................................................................................................... 58
Discussions on a Trans-Caspian Pipeline .......................................................................... 59
Regional Energy Cooperation with Iran ............................................................................ 60
113th Congress Legislation ............................................................................................................. 61
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Figures
Figure 1. Map of Caucasus Region ................................................................................................ 65
Tables
Table 1. U.S. Foreign Assistance to the South Caucasus States, FY1992 to FY2014 ................... 61
Table 2. U.S. Assistance to the South Caucasus by Year, FY1992-FY2001 .................................. 63
Table 3. U.S. Assistance to the South Caucasus by Year, FY2002-FY2010 (and Totals,
FY1992-FY2010) ....................................................................................................................... 63
Table 4. U.S. Budgeted Humanitarian Assistance to Nagorno Karabakh Provided by the
U.S. Agency for International Development and Other Agencies, FY1998-FY2012 ................ 64
Contacts
Author Contact Information........................................................................................................... 65
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Most Recent Developments
Georgia’s presidential election is scheduled for October 27, 2013. Campaigning has been
relatively low-key, and the election may represent the first peaceful electoral transfer of
presidential power in Georgia. Under constitutional changes enacted in 2010, the new president
will be less powerful vis-a-vis the prime minister and the legislature. A major concern centers
around Prime Minister Bidzina Ivanishvili’s statement that he will step down as prime minister
soon after the inauguration of the new president. Georgian Foreign Minister Maia Panjikidze has
suggested that if Ivanishvili steps down, a current minister may be put forward by Ivanishvili to
succeed him (see below, “Political Developments in Georgia”).
On October 14, 2013, President Aliyev pardoned former Azerbaijani Minister of Economic
Development Farhad Aliyev (no relation), who had been imprisoned in 2007 on charges of
fomenting a coup.
Background
Armenia, Azerbaijan, and Georgia are located south of the Caucasus Mountains that form part of
Russia’s borders (see Figure 1). The South Caucasus states served historically as a north-south
and east-west trade and transport “land bridge” linking Europe to the Middle East and Asia, over
which the Russian Empire and others at various times endeavored to gain control. In ancient as
well as more recent times, oil and natural gas resources in Azerbaijan attracted outside interest.
The regional peoples can point to periods of past autonomy or self-government. After the Russian
Empire collapsed in 1917, all three states declared independence, but by early 1921 all had been
re-conquered by Russia’s Red (Communist) Army. They regained independence when the Soviet
Union collapsed at the end of 1991.1
Overview of U.S. Policy Concerns
By the end of 1991, the United States had recognized the independence of all the former Soviet
republics. The United States pursued close ties with Armenia, because of its profession of
democratic principles, and concerns by Armenian Americans and others over its fate. The United
States pursued close ties with Georgia after Eduard Shevardnadze (formerly a pro-Western Soviet
foreign minister) assumed power there in early 1992. Faced with calls in Congress and elsewhere
for a U.S. aid policy for the Eurasian states, then-President George H. W. Bush sent the
FREEDOM Support Act to Congress; it was signed with amendments into law in October 1992
(P.L. 102-511). Appropriations under the authority of the FREEDOM Support Act are currently
included in the State Department’s Economic Support Funds (ESF), Global Health Programs
(GHP), and International Narcotics Control and Law Enforcement (INCLE) accounts.
1 For background, see CRS Report RS20812, Armenia Update, by Carol Migdalovitz; CRS Report 97-522, Azerbaijan:
Recent Developments and U.S. Interests, by Jim Nichol; and CRS Report 97-727, Georgia [Republic]: Recent
Developments and U.S. Interests, by Jim Nichol.
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U.S. policy toward the South Caucasus states
The South Caucasus Region:
has included promoting the resolution of
Basic Facts
conflicts between Armenia and Azerbaijan
over Azerbaijan’s breakaway Nagorno
Area: 72,266 square miles; the region is slightly larger
than Washington State: Armenia is 11,620 sq. mi.;
Karabakh (NK) region and between Georgia
Azerbaijan is 33,774 sq. mi.; Georgia is 26,872 sq. mi.
and its breakaway regions of Abkhazia and
South Ossetia (resolving these latter conflicts
Population: 17.12 million, less than New York;
Armenia: 2.97 m.; Azerbaijan: 9.59 m.; Georgia: 4.56 m.
became much more difficult following the
(CIA, The World Factbook, mid-2013 est.). Over 1 million
August 2008 conflict; see “The August 2008
people from the region are migrant workers in Russia
Russia-Georgia Conflict,” below). Since 1993,
and elsewhere.
U.S. emissaries have been detailed to try to
GDP: $143.63 billion, less than Iowa: Armenia: $18.95
settle these conflicts. Congressional concerns
b.; Azerbaijan: $98.16 b.; Georgia: $26.52 b. (CIA, The
about the NK conflict led to the inclusion of
World Factbook, 2012 est., purchasing power parity).
Section 907 in the FREEDOM Support Act,
which prohibits U.S. government-to-government assistance to Azerbaijan, except for non-
proliferation and disarmament activities, until the President determines that Azerbaijan has taken
“demonstrable steps to cease all blockades and other offensive uses of force against Armenia and
NK.” Provisions in FY1996, FY1998, and FY1999 legislation eased the prohibition by providing
for humanitarian, democratization, and business aid exemptions. In 2002, waiver authority was
enacted (see below, “Regional Responses after the September 11”).
Some observers argue that developments in the South Caucasus are largely marginal to U.S.
strategic interests. They urge great caution in adopting policies that will heavily involve the
United States in a region beset by ethnic and civil conflicts, and some argue that, since the
European Union has recognized the region as part of its “neighborhood,” it rightfully should play
a major role. Some observers argue that the U.S. interest in democratization and human rights
should not be subordinated to interests in energy and anti-terrorism.2
Other observers believe that the United States should be more actively engaged in the region.
They urge greater U.S. aid and conflict resolution efforts to contain warfare, crime, smuggling,
and Islamic extremism and to bolster the independence of the states. Some argue that such
enhanced U.S. relations also would serve to “contain” Russian and Iranian influence and that
close U.S. ties with Azerbaijan could benefit U.S. relations with other Islamic countries. They
also point to the prompt support offered to the United States by the regional states in the
aftermath of the September 11, 2001, attacks by Al Qaeda on the United States. Some argue that
energy resources in the Caspian region are a central U.S. strategic interest, because Azerbaijani
and Central Asian oil and natural gas deliveries could somewhat lessen Western energy
dependency on Russia and the Middle East (see below, “Economic Interests”).
In his annual worldwide threat assessment, Director of National Intelligence James Clapper
testified in March 2013 that heightened rhetoric, distrust, and recurring violence along the line of
contact between Armenian and Azerbaijani armed forces could “escalate the situation with little
warning.” He raised hopes that the victory of Georgia Dream in Georgia’s legislative election
would contribute to improved Georgia-Russia relations, but also voiced concerns that Georgia
faces a “challenging political transition and an increased risk of domestic political instability,”
2 U.S. House of Representatives. Committee on Foreign Relations. Subcommittee on International Organizations,
Human Rights, and Oversight. Ideals vs. Reality in Human Rights and U.S. Foreign Policy: The Cases of Azerbaijan,
Cuba, and Egypt, July 12, 2007; U.S. Commission on Security and Cooperation in Europe. Energy and Democracy,
July 23, 2007.
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presumably referring to the run-up and aftermath of the prospective October 2013 Georgian
presidential election.3
The United States has endeavored to reassure Azerbaijan that it continues to be a “strategic
partner” in counter-terrorism cooperation and energy security and has appeared to balance these
U.S. interests against its concerns about democratization in Azerbaijan. According to some
observers, relations between the United States and Azerbaijan had cooled after the Administration
supported efforts in 2009-2010 by Armenia and Turkey to improve relations that Azerbaijan
opposed (see below, “The Armenia-Turkey Protocols of 2009”) and after President Aliyev was
not invited to the U.S. Nuclear Security Summit in April 2010. Also, according to this view,
Azerbaijan may have pursued closer working relations with Russia in the wake of the August
2008 Russia-Georgia conflict, which showed that Russia remained a major power in the region.
Countering such an assessment, Azerbaijan continues troop support for NATO operations in
Afghanistan (see below, “Regional Support for Military Operations in Iraq and Afghanistan”) and
plays a significant role as part of the Northern Distribution Network for the transit of U.S. and
NATO supplies to and from Afghanistan. Also, Azerbaijan has aimed to step up gas supplies to
Europe.
To underline the significance of U.S.-Azerbaijan relations, then-Secretary of Defense Robert
Gates visited Azerbaijan in June 2010 and then-Secretary of State Hillary Clinton visited in July
2010, and President Obama met with President Aliyev on the sidelines of the U.N. General
Assembly in September 2010. President Obama also stressed the importance of U.S.-Azerbaijani
relations when he met with President Aliyev on September 24, 2010. President Obama expressed
his appreciation for Azerbaijan’s contributions to supporting the NATO mission in Afghanistan,
and the two presidents pledged to support closer bilateral ties.4
U.S.-Azerbaijani relations appeared to generally improve—with some fits and starts—in 2011
and thereafter with the recess appointment of Ambassador to Azerbaijan Matthew Bryza, after
more than a year without an ambassador (the appointment expired at the end of 2011, however).
In late 2011, the United States backed Azerbaijan’s successful bid for a two-year term on the U.N.
Security Council (UNSC).
In early 2012, Azerbaijan’s National Security Ministry and other sources reported that alleged
Iranian-backed terrorists had planned attacks against the U.S. and Israeli embassies in Baku and
their personnel and other targets, but that Azerbaijani security forces had carried out several
arrests and operations that appeared to vitiate the threat.5 In April 2012, the Obama
Administration “re-launched” meetings of the U.S.-Azerbaijan Intergovernmental Commission on
Economic Cooperation, which had last convened in 2008. At the session in Washington, DC,
Azerbaijani co-head Samir Sharifov reported that President Aliyev had instructed the delegation
to “intensify efforts” to expand the current “strategic partnership” between the two countries.
3 U.S. Senate, Select Committee on Intelligence, Hearing on “World Wide Threats,” Statement for the Record:
Worldwide Threat Assessment of the U.S. Intelligence Community, James R. Clapper, Director of National Intelligence,
March 12, 2013.
4 The White House, Office of the Press Secretary, Read-out of President Obama’s Meeting with Azerbaijani President
Ilham Aliyev, September 24, 2010.
5 The Jerusalem Post, January 26, 2012; CEDR, March 14, 2012, Doc. No. CEP-950162; Washington Post, May 27,
2012.
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During her June 6, 2012, visit to Azerbaijan, then-Secretary Clinton discussed security, energy,
and democratization with President Aliyev. She thanked Azerbaijan for its “essential” role in the
transit of personnel and supplies to Afghanistan, and its “central role” in Europe’s efforts to
diversify sources of energy and transport routes. However, she called for further democratization
and for the release of individuals detained for expressing their views in print or on the streets, and
held a meeting with civil society leaders. She also condemned violence along the line of contact
between Armenian and Azerbaijani forces, and urged restraint.6
The Senate Foreign Relations Committee held a confirmation hearing for ambassador-designate
to Azerbaijan Richard Morningstar on June 13, 2012. He testified that the “wide range of shared
interests” between the United States and Azerbaijan “intersects with many of the United States’
highest foreign policy priorities.” He outlined “three core areas of importance to the relationship:
security, energy, and democratic and economic reform,” and stressed that “the Administration
believes we must intensify our cooperation in these areas.” He also warned that security and
prosperity in the South Caucasus could only be assured by the peaceful settlement of the NK
conflict, and he pledged to, if confirmed, support the efforts of the Minsk Group.7 He was
confirmed by the Senate at the end of June 2012 and presented his credentials to President Aliyev
in September 2012.
Meeting with visiting Azerbaijani Foreign Minister Elmar Mammadyarov in June 2013, Secretary
Kerry praised Azerbaijan as an “important partner” in Afghanistan, in facilitating shipments along
the Northern Distribution Network, and in backing the Southern Corridor for gas transit to
Europe. He and Foreign Minister Mammadyarov indicated that the two sides would discuss the
NK conflict, and Secretary Kerry voiced the hope that movement toward a peace settlement could
be revitalized. Secretary Kerry also urged Azerbaijan to continue democratization as one
component of regional peace. Foreign Minister Mammadyarov also termed the U.S.-Azerbaijani
relationship a “strategic partnership,” and voiced the hope that although his country was “far from
the United States” geographically, the two nations would continue to cooperate on these issues.8
There were some Azerbaijani media reports that U.S.-Azerbaijani relations were somewhat
strained during the period before the Azerbaijani presidential election, allegedly linked to U.S.
concerns voiced about campaign problems.9 After President Aliyev’s inauguration on October 19,
2013, to a third presidential term, U.S. Ambassador to Azerbaijan Richard Morningstar stated that
the United States looked forward to working closely with him during his new term in office.
Morningstar called for expanding and deepening U.S.-Azerbaijani cooperation on “many shared
critical interests,” including efforts to resolve the NK conflict and to bolster regional security,
counter-terrorism, energy security, and economic diversification. He also stated that the United
States would “continue to work with the government and civil society to promote democratic
values and principles in Azerbaijan.”10
6 U.S. Department of State, Remarks With Azerbaijani Foreign Minister Elmar Mammadyarov, June 6, 2012.
7 U.S. Senate, Committee on Foreign Relations, Statement of Richard Morningstar, Ambassador-Designate to
Azerbaijan, June 13, 2012.
8 U.S. Department of State, Remarks With Azerbaijani Foreign Minister Elmar Mammadyarov Before Their Meeting,
June 3, 2013.
9 CEDR, September 19, 2013, Doc. No. CEL-39784836.
10 U.S. Embassy, Baku, Ambassador Morningstar’s Statement on the Inauguration of President Ilham Aliyev, October
21, 2013.
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Regional Responses after the September 11, 2001, Terrorist Attacks on the
United States
In the wake of the September 11, 2001, terrorist attacks in New York and Washington, DC, the
former Bush Administration obtained quick pledges from the three South Caucasian states to
support Operation Enduring Freedom (OEF) in Afghanistan, including overflight rights and
Azerbaijan’s and Georgia’s offers of airbase and other support. Congressional attitudes toward
Azerbaijan and Section 907 shifted, resulting in presidential waiver authority being incorporated
into Foreign Operations Appropriations for FY2002 (H.R. 2506; P.L. 107-115). The President
may use the waiver authority if he certifies that U.S. aid supports U.S. counter-terrorism efforts,
supports the operational readiness of the Armed Forces, is important for Azerbaijan’s border
security, and will not harm NK peace talks or be used for offensive purposes against Armenia.
The waiver may be renewed annually, and 60 days after the exercise of the waiver, the President
must report to Congress on the nature of aid to be provided to Azerbaijan, the military balance
between Armenia and Azerbaijan and the effects of U.S. aid on that balance, the status of
Armenia-Azerbaijan peace talks, and the effects of U.S. aid on those talks. The waiver authority
has been exercised annually.
Regional Support for Military Operations in Iraq and Afghanistan
Azerbaijan and Georgia were among the countries that openly pledged to support the U.S.-led
Operation Iraqi Freedom (OIF), with both offering the use of their airbases, and to assist the
United States in rebuilding Iraq. Both countries agreed to participate, subject to U.S. financial
support, in the multinational stabilization force for Iraq. In August 2003, both Azerbaijan and
Georgia dispatched forces to Iraq. Azerbaijan’s 150 troops pulled out in late 2008. Georgia
augmented its troops over time until 2,000 were serving in 2007-2008, the third-largest number of
troops in Iraq, after the United States and the United Kingdom. Virtually all of these troops were
pulled out in August 2008 in connection with the Russia-Georgia conflict. Armenia began sending
personnel to Iraq in January 2005. Armenia’s 46 personnel were pulled out in late 2008.
In Afghanistan:
• Azerbaijan deployed troops to serve with NATO’s International Security
Assistance Force (ISAF) in late 2002, and 94 were deployed as of October 2013.
Azerbaijan has pledged aid to help Afghanistan build up its security forces and to
provide other support for Afghanistan after 2014.
• On November 16, 2009, Georgia sent 173 troops for training in Germany before
their scheduled deployment at the end of March 2010 to support ISAF. These
troops were boosted to 925 in mid-2010. On December 20, 2011, the Georgian
legislature approved sending an added Georgian battalion of 749 troops to
Afghanistan. The troops were deployed in October 2012. ISAF reported that the
Georgian contingent numbered 1,560 troops as of October 2013. The added
deployment made Georgia the largest contributor to ISAF among non-NATO
member countries (surpassing Australia with 1,550 troops). The U.S. European
Command’s Georgia Deployment Program supports Georgian troop training and
rotations. Defense Minister Alasania has stated that the Georgian troops will
remain beyond 2014 to assist the Afghan National Security Forces. The Labor
Party in Georgia is one of the few parties that opposes troop deployments to
Afghanistan and calls for the troops to be recalled.
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• In January 2010, Armenia sent 40 troops for training in Germany before their
deployment to Kunduz, Afghanistan, to serve with German forces. The number
of troops was increased to 45 at the end of 2010. ISAF reported that the
Armenian contingent numbered 131 in October 2013 and were deployed in
Kunduz and Balkh provinces.
The South Caucasus and the Northern Distribution Network (NDN)
Azerbaijan and Kyrgyzstan reportedly are the main over-flight, refueling, and landing routes for
U.S. and coalition troops bound for Afghanistan, and Azerbaijan also is a major land transport
route for military fuel, food, and construction supplies. The Azerbaijani route is one of three main
routes through Russia, the South Caucasus, and Central Asia to Afghanistan, together termed the
NDN, that have supplemented—and for several months in 2011-2012, supplanted—supply routes
through Pakistan. Speaking in 2011, former Ambassador to Azerbaijan Matthew Bryza stated that
“virtually every U.S. soldier deployed to Afghanistan has flown over Azerbaijan.”11 The role of
Azerbaijan as an air corridor will become more significant in coming months as troop transport
functions are shifted from the Manas Transit Center in Kyrgyzstan—which is scheduled to close
by July 2014—to Romania.
Georgia also serves as a major transit route for cargoes that are loaded at the Black Sea port of
Poti for transport to and from Afghanistan. Visiting the port in late July 2013, General William
Fraser, Commander of U.S. Transportation Command, thanked Georgia for supporting the transit
of cargoes to and from Afghanistan through the “key port.” He indicated that the port would
continue significant work during ISAF’s drawdown, and reported that at one time, the port had
been responsible for as much as 30% of cargoes being transported through the Northern
Distribution Network.12
U.S. Policy after the August 2008 Russia-Georgia Conflict
Strong U.S. support for Georgia is reflected in the U.S.-Georgia Charter on Strategic Partnership,
signed in January 2009, which states that “our two countries share a vital interest in a strong,
independent, sovereign, unified, and democratic Georgia.” The accord is similar to a U.S.-
Ukraine Charter signed in December 2008 and a U.S.-Baltic Charter signed in 1998 with Estonia,
Latvia, and Lithuania.
• In the security realm, “the United States and Georgia intend to expand the scope of their
ongoing defense and security cooperation programs to defeat [threats to global peace and
stability] and to promote peace and stability.” Such cooperation will “increase Georgian
capabilities and ... strengthen Georgia’s candidacy for NATO membership.”
• In the economic realm, the two countries “intend to pursue an Enhanced Bilateral
Investment Treaty, to expand Georgian access to the General System of Preferences, and
to explore the possibility of a Free-Trade Agreement.” Energy security goals include
11 U.S. Embassy, Baku, Azerbaijan, Speech to Plenary Session for Caspian Oil and Gas Show 2011 Ambassador
Matthew Bryza, June 8, 2011; Ambassador Matthew Bryza, Press Conference, December 29, 2011.
12 U.S. Embassy, Tbilisi, Ambassador Norland and General Fraser visit Poi Port, July 27, 2013.
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“increasing Georgia’s energy production, enhanc[ing] energy efficiency, and increas[ing]
the physical security of energy transit through Georgia to European markets.”
• In the realm of democratization, the two countries “pledge cooperation to bolster
independent media, freedom of expression, and access to objective news and
information,” and to further strengthen the rule of law. The United States pledged to train
judges, prosecutors, defense lawyers, and police officers.13
Then-Deputy Assistant Secretary Bryza stressed that the charter did not provide security
guarantees to Georgia. According to some observers, the Charter aimed to reaffirm the United
States’ high strategic interest in Georgia’s fate, to counter perceptions that the United States (and
the West) had acquiesced to increased Russian dominance in the South Caucasus.14
Some in Georgia expressed concern that the “reset” in U.S.-Russian relations enunciated by the
Obama Administration in 2009 could lead the United States to downgrade ties with Tbilisi, or
even make concessions to Russia at Georgia’s expense. At the U.S.-Russia summit in July 2009,
however, President Obama stated that one area where the two presidents “agreed to disagree” was
on Georgia, where he stressed that he had “reiterated my firm belief that Georgia’s sovereignty
and territorial integrity must be respected.”15 Perhaps in order to calm the concerns of some
Georgians over the “reset,” Vice President Joseph Biden visited Georgia in late July 2009. After a
U.S.-Russia summit in July 2012, he again visited Georgia to reaffirm U.S. commitments.
In 2011-2013, there were further high-level U.S.-Georgia bilateral visits. In January 2011,
President Saakashvili met with President Obama during a U.S. visit, and reportedly gave the U.S.
President a report detailing Georgia’s defense needs. According to some reports, Presidents
Obama and Saakashvili briefly met on the sidelines of the opening of the U.N. General Assembly
in New York in September 2011. Some congressional delegations also visited. During his state
visit to the United States in January 2012, President Saakashvili met with President Obama, who
praised efforts in Georgia to increase the honesty of police, the rule of law, and free market
reforms, and called for free elections in the future. He stated that these democratic and free
market reforms could serve as examples for other Eurasian countries. He reiterated the call in the
Charter for exploring a free trade agreement, and thanked Saakashvili for Georgia’s troop
contributions in Afghanistan. He mentioned in a press conference that the two presidents had
discussed “strengthen[ing] our defense cooperation,” and he voiced continuing support for
Georgia’s NATO aspirations. In response at the press conference, President Saakashvili stated that
“we are grateful for elevating our defense cooperation further and talking about Georgia’s self-
defense capabilities and developing it.”16 Russia’s then-Prime Minister Putin and others in Russia
denounced what they inferred was a change in U.S.-Georgia defense ties, although the
Administration claimed that its defense cooperation policy toward Georgia had not changed (but
see directly below, and below in “Security Assistance to Georgia since the August 2008
Conflict”).
13 U.S. Department of State. U.S.-Georgia Charter on Strategic Partnership, January 9, 2009.
14 David J. Smith, “US-Georgia Charter is Historic,” Potomac Institute for Policy Studies, January 12, 2009.
15 The White House. Office of the Press Secretary. Press Conference by President Obama and President Medvedev of
Russia, July 6, 2009.
16 The White House, Office of the Press Secretary, Remarks by President Obama and President Saakashvili of Georgia
After Bilateral Meeting, January 30, 2012.
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At her meeting with Saakashvili on June 5, 2012, former Secretary Clinton stated that she
reaffirmed U.S. support for Georgia’s sovereignty and territorial integrity within its
internationally recognized borders, and announced that U.S. consular officials would recognize
so-called status-neutral travel documents issued by the Georgian government to residents of
Abkhazia and South Ossetia who wished to visit the United States. She stated that by recognizing
such travel documents, the United States was facilitating reconciliation in Georgia. She stated that
the two sides had agreed on new areas of defense cooperation, including training and support for
monitoring the seacoast and skies, upgrades for the utility helicopter fleet, and enhanced officer
training (see also below, “Security Assistance to Georgia since the August 2008 Conflict”).
Among other contacts, Secretary Kerry first met with Foreign Minister Maia Panjikidze on April
24, 2013, on the sidelines of a NATO foreign ministerial meeting in Brussels. The U.S. side
issued few details. President Saakashvili visited the United States in late April-early May 2013,
and met with Vice President Biden, Secretary Kerry, and Senator John McCain, among others.
Deputy Secretary of State William Burns visited Tbilisi on July 19, 2013, and reassured Pajikidze
of U.S. support for Georgia’s democratic development, its Euro-Atlantic aspirations, and its
sovereignty and territorial integrity. In late July 2013, General William Fraser, Commander of
U.S. Transportation Command, visited the Georgian port of Poti. In late August 2013, Defense
Secretary Chuck Hagel and other U.S. officials met with visiting Georgian Defense Minister
Irakli Alasania. Reportedly, Alasania discussed Georgia’s defense needs, but little information
was available about the U.S. response.17
Commenting on President Saakashvili’s U.N. General Assembly speech in September 2013, U.S.
Ambassador to Georgia Richard Norland reiterated U.S. concerns about Russia’s construction of
barriers along Abkhazia’s and South Ossetia’s borders, and praised Saakashvili’s admission that
some human rights problems occurred during his presidency. Norland seconded Saakashvili’s
statement that given the challenges faced by Georgia, there is a need to focus on the future while
addressing claims of past injury, and Norland urged applying the tradition of forgiveness. Norland
also stressed that the United States would continue to support the enhancement of the rule of law
in Georgia.18 On October 4, 2013, Ambassador Norland visited the South Ossetia border area,
where he criticized Russia’s construction of fences and other obstacles along the border as a
“tragic situation,” reminiscent of the Berlin Wall, and called for the removal of barriers that
prevent people from moving back and forth.19
Some observers have called for a reevaluation of some aspects of U.S. support for Georgia. These
critics have argued that many U.S. policy makers were captivated by Saakashvili’s charismatic
personality and pledges to democratize and tended to overlook his bellicosity. They have raised
concerns that although the 2012 legislative election was progressive, the post-election arrests of
former government officials and the harsh rhetoric of political actors highlight problems of
democratization. They have warned that U.S. acceptance of Georgian troops for coalition
operations in Afghanistan must not lead to U.S. defense commitments to Georgia, and a few have
suggested that the United States should not unquestionably back Georgia’s territorial integrity, but
should rather encourage reconciliation and the consideration of options short of the near-term
17 U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs), News Release: Readout of
Secretary Hagel's Meeting With Georgia’s Minister of Defense Irakli Alasania, August 21, 2013; Joshua Kucera,
“Alasania, in Washington, Lays Out More Modest Agenda for Georgia,” Eurasianet, August 22, 2013.
18 U.S. Embassy, Tbilisi, Ambassador's Comments on President's UNGA Speech, September 26, 2013.
19 U.S. Embassy, Tbilisi, Ambassador Norland: Situation Reminds Me of the Berlin Wall, October 4, 2013.
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reintegration of the regions into Georgia. In contrast, other observers have called for a more
robust U.S. and NATO effort to resupply Georgia with defensive weaponry so that it might deter
or resist Russian aggression (see also below, “U.S. Security Assistance”). At the same time, most
observers advise against extending diplomatic recognition to breakaway regions without an
international consensus.20
The External Security Context of the South
Caucasus
Russian Involvement in the Region
After Vladimir Putin was elected president in 2000, Russia appeared to place great strategic
importance on increasing influence in the South Caucasus region. Several developments over the
next few years, however, appeared to jeopardize Putin’s influence efforts. These included the
“rose revolution” in Georgia that appeared to usher in democratic reforms, NATO’s increased ties
with the regional states, the completion of the Baku-Tbilisi-Ceyhan oil pipeline and an associated
gas pipeline, Russia’s ongoing concerns about security in its North Caucasus area (including
Chechnya), and Russia’s agreement to close its remaining military bases in Georgia. These
challenges to Russian influence, however, appeared to be reversed as a result of the August 2008
Russia-Georgia conflict.
The Russian leadership has appeared to place its highest priority on exercising influence in the
region in the military-strategic sphere and slightly less priority on influence in the economic
sphere (particularly energy) and domestic political spheres. Russia has viewed Islamic
fundamentalism as a growing threat to the region, but has cooperated with Iran on some issues to
counter Turkish and U.S. influence. Russia has tried to stop ethnic “undesirables,” drugs,
weapons, and other contraband from entering its borders. It has quashed separatism in its North
Caucasus areas while backing it in the South Caucasus.
The South Caucasian states have responded in various ways to Russian influence. Armenia has
close security and economic ties with Russia, given the unresolved NK conflict and concerns
about Turkey. Azerbaijan has been concerned about Russia’s ties with Armenia and has
eliminated Russia’s military presence. At the same time, Azerbaijan has appeared to value having
cooperative relations with Russia to increase its options and leverage in diplomacy and trade.
From 2006 until recently, Georgia suffered from trade restrictions imposed by Russia and has had
no formal diplomatic relations with Russia since the Russia-Georgia conflict.
20 Alexander Cooley and Lincoln Mitchell, “No Way to Treat Our Friends: Recasting Recent U.S.-Georgian Relations,”
The Washington Quarterly, January 2009, pp. 27-41; Lincoln Mitchell, Uncertain Democracy: U.S. Foreign Policy and
Georgia’s Rose Revolution (Philadelphia: University of Pennsylvania Press, 2009); “A Georgia-Russia War Discussion
between Gordon Hahn and Johnson’s Russia List,” Russia: Other Points of View, October 17, 2008, at
http://www.russiaotherpointsofview.com; Paul Saunders, “Help Has Strings Attached,” Washington Times, December
17, 2009; Samuel Charap and Cory Welt, “A New Approach to the Russia-Georgia Conflict: The United States Needs a
Comprehensive Conflict Policy,” Center for American Progress, October 18, 2010.
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Military-Strategic Interests
Russia’s armed presence in the South Caucasus has been multifaceted, including thousands of
military base personnel, border troops, and until 2008, “peacekeepers.” The first step by Russia in
maintaining a military presence in the region was the promulgation of the Commonwealth of
Independent States (CIS) Collective Security Treaty (CST) in 1992, which pledged members to
consult in the event of a threat to one or several members, and to provide mutual aid if attacked. A
follow-on Collective Security Treaty Organization (CSTO) with a charter reiterating these
pledges was established in 2002 (current members include Armenia, Belarus, Kazakhstan,
Kyrgyzstan, Russia, and Tajikistan). Russia also secured permission for two military bases in
Armenia and four in Georgia (on the latter bases, see below). The total number of Russian ground
forces troops in Armenia has been estimated at about 3,300, and an additional number of Air
Force personnel.21 In addition, Russia’s Federal Security Service Border Guard Directorate is
responsible for guarding Armenia’s borders with Turkey and Iran (the directorate reports that the
bulk of the guards under its direction are Armenian citizens). Various statements have appeared
by CSTO and Armenian officials about whether or not the CSTO would defend NK and Armenia
against an Azerbaijani military operation (see also below).
During a visit by then-Russian President Dmitriy Medvedev to Armenia in August 2010, Armenia
agreed to extend the basing agreement with Russia to the year 2044. In the basing accord, Russia
also pledged that its forces would help safeguard Armenia’s national security and that it would
supply more modern weaponry for Armenia’s armed forces. Although some officials in Armenia
hailed the accord as providing greater assurance that Russia would intervene if Azerbaijan began
operations against NK, Medvedev argued during a September 2010 visit to Azerbaijan that the
accord was not aimed against Azerbaijan. Georgia’s then-Foreign Minister Grigol Vashadze,
however, criticized the accord as strengthening Russia’s military influence in the region, as
compromising Armenia’s independence, and as raising tensions that are inimical to the settlement
of the NK conflict.22
In December 2012, President Sargisyan stated that in case of war with Azerbaijan, Armenia was
counting on the support of its allies in the CSTO, rhetorically asking “why else are we in the
organization?”23 In January 2013, President Sargisyan stressed in a speech at the Defense
Ministry that the strategic partnership between Armenia and Russia is “the nucleus of Armenian
security,” and that membership in the CSTO also is the “real guarantee of Armenia’s security.”24
The CSTO has refused to state what it would do in case of the escalation of conflict between
Armenia and Azerbaijan. In September 2012, however, the CSTO Rapid Reaction Forces
simulated repulsing an invasion of Armenia by “terrorists.” One Russian newspaper reported in
January 2013 that Russia recently had transformed its forces in Armenia to primarily professional
contract troops, in anticipation of possible Azerbaijani military action against Armenia or Israeli
action against Iran. The report depicted Azerbaijan as making unfriendly moves against Russia
and quoted a Russian lieutenant general as stating that whether Russia will defend Armenia from
an Azerbaijani action will be a “political decision,” but that the forces should be ready.25
21 The Military Balance, International Institute of Strategic Studies, March 14, 2013.
22 Azerbaijan Press Agency, September 8, 2010. See also Joshua Kucera, “Armenia Boosting Relations with both
NATO and Russia,” Eurasianet, November 19, 2012.
23 CEDR, December 24, 2012, Doc. No. CEP-950187.
24 Interfax, January 16, 2013.
25 CEDR, January 18, 2013, Doc. No. CEP-305001.
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In addition to the Russian troops in the South Caucasus, about 88,000 Russian troops are
stationed nearby in the North Caucasus, naval forces of Russia’s Caspian Sea Flotilla are based in
Astrakhan, and some naval forces of the Black Sea Fleet are docking at the port of Ochamchira in
Abkhazia, Georgia. In 1993, Azerbaijan was the first Eurasian state to get Russian troops to
withdraw, except at the Qabala (Gabala) radar site in northern Azerbaijan. Giving up on closing
the site, in January 2002 Azerbaijan signed a 10-year lease agreement with Russia permitting up
to 1,500 troops there. After months of reportedly contentious negotiations, during which
Azerbaijan purportedly demanded a lease increase from the present $7 million per year to $300
million, Russia announced in early December 2012 that it would relinquish the radar site. A new
radar in the North Caucasus reportedly has assumed at least some of the functions of the Qabala
radar. In April 2013, President Aliyev explained that the country had asked for a higher lease
payment because of the scenic value of the land. He averred that Russia had been asked to pay
market value for leasing the land, just as Russia charges world market value for weaponry it sells
to Azerbaijan. He denied that the lease decision harmed Azerbaijani-Russian relations or that
Azerbaijan had been influenced by the United States regarding the lease negotiations.
President Putin visited Azerbaijan in mid-August 2013, leading a large delegation of ministers
and other officials. Putin hailed Azerbaijan as “one of Russia’s long-standing, traditional, and
reliable partners,” and as Russia’s “strategic partner.” Putin stressed the growth of trade relations
between the two countries, the more than 500 Russian businesses operating in Azerbaijan, and the
1 million or more Azerbaijani labor migrants in Russia. Putin emphasized energy cooperation,
and Russia’s Rosneft state oil firm and Socar signed an accord on oil swaps, exploration,
marketing, and other cooperation. Putin stated that the two sides had discussed security, border
delineation, and environmental protection in the Caspian Sea, and the two leaders inspected ships
from the Russian Caspian Sea Flotilla that were visiting Baku. President Aliyev stated that
cooperation with Russia in the oil and gas sphere would increase and stressed that Azerbaijani-
Russian military cooperation already was substantial and would continue.
According to one report, military cooperation agreements were signed that called for arms
transfers worth at least $4 billion, technical assistance to modernize Azerbaijani defense
industries, and work to repair and upgrade Azerbaijani military hardware and weapons. Russia
agreed to provide military education for at least 100 officers and Azerbaijan allegedly agreed to
shift away from cooperation with the United States on Caspian maritime security and toward
greater maritime cooperation with Russia.26 CSTO Secretary General Nikolay Bordyuzha had
earlier stated—after media reports appeared in mid-2013 of Russian arms deliveries to
Azerbaijan—that Russia considered the impact of such transfers on the military equilibrium in the
South Caucasus, and that Russia was compensating the Armenian side for such transfers,
including by maintaining a Russian military presence “which aims to ensure the safety of
Armenia.” Underlining such support, Russia and Armenia signed a new treaty on military and
technological cooperation on June 25, 2013, during a visit by Russian Security Council Secretary
Nikolai Patrushev. He also stressed that Russia had deployed “enough forces and means [in
Armenia] to guarantee Armenia's security.”27
After the September 11, 2001, terrorist attacks in the United States, Russia stepped up its claims
that Georgia harbored Chechen terrorists (with links to Al Qaeda) who used Georgia as a staging
ground for attacks into Chechnya. The United States expressed “unequivocal opposition” to
26 CEDR, August 23, 2013, Doc. No. CEL-37543661.
27 CEDR, June 27, 2013, Doc. No. CER-27062173; June 22, 2013, Doc. No. IMN-45668864; Interfax, June 25, 2013.
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military intervention by Russia inside Georgia. Georgia launched a policing effort in its northern
Pankisi Gorge in late 2002—with U.S. assistance—that somewhat reduced tensions with Russia
over this issue. In April 2006, Azerbaijan convicted 16 people on charges that they had received
terrorist training from al Qaeda operatives in the Pankisi Gorge. Since 2009, Russia has renewed
its allegations that the Gorge harbors terrorists. Georgia has rejected these allegations as false and
raised concerns that they might serve as a pretext for new Russian violations of Georgia’s
territorial integrity.
Some Russian and regional observers have speculated that in case of a possible U.S.-Israeli
military action against Iran, Russia would take advantage of the operation to move militarily
against the South Caucasus. Russia might quickly secure an air and land route through Georgia to
its military facilities in Armenia, and occupy the rest of the region, ostensibly to safeguard
southern Russia from Iranians fleeing into the South Caucasus or to protect against other claimed
disorder, these observers warn.28
Russian “Peacekeepers” and Bases in Georgia
Russia’s mediation of ceasefires between Georgia and its breakaway regions in the early 1990s
resulted in agreement by the parties on the presence of Russian military “peacekeepers” in
Abkhazia and South Ossetia. Russia’s “peacekeeping” role at that time received at least tacit
approval from world governments and international organizations, with the proviso that the U.N.
and the Organization for Security and Cooperation in Europe (OSCE) also provide monitoring.
For many years, Georgian authorities voiced dissatisfaction with the role of the “peacekeepers” in
facilitating a peace settlement and called for them to either be replaced or supplemented by a
wider international peacekeeping force (see “Civil and Ethnic Conflict in Georgia”).
In the early 1990s, Georgia was pressured by Russia to agree to the long-term presence of four
Russian military bases. By the late 1990s, however, many in Georgia were calling for the bases to
close, and this received support from European countries during talks over amending the
Conventional Armed Forces in Europe (CFE) Treaty. In 1999, Russia and Georgia agreed to
provisions of the amended CFE Treaty calling for Russia to reduce weaponry at its four bases in
Georgia, to soon close two of the bases, and to complete negotiations on the status of the other
two bases. NATO signatories hesitated to ratify the amended Treaty until Russia satisfied these
and other conditions. One base was soon closed and Russia claimed that it had closed another. In
November 2007, the Russian Foreign Ministry proclaimed that it had closed the last base and that
Russia had “fully” accomplished its obligations to Georgia on the withdrawal of military
facilities.
Not even one year had passed, however, before Russia announced—following the August 2008
Russia-Georgia conflict—that two army brigades would be deployed to new military bases in
Abkhazia and South Ossetia. In addition to these army brigades, Russian border troops were
deployed along regional borders with Georgia, along which engineer brigades were creating
revetments, trenches, and minefields. A part of the Black Sea Fleet also was deployed to
28 Nikoloz Devdariani, “Russia to 'Cut Military Transport Corridor' Through Georgia?” Georgia Today, April 13, 2012;
CEDR, April 13, 2012, Doc. No. CEP-950045.
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Ochamchira in Abkhazia. The British publication The Military Balance reports that as of early
2013 there were 6,900 Russian military troops in Abkhazia and South Ossetia.29
Economic Interests
Russia plays a major role in Armenia’s economy, and less in Azerbaijan and Georgia. Russia is
Armenia’s major foreign investor, and is responsible for about one-quarter of Armenia’s trade
turnover. All three states rely somewhat on remittances provided by migrant workers in Russia. A
Russian embargo on much trade with Georgia was in place from 2006 until some transactions
were resumed in 2013. Russia has opposed the conclusion of free-trade and association
agreements between the EU and Soviet successor states, including Armenia, instead advocating
that the states forge closer economic ties with Russia.
According to some observers, Armenia appeared to accede to Russian pressure in September
2013 when it announced that it would prioritize joining the Russia-led Eurasian Customs Union,
placing in jeopardy its four years of talks with the EU on a free-trade and association agreement
(see also below). President Sargisyan explained that Armenia previously had questioned the need
to join the Customs Union because Armenia does not share borders with other members, but that
the country had decided to join in order to prevent “serious problems in further deepening and
expanding Armenia’s economic [and] cultural ties with its strategic partner.” Armenian Defense
Minister Ohanyan reportedly stated that the decision to join the Customs Union was spurred by
the security environment faced by Armenia.30 Russia had greatly boosted the price of gas in April
2013, but offered a partial subsidy in late August, and an accord on energy security was signed
during Sargisyan’s September 2013 Moscow visit.31 On September 18, 2013, Representative Eliot
Engel wrote a letter to Secretary Kerry raising concerns that Russia was attempting to prevent
Armenia and other Eurasian states from building ties with Europe.
Russia has tried to play a dominant role in future oil and gas production and transportation in the
Caspian Sea region. A major lever has been the prices it charges the South Caucasian countries
for gas. In 2006, Russia charged all three regional states much more for gas. Armenia agreed to
relinquish various energy assets to Russian firms as partial payment for this price increase. Some
critics have alleged that Russia now has virtual control over Armenia’s energy supplies. Russia
again hiked gas prices in 2007. Georgia negotiated an agreement to receive some Azerbaijani gas
via the new South Caucasus Pipeline (SCP, see “Building the Baku-Tbilisi-Ceyhan and South
Caucasus Pipelines,” below) and another small existing pipeline. It also agreed to continue to
purchase some higher-priced gas from Gazprom. Russia’s requests for higher prices and
reductions in the amounts of gas and electricity supplied to Azerbaijan led President Aliyev to
announce that the country would no longer purchase Russian gas. Following the August 2008
Russia-Georgia conflict, Gazprom’s arrangement with Georgia involving the transit of Russian
gas to Armenia remained in place. Armenia pays a share of gas to Georgia as a transit fee.
According to BP, Russia in 2010 provided 7.4 billion cubic feet of gas to Georgia and 45.6 billion
cubic feet of gas to Armenia. Georgia received a much greater share of its gas—36.4 billion cubic
feet of gas in 2010—from Azerbaijan than from Russia, according to BP. (See also below,
29 The Military Balance, International Institute of Strategic Studies, March 14, 2013.
30 CEDR, October 15, 2013, Doc. No. CEL-51285601; September 18, 2013, Doc. No. CEL-57379774.
31 Armenia: Country Report, Economist Intelligence Unit, October 2013; Interfax, August 29, 2013.
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“Energy Resources and U.S. Policy,” for more information on Russia’s efforts to gain control of
regional energy resources and infrastructure.)
The Roles of Turkey, Iran, and Others
The United States has generally viewed Turkey as able to foster pro-Western policies and
discourage Iranian interference in the South Caucasus states, even though Turkey favors
Azerbaijan in the NK conflict. Critics of Turkey’s larger role in the region caution that the United
States and NATO might be drawn by their ties with Turkey into regional imbroglios. Turkey seeks
good relations with Azerbaijan and Georgia and some contacts with Armenia, while trying to
limit Russian and Iranian influence. Azerbaijan likewise long viewed Turkey as an ally against
such influence, and as a balance to Armenia’s ties with Russia (see below for recent
developments). Georgia has an abiding interest in ties with the approximately 1 million Georgians
residing in Turkey and the approximately 50,000 residing in Iran, and has signed friendship
treaties with both states. Turkey is one of Georgia’s primary trade partners. Existing and planned
east-west oil and gas pipelines reflect cooperation between Azerbaijan, Georgia, and Turkey.
Armenia is a member of the Black Sea Economic Cooperation Organization, along with Turkey,
and the two states have established consular relations. Obstacles to better Armenian-Turkish
relations have included Turkey’s rejection that there was an Armenian genocide in 1915-1923 and
its support for Azerbaijan in the NK conflict.
The Armenia-Turkey Protocols of 2009
In September 2008, Turkey’s President Abdullah Gül visited Armenia, ostensibly to view a soccer
game, and this thaw contributed to the two countries reaching agreement in April 2009 on a “road
map” for normalizing ties, including the establishment of full diplomatic relations and the
opening of borders. After further negotiations, Turkish Foreign Minister Ahmet Davutoglu and
Armenian Foreign Minister Edvard Nalbandian initialed two protocols “On Establishing
Diplomatic Relations,” and “On Development of Bilateral Relations” on August 31, 2009, and
formally signed them on October 10, 2009. New Secretary of State Clinton reportedly met with
Turkish leaders in March 2009 in Ankara to encourage them and President Obama reportedly
actively supported the negotiators during a meeting in Istanbul in April 2009.32 The protocol on
diplomatic relations called for the two sides to establish embassies in each other’s capitals within
two months after the mutual legislatures approved the protocols and after the exchange of the
articles of ratification of the protocol. The protocol on foreign relations called for the two sides to
“agree to open the common border within two months after the entry into force of this Protocol,”
that is, after ratification of the protocols by the legislatures of the two states, to “implement a
dialogue on the historical dimension with the aim to restore mutual confidence between the two
nations, including an impartial scientific examination of the historical records and archives to
define existing problems and formulate recommendations,” and to undertake other cooperative
efforts.33
32 David Phillips, Diplomatic History: The Turkey-Armenia Protocols, Institute for the Study of Human Rights in
collaboration with the Future of Diplomacy Project, Harvard Kennedy School, March 2012.
33 Ministry of Foreign Affairs of Armenia. Protocol on the Establishment of Diplomatic Relations between the Republic
of Armenia and the Turkish Republic and the Protocol on the Development of Mutual Relations Between the Republic
of Armenia and the Turkish Republic, August 31, 2009, at http://www.armeniaforeignministry.com/pr_09/
(continued...)
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A ruling of the Armenian constitutional court on January 18, 2010, that the protocols could not
affect Armenia’s policy on genocide recognition was criticized by the Turkish government as not
being in conformity with the text of the protocols. The Armenian government stated that the
ruling did not affect the conditions of the protocols. Azerbaijan strongly criticized Turkey for
moving toward normalizing relations with Armenia without formally linking such a move to a
peace settlement of the NK conflict. This criticism quickly elicited pledges by Turkey’s leaders
that the Turkish legislature would not approve the protocols until there was progress in settling
the NK conflict. On April 22, 2010, the ruling Armenian party coalition issued a statement that
“considering the Turkish side’s refusal to fulfill the requirement to ratify the accord without
preconditions in a reasonable time, making the continuation of the ratification process in the
national parliament pointless, we consider it necessary to suspend this process.”34
Perhaps reflecting the repair of Azerbaijani-Turkish ties, in August 2010, Azerbaijan and Turkey
signed a strategic partnership and mutual assistance agreement. The 10-year accord specifies that
if one of the sides is attacked by a third country, the sides will provide reciprocal aid. Other
provisions call for the sides to cooperate to eliminate threats to national security; to ban the
operation of groups threatening the independence, sovereignty, and territorial integrity of the
other side; to prevent their territories from being used for acts of aggression against the other side;
and to cooperate in defense industry production, holding joint military exercises, and training
army specialists.
Iran
Iran’s goals in the South Caucasus include discouraging Western powers such as Turkey and the
United States from gaining influence (Iran’s goal of containing Russia conflicts with its
cooperation with Russia on these interests), ending regional instability that might threaten its own
territorial integrity, and building economic links. Armenia and Georgia have through the ages
upheld their Christian heritage within the wider Islamic region (although many Georgian Ajarians
are Sunni Muslims). Azerbaijanis are mainly a Turkic people and practice Shiite Islam, as do the
bulk of Iranians, but many Azeris reject the strict Shiism of Iran and its cleric-led politics. A
major share of the world’s ethnic Azerbaijanis reside in Iran (The World Factbook estimates about
12 million, although other estimates are far higher), as well as about 200,000 Armenians. Ethnic
consciousness among some “Southern Azerbaijanis” in Iran has grown. Azerbaijani elites fear
Iranian-supported Islamic extremism and object to Iranian support to Armenia. Baku banned the
pro-Iranian Islamic Party of Azerbaijan (IPA) in 1995. To block the West and Azerbaijan from
developing Caspian Sea energy, Iran long has insisted on either common control by the littoral
states or the division of the seabed into five equal sectors. There is some trade between the two
countries, reportedly between $240 million and $300 million in turnover in 2011, but amounts
have been declining.
In recent months, Iran has boosted its diplomacy in the region, perhaps to counter growing
international concern about its nuclear programs and to counter U.S. influence. Iran has proposed
to build a railroad link to Armenia and another to Azerbaijan. The latter railroad will permit not
only greater trade with Azerbaijan but also with Russia. Iran sells some gas to Armenia, and
(...continued)
20090831_protocol.pdf. See also The Turkish Weekly, August 31, 2009.
34 “Armenia Suspends Normalization of Ties with Turkey,” BBC News, April 22, 2010.
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Azerbaijan sells some gas to Iran. Iran’s efforts to improve relations with Azerbaijan have
appeared to be complicated, however, by its reported suppression of rising dissent among
“Southern Azerbaijanis” as well as alleged support for Islamic extremism in Azerbaijan. U.S.
policy aims to contain Iran’s threats to U.S. interests in the region.35
Azerbaijan’s relations with Iran were roiled in February 2012 when Iran accused Azerbaijan of
harboring Israeli intelligence agents who had crossed the Azerbaijani-Iran border to carry out
operations, allegedly including assassinations of Iranian nuclear scientists. That same month,
Azerbaijan sentenced seven individuals it had arrested in 2008 that it claimed had been trained in
Iran to carry out terrorism, including plans to bomb the Israeli embassy. In late February,
Azerbaijan confirmed that it had reached a large arms deal with Israel, but stated that the weapons
purchase was aimed not against Iran but to “liberate” occupied territories.
Attempts to ease Azerbaijani-Iranian tensions included a trip by Defense Minister Safar Abiyev to
Tehran in mid-March 2012. Abiyev stressed that Azerbaijani territory would not be used to launch
attacks on Iran. Two days later, however, the Azerbaijan National Security Ministry announced
that nearly two dozen terrorists trained in Iran had been arrested, who had been planning attacks
on Israeli and U.S. embassies and other Western interests, and at the end of the month, the
ministry reported that two other Iranian spy networks had been uncovered in 2011.
Also in late March 2012, Iran increased its accusations that Azerbaijan was providing Israel with
military access to launch attacks on Iran after such allegations appeared in Western media. In
early April, Iran arrested some individuals it claimed were Israeli agents being directed from an
unnamed nearby country, presumably Azerbaijan. On April 12, Azerbaijani media reported that
the government had arrested several Iranians and Azerbaijanis involved in weapons and drug
smuggling from Iran. In early May 2012, Iran recalled its ambassador to Azerbaijan for
“consultations” following anti-Iranian protests outside Iran’s embassy in Baku against Iranian
criticism of the Eurovision Song Contest to be held on May 22-26, 2012, in Baku.
In early September 2012, Iran released two Azerbaijani poets it had convicted in August on spy
charges, and Azerbaijan paroled an Iranian reporter convicted on drug charges, just before a visit
by the Iranian vice president to Azerbaijan. In October 2012, President Ahmadinezhad met with
President Aliyev on the sidelines of the Economic Cooperation Organization summit in Baku, and
both leaders reportedly expressed satisfaction with the development of political, economic, and
cultural cooperation between their two countries, and called for further expanding economic ties.
Azerbaijani officials reportedly have pledged to Iran that Azerbaijan will not be used as a
launching pad for third-party aggression against Tehran, but also have vowed to support
international sanctions against Iran.
Bilateral relations appeared further strained after a conference by a “Southern Azerbaijan”
liberation group was held in Baku at the end of March 2013. Iranian officials condemned the
meeting, expressing dismay that the Azerbaijani government permitted it and accusing U.S. and
“Zionist” interests of orchestrating the meeting to spoil Azerbaijani-Iranian relations. Seemingly
in retaliation, the Iranian legislature began debate on redrawing Iran’s borders to incorporate
modern-day Azerbaijan.
35 See CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
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In recent months, Azerbaijan and Iran have appeared to seek better relations. In July 2013,
Azerbaijan welcomed Iran’s proposal that it use its influence in the Organization of Islamic
Cooperation and the Non-Aligned Movement to support a settlement of the NK conflict. In early
August 2013, Azerbaijani Speaker Oqtay Asadov attended attended the swearing-in ceremony for
newly elected Iranian President Hasan Ruhani. However, the Iranian embassy in Baku denounced
the sentencing by an Azerbaijani court on October 11, 2013, of Iranian citizen Bahram Fayzi—
arrested in March 2012—to 15 years in prison on charges of planning an attack on the Israeli
embassy and other crimes. The embassy denied court allegations that Fayzi was an agent of Iran’s
Army of the Guardians of the Islamic Revolution (Sepah).
Other Countries
Among non-bordering states, the United States and European states are the most influential in the
South Caucasus in terms of aid, trade, exchanges, and other ties. U.S. and European goals in the
region are broadly compatible, involving integrating it into the West and preventing an anti-
Western orientation, opening it to trade and transport, obtaining energy resources, and helping it
become peaceful, stable, and democratic. As part of its European Neighborhood Policy, the EU
signed Action Plans with the three regional states in November 2006 that it hoped would foster
both European and regional integration.
Some observers have suggested that the EU assumed a more prominent role than the United
States in the region after the August 2008 Russia-Georgia conflict.36 The EU took the
international lead in mediating the conflict and in deploying observers after the ceasefire (see
“The August 2008 Russia-Georgia Conflict,” below). The EU launched an Eastern Partnership
program in 2009 to deepen ties with the South Caucasus states. Under the program, the EU plans
“deep and comprehensive free trade agreements with those countries willing and able to enter into
a deeper engagement, gradual integration in the EU economy, and ... easier travel to the EU
through gradual visa liberalization.”37 In July 2013, the EU announced the successful conclusion
of talks with Armenia on a Deep and Comprehensive Free Trade Area, as part of the Association
Agreement between the EU and the Republic of Armenia. The free trade agreement was expected
to bring Armenia’s laws and regulations into harmony with EU standards, greatly enhance
Armenia’s exports to the EU, and boost Western investment in Armenia.38 Instead, Armenia
announced in September 2013 that it would join the Russia-led Customs Union. Although
Armenia indicated that it still hoped to sign an association agreement at the EU’s upcoming
November 2013 Eastern Partnership Summit in Lithuania, the EU has indicated that relations are
being re-assessed.
The South Caucasus region has developed some economic and political ties with other Black Sea
and Caspian Sea littoral states, besides those discussed above. Azerbaijan shares with Central
Asian states common linguistic and religious ties and concerns about some common neighbors
(Iran and Russia). The South Caucasian and Central Asian states are concerned about ongoing
terrorist threats and drug trafficking from Afghanistan. Central Asia’s increasing ties with the
South Caucasus make it more dependent on stability in the wider region.
36 Robert Coalson, “Five Years After The War, South Caucasus Still Caught Between Russia, The West,” RFE/RL,
August 07, 2013.
37 EU, European Commission, “Eastern Partnership,” at http://ec.europa.eu/external_relations/eastern/index_en.htm.
38 EU, European Commission, Press Release: EU and Armenia Agree Trade Deal, July 24, 2013.
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Obstacles to Peace and Independence
Regional Tensions and Conflicts
Ethnic conflicts have kept the South Caucasus states from fully partaking in peace, stability, and
economic development since the Soviet collapse in 1991, some observers lament. The countries
are faced with ongoing budgetary burdens of arms races and caring for refugees and displaced
persons. Other costs of ethnic conflict include threats to bordering states of widening conflict and
the limited ability of the region or outside states to fully exploit energy resources or trade and
transportation networks.
U.S. and international efforts to foster peace and the continued independence of the South
Caucasus states face daunting challenges. The region has been the most unstable part of the
former Soviet Union in terms of the numbers, intensity, and length of its ethnic and civil conflicts.
The ruling nationalities in the three states are culturally rather insular and harbor various
grievances against each other. This is particularly the case between Armenia and Azerbaijan,
where discord led to the virtually complete displacement of ethnic Armenians from Azerbaijan
and vice versa by the early 1990s, so that younger Armenians and Azerbaijanis now have no
memories of a more diverse past. The main languages in the three states are dissimilar (also, those
who generally consider themselves Georgians—Kartvelians, Mingrelians, and Svans—speak
dissimilar languages). The borders of the countries do not coincide with eponymous ethnic
populations. Separatist NK relies on economic support from Armenia, and Abkhazia and South
Ossetia from Russia.
Nagorno Karabakh Conflict
In 1988, the Nagorno Karabakh (NK) Autonomous Region of Azerbaijan petitioned to become
part of Armenia, sparking armed conflict between ethnic Armenians and ethnic Azerbaijanis. In
December 1991, an NK referendum (boycotted by local ethnic Azerbaijanis) approved NK’s
independence and a Supreme Soviet was elected, which in January 1992 futilely appealed for
world recognition. A ceasefire agreement was signed in July 1994 by Armenia, Azerbaijan, and
NK Armenians (and mediators Russia and Kyrgyzstan), and the sides pledged to work toward a
peace settlement. The conflict over the status of NK has resulted in about 15,000 casualties and
hundreds of thousands of refugees and displaced persons in Armenia and Azerbaijan. According
to the OSCE, an average of about 30 troops and civilians have been killed each year along the
137-mile “line of contact” and along the Armenia-Azerbaijan border dividing the conflicting
sides.39
The “Minsk Group” of concerned member-states of what is now termed the OSCE was
established in 1992 to facilitate peace talks. The United States,40 France, and Russia co-chair the
39 “Facilitating Dialogue: Interview with Ambassador Andrzej Kasprzyk,” OSCE Magazine, January 2010.
40 The status of the U.S. envoy was downgraded in 1993. In early 2006, the State Department eliminated the post of
U.S. Special Negotiator for Eurasian Conflicts and divided its responsibilities among the Deputy Assistant Secretary of
State and the Office of Caucasus Affairs and Regional Conflicts. In 2009, a separate post of U.S. OSCE Minsk Group
Co-Chair was filled by Ambassador Robert Bradtke. In December 2012, Ian Kelly became the acting U.S. co-chair
(and was appointed co-chair in February 2013). In August 2013, Secretary Kerry appointed James Warlick the U.S. co-
chair.
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Minsk Group, and other participants include (besides Armenia and Azerbaijan) Belarus, Germany,
Italy, Portugal, the Netherlands, Sweden, Finland, and Turkey. An OSCE high-level planning
group composed of military officers also was set up to plan for multi-national peacekeeping after
a peace agreement is signed. In 1995, the OSCE chairman-in-office appointed a personal
representative to help facilitate a peace settlement, including by carrying out monitoring missions
along the line of contact and the Armenia-Azerbaijan border. This personal representative is based
in Tbilisi, Georgia, and has small staffs in Yerevan, Armenia; Baku, Azerbaijan; and NK.
The U.N. High Commissioner for Refugees (UNHCR) has reported that at the beginning of 2013,
there were still about 2,850 people considered refugees in Armenia. Armenia has granted
citizenship and acted to permanently house most of the ethnic Armenians who fled Azerbaijan.
UNHCR has reported that at the beginning of 2013, there were still over 600,000 people
considered refugees or displaced persons in Azerbaijan.41 The non-governmental International
Crisis Group estimates that about 13%-14% of Azerbaijan’s territory, including most of NK, is
controlled by NK Armenian forces (The World Factbook estimates about 16%).42
The Minsk Group reportedly has presented four proposals as a framework for talks, but a peace
settlement has proved elusive. Since 2005, officials in both countries have reported negotiations
on a fourth “hybrid” peace plan calling for initial agreement on “basic principles.” In November
2007, then-Under Secretary of State Nicholas Burns, Russian Foreign Minister Sergey Lavrov,
and then-French Foreign Minister Bernard Kouchner presented the foreign ministers of Armenia
and Azerbaijan with a draft text—Basic Principles for the Peaceful Settlement of the Nagorno-
Karabakh Conflict—for transmission to their presidents. These officials urged the two sides to
accept the Basic Principles (also termed the Madrid principles, after the location where the draft
text was presented) that had resulted from three years of talks and to begin “a new phase of talks”
on a comprehensive peace settlement.43
On November 2, 2008, then-Russian President Medvedev hosted talks in Moscow between
Armenian President Serzh Sarkisyan and Azerbaijani President Ilham Aliyev on a settlement of
the NK conflict. A joint declaration signed by Aliyev and Sarkisyan (also termed the Meindorf
declaration after the castle where talks were held) upheld a continued mediating role for the
Minsk Group, but the talks represented Russia’s intention to play the major role in mediating the
conflict, some observers argue. The joint declaration was the first document on the NK conflict
signed by the leaders of Armenia and Azerbaijan since the ceasefire in 1994.
As “updated” by the presidents of the co-chairing countries in July 2009 at L’Aquila, France, the
Basic Principles call for the phased return of the territories surrounding NK to Azerbaijani
control; an interim status for NK providing guarantees for security and self-governance; a
corridor linking Armenia to NK; future determination of the final legal status of NK through a
legally binding expression of will; the right of all internally displaced persons and refugees to
41 U.N. High Commissioner for Refugees, Armenia: Statistical Snapshot, at http://www.unhcr.org/cgi-bin/texis/vtx/
page?page=49e48d126; Azerbaijan: Statistical Snapshot, at http://www.unhcr.org/cgi-bin/texis/vtx/page?page=
49e48d1e6.
42 Nagorno-Karabakh: Viewing the Conflict from the Ground, International Crisis Group, September 14, 2005; CIA,
The World Factbook. Azerbaijan, at https://www.cia.gov/cia/publications/factbook/geos/aj.html. The website of the
“Government of the NK Republic,” shows a map that includes the occupied areas as well as the bulk of the former NK
Autonomous Region. See http://www.karabakh.net/engl/gov?id=1.
43 U.S. Department of State. Office of the Spokesman. Media Note: Support for Basic Principles for Peaceful
Settlement of the Nagorno-Karabakh Conflict, November 29, 2007.
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return to their former places of residence; and international security guarantees that would include
a peacekeeping operation.44 The co-chairs presented the “updated” Madrid principles to President
Aliyev in Baku in December 2009 and to President Sarkisyan in Yerevan in January 2010. Then-
President Medvedev hosted Aliyev and Sargisyan in Sochi, Russia in late January 2010, and the
two sides reportedly agreed on many parts of a preamble to an agreement. However, in July 2010,
the Russian and French foreign ministers and the U.S. deputy secretary of state issued a statement
criticizing Armenia and Azerbaijan for not making more progress in reaching a peace agreement,
and deploring recent negative trends, including violence along the line of contact that resulted in
several casualties and bellicose statements by officials.
At the December 1-2, 2010, summit meeting of the OSCE, hopes that the attending presidents of
Armenia and Azerbaijan would hold talks and make progress in resolving the NK conflict proved
unfounded. The co-chairs of the Minsk Group and the two presidents instead issued a statement
that called for “more decisive efforts to resolve the NK conflict.” The presidents pledged to seek a
final settlement based on international law.45
Meeting in Sochi, Russia, on March 5, 2011, Presidents Medvedev, Sargisyan, and Aliyev issued
a statement vowing “to tackle all disputable issues peacefully and to probe incidents along the
ceasefire line together under the aegis of the OSCE Minsk Group co-chairs and with assistance
from the OSCE chairman-in-office’s special envoy.”46 On March 9, 2011, the Minsk Group co-
chairs condemned ceasefire violations along the line of contact that occurred before and after the
Sochi meeting, including the alleged sniper shooting of an Azerbaijani child. On March 17, 2011,
a prisoner exchange occurred, as agreed to by Presidents Aliyev and Sargisyan at Sochi, but the
next day, a sniper allegedly killed a member of the NK Self-Defense Army. The chairman-in-
office of the OSCE reiterated past calls by the OSCE and others for the removal of snipers from
the line of contact. On March 17, 2011, Azerbaijani Defense Minister Safar Abiyev reportedly
stated that the “worthlessness” of the Minsk Group talks had forced Azerbaijan to build up its
military capabilities in order to “take serious and necessary measures to liberate” NK and
surrounding areas.47
In late March 2011, the Minsk Group co-chairs released the executive summary of a report of
their findings and recommendations following an October 2010 Field Assessment Mission to the
occupied areas surrounding NK. The last such assessment had been carried out in 2005. The new
report appeared to generally echo the findings of the 2005 report that most of the “towns and
villages that existed before the conflict are abandoned and almost entirely in ruins,” although
some land was being farmed. They reported that there are an estimated 14,000 persons living in
small settlements and in the towns of Lachin and Kelbajar, for the most part ethnic Armenians
who were relocated from elsewhere in Azerbaijan. The “harsh” living conditions in the areas, the
co-chairs emphasized, reinforced their view that “only a peaceful, negotiated settlement can bring
44 The White House. Joint Statement on the Nagorno-Karabakh Conflict by U.S. President Obama, Russian President
Medvedev, and French President Sarkozy at the L’Aquila Summit of the Eight, July 10, 2009.
45 OSCE, Astana Summit, Joint Statement by the Heads of Delegation of the OSCE Minsk Group Co-Chair Countries
and the Presidents of Azerbaijan and Armenia, December 1, 2010.
46 Meeting with Presidents of Armenia and Azerbaijan, President of Russia, March 5, 2011, at http://eng.kremlin.ru/
news/1859.
47 Interfax, March 17, 2011.
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the prospect of a better, more certain future to the people who used to live in the territories and
those who live there now.”48
In May 2011, the presidents of the United States, France, and Russia issued a statement on the
sidelines of a Group of Eight (group of industrialized nations) meeting in Deauville, France, that
urged the Armenian and Azerbaijani presidents to finalize agreement on the Basic Principles at an
upcoming late June 2011 meeting in Kazan, Russia. At this meeting, Presidents Sargisyan and
Aliyev issued a joint statement that agreement had been reached on some issues and that further
talks would be held. Many observers had heightened expectations of progress, perhaps illustrated
by President Obama’s phone calls to the Armenian and Azerbaijani presidents before the meeting
to urge them to reach a settlement. A couple of weeks later, then-President Medvedev, reportedly
disappointed that there had been scant progress at the talks, sent letters to the two leaders
requesting suggestions on how to move the talks forward.
In October 2011, the Minsk Group co-chairs issued a statement after talks with Presidents Aliyev
and Sargisyan that the two presidents had agreed in principle on some border incident
investigation procedures that the presidents had called for developing at their meeting in Sochi in
March 2011. A call for finalizing these procedures was issued at the OSCE Ministerial Council
Meeting in Vilnius in early December 2011.
Before a planned meeting of the Armenian and Azerbaijani presidents in Sochi, Russia, on
January 23, 2012, President Aliyev stressed that “no one wants war, least of all Azerbaijan, which
has made such great achievements. However, this does not mean that negotiations ... will be
focused on the prevention of war.”49 At the Sochi meeting, the two presidents issued a joint
statement requesting Russia to act to facilitate humanitarian ties between the two countries and
pledging to speed up efforts to agree to the basic principles, which raised expectations among
some observers. The co-chairs of the OSCE Minsk Group also presented the Armenian and
Azerbaijani presidents with a draft plan for setting up a group to investigate incidents along the
line of contact, and the presidents called for further work on the plan.
In late March 2012, Azerbaijani presidential administration official Ali Hasanov acknowledged
that Baku regards the talks mediated by the president of Russia as the most significant means to
settle the NK conflict, given Russia’s close ties to Armenia. Hasanov claimed that Russia has
overwhelming influence over Armenia, and appeared to argue that Azerbaijan’s major goal is to
persuade Russia to use its influence to settle the conflict.50
On June 19, 2012, the presidents of the United States, France, and Russia, meeting on the
sidelines of the Group of Twenty (G-20; grouping of major developed and developing countries)
summit in Mexico, issued a joint statement regretting that there had not been substantial progress
since their last such appeal in mid-2011. The presidents called on both sides to eschew hostile
rhetoric, and argued that “military force will not resolve the conflict and would only prolong the
suffering ... by peoples of the region.”51 Appearing to reflect the rejection of the creation of an
48 OSCE, Minsk Group, Executive Summary of the Report of the OSCE Minsk Group Co-Chairs’ Field Assessment
Mission to the Occupied Territories of Azerbaijan Surrounding Nagorno-Karabakh, March 24, 2011.
49 Interfax, January 16, 2012.
50 CEDR, March 29, 2012, Doc. No. CEP-950123.
51 The White House, Joint statement by the Presidents of the United States, the Russian Federation and France on
Nagorno-Karabakh, June 19, 2012.
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incident investigation mechanism, Azerbaijani Foreign Minister Mammadyarov stated on July 9,
2012, that “the problem is not in mechanisms, it is in the presence of the Armenian troops in the
occupied Azerbaijani lands. If troops are withdrawn, both the problems with the incidents and
mechanisms will be solved. This is Azerbaijan's position and we will not change it.”52
Tense relations between Armenia and Azerbaijan were heightened at the end of August 2012
when Hungary extradited Azerbaijani citizen Ramil Safarov—who was sentenced to life in prison
for killing an Armenian officer during NATO training—and he was immediately pardoned and
rewarded by Azerbaijani President Aliyev. Hungary protested that it had extradited the prisoner
only after receiving assurances from Azerbaijan that he would serve out the balance of his
sentence. Armenia broke off diplomatic relations with Hungary. The White House stated that it
was communicating its “disappointment” to Azerbaijan and several Members of Congress were
critical of the pardon.
The OSCE Minsk Group met individually with the Armenian and Azerbaijani foreign ministers in
Paris on September 2-3, 2012, and raised “deep concern” that the pardon had harmed peace
efforts. Appearing to respond to the OSCE statement, President Aliyev argued in a speech on
September 11, 2012, that the Minsk Group had been unsuccessful during its two-decade efforts in
moving Armenia to settle the NK conflict, so that the solution might depend on Azerbaijan’s use
of military force. He asserted that since NK was “occupied” by Armenia, Azerbaijan’s main focus
was on “isolating Armenia from all international and regional [economic] projects” (see also
below, “Economic Conditions, Blockades, and Stoppages”).53
At the opening session of the U.N. General Assembly in late September 2012, the Armenian and
Azerbaijani foreign ministers harshly characterized each other’s positions on the NK conflict as
“blatant distortions” and “lies.” At the OSCE Ministerial Council Meeting in Dublin on
December 6, 2012, the three Minsk Group co-chairing countries issued a statement regretting that
there had been no progress in talks since the Armenian and Azerbaijani presidents had pledged
more rapid progress in Sochi in January 2012. They also raised concerns about increased tensions
between the two states in recent months, and called on the presidents to “prepare their populations
for the day when they will live again as neighbors, not enemies.”54
In a presidential campaign speech in January 2013, President Sargisyan reportedly advised
against Armenian recognition of the independence of NK “at the moment,” stating that such
recognition would end the peace talks and “in that case, we must be ready for military actions.”55
The Armenian and Azerbaijani foreign ministers met jointly with the Minsk Group co-chairs in
Paris in late January 2013, and the presidents of Armenia and Azerbaijan met with the visiting co-
chairs in May 2013, but no progress was reported. The co-chairs met with Azerbaijani Foreign
Minister Mammadyarov in London on June 6 and Armenian Foreign Minister Nalbandyan in
Paris on June 28, and the two foreign ministers held a joint meeting in Vienna with the co-chairs
52 CEDR, July 10, 2012, Doc. No. CEP-950155.
53 APA News Agency, September 11, 2012.
54 OSCE, Press Release: Statement by the Heads of Delegation of the OSCE Minsk Group Co-Chair Countries,
December 6, 2012.
55 “Licentious Behavior of Azerbaijani Authorities is First of All Harming Them: President of Armenia,” Armenpress
News Agency, January 21, 2013, at http://armenpress.am/eng/news; CEDR, January 22, 2013, Doc. No. CEP-950061.
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on July 12, in order to develop ideas for moving the peace process forward and to explore holding
a possible meeting between the presidents of Armenia and Azerbaijan late in the year. On June 18,
2013, the presidents of the United States, France, and Russia, meeting on the sidelines of the
Group of 8 summit in the United Kingdom, issued a joint statement pledging continued support
for a settlement, but decried continued efforts by the conflict parties to “seek one-sided
advantage.” They urged that the sides consider the basic principles “as an integrated whole,”
rather than picking and choosing among the elements.
On October 17, 2013, OSCE teams led by the Personal Representative of the OSCE Chairman-in-
Office, Ambassador Andrzej Kasprzyk, experienced shooting as they took part in a monitoring
exercise along the line of contact, and were forced to abandon the monitoring exercise. The co-
chairs decried the “exceptional and regrettable incident” as undermining the 1994 ceasefire
agreement.
Civil and Ethnic Conflict in Georgia
Several of Georgia’s ethnic minorities stepped up their dissidence, including separatism, in the
late 1980s and early 1990s, resulting in the loss of central government control over the regions of
South Ossetia and Abkhazia. Some observers argued that Russia’s increasing controls over South
Ossetia and Abkhazia over the years transformed the separatist conflicts into essentially Russia-
Georgia disputes. Most residents of Abkhazia and South Ossetia had been granted Russian
citizenship before the August 2008 Russia-Georgia conflict and most had appeared to want their
regions to become independent or parts of Russia.56
U.S. diplomacy long appeared to urge Georgia to work within existing peace settlement
frameworks for Abkhazia and South Ossetia—which allowed for Russian “peacekeeping”—while
criticizing some Russian actions in the regions. This stance appeared to change during 2008,
when the United States and other governments increasingly came to support Georgia’s calls for
the creation of alternative peace settlement mechanisms, particularly since talks under existing
formats had broken down.
This U.S. policy shift was spurred by increasing Russian actions that appeared to threaten
Georgia’s territorial integrity. Among these, the Russian government in March 2008 formally
withdrew from CIS economic sanctions on Abkhazia, permitting open Russian trade and
investment. Of greater concern, President Putin issued a directive in April 2008 to step up
government-to-government ties with Abkhazia and South Ossetia. He also ordered stepped up
consular services for the many “Russian citizens” in the two regions. He proclaimed that many
documents issued by the separatist governments and businesses which had been established in the
regions would be recognized as legitimate by the Russian government (For other Russian actions
during 2008 specific to a breakaway region, see “Developments in Abkhazia before August
2008,” “Developments in South Ossetia before August 2008,” or “The August 2008 Russia-
Georgia Conflict,” below.)
56 Vladimir Socor, Eurasia Insight, November 20, 2006. According to an issue of the Rossiyskoye Voyennoye
Obozreniye (Russian Military Review) published by the Defense Ministry in early 2008, 80% of residents of Abkhazia
were citizens of Russia at that time, and most had voted in the December 2007 Russian legislative election. CEDR,
April 21, 2008, Doc. No. CEP-358004.
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Developments in Abkhazia before August 2008
In July 1992, Abkhazia’s legislature declared the region’s effective independence, prompting an
attack by Georgian national guardsmen. In October 1992, the UNSC approved sending a U.N.
Observer Mission in Georgia (UNOMIG), the first to a Eurasian state, to help the parties reach a
settlement. Russian and North Caucasian “volunteers” (who reportedly made up the bulk of
Abkhaz separatist forces) routed Georgian forces in 1993. Georgia and Abkhazia agreed in April-
May 1994 on a framework for a political settlement and the return of refugees. Russian troops
(acting as CIS “peacekeepers”) were deployed in a zone between Abkhazia and the rest of
Georgia. The conflict resulted in about 10,000 deaths and over 200,000 displaced persons, mostly
ethnic Georgians.
The U.S. Deputy Assistant Secretary of State worked with the Special Representative of the U.N.
Secretary General and other “Friends of the Secretary General” (France, Germany, Russia, the
United Kingdom, and Ukraine) to facilitate a settlement. In July 2006, a warlord in the Kodori
Gorge area of northern Abkhazia, where many ethnic Svans reside, foreswore his nominal
allegiance to the Georgian government. The Georgian government quickly sent forces to the area
and defeated the warlord’s militia. Regular Georgia-Abkhazia peace talks were suspended in
October 2006. Abkhazia called for Georgia to remove the government representatives and alleged
military forces.
The United States and others in the international community raised concerns when the Russian
foreign and defense ministries announced on April 29, 2008, that the number of “peacekeepers”
in Abkhazia would be boosted up to the maximum permitted under ceasefire accords. The
ministries claimed that the increases were necessary to counter a buildup of Georgian “military
forces” and police in the Kodori Gorge, which they alleged were preparing to attack the de facto
Abkhaz government. It was also troubling that 400 Russian paratroopers were deployed to
Abkhazia that Russian officials reportedly stated would be fully armed in order to repulse
possible Georgian attacks on Abkhazia.57 In late May 2008, Russia announced that about 400
railway construction troops were being sent to Abkhazia for “humanitarian” work. These
troops—whose role is to facilitate military positioning—reportedly left Abkhazia at the end of
July 2008 after repairing tracks and bridges. According to former Deputy Assistant Secretary
Bryza, the railway was used in August by Russia when its troops moved into Georgia.58
Developments in South Ossetia before August 2008
In 1989, the region lobbied for joining its territory with North Ossetia in Russia or for
independence. Repressive efforts by former Georgian President Gamsakhurdia triggered conflict
in 1990, reportedly contributing to an estimated 2,000-4,000 deaths and the displacement of tens
of thousands of people. In June 1992, Russia brokered a cease-fire, and Russian, Georgian, and
Ossetian “peacekeeping” units set up base camps in a security zone around Tskhinvali, South
Ossetia. Reportedly, the units totaled around 1,100 troops, including about 530 Russians, a 300-
member North Ossetian brigade (which actually was composed of South Ossetians and headed by
a North Ossetian), and about 300 Georgians. OSCE monitors did most of the patrolling.
57 ITAR-TASS, May 6, 2008.
58 Pavel Felgenhauer, Eurasia Daily Monitor, June 12, 2008; U.S. Department of State. Foreign Press Center. Briefing:
The Situation in the Republic of Georgia and its Implications for the Caucasus, August 19, 2008.
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In 2004, President Saakashvili increased pressure on South Ossetia by tightening border controls
and by breaking up a large-scale smuggling operation in the region that allegedly involved
Russian organized crime and corrupt Georgian officials. He also reportedly sent several hundred
police, military, and intelligence personnel into the region. Georgia maintained that it was only
bolstering its peacekeeping contingent up to the limit of 500 troops, as permitted by the cease-fire
agreement. Georgian guerrilla forces also reportedly entered the region. Allegedly, Russian
officials likewise assisted several hundred paramilitary elements from Abkhazia, Transnistria, and
Russia to enter. Following inconclusive clashes, both sides by late 2004 ostensibly had pulled
back most undeclared forces. In November 2006, a popular referendum was held in South Ossetia
to reaffirm its “independence” from Georgia. After October 2007, no more peace talks were held.
The August 2008 Russia-Georgia Conflict
Simmering long-time tensions erupted on the evening of August 7, 2008, when South Ossetia
accused Georgia of launching a “massive” artillery barrage against its capital, Tskhinvali, while
Georgia reported intense bombing of some Georgian villages in the conflict zone by South
Ossetian forces. Georgia claims that South Ossetian forces did not respond to a ceasefire appeal
but intensified their shelling, “forcing” Georgia to send in troops that reportedly soon controlled
Tskhinvali and other areas.59
On August 8, Russia launched large-scale air attacks across Georgia and dispatched seasoned
troops to South Ossetia that engaged Georgian forces in Tskhinvali later in the day. Reportedly,
Russian troops had retaken Tskhinvali, occupied the bulk of South Ossetia, reached its border
with the rest of Georgia, and were shelling areas across the border by the morning of August 10.
Russian warplanes bombed the outskirts of the capital, Tbilisi, as well as other sites. Russian
ships landed troops in Georgia’s breakaway Abkhazia region and took up positions off Georgia’s
Black Sea coast.
On August 12, then-President Medvedev declared that “the aim of Russia’s operation for coercing
the Georgian side to peace had been achieved and it had been decided to conclude the
operation.... The aggressor has been punished and suffered very heavy losses.”60 Medvedev
endorsed some elements of a European Union (EU) peace plan presented by visiting then-French
President Nicolas Sarkozy. On August 15, the Georgian government accepted the French-
brokered six-point cease-fire that left Russian forces in control of South Ossetia, Abkhazia, and
“security zones” in undisputed Georgian territory.61 The six points included commitments not to
use force, to halt hostilities, to provide full access for humanitarian aid, to withdraw Georgian
forces to the places they were usually stationed prior to the conflict, to withdraw Russian forces
to positions prior to the outbreak of hostilities (although they were permitted to implement
security measures in the zone of the conflict until international monitors were in place), and to
open international discussions on ensuring security and stability in Abkhazia and South Ossetia.
59 See also CRS Report RL34618, Russia-Georgia Conflict in August 2008: Context and Implications for U.S. Interests,
by Jim Nichol.
60 ITAR-TASS, August 12, 2008. On September 11, Prime Minister Putin stated that Georgia’s aggression was answered
by “a well-deserved mighty punch” by Russia. ITAR-TASS, September 11, 2008.
61 See CRS Report RL34618, Russia-Georgia Conflict in August 2008: Context and Implications for U.S. Interests, by
Jim Nichol, August 29, 2008.
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Much of the international community condemned then-President Medvedev’s August 26, 2008,
decree officially recognizing the independence of South Ossetia and Abkhazia.62 Nicaragua,
Venezuela, and a few small Pacific island nations are the only countries that have followed suit in
extending diplomatic relations to Abkhazia and South Ossetia.
On September 8, 2008, then-President Medvedev and visiting then-President Sarkozy signed a
follow-on ceasefire accord that fleshed out the provisions of the six-point peace plan. Among its
provisions, it stipulated that Russian forces would withdraw from areas adjacent to the borders of
Abkhazia and South Ossetia by October 11; that Georgian forces would return to their barracks
by October 1; that international observers already in place from the U.N. and OSCE would
remain; and that the number of international observers would be increased by October 1, to
include at least 200 observers from the EU, and perhaps more later. The EU called for Russia to
permit these observers to patrol in Abkhazia and South Ossetia. Russia’s position has been that
these observers cannot patrol in the regions without the approval of the regions, and the regional
leaders have refused to permit such patrols. Although Sarkozy strongly implied that the
international conference would examine the legal status of Georgia’s breakaway Abkhazia and
South Ossetia, Medvedev asserted that the regions had been recognized as independent by Russia
on August 26, 2008, and that disputing this recognition was a “fantasy.”63
Many observers have argued that Russia aimed both to consolidate control over South Ossetia
and Abkhazia and to depose Georgian President Saakashvili when it launched the August 2008
military incursion into Georgia. Russia hoped to achieve this latter goal either directly by
occupying Georgia’s capital of Tbilisi and killing or arresting Saakashvili, or indirectly by
triggering his overthrow, according to these observers. They state that Saakashvili’s survival as
the popularly elected president was a major accomplishment of the diplomacy of the EU and the
United States that ended Russia’s offensive.64
By October 1, 2008, the EU Monitoring Mission (EUMM) had deployed over 200 monitors and
Russia announced on October 9 that its troops had withdrawn from buffer zones. Georgia has
maintained that Russian troops have not pulled out of Akhalgori, a district that Russia asserts is
within South Ossetia’s Soviet-era borders, and the Kodori Gorge, and that no Russian military
bases are permitted in the regions. In December 2008, Russia objected to continuing a mandate
62 The EU fact-finding mission on the causes and outcome of the Russia-Georgia conflict stated that according to
overwhelmingly accepted principles of international law, “only former constituent republics such as Georgia but not
territorial sub-units such as South Ossetia or Abkhazia are granted independence in case of dismemberment of a larger
entity such as the former Soviet Union. Hence, South Ossetia did not have a right to secede from Georgia, and the same
holds true for Abkhazia.... Recognition of breakaway entities such as Abkhazia and South Ossetia by a third country ...
runs against Principle I of the Helsinki Final Act which states “the participating States will respect each other’s
sovereign equality and individuality ... including in particular the right of every State to juridical equality, to territorial
integrity and to freedom and political independence.” The fact-finding mission also pointed out that the founding
documents of the Commonwealth of Independent States, to which Georgia belonged from 1993 to 2008, called for
upholding the territorial integrity of the members. Council of the European Union, Report of the Independent
International Fact-Finding Mission on the Conflict in Georgia, September 2009, Vol. 1, p. 17; Vol. 2, pp. 127-146.
63 CEDR, September 28, 2008, Doc. No. CEP-950425; CEP-950440.
64 U.S. House of Representatives. Committee on Foreign Affairs. Hearing on U.S.-Russia Relations in the Aftermath of
the Georgia Crisis. Testimony of Daniel Fried, Assistant Secretary of State for European and Eurasian Affairs,
September 9, 2008. Saakashvili also highlighted this Russian aim during his testimony to the Georgian legislative
commission investigating the causes of the conflict. See “Saakashvili Testifies Before War Commission, Analysts
Comment,” The Messenger (Tbilisi), December 1, 2008. Georgia’s Ambassador to the United States, Davit
Sikharulidze, argued that Russia’s “aim was to overthrow the [Georgian] government and it would have come true but
for the U.S. interference.” CEDR, December 1, 2008, Doc. No. CEP-950233. Russia officially has denied such an aim.
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for about 200 OSCE observers in Georgia—including some observers authorized before the
August 2008 conflict and some who were added after the August 2008 conflict—and they pulled
out on June 30, 2009. Similarly, in June 2009 Russia vetoed a UNSC resolution that extended the
UNOMIG mandate, and they pulled out of Abkhazia. The EUMM is now the sole international
group of monitors. It reported in August 2013 that the number of staffers was 268 (of which 208
are monitors) and that the monitors are based in three field offices near the contested borders.65
According to former Assistant Secretary of Defense Alexander Vershbow and Assistant Secretary
of State Philip Gordon, the EUMM has been effective at debunking several allegations made by
Russia and the separatist regions that ceasefire violations have been committed by Georgia. The
United States and the EU continue to call for unrestricted access to Abkhazia and South Ossetia in
order to monitor the ceasefire. Vershbow and Gordon have praised Georgia’s cooperation with the
EUMM, including Georgia’s agreement with the EUMM at the beginning of 2009 to report all
movements of its security forces near the administrative borders and to permit unannounced
inspections of its military facilities. They contrast this cooperation to the refusal of Russia,
Abkhazia, and South Ossetia to permit patrols in the regions.66 In late April 2012, Abkhazia
declared that the head of the EUMM was persona non grata, including because he advocated for
the EUMM to patrol inside the breakaway regions. Abkhazia has refused to reconvene meetings
of the incident prevention group (see below) since then, because the EUMM head normally
would attend. The meetings have not resumed even though the EUMM head was rotated in
September 2013.
An international conference to discuss security, repatriation, and status issues related to the
conflict held its inaugural session in Geneva on October 15, 2008. Facilitators at the talks include
the U.N., the EU, and the United States. Russia, South Ossetia, and Abkhazia reject any
challenges at the conference to the claimed independence of the breakaway regions. Russia has
insisted at these meetings and elsewhere that the international community impose an arms
embargo on Georgia. Russia also has insisted at these meetings that Georgia sign non-use-of-
force agreements with the breakaway regions. In March 2010, Russia stated that, as a preliminary
to the signing of such agreements, Georgia, South Ossetia, and Abkhazia could provide written
pledges of the non-use of force to the United Nations (see below).67
Among significant Geneva conference meetings:
• In February 2009, the sides agreed to set up an “incident prevention and response
mechanism” along the South Ossetian border with the rest of Georgia in order to
defuse tensions before they escalate. On April 23, the first meeting of the
Georgia-South Ossetia Incident Prevention and Response Mechanism was
convened in the Georgian town of Ergneti, with the participation of the Georgian
and South Ossetian sides, as well as representatives of the Russian Ministry of
Defense, the OSCE, and the EU.
65 EUMM. Mission Facts and Figures, at http://www.eumm.eu/en/about_eumm/facts_and_figures.
66 U.S. Senate. Committee on Foreign Relations. Subcommittee on Europe. Hearing on Georgia: One Year After the
August War. Testimony of Alexander Vershbow, Assistant Secretary of Defense for International Security Affairs, and
Testimony of Philip H. Gordon, Assistant Secretary for European and Eurasian Affairs, August 4, 2009.
67 Samuel Charap and Cory Welt, A More Proactive U.S. Approach to the Georgia Conflicts, Center for American
Progress, February 2011; CEDR, July 28, 2010, Doc. No. CEP-6001.
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Armenia, Azerbaijan, and Georgia
• At the July 2009 Geneva conference meeting, the sides discussed setting up an
incident prevention group to resolve issues such as cross-border travel between
Abkhazia and the rest of Georgia. A meeting in Gali, Abkhazia, to establish the
group was held on July 14, 2009.
• At the October 14, 2010, meeting, Russia announced that it was pulling its troops
out of the town of Perevi, Georgia, near the border with South Ossetia. The
troops pulled out on October 18, 2010. Russia declared that this pullout marked
its complete fulfillment of the ceasefire accords.68 South Ossetia refused to
discuss problems of refugees and displaced persons after a Georgian-sponsored
resolution on the return of displaced persons and refugees to South Ossetia was
approved by the U.N. General Assembly in September 2010.
• At the June 7, 2011, meeting, Georgia raised concerns about alleged Russian
terrorist attacks and plans (see below) and stated that it might reconsider
participation in the Geneva conference if the terrorism persisted.
• At the December 14, 2011, meeting, the moderators, the United States, and
Georgia argued that if binding nonuse-of-force agreements are signed, they
logically should include provisions for international monitors to patrol in the
breakaway regions, a stance rejected by Russia, South Ossetia, and Abkhazia.
Georgia and South Ossetia agreed to exchange over two dozen detainees who
allegedly had illegally crossed disputed borders. The prisoner exchange—under
the aegis of the incident prevention mechanism—took place at the end of
December 2011.
• At the June 7-8, 2012, meeting, the Russian side criticized then-Secretary
Clinton’s announcement during her just-concluded visit to Georgia that U.S.
embassies and consulates would recognize the validity of status-neutral travel
documents issued by Georgia to residents of Abkhazia and South Ossetia who
wished to travel or study in the United States. Russia claimed that the
announcement set back the peace process.
• The new Ivanishvili government hoped for progress at the December 11-12,
2012, Geneva meeting, but voiced disappointment after the meeting and
criticized Russia for failing to consider its proposals. Abkhaz authorities also
rejected a conciliatory proposal by the Ivanishvili government to restore rail
service from Georgia through Abkhazia to Russia, viewing it as a ploy to avoid
extending recognition to the region.
• At the March 26-27, 2013, meeting, Russia’s Deputy Foreign Minister, Grigoriy
Karasin, accused Georgia of hindering the talks and claimed that the only point
of the talks was to convince Georgia to sign a non-use of force agreement with
the breakaway regions. At the same time, Russia continued to refuse to pledge
not to use force against Georgia (see below).
• The June 25-26, 2013, meeting was roiled by increasing efforts by Russia’s
border guards to erect fences and other obstacles between what Russia claimed
68 The Georgian Foreign Ministry issued a statement that the withdrawal of Russian troops from Perevi was welcome
but was “just a miniscule step in comparison with commitments envisaged by the ceasefire agreement of August 12,
2008, which Russia still has to comply with.” Statement of the Ministry of Foreign Affairs of Georgia on the
Withdrawal of the Russian Armed Forces, Ministry of Foreign Affairs of Georgia, October 19, 2010.
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was the border of South Ossetia with the rest of Georgia (see also below).
Georgia termed the obstacles a violation of the ceasefire accords and called for
them to be removed, and also rejected attempts by Russia and the breakaway
regions to change the format of the talks. Emissaries from the breakaway regions
walked out of the session on humanitarian issues. Georgia has indicated that the
issue of the fences will be a major topic of discussion at the planned November
5-6 meeting in Geneva.
In late 2010, President Saakashvili gave speeches at sessions of the European Parliament and the
OSCE in Astana, Kazakhstan, pledging the non-use of force except in cases of self-defense.69
South Ossetia and Abkhazia followed suit with oral statements, but Russia refused to issue such a
pledge on the grounds that it was not a party to the conflict. In March 2013, the Georgian
legislature approved a resolution on foreign policy that reaffirmed the non-use of force pledge.
The International Crisis Group (ICG), a non-governmental organization, estimated in June 2010
that there may be fewer than 30,000 people residing in South Ossetia, and that the population
continues to decline (a 1989 census, taken before the beginning of conflict, reported a regional
population of 98,500). The ICG suggests that the region is increasingly less able to govern or
sustain itself economically, and so must rely on Russian aid and thousands of Russian
construction and government workers, troops, and border guards that are deployed there.70
In March 2011, Assistant Secretary of State Philip Gordon reiterated the U.S. position that
Georgia’s territory is “occupied” by Russian troops. He explained that
We don’t know what else to call it.... We believe that Russia used disproportionate force and
remains present in what we consider to be sovereign Georgia. So it’s not meant to be a
particular provocation, it’s just a description of what we think the situation is and we’ve very
active in the Geneva talks and bilaterally with Russia to try to bring about an end to what we
consider to be a military occupation.71
On June 2 and June 6, 2011, Georgia announced that it had apprehended Russian terrorist
infiltrators who were planning attacks in Georgia, including against the NATO Liaison Office in
Tbilisi. Georgia alleged that Russian security agencies were behind the planned attacks. Russia
termed these allegations “artificially fabricated arrays of data.”72 In late July 2011, the
Washington Times alleged that the U.S. intelligence community had backed up a Georgian claim
that Russian intelligence operatives had orchestrated a bombing in September 2010 near the U.S.
Embassy in Tbilisi.73
In late August 2012, over two dozen alleged terrorists affiliated with the Caucasus Emirate
supposedly entered Georgian territory from Russia’s Dagestan or Chechnya republics and took
hostages. Georgian police forces battled the terrorists, killing or apprehending most of them.
69 President of Georgia’s Address to European Parliament Members, Mikheil Saakashvili, The President of Georgia, at
http://www.president.gov.ge/index.php?lang_id=ENG&sec_id=228&info_id=5857; Le Figaro, November 23, 2010.
70 International Crisis Group. South Ossetia: The Burden of Recognition, June 7, 2010.
71 U.S. Embassy, Bratislava, Slovakia, Assistant Secretary of State for Europe Phil Gordon in Bratislava: The U.S.
Relationship With Central Europe Under the Obama Administration, March 3, 2011.
72 Ministry of Foreign Affairs of the Russian Federation, June 13, 2011.
73 Washington Times, July 27, 2011; Maka Gurgenidze, “CIA Reportedly Concluded Bombing of U.S Embassy in
Tbilisi has Ties to Moscow,” CACI Analyst, August 3, 2011.
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President Saakashvili declared that he would not permit instability in Russia to spill over into
Georgia. On April 1, 2013, the Georgian legislature’s human rights ombudsman alleged that
Georgian police had been assisting the terrorists to carry out operations in Russia, but that the
terrorists had turned on the Georgians.
In February 2013, Russia’s border guards launched new efforts to erect fences and other obstacles
between what Russia claimed was the border of South Ossetia with the rest of Georgia. In late
May 2013, Prime Minister Ivanishvili decried the border construction actions as “most
unexpected,” and “incomprehensible,” particularly in the light of efforts by his administration to
improve ties with Russia.74 The United States and NATO have criticized the ongoing construction
of the fences and other obstacles.
The Tagliavini Report on the Origins and Outcome of the August 2008 Conflict
On September 30, 2009, a special EU fact-finding mission led by Swiss diplomat Heidi Tagliavini
released a report on the origins and outcome of the August 2008 Russia-Georgia conflict. On the
one hand, the mission concluded that “open hostilities began with a large-scale Georgian military
operation against the town of Tskhinvali [in South Ossetia] and the surrounding areas, launched
on the night of 7 to 8 August 2008. Operations started with a massive Georgian artillery attack.”
The mission also argued that the artillery attack was not justifiable under international law.
However, it also argued that the artillery attack “was only the culminating point of a long period
of increasing tensions, provocations and incidents” by the parties to the conflict. On the other
hand, the mission suggested that “much of the Russian military action went far beyond the
reasonable limits of defense,” and that such “action outside South Ossetia was essentially
conducted in violation of international law.” In Abkhazia, actions by Russian-supported militias
in the upper Kodori Valley “constituted an illegal use of force ... not justified under international
law.” The mission likewise asserted that actions by South Ossetian militias “against ethnic
Georgians inside and outside South Ossetia, must be considered as having violated International
humanitarian law and in many cases also human rights law.”75 Commenting on the release of the
report, a U.S. State Department spokesman stated that “we recognize that all sides made mistakes
and miscalculations through the conflict last year. But our focus is on the future.”76
Economic Conditions, Blockades, and Stoppages
The economies of all three South Caucasus states greatly declined in the early 1990s, affected by
the dislocations caused by the breakup of the Soviet Union, conflicts, trade disruptions, and the
lingering effects of the 1988 earthquake in Armenia. Gross domestic product (GDP) began to
rebound in the states in the mid-1990s. Investment in oil and gas resources has fueled economic
growth in Azerbaijan at the expense of other sectors of the economy, although there are efforts to
strengthen non-oil sectors. Problems of poverty and regional conflict have contributed to high
emigration from all three states, and remittances from these émigrés have provided major support
for the remaining populations.
74 “Georgia-Russia: Border Demarcation Issue Poses Threat to Emerging Thaw,” Open Source Center Analysis, June 7,
2013.
75 Report of the Independent International Fact-Finding Mission on the Conflict in Georgia, Vol. 3.
76 U.S. Department of State. Daily Press Briefing, September 30, 2009.
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The global economic downturn that began in 2008 hampered Armenia’s economic growth and
added to Georgia’s economic stresses in the wake of the August 2008 conflict. Azerbaijan’s
energy revenues, although reduced, helped it weather the downturn with continued GDP growth.
The influx of international assistance to Georgia ameliorated to some degree the impact of the
conflict and the world economic crisis. In October 2010, Russia announced a $500 million loan to
Armenia to assist it in economic stabilization and recovery.77 Perhaps surmounting the downturn,
all the regional economies reported GDP growth in 2011-2012. Despite the downturn, major
economic accomplishments in recent years have included the reduction of a high rate of poverty
in Azerbaijan and the World Bank’s 2012 assessment that Georgia had made the most progress
among 183 countries in making business regulatory reforms and ranked 16th worldwide in the
overall ease of doing business.
Transport and communications obstructions and stoppages have severely affected economic
development in the South Caucasus and stymied the region’s emergence as an East-West and
North-South corridor. Since 1989, Azerbaijan has obstructed railways and pipelines traversing its
territory to Armenia.78 According to the U.S. Embassy in Baku, Azerbaijan’s Nakhichevan
exclave “is blockaded by neighboring Armenia.” From 2006 until 2013, Russia restricted
agricultural trade and land, air, and sea links with Georgia. Russia hinders Azerbaijan’s use of the
Volga-Don Canal to reach world shipping channels. Russia has at times cut off gas supplies to
Georgia. During the August 2008 Russia-Georgia conflict, Russia’s effective blockade of
Georgia’s Black Sea ports disrupted trade shipments to and from Armenia. In the wake of the
conflict, gas transit from Russia to South Ossetia via other Georgian territory was disrupted, with
each side blaming the other, until service was restored in late January 2009. In late August 2009,
Russia completed construction of a 110-mile gas pipeline from North Ossetia to South Ossetia to
avoid transiting Georgia. Trans-border road traffic between Georgia and the regions of South
Ossetia and Abkhazia is severely restricted.
Armenia has hoped for the reopening of a section of railway transiting Georgia to Abkhazia and
Russia, but while Georgian Prime Minister Ivanishvili in late 2012 called for reopening the
railway, Abkhazia rejected the offer unless it was accompanied by Georgia’s recognition of its
independence. President Saakashvili criticized this proposal, stating in January 2013 that the
completion of another railway, the Baku-Tbilisi-Kars railway (mentioned above), was of greater
strategic importance to Georgia because it did not transit Russia. Azerbaijani officials and others
likewise condemned the proposal, since the railway would benefit Armenia, and stated that Baku
might respond by restricting economic projects in Georgia.79
In June 2013, Rovnag Abdullayev, the CEO of Azerbaijan’s State Oil Company of the Azerbaijani
Republic (Socar), stated that his company “humanely” was prepared to supply gas to Armenia
77 ITAR-TASS, October 20, 2010.
78 Armenia long opposed the construction or revamping of a section of railway from Kars, Turkey, to Tbilisi (and
thence to Azerbaijan) that would bypass Armenia, arguing that an existing section of railway from Kars that transits
Armenia into Georgia could be returned to service “in a week.” The Export-Import Bank Reauthorization Act of 2006
(P.L. 109-438) prohibits the Bank from guaranteeing, insuring, or extending credit in support of any railway
construction that does not traverse or connect with Armenia and does traverse or connect Baku, Tbilisi, and Kars. Work
on the railway began in late 2007 and is planned to be completed in 2014. According to some reports, NATO has
become more interested in the completion of the railway as a transit route as ISAF operations are concluded.
79 CEDR, January 17, 2013, Doc. No. CEP-950152; November 10, 2012, Doc. No. CEP-950054; November 30, 2012,
Doc. No. CEP-964141; Eka Janashia, “Abkhazia Seeks to Change Geneva Format,” Central Asia-Caucasus Analyst,
November 28, 2012.
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through a disused pipeline if the latter country requested assistance, since Russia was charging
more for gas than Azerbaijan was charging Georgia. The proposal was dismissed by Armenia,
particularly since the Azerbaijani presidential administration reportedly added conditions to the
offer.
Turkey closed its land borders with Armenia in 1993. These obstructions have had a negative
impact on the Armenian economy, since it is heavily dependent on energy and raw materials
imports. Turkey’s closure of land borders in effect barred direct U.S. shipments of aid through its
territory to Armenia. Foreign Operations Appropriations for FY1996 (P.L. 104-107) and Omnibus
Consolidated Appropriations for FY1997 (P.L. 104-208)80 have mandated U.S. aid cutoffs (with a
presidential waiver) to any country which restricts the transport or delivery of U.S. humanitarian
aid to a third country. These provisions were designed to convince Turkey to allow the transit of
U.S. aid to Armenia. (See also above, “The Roles of Turkey, Iran, and Others.”)
Azerbaijani Civil Aviation official Arif Mammadov reportedly warned in late March 2011 that
Azerbaijan could shoot down airplanes that have not received Azerbaijani permission to land at
an airport being constructed in Stepanakert (Xankandi), the capital of NK. Armenia’s defense
ministry reportedly responded that its air defenses were capable of protecting the country’s
airspace. Then-U.S. Ambassador Bryza reportedly condemned the idea of attacking civilian
aircraft and the Azerbaijani Foreign Ministry pledged that the country would not attack civilian
aircraft.81 In late July 2012, however, Azerbaijan’s Civil Aviation Department asserted that air
flights into NK without Azerbaijani permission would be considered a violation of airspace and
“relevant action” would be taken.82 As the airport neared completion, an Azerbaijani air force
official in January 2013 reportedly reiterated that “unpermitted flights ... will be prevented.”
Reportedly, new Azerbaijani government regulations call for forcing an intruding airplane to land,
and if it does not comply and there is no information on civilian passengers, for shooting it
down.83 In October 2013, an NK official discussed plans to build a road from Armenia into
northern NK, since Azerbaijan was blocking the operation of the airport.84
Recent Democratization Problems and Progress
According to the NGO Freedom House, in 2013 Armenia and Georgia ranked as “partly free,”
while Azerbaijan ranked as “not free,” in terms of political rights and civil liberties. Armenia and
Azerbaijan were assessed as having very restricted political rights, where elections have been
marred by serious irregularities. Armenia’s government was assessed as slightly better in
respecting civil liberties than was Azerbaijan’s, where the media have been severely restricted.
Georgia was assessed as improving in political rights and civil liberties in 2011-2012, due in part
to increasing media diversity and the holding of a “free and fair” legislative election. Among the
disputed territories, Nagorno Karabakh (NK) and South Ossetia were judged to be “not free,”
while Abkhazia was judged to be “partly free.”85 In a report on Internet rights, Freedom House
80 P.L. 104-208, §559, amends the Foreign Assistance Authorization Act of 1961.
81 CEDR, March 23, 2011, Doc. No. CEP-950100; April 11, 2011, Doc. No. CEP-950112; “Azerbaijan Threatens To
Shoot Down Karabakh Planes,” RFE/RL, March 16, 2011.
82 CEDR, July 25, 2012, Doc. No. CEP-950156.
83 Joshua Kucera, “Azerbaijan Again Threatens Karabakh Flights,” Eurasianet, January 8, 2013; CEDR, January 21,
2013, Doc. No. CEP-950071.
84 CEDR, October 8, 2013, Doc. No. CEL-25050181.
85 Freedom in the World, Freedom House, January 2013. Abkhazia’s ranking on political rights was deemed to have
(continued...)
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ranked Armenia and Georgia as “free” in terms of Internet availability, access to content, and user
rights, while Azerbaijan was ranked “partly free.”86
Political Developments in Armenia
In anticipation of legislative elections scheduled to be held on May 6, 2012, and presidential
elections scheduled for early 2013, a new electoral code was approved in June 2011 that included
several reform suggestions by the Council of Europe’s advisory Venice Commission and the
OSCE’s Office of Democratic Institutions and Human Rights (ODIHR). Reforms included steps
to form a more non-partisan electoral administration and the specification of conditions under
which election results might be invalidated. However, the Venice Commission and ODIHR called
for added reforms, including easing restrictions on becoming a candidate for election, ensuring
the separation of state and party structures, improving the transparency of vote counting, and
improving complaint and appeal procedures.87 Also in anticipation of the May 2012 legislative
election, the opposition Heritage Party and the Armenian Revolutionary Federation (ARF)
deputies in the legislature introduced a bill in January 2012 calling for the elimination of single
member district voting and the transition to a proportional (party list) system to elect all deputies.
Several opposition parties and blocs not represented in the legislature indicated support for the
bill. Backers of the bill argued that voting in single member districts was controlled by local
officials who carried out the wishes of the Sargisyan government, while voting via national party
lists might increase the chances that more opposition deputies could be elected. At the end of
February 2012, the bill was rejected by the majority deputies belonging to the ruling coalition
(Republican Party of Armenia, Prosperous Armenia, and Law-Governed Country), although a few
Prosperous Armenia deputies reportedly supported the bill.
Eight parties and the Armenian National Congress (an opposition party bloc) were approved to
run on party lists for 90 seats in the May 6, 2012, legislative election. In addition, 155 candidates
were registered to run for 41 seats in single-mandate constituencies. Of these candidates, 66 were
self-nominated. Official campaigning began on April 8. Nearly 63% of 2.5 million registered
voters turned out. Six of the eight parties won legislative seats in the party list portion of the
election. The Republican Party won 40 seats, the Prosperous Armenia Party won 28 seats, the
Armenian National Congress bloc won 7 seats, the Heritage Party won 5 seats, the Armenian
Revolutionary Federation won 5 seats, and the Orinets Yerkir Party won 5 seats. In the
majoritarian races, the Republican Party won about three-quarters of the seats, giving it a bare
majority of seats in the legislature. A majority of incumbent deputies were returned to the
legislature.
According to the final report issued by the OSCE monitoring mission, the election was
competitive, vibrant, and largely peaceful, but was marred by an unequal playing field and by
deficiencies in the complaint and appeals process. Media coverage appeared free and fair, as were
candidate registration processes. Participants raised concerns about the accuracy of voter lists.
Violations of electoral codes were sometimes committed by local authorities, including school
(...continued)
improved because of a more competitive legislative election in March 2012.
86 Freedom on the Net, Freedom House, October 3, 2013.
87 Council of Europe, European Commission For Democracy Through Law, European Commission For Democracy
Through Law (Venice Commission) and OSCE ODIHR Draft Joint Opinion on the Electoral Code of Armenia Adopted
on 26 May 2011, Opinion No. 611 / 2011, September 29, 2011.
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teachers, who participated in campaign activities, and by party-linked organizations, which
provided gifts to voters. Election monitors observed the presence of unauthorized persons or
group voting in 12% of nearly 1,000 polling stations visited. Vote counting was assessed
negatively in almost one-fifth of polling stations, including the participation of unauthorized
persons in counting. Vote tabulation was assessed negatively in most higher-level electoral
commissions visited.88 U.S. Ambassador to Armenia John Heffern reportedly assessed the
election as a major step forward in democratization in Armenia, pointing to “a lot of progress in
several key areas,” including access to media and orderly and transparent voting (including the
presence of cameras in polling places). At the same time, he stated that the OSCE monitors had
reported that there were some problems, so that “there is still some work to do for the elections
next time.”89
On May 30, 2012, the Republican Party and the Orinats Yerker (Rule of Law) Party (headed by
National Security Council Secretary Artur Bagdasaryan) formed a coalition. A former coalition
member, the Prosperous Armenia Party, declined to join the new coalition. At the opening session
of the new legislature on May 31, Hovik Abrahamyan was elected Speaker (he had stepped down
as speaker in late 2011 to head up the election campaign of the Republican Party). On June 2,
2012, President Sargisyan re-appointed Tigran Sargisyan as prime minister.
On May 6, 2012, Oskanyan criticized the legislative election as not free and fair, and laid the
blame on unnamed “authorities.” About two weeks later, Oskanyan and several other members of
the Prosperous Armenia Party who had been elected to the legislature threatened to leave the
party if its head, Gagik Tsarukyan, decided that the party should join the ruling coalition. In late
May 2012, just after Tsarukyan announced that the party would not join the coalition, the
National Security Service opened an investigation against Oskanyan on preliminary charges of
misappropriating funds belonging to his charitable organization and money laundering. On
October 1, 2012, the legislature voted to lift Oskanyan’s immunity from prosecution, and a few
days later, the National Security Service indicted Oskanyan. The U.S. Embassy in Yerevan issued
a statement on October 10 that the indictment was “bad for justice and democracy in Armenia....
[T]he case appears to represent the selective application of Armenian law. Moreover, the timing
of these events in relation to the [presidential] election schedule is troubling.”90 According to
some observers, the charges against Oskanyan were spurred by his opposition activities, including
the possibility that he would run in the 2013 presidential election.91 He had not been arrested as of
late April 2013.
On January 14, 2013, Armenia’s Central Electoral Commission registered eight candidates for the
February 18, 2013, presidential election. Some observers questioned why major political parties
and politicians failed to field candidates or run, including former President Robert Kocharyan,
Prosperous Armenia Party head Gagik Tsarukyan, and Armenian National Congress (ANC) head
Levon Ter-Petrosyan (the Freedom Party, a member of the ANC bloc, fielded candidate Hrant
Baghratyan, but he was not endorsed by the ANC). Ter-Petrosyan claimed that he was too old
88 OSCE, ODIHR, International Election Observation, Republic of Armenia, Parliamentary Elections, 6 May 2012:
Statement of Preliminary Findings and Conclusions, May 7, 2012; Republic of Armenia, Parliamentary Elections, 6
May 2012, OSCE/ODIHR Election Observation Mission: Final Report, June 26, 2012.
89 Sargis Harutyunyan, “U.S. Envoy Praises Armenian Elections,” RFE/RL Armenian Service, May 18, 2012.
90 U.S. Embassy, Yerevan, Ambassador John Heffern, “Oskanyan Case and Rule of Law in Armenia,” October 10,
2012.
91 CEDR, June 22, 2012, Doc. No. CEP-950094.
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(68) to rule effectively and that fraudulent election practices of the past remained in place. Some
observers alleged that the Prosperous Armenia Party had been persuaded to not field a candidate.
Campaigning began in a dramatic fashion on January 21, 2013, when candidate Andreas
Ghukasyan, a radio commentator, began a hunger strike to protest the “fake election.” The next
day, contender Arman Melikyan, a former official in the breakaway Nagorno Karabakh, also
questioned the fairness of the election and stated that he was suspending his campaigning.
Likewise, contender Aram Arutyunyan, head of the National Accord Party, stated that he planned
to withdraw a few days before the election (he pulled out on February 8). On January 31, 2013,
presidential candidate Paruyr Hayrikyan, head of the National Self-Determination Union Party,
was shot and injured, but did not withdraw from the contest. The OSCE long-term observers
characterized campaigning as low-key, with Sargisyan stressing the need for continued stability
and stressing his credentials as a military leader in NK and former defense minister.92 On
February 25, 2013, the CEC reported its final tally and declared that Sargisyan had won the
election with 58.64% of 1.5 million votes cast, followed by Hovannisyan with 36.74%.
Immediately after the election, Hovannisyan claimed that he had in fact won, but virtually all
election complaints made by his party were rejected by the CEC. His Heritage Party held a series
of protests throughout Armenia to call for new elections. As a footnote to the election campaign,
the National Security Service formally indicted one of the presidential candidates, poet Vardan
Sedrakiyan, on March 6 on charges of having ordered the attack on fellow candidate Hayrikyan.
According to the preliminary assessment of the OSCE observers, the election “was generally
well-administered and was characterized by a respect for fundamental freedoms. Contestants
were able to campaign freely. Media provide[d] balanced coverage.... At the same time, a lack of
impartiality of the public administration, misuse of administrative resources, and cases of
pressure on voters were of concern. While election day was calm and orderly, it was marked by
undue interference in the process, mainly by proxies representing the incumbent.” The observers
assessed the voting process negatively in 5% of 853 polling stations, including because of
overcrowding and interference in the vote. Vote counting and tabulation were assessed negatively
in less than 10% of 106 polling stations and of 41 territorial election commissions observed. The
OSCE observers later raised concerns about the high correlation between turnout at polling
stations and the vote for Sargisyan, the treatment and dismissal of complaints, and restrictive
media coverage of electoral problems.93
In his April 9, 2013, inaugural address, President Sargisyan pledged to continue to strengthen
democracy and enhance the rule of law, and to address the problems of emigration, poverty, and
unemployment. Hovannisyan held an “alternative inauguration” protest that later resulted in some
detentions by police. Sargisyan’s cabinet resigned that same day as mandated by the constitution.
He has re-appointed his former prime minister and defense and foreign ministers.
92 Organization for Security and Cooperation in Europe (OSCE), Office for Democratic Institutions and Human Rights
(ODIHR), Election Observation Mission, Republic of Armenia, Presidential Election, 18 February 2013: Interim
Report, No. 1, January 23, 2013; Interim Report, No. 2, February 7, 2013.
93 OSCE, ODIHR, International Election Observation Mission, Republic of Armenia, Presidential Election, 18
February 2013: Statement of Preliminary Findings and Conclusions, February 19, 2013; Republic of Armenia,
Presidential Election, 18 February 2013: Post-Election Interim Report (19–26 February 2013), March 2, 2013.
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Political Developments in Azerbaijan
An Internet-launched “great people’s day” protest was planned for March 11, 2011, reportedly
supported by thousands of Internet users. Organizers of the protest stated that the date was set to
commemorate the date a month previously that Egyptian President Hosni Mubarek had been
ousted. In the days leading up to March 11, up to a dozen or more Internet users reportedly were
detained, and some allegedly were held secretly. One organizer, Bakhtiyar Hajiyev, a Harvard-
educated resident of Ganja, was arrested on March 4, 2011, on charges of draft evasion. Several
dozen people were arrested on March 11, and some received prison sentences of a few days. In
the run-up to the Internet-launched protest, authorities reportedly deployed military troops in
Baku and teachers at universities and secondary schools reportedly were ordered to lecture their
students not to attend protests or otherwise become involved in “anti-Azerbaijani” actions. On
March 9, 2011, the Interior Ministry claimed that the protests were fomented by “radical
oppositionists” financed by foreign countries aiming to trigger further “color revolutions” in
Soviet successor states.
The government detained several opposition activists ahead of a planned April 2, 2011, protest by
the Public Chamber; a coalition of non-partisan politicians, members, and officials of the
opposition Popular Front, Musavat, and National Independence parties; and sympathetic NGOs.
Those attempting to gather on April 2, 2011, to call for the government's resignation, new
legislative elections, and the freedom of speech and assembly were forcibly dispersed and several
people were arrested. The U.S. Embassy in Baku raised concerns about the government actions.94
Over a dozen individuals, including officials and members of the Popular Front and Musavat
parties, received prison sentences of up to several years on charges of violating public order and
using force against government representatives.
In early May 2011, a protest against the ban on wearing the hijab in public schools by 150 or
more people at the Education Ministry was forcibly suppressed. Reportedly, 65 were detained,
with the government claiming that the protest was led by “radical” Muslims and resulted in
property damage and injuries to 26 policemen. In early October 2011, five men received
sentences ranging from probation to 2.5 years in prison for organizing the early May 2011 protest
and using force against government representatives. The chairman of the banned Islamic
Renaissance Party of Azerbaijan (IRPA), Movsum Samadov, also denounced the ban on the hijab,
and he and six other party members subsequently were arrested and convicted in October 2011 on
charges of planning a coup.
Some observers linked some easing of restrictions on assembly and other measures in early 2012
to Azerbaijan’s desire to present itself in a good light during the May 22-26, 2012, Eurovision
Song Contest in Baku. On March 16, 2012, Aliyev pardoned prisoners, including two regarded by
activists as “political prisoners,” including one alleged organizer of the April 2011 attempted
protest. After some delay, Baku authorities permitted the Public Chamber for the first time to hold
a protest at an obscure locale in the suburbs under tight security and alleged restrictions on access
on April 8, 2012. The reported 3,000 protesters called for the release of political prisoners,
democratic reforms, and other demands. Although seven oppositionists were sentenced for up to
two weeks in jail for distributing leaflets, President Aliyev appeared to refer to this rally on April
16 when he stated that “the Azerbaijani public has seen that there is freedom of assembly in our
94 CEDR, March 29, 2011, Doc. No. CEP-950156; U.S. Embassy in Baku, Azerbaijan, U.S. Embassy Statement on
April 2 Protests.
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country.”95 The Public Chamber held several small demonstrations in the run-up to the May 22-
26, 2012, Eurovision Song Contest. During the contest, however, protests were efficiently
prevented or quickly quashed by the authorities, according to some Western reports.
Democratic activist Bakhtiyar Hajiyev (mentioned above) was released from prison on probation
on June 4, 2012, just before former Secretary Clinton visited the country.
An amendment to the freedom of assembly law was passed in November 2012 greatly boosting
the fines for taking part in unauthorized demonstrations, with those deemed to have organized
such demonstrations facing fines of up to $38,000. Critics charged that the increased fines were
intended to discourage the holding of rallies in the run-up to the presidential election in October
2013.96
Some observers raised concerns about increasing efforts in 2013 by the government to detain and
arrest protesters and otherwise to constrain civil society. On January 12, 2013, after a soldier had
reportedly died following brutal hazing, several dozen people staged an unauthorized protest in
Baku, including many relatives of soldiers who had similarly died. Police arrested over two dozen
of the demonstrators and the courts levied heavy fines of up to nearly $800 against them. A fund
on the Internet quickly gathered over $13,000 to pay the fines. Several activists of youth groups
were detained ahead of a planned March 10, 2013, protest against non-combat deaths in
Azerbaijan, or were arrested later, on charges of weapons possession and incitement to violence
to overthrow the government. The protest was forcibly dispersed by police. Azerbaijani media
alleged that the U.S. National Democratic Institute (NDI) was fostering Internet-spread
subversion against the Azerbaijani government. Both the suppression of the protest and the
allegations against NDI raised objections from the U.S. Embassy.
In March 2013, Azerbaijan requested that the OSCE downgrade its office in Baku, to end its
ability to launch independent events and to monitor and submit reports on democratization and
adherence to human rights. Azerbaijan’s presidential administration argued that the office’s
attention to civil and human rights in Azerbaijan was unnecessary given the country’s current
stage of development, where there are “a sufficient number of NGOs, political institutions, and
public organizations.”97
In early April 2013, the Prosecutor General’s Office raided and closed the Free Thought
University, run by an unregistered youth civic movement. U.S. Ambassador Morningstar raised
concerns about the closure of the school, as did Deputy Assistant Secretary of State Thomas
Melia during an April 2013 visit.98 Azerbaijan’s presidential administration has stated that the
university might be permitted to reopen if it is found that it has adhered to all legal requirements.
Ten candidates were registered for the October 9, 2013, Azerbaijani presidential election,
including incumbent President Aliyev, who ran for his third term in office.99 The main opposition
95 CEDR, April 17, 2012, Doc. No. CEP-950147.
96 Shahla Sultanova, “Azerbaijan: Can Facebook become a Substitute for Live Opposition Protests?” Eurasianet,
November 19, 2012.
97 CEDR, April 22, 2013, Doc. No. CEL-42484764.
98 Embassy of the United States of America, Baku, Azerbaijan, Press Release: Ambassador Morningstar Speaks to
Free Thought University [Students], April 12, 2013; American Center Press Conference, Deputy Assistant Secretary of
State Thomas Melia, April 18, 2013.
99 For the previous election, see CRS Report RS22977, Azerbaijan's October 2008 Presidential Election: Outcome and
(continued...)
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candidate was Jamil Hasanli, an historian and former legislator, who was nominated by the
National Council of Democratic Forces, a coalition that includes the Musavat and Popular Front
parties. These parties had boycotted the previous 2008 presidential election on the grounds that it
would not be free and fair, but decided to ally to contest the 2013 election. Other opposition
candidates included legislator Iqbal Agazada, head of the Hope Party (who also ran in 2008),
legislator Ilyas Ismayilov, head of the Justice Party, and Sardar Calaloglu, head of the Democratic
Party. The Central Electoral Commission reported that 71.6% of 5.2 million voters turned out and
that President Aliyev received 84.54% of the vote, followed by 5.53% for Hasanli and 2.4% for
Agazada.100
According to the preliminary report of the OSCE, the election was well organized, several
candidates took part, and turnout was high, but the electoral process was undermined by
limitations on the freedoms of expression, assembly, and association that provided advantages to
the campaign of the sitting president. Campaigning was marred by allegations of candidate and
voter intimidation, insufficient access by most candidates to the media, and harassment of
journalists. The government limited the number of venues where candidates could meet with
voters and places where campaign posters could be displayed. OSCE observers witnessed some
efforts to coerce individuals to attend presidential campaign rallies and to disrupt National
Council rallies, and the prosecutor announced that he was investigating National Council member
activities. Hasanli was warned that he had insulted the dignity of the president, a criminal offense.
Editorial statements by media and public affairs discussion of the campaign were constrained by
law. Given the restrictions on campaigning, substantive debate of platforms did not take place.
Aliyev’s campaign emphasized the achievements of his presidency, while the campaigns of other
candidates to some extent addressed socioeconomic issues and corruption, and opposition
candidates called for upholding political rights and abolishing presidential domination of the
political system. Voting day also witnessed serious shortcomings, including instances of multiple
voting and ballot box-stuffing. The ballot-counting process was judged to be problematic in an
“unprecedented” majority of polling places, and included involvement of unauthorized
individuals in vote-counting and the reassigning of votes from one candidate to another.101
The State Department issued a statement regretting that despite urging by the United States, the
presidential election “fell short of international standards.” The State Department concurred with
OSCE and other monitors that there were serious vote-counting problems and a repressive
campaign environment. At the same time, the State Department praised the registration of some
opposition candidates, the authorization of some opposition campaign rallies, and the decision to
invite the OSCE to monitor the election.102
(...continued)
Implications, by Jim Nichol.
100 Central Electoral Commission of the Republic of Azerbaijan, Presidential Election of the Republic of Azerbaijan:
Protocol of the Voting Results, October 17, 2013, at
http://www.msk.gov.az/uploads/protokollar/CEC_protocol_2013.pdf. For background, see Shahin Abbasov,
“Azerbaijan: Presidential Campaign in Name Only?” Eurasianet, September 18, 2013; Shahin Abbasov, “Azerbaijan:
Putting Inauguration Ahead of the Vote,” Eurasianet, October 8, 2013.
101 OSCE, Office for Democratic Institutions and Human Rights, International Election Observation Mission, Republic
of Azerbaijan, Presidential Election, 9 October 2013: Statement of Preliminary Findings and Conclusions, October 10,
2013.
102 U.S. Department of State, Statement by Marie Harf, Deputy Spokesperson: Azerbaijan Presidential Election,
October 10, 2013.
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Political Developments in Georgia
An election for the 150-member Parliament of Georgia was held on October 1, 2012. Georgia’s
Central Electoral Commission registered 16 parties and blocs and several thousand candidates to
run in mixed party list and single-member constituency races. A party coalition—Georgia Dream
(GD)—set up by billionaire Bidzina Ivanishvili posed the main opposition to President
Saakashvili’s United National Movement (UNM), which at that time held the majority of
legislative seats. A video tape of abuse in a prison released by GD late in the campaign seemed to
be a factor in the loss of voter support for the UNM and in the electoral victory of GD, which
won 85 (57%) of the 150 legislative seats. According to observers from the Organization for
Security and Cooperation in Europe (OSCE), the election freely reflected the will of the people,
although a few procedural and other problems were reported.
The White House described the election as “another milestone” in Georgia’s development as a
democracy, and called for Ivanishvili and Saakashvili to work together to ensure the country’s
continued peaceful transition of power. The Administration also stated that it looked forward to
strengthening the U.S.-Georgia partnership. Several Members of Congress observed the election,
and several Members of the Senate issued a post-election statement commending President
Saakashvili for his efforts to transform Georgia into a prosperous democracy, while cautioning
that the future of U.S.-Georgia relations depended on the country’s continued commitment to
democratization.103
On October 25, 2012, the new legislature convened and the parties making up the majority GD
coalition approved Ivanishvili as prime minister, along with his proposed cabinet ministers and
his government program. The program calls for “large-scale reforms in all strategic directions,”
including changing the constitution to bolster parliamentary power, restructuring the Interior
(police) Ministry and depoliticizing the Interior and Defense Ministries, promulgating a new
national security strategy, and modernizing the economy. The latter will include new grants for
agriculture, pursuit of a free trade agreement with the United States, and talks with Russia to
persuade it to lift its embargo on many Georgian products. The program also proclaims that the
United States is Georgia’s main ally and that foreign policy objectives include EU and NATO
membership. At the same time, the program calls for opening a dialogue with Russia to improve
relations. The bulk of UNM members in the legislature voted against the new government and
criticized its program as failing to build on the reforms of the Saakashvili government.
Relations between the parties making up the GD coalition and the UNM in the legislature and
between the GD-led cabinet and the president have been contentious, and may well remain so in
coming months, as both sides maneuver before a planned 2013 presidential election. Saakashvili
is term-limited and cannot run, but the UNM hopes to retain the presidency. Under constitutional
provisions already in place, the legislature is slated to gain greater powers vis-à-vis the
presidency, so a divided political situation could endure for some time. In such a case,
statesmanship and a commitment to compromise and good governance are essential for Georgia’s
continued democratization, observers stress.
In early November 2012, the Ivanishvili government began arresting officials who had served in
the previous Saakashvili government or who were active in the UNM, most prominently former
103 U.S. Senate, Senator John McCain, Statement by Senators McCain, Lieberman, and Graham on Elections in
Georgia, October 3, 2012.
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defense and interior minister Bacho Akhalaia and chief of the armed forces Georgy Kalandadze,
both of whom were charged with allegedly beating six servicemen in 2011. Addressing concerns
by many domestic and international observers about due process, Prime Minister Ivanishvili
asserted on November 22 that Akhalaia’s “guilt will be proven quite soon.”104 During a mid-
November visit to Georgia, Assistant Secretary of State Philip Gordon stressed to Prime Minister
Ivanishvili that the United States recognized that those who committed crimes should be
investigated and prosecuted, but “nobody wants to see or get the perception that what this is about
it retribution against political enemies.... For Georgia to continue down the path to Euro-Atlantic
integration ... [it needs] to be absolutely scrupulous in making sure that due process and
transparency are applied.”105
On November 29, 2012, Georgian Foreign Minister Maia Panjikidze met with then-Secretary
Clinton in Washington, DC; Clinton urged that prosecutions by the Ivanishvili government
against possible “wrongdoers” be undertaken “with due process and the rule of law.” Panjikidze
assured Clinton that the arrests were not politically motivated but rather represented “the
restoration of justice.”106 In December 2012, Senators Jeanne Shaheen, Joe Lieberman, James
Risch, Lindsey Graham, and John McCain sent a letter to Prime Minister Ivanishvili raising
concerns that the arrests were politically motivated.
In January 2013, the Georgian legislature overrode a presidential veto of a law on amnesty for
“political prisoners,” and nearly 200 alleged victims subsequently were released from prison,
including 13 individuals sentenced as Russian espionage agents. In addition, courts have
exonerated other prominent individuals sentenced by the former Saakashvili government. Some
observers have raised concerns that the increasing numbers of arrests might harm Georgia’s
international reputation and its foreign relations with Western governments and international
organizations.107
Elected local councils and executive leaderships, formerly dominated by members of the UNM,
faced increasingly strident GD supporters, and many or most members and leaders resigned,
switched parties, or declared that they were independent of party affiliation. Some observers have
decried this situation, terming it an effort by GD to take over local politics rather than cooperate
with the UNM. They also have raised concerns that Georgia will thus come to sustain a political
environment where one party is predominant, rather than evolve into a competitive party
democracy.108
On February 7, 2013, legislative speaker Davit Usupashvili announced that President Saakashvili
would not be permitted to deliver his annual speech to the legislature until he agreed to amend the
constitution to reduce his powers (see below). The next day, Saakashvili attempted to deliver the
speech from the legislative library, but pro-Ivanishvili protesters blocked the library entrance.
Instead, Saakashvili delivered the speech from his residence. Ivanishvili issued a statement after
104 Interfax, November 22, 2012.
105 U.S. Department of State, Press Roundtable on Georgia's Democratic Transition, Philip Gordon, Assistant
Secretary, Bureau of European and Eurasian Affairs, November 17, 2012.
106 U.S. Department of State, Remarks With Georgian Foreign Minister Maia Panjikidze Before Their Meeting, Hillary
Rodham Clinton, Secretary of State, November 29, 2012; Daily Press Briefing, November 29, 2012.
107 Niklas Nilsson, “Arrests in Georgia Disturb Transfer of Power,” Central Asia-Caucasus Analyst, November 28,
2012.
108 Molly Corso, “Georgia: Political Tumult Hits Regions,” Eurasianet, December 26, 2012; Lincoln Mitchell,
“Georgia: Four Observations and Four Questions from the Georgian Election,” Eurasianet, November 15, 2012.
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the speech condemning the violence, and suggesting that it could have been avoided if
Saakashvili had postponed his speech.109 After the tumult of the blocked annual address, the co-
chairs of the Congressional Caucus on Georgia—Representatives Bill Shuster and Allyson
Schwartz—as well as Representative Michael Turner and Representative Mario Diaz-Balert,
called in a letter for Secretary Kerry to inform Georgia’s leaders of U.S. concerns about the many
arrests of former officials and other democratization trends in the country.110
In late March 2013, GD convinced enough UNM legislators to join in a two-thirds majority vote
to amend the constitution to take away President Saakashvili’s power to dismiss the sitting
cabinet and to appoint a new cabinet without parliamentary approval. He had disavowed any
intention of carrying out such an action during the few days that the constitution permitted it
between the legislative and presidential elections.
In a speech to the Parliamentary Assembly of the Council of Europe (PACE) on April 23, 2013,
Ivanishvili asserted that Georgia is committed to democratization and respect for human rights,
and remains Western-oriented, pointing to the foreign policy statement recently approved by the
Georgian legislature. Seemingly underlining this orientation, he stressed that he remains a French
citizen. He stated that he had advocated for the EU’s appointment of Thomas Hammarberg, the
former COE High Commissioner on Human Rights, as a Special Advisor for Legal and
Constitutional Reform and Human Rights in Georgia, and pledged that OSCE observers and other
human rights advocates would be permitted to monitor the prosecutions of former government
officials.111
A presidential election is scheduled for October 27, 2013. Prime Minister Ivanishvili has stated
repeatedly that he plans to step down as premier soon after the election, although he vaguely
states that he plans to maintain influence over politics. Twenty-three candidates are registered to
run. The GD candidate is Giorgi Margvelashvili, the former Minister of Education, and the UNM
candidate is legislator Davit Bakradze, the former legislative speaker and foreign minister. Other
candidates whom have appeared influential in polls include Nino Burjanadze, the head of the pro-
Russian Democratic Movement-United Georgia Party and the former legislative speaker; Giorgi
Targamadze, head of the pro-Western and socially conservative Christian Democratic Movement;
and Shalva Natelashvili, head of the populist Labor Party. If no candidate receives over 50% of
the vote, a runoff will be held. The campaign atmosphere has been relatively calm, ascribed by
some observers in part to the reduced powers constitutionally mandated to be exercised by the
winning candidate.
U.S. Aid Overview
The United States is the largest bilateral aid donor by far to Armenia and Georgia, and the two
states are among the five Eurasian states that each have received more than $1 billion in U.S. aid
FY1992-FY2010 (the others are Russia, Ukraine, and Kazakhstan, which have received sizeable
109 “Georgia: Conflict Rather than Cohabitation,” Eurasianet, February 8, 2013; CEDR, February 11, 2013, Doc. No.
CEP-964101.
110 Julian Pecquet, “Lawmakers press Kerry to use 'full diplomatic resources' to Resolve Georgia Political Crisis,” The
Hill, February 15, 2013.
111 PACE, 2013 Ordinary Session, Twelfth Sitting, Second Part-Session, Transcript, April 23, 2013, at
http://www.assembly.coe.int/Main.asp?link=/Documents/Records/2013/E/1304231000E.htm.
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Comprehensive Threat Reduction funds; see Table 1, Table 2, and Table 3). U.S. assistance to
the region FY1992-FY2010 amounts to about 16% of all aid to Eurasia and has included
FREEDOM Support Act (FSA) programs, food aid (U.S. Department of Agriculture), Peace
Corps, and security assistance. Armenia and Georgia have regularly ranked among the top world
states in terms of per capita U.S. aid, indicating the high level of concern within the
Administration and Congress. In Foreign Operations Appropriations for FY1998 (P.L. 105-118),
Congress created a new South Caucasian funding category to emphasize regional peace and
development, and since then has upheld this funding category in yearly appropriations.
The Administration indicated in its FY2012 budget request that the reduced amount for that year
for Europe and Eurasia reflected progress made by many countries in the region and other more
pressing global priorities.112 In the case of the South Caucasian countries, FY2012 spending was
slightly less than that of the previous year. FY2013 estimated spending further declined. The
Administration’s budget request for FY2014 calls for reductions of aid to the South Caucasus
countries over that provided the previous year.
The Administration plans to target FY2014 aid:
• to Georgia to support its Euro-Atlantic orientation and to encourage further
democratization;
• to Armenia to support civil society, local governance, and the business
environment and global competiveness;
• and to Azerbaijan to support civil society, political parties, independent media,
open markets, informed citizen participation, energy security and integration with
European energy markets, and government accountability.
The Administration also plans to continue assistance for participation by the regional states in
NATO activities and deployments (see Table 1).
Congress also has directed that humanitarian aid be provided to displaced persons and needy
civilians in NK out of concern that otherwise the region might not get aid. Such budgeted aid has
amounted to about $41 million from FY1998 through FY2012. See Table 4. In the Omnibus
Appropriations Act for FY2009 (P.L. 111-8) and the Consolidated Appropriations Act for FY2010
(P.L. 111-117) up to $8 million was made available for NK.113 Actual aid to NK has been about $2
million per year since FY2002. Aid has been provided to NGOs to rehabilitate homes, renovate
health clinics and train personnel, repair water systems, provide micro-loans for agriculture, and
clear landmines. In FY2012, aid to NK was provided for demining ($1 million to the HALO Trust
NGO) and for rehabilitating the water system in Stepanakert/Khankendi ($1 million to the
CESCO NGO) (both of these are multi-year projects). Besides bilateral aid, the United States
112 CRS Report R42621, State, Foreign Operations, and Related Programs: FY2013 Budget and Appropriations, by
Susan B. Epstein, Marian L. Lawson, and Alex Tiersky. The CRS Report refers to U.S. Department of State, Executive
Budget Summary, Function 150 and Other International Programs, FY2012, p. 86.
113 Several Azerbaijani legislators protested the conference agreement to H.R. 3288 (P.L. 111-117) to direct up to $8
million in humanitarian aid to NK. Some legislators and the Azerbaijani presidential administration reportedly
suggested that such aid be shared with those who had fled the region. An Azerbaijani Foreign Ministry note to the State
Department said that the aid “decreases confidence and trust toward the United States in Azerbaijan.” CEDR,
December 16, 2009, Doc. No. CEP-950112; December 20, 2009, Doc. No. CEP-95002; January 4, 2010, Doc. No.
CEP-950063; OSC Report, January 12, 2010.
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contributes to multilateral organizations such as the International Monetary Fund and the World
Bank that aid the South Caucasus region.
The Millennium Challenge Account
In January 2004, Congress authorized a major new global assistance program, the Millennium
Challenge Account (Section D of P.L. 108-199). The focus of the new Millennium Challenge
Corporation (MCC) was poverty reduction in countries deemed highly receptive to such aid based
on selection criteria: their levels of economic freedom, their investments in social programs, and
their democratization progress. MCC deemed that Georgia was eligible for assistance, even
though it did not meet criteria on anti-corruption efforts, and in September 2005 signed a five-
year, $295.3 million agreement (termed a “compact”) with the country. Projects included
improving a road from Javakheti to Samtskhe; repairing a gas pipeline; creating a small business
investment fund; setting up agricultural grants; and improving municipal and rural water supply,
sanitation, irrigation, roads, and solid waste treatment. In the wake of the August 2008 Russia-
Georgia conflict, the MCC announced plans for an extra $100 million for road-building, water
and sanitation facilities, and a natural gas storage facility. The MCC reported in April 2011 that it
had completed its compact with Georgia.
In January 2011, MCC announced that Georgia was eligible for a second compact. Georgia
suggested efforts to bolster education, and MCC notified Congress in 2012 that it planned to
provide some preliminary funding to assist Georgia in working out details of such a program. On
July 26, 2013, the MCC and Georgia signed a five-year, $140 million agreement (compact) to
improve the quality of secondary education, including through teacher training and school
rehabilitation, and to improve higher education science, technology, engineering, and math degree
programs.
In December 2005, the MCC approved plans to sign a five-year, $235.65 million compact with
Armenia—to bolster rural agriculture through road-building and irrigation and marketing
projects—but raised concerns about the November 2005 constitutional referendum. Following
assurances by then-Foreign Minister Oskanyan that Armenia would address democratization
shortfalls, the MCC and Armenia signed the compact, and it went into force in September
2006.114 After the political turmoil in Armenia in March 2008, the MCC indicated that as an
expression of its “serious concern,” it would halt contracting for road-building. In December
2008, the MCC Board reiterated its concerns about democratization progress in Armenia and
decided to retain the suspension of some road work, while moving ahead on other projects. In
June 2009, the MCC Board announced that it was cancelling $67.1 million in funding for the road
building project because of Armenia’s halting democratization, although other projects would
continue (later this canceled amount was said to be about $59 million).115 Some of the road-
building projects canceled by MCC subsequently were funded by the World Bank. The MCC
114 MCC, Ambassador Danilovich’s letter to Armenian President Robert Kocharyan, December 16, 2005; Press
Release: Millennium Challenge Corporation Board Approves Armenia Compact but Expresses Concern Regarding
Irregularities in the November Referendum, December 19, 2005; and Ambassador Danilovich’s letter to Armenian
President Robert Kocharyan, January 18, 2006, at http://www.mcc.gov. See also Armenian Foreign Ministry. Oskanyan
Thanks MCC for Millennium Compact, January 12, 2006, at http://www.armeniaforeignministry.com.
115 U.S. Embassy in Yerevan, Background Information on the Status of the MCA-Armenia Program,” December 16,
2008; MCC, Press Release: MCC Board of Directors Meets to Address U.S. Government Global Development
Priorities, June 10, 2009.
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Armenia, Azerbaijan, and Georgia
reported in October 2011 that it had completed its compact with Armenia by disbursing $177
million. Beneficiaries reportedly included about 428,000 rural residents in hundreds of
communities across Armenia.
At a meeting in late 2011, the MCC did not select Armenia as eligible for a compact. MCC raised
concerns about fiscal policy, inadequate government expenditures for health and education,
problematic political rights, and restrictions on freedom of information. For FY2013, Armenia is
on a list of candidate countries, but in late 2012, MCC did not designate it as eligible for a
compact, citing some of the same concerns as raised the previous year.
U.S. Assistance after the Russia-Georgia Conflict
To address Georgia’s urgent humanitarian needs in the wake of the August 2008 Russia-Georgia
conflict, the U.S. Agency for International Development (USAID) and the Defense and State
Departments provided Georgia with urgent humanitarian assistance, with the Defense Department
quickly beginning naval and air deliveries. Reportedly, the Bush Administration had authorized
these Defense Department deliveries to demonstrate U.S. backing for Georgia’s continued
independence.
On September 3, 2008, then-Secretary of State Condoleezza Rice announced a multi-year $1
billion aid plan for Georgia. The Administration envisaged that the proposed $1 billion aid
package would be in addition to existing aid and requests for Georgia, such as FREEDOM
Support Act assistance. The added aid was planned for humanitarian needs, particularly for
internally displaced persons, for the reconstruction of infrastructure and facilities that were
damaged or destroyed during the Russian invasion, and for safeguarding Georgia’s continued
economic growth.116
Congress acted quickly to flesh out the Administration’s aid proposals for Georgia. The
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (H.R.
2638/P.L. 110-329), signed into law on September 30, 2008, appropriated an additional $365
million in aid for Georgia and the region (beyond that provided under continuing appropriations
based on FY2008 funding) for humanitarian and economic relief, reconstruction, energy-related
programs, and democracy activities. Of that amount, $315 million was actually budgeted for
Georgia. The Supplemental Appropriations Act for FY2009 (P.L. 111-32; signed into law on June
24, 2009) provided an additional $242 million in Freedom Support Act assistance to Georgia, “the
final portion of the $1 billion pledge.”117
U.S. Security Assistance
The United States has provided some security assistance to the region, and bolstered such aid
after September 11, 2001. Admiral James Stavridis, Commander of the U.S. European Command
(EUCOM) testified in March 2013 that
116 U.S. Department of State. Secretary Condoleezza Rice. Remarks On U.S. Economic Support Package for Georgia,
September 3, 2008; Briefing On U.S. Economic Support Package for Georgia, September 3, 2008.
117 U.S. Senate. Committee on Foreign Relations. Subcommittee on Europe. Hearing on Georgia: One Year After the
August War. Statement of S. Ken Yamashita, Acting Assistant Administrator for the Bureau for Europe and Eurasia,
United States Agency for International Development, August 4, 2009.
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Armenia, Azerbaijan, and Georgia
instability and fragility in the Caucasus will continue. That instability is highlighted by
Russia’s continued non-compliance with the August 2008 cease-fire agreement with
Georgia.... The South Caucasus remains a concern in the absence of an agreed political
resolution to the NK conflict between Armenia and Azerbaijan and continued violent
incidents on the Line of Contact separating the opposing forces. EUCOM continues vigorous
engagement across the Caucasus, given the region’s strategic importance as a global energy
corridor, key node on the NDN, source of national contributions to ISAF, potential for
narcotics and illicit weapons trafficking, interest area for both Russia and Iran, and location
of frozen conflicts that have potential to flash into wider and more destabilizing wars....
Security cooperation program priorities in the South Caucasus are focused on developing and
sustaining relationships that: ensure U.S. access and freedom of action (focused in the near
term on NDN areas); counter regional and transnational threats, especially violent extremist
organizations, counter-WMD proliferation, and illicit trafficking; solidify defense
institutional reforms; and sustain partner capacity to enhance regional security...118
EUCOM initiatives in the region have included the Georgia Deployment Program and the
Caspian Regional Maritime Security Cooperation program. The Georgia Deployment Program-
ISAF, a multi-year program that began in late 2009, is supported by Marine Forces Europe to
train and deploy Georgian forces alongside U.S. Marine Forces to Afghanistan. The program
encompasses rotations of Georgian battalions with a Marine Corps Marine Expeditionary Brigade
to southern Afghanistan.
General Bantz John Craddock, former EUCOM Commander, testified in 2008 that the Caspian
Regional Maritime Security Cooperation program aimed to “coordinate and complement U.S.
government security cooperation activities in Azerbaijan and Kazakhstan. U.S. Naval Forces
Europe continues to promote Maritime Safety and Security and Maritime Domain Awareness in
the Caspian Sea through routine engagement with Azerbaijan. These efforts aim to bolster
Azerbaijan’s capabilities to ‘observe, evaluate, and respond’ to events in their maritime
domain.”119 (This program appeared to combine elements of the former Caspian Guard and
Hydrocarbons programs.) Admiral Stavridis did not discuss this program in testimony in 2013,
but did mention U.S. Naval Forces Europe’s cooperation with Azerbaijan and with U.S. Central
Command on activities involving Kazakhstan and Turkmenistan. For FY2014, the Administration
requested FMF assistance for Azerbaijan to bolster their naval capabilities or otherwise enhance
Caspian Sea maritime security.
Of the cumulative assistance from all agencies and programs provided to the South Caucasian
states from FY1992 through FY2010, the State Department reports that $223 million was
provided to Armenia, $327 million to Azerbaijan, and $896 million to Georgia for “ensuring
peace and security.” This category includes law enforcement, border security, counter-narcotics,
counter-terrorism, and conflict mitigation funds. Also included are International Military
Education and Training (IMET), Foreign Military Financing (FMF), Section 1206 (to train and
equip forces for counterterrorism and operations in Afghanistan) and other Defense Department,
and agency and program funding (although some classified funding may not be reported).
118 U.S. Senate. Committee on Armed Services. Hearing to Receive Testimony on U.S. European Command, U.S.
Northern Command, and U.S. Southern Command in Review of the Defense Authorization Request for Fiscal Year
2014 and the Future Years Defense Program, Testimony of Admiral James G. Stavridis, United States Navy,
Commander, United States European Command, March 19, 2013.
119 U.S. Senate. Committee on Armed Services. Statement of General Bantz J. Craddock, March 13, 2008.
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Armenia, Azerbaijan, and Georgia
Until waived, Section 907 had prohibited much U.S. security aid to Azerbaijan, including Foreign
Military Financing (FMF), and International Military Education & Training (IMET). Under U.S.
policy, similar aid had not been provided to Azerbaijan’s fellow combatant Armenia. From 1993
to 2002, both had been on the Munitions List of countries ineligible for U.S. arms transfers. Since
the waiver provision to Section 907 was enacted, some Members have maintained that the
Armenian-Azerbaijani military balance is preserved by providing equal amounts (parity) in IMET
and FMF assistance to each country. Successive Administrations have not always agreed with this
understanding of “parity,” and occasionally have requested unequal amounts of such aid, but
Congress usually has directed that equal amounts be provided. The Executive Budget Summary:
Function 150 and Other International Programs for FY2014, released on April 10, 2013, calls for
$2.7 million in FMF and $600,000 in IMET for each country.
Security Assistance to Georgia since the August 2008 Conflict
In the wake of the August 2008 Russia-Georgia conflict that severely damaged Georgia’s military
capabilities, General Craddock visited Georgia on August 21 to survey the destruction of
infrastructure and military assets. According to then-Assistant Secretary of Defense Vershbow,
EUCOM carried out a “comprehensive multi-month assessment of Georgia’s Armed Forces.” In
October 2008, the Defense Department also held yearly bilateral defense consultations with
Georgia. Vershbow testified that as a result of these assessments, “many previously unrecognized
or neglected deficiencies in the various required capacities of the Georgian Armed Forces and
Ministry of Defense [came to light]. In practically all areas, defense institutions, strategies,
doctrine, and professional military education were found to be seriously lacking.”120
In March 2009, General James Cartwright, then the Vice Chairman of the Joint Chiefs of Staff,
visited Georgia to further assess its defense needs. He pledged training that would be “focused on
the defense of Georgia, on its self and internal defense,” and equipment transfers that would be
based on “what equipment needs to be upgraded and then what new types of equipment that are
necessary for their homeland defense.”121 Vershbow similarly testified in August 2009 that
we are focusing on building defense institutions, assisting defense sector reform, and
building the strategic and educational foundations that will facilitate necessary training,
education, and rational force structure design and procurement. We are assisting Georgia to
move along the path to having modern, western-oriented, NATO-interoperable armed forces
capable of territorial defense and coalition contributions.122
He stressed, however, that “the United States has not ‘rearmed’ Georgia as some have claimed.
There has been no lethal military assistance to Georgia since the August [2008] conflict. No part
of the $1 billion U.S. assistance package went to the Ministry of Defense.”123
120 U.S. Senate. Committee on Foreign Relations. Subcommittee on Europe. Hearing on Georgia: One Year After the
August War. Testimony of Alexander Vershbow, Assistant Secretary of Defense for International Security Affairs,
August 4, 2009.
121 Air Force Master Sgt. Adam Stump, “U.S., Georgia to Continue Strategic Partnership,” American Forces Press
Service, March 31, 2009; CEDR, March 30, 2009, Doc. No. CEP-950352; Giorgi Lomsadze, “Georgia: Pentagon to
Start Military Training Program,” Eurasia Insight, March 30, 2009.
122 Vershbow, August 4, 2009.
123 U.S. Senate. Committee on Foreign Relations. Subcommittee on Europe. Hearing on Georgia: One Year After the
August War. Testimony of Alexander Vershbow, Assistant Secretary of Defense for International Security Affairs,
August 4, 2009.
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Armenia, Azerbaijan, and Georgia
Some in Congress and elsewhere criticized this dearth of lethal security assistance to bolster
Georgia’s territorial defense capabilities.124 Although President Saakashvili seemed to indicate
during then-Secretary Clinton’s July 2010 visit that U.S. security cooperation with Georgia was
adequate, he stated in September 2010 that “leaving Georgia defenseless doesn’t help the
situation. Georgia cannot attack Russia, while a defenseless Georgia is a big temptation for
Russia to change our government through military means…. As part of ongoing security
cooperation, we hope that the U.S. will help us with defense-weapons capabilities.”125 On
December 12, 2010, U.S. Senator John McCain called for the Obama Administration to resume
some defensive arms transfers to Georgia, including early warning radars. During his March 10-
17, 2011, visit to the United States, President Saakashvili reportedly requested U.S. transfers of
defensive weapons. In late March 2011, he reportedly stated that while some U.S. small arms
transfers were “in the pipeline,” Georgia needed anti-air and anti-tank weapons from the United
States.126
During a hearing of the Senate Armed Services Committee on March 29, 2011, Senator McCain
asked whether the United States was providing defensive weapons to Georgia, and EUCOM
Commander Stavridis stated that “at this moment we are not providing them [with] what I would
term high-end military defensive weapons.” Senator McCain responded that “it is hard for me to
understand, since the Russians still occupy territory that is clearly Georgian territory and continue
to threaten Georgia, and yet we're not even giving them weapons with which to defend
themselves. It is not comprehensible.”127
After a meeting between U.S. Members of Congress and Georgian legislators on the sidelines of
the annual meeting of the NATO Parliamentary Assembly in Bucharest, Romania, in mid-October
2011, the U.S. delegation head, Representative Mike Turner, released a statement stating that “all
NATO states should look to arms sales with Georgia that can add to the collective defense…. A
stronger Georgia is clearly in the interest of all NATO members.”128
A report issued in October 2011 by a team led by Senators Jeanne Shaheen and Lindsey Graham
urged that U.S. policy be changed to “normalize ... defense relations with Georgia, including
allowing sales of defensive military equipment [which] will encourage other allies to follow suit,
enabling Georgia to resume purchasing armaments from Central European allies.”129
On December 31, 2011, President Obama signed into law the National Defense Authorization Act
(NDAA) for FY2012 (P.L. 112-81). Section 1242 calls for the Defense Secretary to submit a plan
to Congress for the normalization of U.S. defense cooperation with Georgia, including the sale of
defensive weapons. In a signing statement, the President stated that if the provisions of the
124 U.S. Senate. Committee on Foreign Relations. Striking The Balance: U.S. Policy And Stability In Georgia, a Report
to the Committee on Foreign Relations, S. PRT. 111–37, December 22, 2009; Joshua Kucera, “Georgia: Senate Staff
Report Stokes Unease in the Caucasus,” Eurasia Insight, January 5, 2010.
125 Jerry Guo, “Russia’s Occupation Won’t Last,” Newsweek, September 12, 2010.
126 Josh Rogin, “Georgian President: Russia has to Compromise if it Wants into WTO,” The Cable, Foreign Policy,
March 30, 2011, at http://thecable.foreignpolicy.com/posts/2011/03/30/
georgian_president_russia_has_to_compromise_if_it_wants_into_wto.
127 U.S. Congress, Senate, Committee on Armed Services, Hearing on the U.S. European Command and U.S. Strategic
Command Budget for Fiscal Year 2012, March 29, 2011.
128 “Meeting of US and Georgian Delegations at NATO Parliamentary Assembly,” The Messenger, October 11, 2011;
“U.S. Congresspersons Release Strong Statement of Support for Georgia in NATO,” The Messenger, October 12, 2011.
129 Georgia in the West: A Policy Road Map to Georgia’s Euro-Atlantic Future, Atlantic Council, October 13, 2011.
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Armenia, Azerbaijan, and Georgia
section conflict with his constitutional authority to conduct foreign relations (presumably, in this
case, including his “reset” policy with Russia), they would be considered non-binding. At a press
conference after he met with President Obama in late January 2012, President Saakashvili stated
that “we are very grateful for elevating our defense cooperation further, and talking about
[developing] Georgia’s self-defense capabilities,” while President Obama appeared more reticent
in stating only that “we will continue to strengthen our defense cooperation.”130
The National Defense Authorization Act Report on Georgia
The report required by the NDAA for FY2012 was transmitted to Congress on April 30, 2012.
The report stated that results of bilateral security collaboration since the 2008 conflict included
the revision of Georgia’s national security strategy and defense plan, institutionalizing Afghan
training and deployment methods, implementing a military personnel management system, and
reorganizing the armed forces. The latter included the creation of a National Defense Academy to
train officers who can operate with U.S. and NATO forces and who share Western values. The
report stressed that there were two pillars of U.S.-Georgia defense cooperation: U.S. support for
modernizing Georgia’s armed forces; and U.S. support for Georgia’s contributions to ISAF. For
the first pillar, there were 63 cooperative training, education, and operational contacts in FY2011,
and 23 in FY2012 through April 2012. According to the report, all of Georgia’s 19 requests since
May 2010 for foreign military sales equipment and services resulted in transfers or were in the
process of being fulfilled. Six of these requests were to support ISAF deployments, but the rest
were to support defense modernization, mostly involving training. Only two transfers seemed to
involve military equipment for defense capabilities, in order to enhance communications (the
report did not list the sale of carbines, mentioned by other sources).
The report stated that Presidents Obama and Saakashvili had agreed in January 2012 on enhanced
defense cooperation in the areas of air and coastal surveillance and defense training, train-the-
trainer instruction for non-commissioned officers, brigade command and staff training, combat
engineer training, and utility helicopter training. The report stated that discussions were underway
for Georgia to purchase air and coastal surveillance radar and acoustic systems and small arms
ammunition. The report announced that the “enhanced defense cooperation” program would
begin in FY2013.131
Recent Developments
During her June 5-6, 2012, visit to Georgia, former Secretary Clinton hailed this planned
enhanced defense cooperation. While there, she also highlighted other security cooperation. She
helped formally commission a patrol boat that had been modernized with funds from the Export
Control and Related Border Security (EXBS) Account of the State Department. She stated that
since the 2008 conflict, the United States had supplied $10 million to rebuild Georgia’s Coast
Guard, including three patrol boats, construction of a ship repair facility, installation of new
130 The White House, Remarks by President Obama and President Saakashvili of Georgia After Bilateral Meeting,
January 30, 2012.
131 U.S. Department of Defense, Report to Congressional Committees on the Department of Defense Plan for Defense
Cooperation with the Republic of Georgia, April 30, 2012.
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Armenia, Azerbaijan, and Georgia
communications and observation equipment, and a maritime information center. She also hailed
other EXBS assistance to Georgia in recent years.132
In his March 2013 testimony to Congress, EUCOM Commander Stavridis stated that EUCOM
had expanded the Georgia Deployment Program to train and deploy two battalions every six
months to ISAF’s Regional Command Southwest, had supported Armenian-Georgian training on
cross-border Humanitarian Assistance and Disaster Response, had led an assessment of junior
officer and non-commissioned officer professional development programs as well as combat
engineer training and education, and had coordinated brigade command and staff development.
He stated that Georgian troops had taken advantage of training at U.S. Army Europe’s Joint
Multinational Training Center for mission rehearsal exercises prior to ISAF deployment, and had
participated in Agile Spirit, a training workup for troops in the Georgia Deployment Program. He
also reported that U.S. Naval Forces Europe continued to lead Eurasia Partnership Capstone,
which included training with Georgian naval forces, and provided training for non-commissioned
officer development, maritime interdiction operations, visit/board/search/ seizure, search and
rescue, maritime law enforcement, and environmental protection. U.S. Naval Forces Europe also
co-hosted the annual Sea Breeze naval exercise in the Black Sea, which included participation by
Georgian forces. Admiral Stavridis did not report on any weapons transfers to Georgia.133
In his April 11, 2013, nomination hearing to be EUCOM Commander, General Philip Breedlove
stated that the United States “has a vigorous defense cooperation program with Georgia,”
involving hundreds of events annually, including cyber defense, border security, professional
military education development, and counterinsurgency operations training. He stated that FMF
funding is “robust,” amounting to approximately $14 million (presumably referring to FY2012;
see below). He reiterated the areas of engagement that President Obama had offered to President
Saakashvili in January 2012, and stated that EUCOM “has already conducted or has planned
initial engagements with Georgia in all these areas,” including through the use of IMET funds. He
repeated the language of the April 2012 NDAA Report (discussed above) that the Obama
Administration would look favorably on the sale of air surveillance radars, coastal surveillance
acoustic systems, and small arms ammunition to Georgia.134
The Executive Budget Summary: Function 150 and Other International Programs for FY2014,
released on April 10, 2013, calls for $1.8 million in IMET and $12 million in FMF for Georgia,
about a $2.5 million reduction from such aid in FY2012.
The Regional States and NATO
All three regional states joined NATO’s Partnership for Peace (PFP) in 1994. The June 2004
NATO summit pledged enhanced attention to the South Caucasian and Central Asian PFP
132 U.S. Department of State, Remarks at Coast Guard Ship Commissioning, June 5, 2012.
133 U.S. Senate. Committee on Armed Services. Hearing to Receive Testimony on U.S. European Command, U.S.
Northern Command, and U.S. Southern Command in Review of the Defense Authorization Request for Fiscal Year
2014 and the Future Years Defense Program, Testimony of Admiral James G. Stavridis, United States Navy,
Commander, United States European Command, March 19, 2013.
134 U.S. Senate, Committee on Armed Services, Hearing on the nomination of Philip M. Breedlove for Commander,
United States European Command and Supreme Allied Commander, Europe, Advance Questions for General Philip M.
Breedlove, USAF, April 11, 2013.
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Armenia, Azerbaijan, and Georgia
members. A Special Representative of the NATO Secretary General was appointed to encourage
democratic civil-military relations, transparency in defense planning and budgeting, and enhanced
force inter-operability with NATO. In 2004-2005, all three states agreed with NATO to participate
in Individual Partnership Action Plans (IPAPs) for military and civil-military reforms.
• Troops from all three regional states have served as peacekeepers in the NATO
Kosovo Force (KFOR). As of September 2013, 36 troops from Armenia
continued to serve in KFOR.135
• All three regional states have deployed troops to support the International
Security Assistance Force (ISAF) in Afghanistan (see above, “Regional Support
for Military Operations in Iraq and Afghanistan”).
Armenia’s Foreign Minister Edvard Nalbandyan reportedly indicated that President Sargisyan did
not attend the NATO summit in Chicago in May 2012 because he knew that the summit would
uphold Azerbaijan’s territorial integrity, as was subsequently reflected in the summit declaration.
Nalbandyan stated that the declaration not only harmed the negotiation process but also
“jeopardize[d] the fragile peace in the region, especially given the unprecedented growth of
Azerbaijan’s military expenses and bellicose rhetoric.”136
NATO and Georgia
Although the United States urged that Georgia be considered for a Membership Action Plan
(MAP; preparatory to membership), NATO’s Riga Summit in November 2006 reaffirmed support
for an “intensified dialogue” to assist Georgia in implementing reforms.137 A MAP for Georgia
was a matter of contention at the April 2008 NATO Summit. Although Georgia was not offered a
MAP, the Alliance pledged that Georgia would eventually become a member of NATO, and stated
that the issue of a MAP for Georgia would be revisited later in the year.
After the August 2008 Russia-Georgia conflict, several allies raised heightened concerns that
Georgia was not ready to be granted a MAP because of the destruction of much of its military
infrastructure by Russia, the uncertain status of the breakaway regions, and the uncertain quality
of conflict decision-making by Georgia’s political and military leadership. At a NATO foreign
ministers’ meeting in early December 2008, the allies agreed to step up work within the Georgia-
NATO Council (established soon after the Russia-Georgia conflict) to facilitate Georgia’s
eventual NATO membership, and to prepare annual plans on Georgia’s progress toward eventual
membership. The first annual national plan was worked out during meetings of the Georgia-
NATO Council and started to be implemented in May 2009.
After meeting with President Saakashvili at the White House in late January 2012, President
Obama stated that he had “assured [Saakashvili] that the United States will continue to support
135 NATO, Kosovo Force, Troop Numbers and Contribution Nations, September 6, 2013, at
http://www.aco.nato.int/kfor/about-us/troop-numbers-contributions.aspx.
136 Mediamax, May 21, 2012.
137 NATO. North Atlantic Council. Riga Summit Declaration, November 29, 2006. Sen. Richard Lugar urged soon
granting Georgia a MAP and suggested that NATO’s energy security would be facilitated by eventually offering
NATO membership to Azerbaijan and Kazakhstan. “Senator Lugar Delivers Remarks at the Riga Summit, Latvia,”
Congressional Quarterly Transcripts, November 27, 2006.
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Armenia, Azerbaijan, and Georgia
Georgia's aspirations to ultimately become a member of NATO.”138 At his confirmation hearing in
March 2012, Ambassador-designate to Georgia Richard Norland reported that the Administration
planned at the upcoming May 2012 NATO summit in Chicago “to signal acknowledgement for
Georgia’s progress ... and to work with the allies to develop a consensus on the next steps
forward.”139 The Chicago Summit Declaration issued at the meeting grouped Georgia with the
other three NATO aspirants, Macedonia, Montenegro, and Bosnia-Herzegovina, and announced
that the Alliance ties with Georgia would be strengthened. The Declaration reaffirmed NATO
support for Georgia’s territorial integrity and called on Russia to make a pledge not to use force
against Georgia and to rescind its recognition of the breakaway regions as independent. It also
raised concerns about Russia’s military buildup in the breakaway regions and called on Russia to
permit international observers and humanitarian groups free access to the regions.140
At a mid-November 2012 meeting at NATO headquarters in Brussels with Secretary General
Anders Fogh Rasmussen, visiting Prime Minister Ivanishvili assured him that due process would
be followed in the cases of former defense and interior minister Bacho Akhalaia, chief of the
armed forces Georgy Kalandadze, and others arrested in Georgia, and invited NATO to set up a
commission in Georgia to monitor the cases.141 At a meeting of the NATO-Georgia Commission
in Brussels, held a week after Ivanishvili’s NATO visit, Georgian Defense Minister Alasania
stated that post-election Georgia was now more stable and a stronger and more predictable NATO
partner, and that Georgia would uphold the rule of law. At a follow-on meeting of the NATO-
Georgia Commission on December 5, 2012, during the NATO foreign ministerial meeting in
Brussels, Secretary General Rasmussen reiterated that the Alliance would continue to monitor
judicial developments in Georgia, and stressed that NATO looked forward to a “still stronger and
closer relationship [with Georgia] in 2013 and beyond.”142
At a meeting of the NATO-Georgia Commission on March 19, 2013, the Georgian side reported
on its annual plan for 2013. NATO emissaries reportedly praised the annual plan and offered
assistance for its fulfillment, and urged vying political interests in Georgia to work together to
further the country’s democratization. A North Atlantic Council delegation, led by NATO
Secretary General Anders Fogh Ramussen, visited Tbilisi in late June 2013, and a meeting of the
NATO-Georgia Commission also was held, attended by Prime Minister Ivanishvili. Rasmussen
raised concerns about arrests of former Georgian officials and called for Georgia to further
democratize and protect the rights of minority groups and other human rights as part of its
movement toward NATO membership. Ivanishvili reiterated that Georgia was committed to
joining NATO and would continue to support peacekeeping in Afghanistan. A reported major
issue discussed by the NATO-Georgia Commission was the movement of border barriers by
Russian border guards in South Ossetia. On October 2, 2013, Rasmussen called for Russia to
remove fences and other obstacles it was constructing in South Ossetia and to reverse the
recognition of the independence of the breakaway regions. On October 11, 2013, Rasmussen
138 The White House, January 30, 2012.
139 U.S. Senate, Committee on Foreign Relations, Hearing on Nominations, March 21, 2012.
140 NATO, Chicago Summit Declaration, May 20, 2012.
141 NATO, Joint Press Point by NATO Secretary General Anders Fogh Rasmussen and the Prime Minister of Georgia,
Bidzina Ivanishvili, November 14, 2012.
142 NATO, NATO Foreign Ministers Praise Georgia’s Commitment to Euro-Atlantic Integration, December 5, 2012;
Opening Remarks by NATO Secretary General Anders Fogh Rasmussen at the NATO-Georgia Commission in Foreign
Ministers Session, December 5, 2012; CEDR, December 6, 2012, Doc. No. CEP-964069; December 7, 2012, Doc. No.
CEP-964050.
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Armenia, Azerbaijan, and Georgia
stated that Georgia would join NATO’s Response Force (a maritime and special operations rapid-
reaction force) in 2015.
The U.S. Congress approved the NATO Freedom Consolidation Act of 2007, signed into law in
April 2007 (P.L. 110-17), to urge NATO to extend a MAP for Georgia and to designate Georgia as
eligible to receive security assistance under the program established by the NATO Participation
Act of 1994 (P.L. 103-447). The statement released by the U.S. delegation to the NATO
Parliamentary Assembly in October 2011 (mentioned above) called for NATO to extend a MAP
for Georgia at the upcoming NATO Summit in Chicago in May 2012. In March 2012, then-
Senator Richard Lugar introduced S. 2177, The NATO Enhancement Act, in the 112th Congress,
which reaffirms an “open door” policy with respect to the accession of additional countries to
NATO, including NATO aspirant Georgia (a similar bill, H.R. 4243, was introduced in the House
by Representative Michael Turner later in March 2012). The bills expressed the sense of
Congress that the President should lead efforts at the Chicago NATO Summit to provide a clear
roadmap for the granting of a MAP (or other equivalent plan) to Georgia and other aspirants.
However, as mentioned above, Georgia was not offered a MAP at the Chicago NATO summit.
U.S. Trade and Investment
The former Bush Administration and others have maintained that U.S. support for privatization
and the creation of free markets directly serve U.S. national interests by opening markets for U.S.
goods and services and sources of energy and minerals. Among U.S. economic links with the
region, bilateral trade agreements providing for normal trade relations for products have been
signed and entered into force with all three states. Bilateral investment treaties providing national
treatment guarantees have entered into force. U.S. investment is highest in Azerbaijan’s energy
sector, but corruption in the three regional states and regional instability otherwise has appeared
to discourage investors. With U.S. support, in June 2000 Georgia became the second Eurasian
state (after Kyrgyzstan) to be admitted to the WTO. The application of Title IV of the Trade Act
of 1974, including the Jackson-Vanik amendment, was terminated with respect to Georgia in
December 2000, so its products receive permanent nondiscriminatory (normal trade relations or
NTR) treatment. Armenia was admitted into WTO in December 2002. The application of Title IV
was terminated with respect to Armenia in January 2005.
Georgia and Russia’s Accession to the WTO
When Georgia became a member of the WTO in 2000, it joined an existing Working Party of
interested WTO members—established in 1993—that has been considering Russia’s WTO bid.
Georgia added its main concerns to those of the other 60-odd members of the Working Party, that
market access be upheld and that Georgia establish control over customs clearance at posts
located along its borders with Russia (including between its breakaway regions and Russia), in
accordance with its sovereign territorial rights and the provisions of a 1994 free trade agreement
signed by Georgia and Russia (never ratified by Russia). This Georgian request for customs
control did not fundamentally change after Russia recognized the independence of the breakaway
regions in late August 2008. Although Russia held bilateral talks with all members of the Working
Party and by late October 2011 had resolved most of their concerns, Russia long continued to
refuse to resolve Georgia’s concerns about customs control, arguing that the issue was political
and hence irrelevant to WTO accession. Instead, Russia demanded that the United States put
pressure on Georgia to drop its request or that the WTO use an unprecedented majority vote of
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Armenia, Azerbaijan, and Georgia
the membership to admit Russia to get around Georgia’s request. The Russia-Georgia dispute
became the last major obstacle to Russia’s WTO accession. According to some observers,
powerful interests in Russia that remained opposed to WTO membership were using the dispute
to convince others in the Russian leadership to cease efforts to join WTO.143
At talks moderated by Switzerland that began in March 2011 between Russia and Georgia,
Switzerland reportedly proposed in mid-2011 that an international monitoring group could be
established, similar to the EU Border Assistance Mission to Moldova and Ukraine (EUBAM), to
work at customs posts between Russia and the breakaway regions.144 The Swiss proposal also
reportedly included, as an adjunct or alternative element, the establishment of a computerized
reporting system to bolster the transparency of cross-border trade.
Georgia and Russia signed a trade monitoring agreement in Geneva on November 9, 2011, after
lengthy negotiations mediated by Switzerland, clearing one of the last major obstacles to Russia
being invited to join the WTO at its Ministerial Conference in mid-December 2011. Russia’s
accession took place in August 2012. The monitoring agreement called for customs monitoring
along three “trade corridors” on the Georgia-Russia border, two running through the breakaway
regions and the third running through the uncontested Zemo Larsi-Kazbegi border crossing. In
regard to the breakaway regions, a terminal was set up at Russia’s border with the region, and
another at Georgia’s border with the region. A private firm was to be hired and managed by
Switzerland to monitor the terminals. Georgia and Russia were to provide trade data to the firm,
which was to forward the data to the WTO.
Energy Resources and U.S. Policy
The U.S. Energy Department reports estimates of 7 billion barrels of proven oil reserves, and 35
trillion cubic feet of proven natural gas reserves in Azerbaijan.145 In addition, gas was discovered
in 2011 at the Umid and Apsheron offshore fields, estimated at 15 trillion cubic feet of proven
reserves. Critics argue that oil and gas from Azerbaijan will amount to a tiny percent of world
exports, but successive U.S. Administrations have argued that these exports could nonetheless
boost energy security somewhat for European customers currently relying more on Russia.
Azerbaijan is expecting that its gas exports will be greatly boosted when phase two production
begins at its offshore Shah Deniz gas fields, scheduled for late 2018 or early 2019.
In testimony in June 2011, then-U.S. Special Envoy for Eurasian Energy Richard Morningstar
stated that U.S. policy encourages the development of new Eurasian oil and gas resources to
143 Anders Aslund, “Why Doesn’t Russia Join the WTO?” The Washington Quaterly, April 2010; Mamuka Tsereteli,
“Russia’s WTO Accession: Is Georgia an Obstacle?” Center for Black Sea/Caspian Studies, The American University,
2011; Government of the Russian Federation, Prime Minister, Transcript: Interview with Prime Minister Vladimir
Putin, October 17, 2011, at http://premier.gov.ru.
144 EUBAM was set up in late 2005 between Moldova’s border with Ukraine, and works to monitor trade involving
Ukraine and Moldova, including to a substantial degree the latter’s breakaway region of Transnistria. Corruption and
crime had previously been an increasing problem along these borders. Russia has objected to the monitoring by
EUBAM, terming it as supporting Moldova’s “economic blockade” of Transnistria. At the same time, many
Transnistrian companies, including those that are Russian-owned, have cooperated with Moldovan customs regulations
in order to gain access to WTO and EU markets (Moldova is a member of WTO and receives trade preferences from
the EU).
145 U.S. Energy Department. Energy Information Administration. Azerbaijan: Country Analysis Brief, September 10,
2013.
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Armenia, Azerbaijan, and Georgia
increase the diversity of world energy supplies. In the case of oil, increased supplies may directly
benefit the United States, he stated. A second U.S. goal is to increase European energy security, so
that some countries in Europe that largely rely on a single supplier (presumably Russia) may in
the future have diverse suppliers. A third goal is assisting Caspian regional states to develop new
routes to market, so that they can obtain more competitive prices and become more prosperous. In
order to achieve these goals, the Administration supports the development of the Southern
Corridor of Caspian (and perhaps Iraq) gas export routes transiting Turkey to Europe. Of the
vying pipeline proposals, the Administration will support the project “that brings the most gas,
soonest and most reliably, to those parts of Europe that need it most.” At the same time,
Morningstar rejected views that Russia and the United States are competing for influence over
Caspian energy supplies, pointing out that the Administration has formed a Working Group on
Energy under the U.S.-Russia Bilateral Presidential Commission.146 According to some observers,
the construction of Southern Corridor pipelines will bolster the strategic importance to the West
of stability and security in the Caspian region.147
U.S. officials have argued that Azerbaijani gas is critical to the development of the Southern
Corridor.148 In March 2007, Azerbaijan and the United States signed a memorandum of
understanding on energy cooperation that called for discussions on various proposed gas
pipelines. In August 2007, the U.S. Trade Development Administration granted Azerbaijan $1.7
million to fund feasibility studies on building both oil and gas pipelines across the Caspian Sea to
link Central Asia to Azerbaijani pipelines.
Building the Baku-Tbilisi-Ceyhan and South Caucasus Pipelines
During the Clinton Administration, the United States in 1995 encouraged the building of one
small oil pipeline (with a capacity of about 155,000 barrels per day) from Azerbaijan to the
Georgian Black Sea port of Supsa as part of a strategy of ensuring that Russia did not monopolize
east-west export pipelines. As part of this strategy, the United States also stressed building the
Baku-Tbilisi-Ceyhan (BTC) pipeline (with a capacity of about 1 million barrels per day) as part
of a “Eurasian Transport Corridor.” In November 1999, Azerbaijan, Georgia, Turkey, and
Kazakhstan signed the “Istanbul Protocol” on construction of the 1,040-mile long BTC oil
pipeline. In August 2002, the BTC Company (which includes U.S. firms Conoco-Phillips,
Amerada Hess, and Chevron) was formed to construct, own, and operate the oil pipeline. The first
tanker on-loaded Azeri oil at Ceyhan at the end of May 2006. Azerbaijan’s state oil firm SOCAR
reported in April 2012 that the BTC pipeline had transported 1.33 billion barrels of oil to the
Ceyhan terminal since 2006. Reportedly, some Azerbaijani oil reaches U.S. markets.
A gas pipeline from Azerbaijan to Turkey (termed the South Caucasus Pipeline or SCP) was
completed in March 2007. Exports to Georgia, Turkey, and Greece were 53 billion cubic feet of
146 U.S. House of Representatives, Committee on Foreign Affairs, Subcommittee on Europe and Eurasia, Hearing on
European and Eurasian Energy: Developing Capabilities for Security and Prosperity, Testimony of Ambassador
Richard L. Morningstar, Special Envoy for Eurasian Energy, June 2, 2011. See also U.S. Department of State, Remarks
at The Economist's Investment Energy Summit, Richard Morningstar, Special Envoy for Eurasian Energy, The
Economist Conference, Athens, Greece, March 28, 2012.
147 Sedat Laciner, “Turkey’s Pipeline Politics,” The Journal of Turkish Weekly Online, International Strategic Research
Organization, September 16, 2009.
148 Speech to Plenary Session of Caspian Oil and Gas Conference, Ambassador Richard L. Morningstar, June 8, 2011;
“Former U.S. Envoy [Matthew Bryza] Says Gas Project ‘Impossible’ without Azerbaijan,” APA News Agency, March
28, 2012.
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gas in 2007, the first year of operation, and most recently were reported to be 159 billion cubic
feet in 2011. The ultimate capacity of the SCP is about 706 billion cubic feet per year, according
to British Petroleum. The joint venture for the SCP includes Norway’s Statoil (20.4%); British
Petroleum (20.4%); Azerbaijan’s Ministry of Industry and Energy (20%); and companies from
Russia, Iran, France, and Turkey. Some in Armenia object to lack of access to the BTC and SCP
pipelines.
The August 2008 Russia-Georgia conflict did not result in physical harm to the BTC pipeline or
the SCP. The BTC pipeline was closed due to other causes. The SCP and the small Baku-Supsa
oil pipeline were closed temporarily as a safety precaution. Russian gas shipments via Georgia to
Armenia decreased in volume for a few days at the height of the conflict. Rail shipments of oil by
Azerbaijan to the Kulevi oil terminal (owned by Azerbaijan) on Georgia’s Black Sea coast were
disrupted temporarily.
At the end of October 2008, the first oil from Kazakhstan started to be pumped through the BTC
pipeline, but a transit price increase by Azerbaijan in 2011 led Kazakhstan to restrict its use of the
BTC. Some Kazakh oil is barged to Azerbaijan to be shipped by rail to Georgia’s Black Sea port
of Batumi, where Kazakhstan owns an oil terminal. Kazakhstan and Azerbaijan continue talks on
expanding the barging of oil to the BTC pipeline. Some Turkmen oil began to be transported
through the BTC pipeline in June 2010. Some observers argue that the completion of the BTC
and SCP boosted awareness in the European Union and the United States of the strategic
importance of the South Caucasus.149
Other Export Pipeline Proposals
In mid-November 2007, Greek Prime Minister Kostas Karamanlis and Turkish Prime Minister
Recep Tayyip Erdogan inaugurated a gas pipeline connecting the two countries. Since some
Azerbaijani gas reaches Greece, the pipeline represents the first gas supplies from the Caspian
region to the EU. It was proposed that a pipeline extension be completed to Italy—the
Interconnector Turkey-Greece-Italy (ITGI) gas pipeline—that would permit Azerbaijan to supply
gas to two and perhaps more EU members, providing a source of supply besides Russia.
The Nabucco pipeline faced numerous delays, some of them attributable to Russia’s counter-
proposals to build pipelines that it asserted would reduce the efficacy of the Nabucco pipeline. In
September 2010, the European Investment Bank, the European Bank for Reconstruction and
Development, and the World Bank announced a commitment—pending environmental and social
feasibility studies—to provide $5.2 billion to build the Nabucco pipeline. EU planning at that
time called for construction of the 1.1 trillion cubic feet capacity Nabucco pipeline to begin in
2012. In 2011, new higher cost estimates for building the pipeline, and BP’s call for building a
“South East Europe Pipeline” (SEEP; see below), appeared to seriously threaten these plans.
At a meeting in early May 2009 in Prague, the EU, Azerbaijan, Georgia, Turkey, and Egypt
signed a declaration on a “Southern [energy] Corridor” to bolster east-west energy transport. The
declaration called for cooperation among supplier, transit, and consumer countries in building the
Nabucco gas pipeline, finishing the Italian section of the ITGI gas pipeline, and other projects.
149 Jaba Devdariani and Blanka Hancilova, “EU Broaches Peacekeeping Possibility in Georgia,” Central Asia-
Caucasus Analyst, March 7, 2007; Rovshan Ismayilov, “Azerbaijan, Georgia and Turkey: Building a Transportation
Triumvirate?” Eurasia Insight, February 7, 2007.
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Armenia, Azerbaijan, and Georgia
In 2009, Azerbaijan stepped up its efforts to diversify the routes and customers for its gas exports
beyond the SCP and the proposed Nabucco pipeline. President Aliyev attributed some of this
increased interest in added gas export routes—including to Russia and Iran—to the country’s
difficult negotiations with Turkey over gas transit fees and prices (excluding the agreed-upon
arrangements for Nabucco). In October 2009, Azerbaijan’s State Oil Company (SOCAR) and
Russia’s Gazprom gas firm signed agreements that SOCAR would supply 17.7 billion cubic feet
of gas per year to Russia beginning in 2010. The gas would be transported by a 140-mile gas
pipeline from Baku to Russia’s Dagestan Republic that was used until 2007 to supply Azerbaijan
with up to 283 billion cubic feet of gas per year. During a visit by then-President Medvedev to
Azerbaijan in September 2010, the two countries agreed that Azerbaijan would provide up to 35.4
billion cubic feet of gas per year beginning in 2011 (this increase had been under consideration
since the signing of the 2009 accord). President Aliyev stressed that this small supply agreement
would not jeopardize plans to supply gas for Nabucco, since Azerbaijan possessed huge gas
reserves.150
As another alternative to gas shipments through Turkey, Azerbaijan, Romania, and Georgia
signed a memorandum of understanding in April 2010 to transport liquefied natural gas (LNG)
from Azerbaijan to the EU through Georgia and Romania. This Azerbaijan-Georgia-Romania-
Interconnection (AGRI) project envisions the construction of a gas pipeline from Azerbaijan to
the Georgian port of Kalevi, where the gas would be liquefied, shipped across the Black Sea, and
regasified at the Romanian port of Constanta. The output is expected to be 247 billion cubic feet
per year, with 71 billion cubic feet of the gas used by Romania and the rest by other EU countries.
The presidents of the three countries (and the prime minister of Hungary, which joined the
project) met in Baku on September 15, 2010, to sign the Baku Declaration of political support for
the project.
Some of the tensions between Turkey and Azerbaijan involving energy issues appeared to ease in
June 2010, during President Aliyev’s visit to Turkey, when the two countries signed accords on
the sale and transportation of Azerbaijani natural gas to Turkey and to other countries via Turkey.
A memorandum of understanding permitting Azerbaijan to conclude direct sales with Greece,
Bulgaria, and Syria involving gas transiting Turkey was signed.
In January 2011, President Aliyev and the President of the European Commission, Jose Manuel
Barroso, signed a joint declaration committing Azerbaijan to supplying substantial volumes of gas
over the long term to the European Union. Nonetheless, some analysts raised concerns that there
would not be enough Azerbaijani gas to fill the proposed ITGI and Nabucco pipelines (deliveries
would be 406 billion cubic feet per year for ITGI and 158 billion to 459 billon cubic feet per year
for Nabucco) and to provide for the proposed AGRI project without a trans-Caspian gas pipeline
or participation by Iran or Iraq. Others suggested that Azerbaijan would be able to supply at least
most of the needed gas for both the ITGI and Nabucco pipelines and the AGRI project, including
because of recent results from exploratory drilling off the Caspian seacoast.151
Meeting an October 1, 2011, deadline, the Shah Deniz Export Negotiating Team—led by the State
Oil Company of Azerbaijan (SOCAR) and including BP, Statoil, and Total—received what were
then claimed to be final proposals for pipelines to export gas from the second phase development
of the Shah Deniz offshore oil and gas fields. Proposals were received from consortia backing the
150 CEDR, September 6, 2010, Doc. No CEP-950267.
151 Eric Watkins, “New USGS Report Confirms Big Caspian Stakes,” Oil & Gas Journal, January 3, 2011.
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ITGI, Nabucco, and Trans-Adriatic Pipeline (TAP; from Turkey through Greece, Albania, and the
Adriatic Sea to Italy) projects, as well as from BP, which reportedly proposed building an 808-
mile “South East Europe Pipeline” (SEEP) from western Turkey through Bulgaria, Romania, and
Hungary to Austria.
On October 25, 2011, Azerbaijan and Turkey announced that they had signed accords on the final
terms for the transit of Shah Deniz phase 2 gas through Turkey. The agreements—signed during
President Aliyev’s visit to Turkey—specified that 565-706 billion cubic feet of gas would transit
Turkey, of which 212 billion cubic feet would be available for Turkey’s domestic use. Another
accord provided for the possible construction of a new Trans-Anatolian Pipeline (TANAP; from
the Georgian-Turkish border to the Turkish-Bulgarian border), so that the gas from Shah Deniz
Phase 2 would not have to go through the existing Turkish pipeline system. This pipeline was
envisaged at that time to possibly link to BP’s proposed SEEP, to TAP, or to a new version of the
Nabucco pipeline termed “Nabucco West” (stretching from the Turkish border to Austria).
In late December 2011, the Azerbaijani and Turkish governments signed a memorandum of
understanding on setting up a consortium involving SOCAR, the Turkish state-owned TPAO
energy firm, and TPAO’s pipeline subsidiary, BOTAS, to construct TANAP. An inter-
governmental agreement was signed by President Aliyev and Prime Minister Erdogan in June
2012. SOCAR is designated initially to hold an 80% share in the consortium, although other
members are being invited to join the consortium and to hold 29% of the shares. The first stage,
with a capacity of 565 bcf per year, is planned to be completed in 2018.
In May 2012, the Nabucco consortium submitted new pipeline proposals to the Shah Deniz
consortium, reportedly including the original route as well as the shorter Nabucco West route. The
Shah Deniz Export Negotiating Team reportedly indicated in February 2012 that it preferred the
TAP proposal over the ITGI pipeline proposal. In mid-2012, it rejected SEEP, leaving TAP and
Nabucco West as the choices. In late March 2013, the Nabucco and TAP consortiums submitted
refined proposals to the Shah Deniz Team, which has indicated that it will make a final decision
about the pipeline in June 2013.
In late 2012, Russia finalized arrangements with transit states for the construction of the South
Stream gas pipeline, with a capacity of 2.2 bcf per year, under the Black Sea to European
markets, and began construction of the onshore portion in Russia in December 2012. The
undersea portion will extend nearly 600 miles. From Bulgaria, the pipeline is planned to transit
Serbia, Hungary, and Slovenia to Austria. According to some analysts, the pipeline is not
economically viable, but is being proposed by Russia to counter proposals to build the Nabucco
West and TAP pipelines and perhaps a trans-Caspian pipeline, so that Russia may maintain a
dominant gas presence in Europe.
Azerbaijan’s Announcement of a Gas Pipeline to Europe
On June 28, 2013, the Shah Deniz consortium of energy firms in Azerbaijan formally announced
that it had chosen the TAP to transport gas to Italy. The consortium stated that its decision was
based on a number of criteria including commercial viability, funding availability, and public
policy considerations. The lead member of the consortium, BP, reported that there was a
“substantial” commercial difference between the two competing pipeline projects, particularly the
difference between the cost of shipping the Azeri gas and gas prices in the respective markets. BP
also stated that companies in five countries already had indicated interest in purchasing three
times the gas planned initially to be delivered by TAP.
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Gas delivered by TAP is anticipated to be used by Albania, Greece, and Italy, and to be piped
north from Italy to Central Europe and the Balkans. In addition, there are proposals for
connections to TAP in Albania, in particular to the 321-mile Ionian Adriatic Pipeline (IAP), which
could supply up to 180 billion cubic feet (bcf) of gas per year to Montenegro, Bosnia-
Herzegovina, and Croatia (half the initial capacity of TAP). European Commission (EC) Energy
Commissioner Günther Oettinger has stressed that the EC push to build interconnectors between
European pipelines also will enable TAP-supplied gas to reach other states such as Bulgaria and
Hungary that are vulnerable to Russian gas supply cut-offs.152
The decision on TAP is a prelude to a final investment decision by the end of 2013 on the phase II
development of Azerbaijan’s Shah Deniz gas field, anticipated to cost $28 billion. Given the
expense of developing Shah Deniz phase II, the cost of transporting the gas and the final market
price are critical to the economic viability of phase II development.
Implications of TAP
For Europe: Some analysts argue that since TAP’s initial capacity of approximately 350 bcf
represents about 2% of the EU’s current gas consumption, and TAP’s later deliveries of 700 bcf
would represent at the most only a percentage or two more, TAP will not appreciably reduce
reliance on Russian gas. Nevertheless, observers have commended that TAP will assist Europe in
diversifying its supply sources beyond reliance on Russia, will help Greece to strengthen its
economy, and could encourage cooperation between historic rivals Greece and Turkey.153 And,
TAP will result in added investment and will for the first time include Albania in European gas
transit routes.154 In addition, Austria’s OMV stated that in the face of the negative decision on
Nabucco West, “OMV [will] seek to provide European gas to European consumers” and “to
develop opportunities based on alternative gas sources,” possibly referring to shale gas or Black
Sea exploration.155 Similarly, while voicing disappointment about the loss of the Nabucco West
pipeline, Romanian officials stated that the country instead would pursue a policy of developing
indigenous sources of supply and would further develop the AGRI proposal.156 The EU also has
stated that it will continue talks with Turkmenistan on a possible trans-Caspian gas pipeline that
could increase gas transit through the Southern Corridor, thereby enhancing European energy
security (see below).
For the U.S.: The State Department welcomed the decision on TAP as furthering the U.S.-
supported goal of a Southern Corridor bringing new sources of gas to Europe, thereby
strengthening European and global energy security.157
152 “Statement of Günther H. Oettinger, European Commissioner for Energy: The Shah Deniz Decision, More Gas for
Europe,” Natural Gas Europe, July 1, 2013, at http://www.naturalgaseurope.com/shah-deniz-decision-oettinger. See
also Matthew Bryza and David Koranyi, “A Tale of Two Pipelines: Why TAP has Won the Day,” Natural Gas Europe,
July 2, 2013.
153 “Russian Gas Pipeline Could Doom Europe’s Nabucco Plan,” Reuters, May 28, 2013.
154 H.K. Tzanis, “Trans-Adriatic Pipeline to Bring Azeri Gas to Europe,” Southeast European Times (Athens), July 3,
2013.
155 Cristian Campeanu, “How To Get Rid of Russian Gas Dependence After Nabucco Failure?” Libera, July 4, 2013.
156 Oana Voncick, “Basescu: 'I Believe That Romania Will Be Capable To Export Gas From the Black Sea in 2018 or
2019,” Libera, July 5, 2013; Open Source Center, Europe: Daily Report, July 23, 2013, Doc. No. EUN-13547005.
157 U.S. Department of State, Press Statement: Selection of Pipeline Route for the Southern Gas Corridor, June 28,
2013.
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For Azerbaijan: The TAP decision should provide a boost to the economy as European energy
markets are considered by some observers to be more predictable and manageable than other
possible export markets, such as Russia.158 These observers also claim that the completion of TAP
will bolster Azerbaijan’s Euro-Atlantic orientation. One pro-government Azerbaijani legislator
asserted that Europe should stop “ignoring” the NK conflict, since a renewal of fighting could
threaten Europe’s energy security.159
Discussions on a Trans-Caspian Pipeline
In 1999, Turkmenistan signed an accord with two U.S. construction firms to conduct a feasibility
study on building a trans-Caspian pipeline, but it failed to commit to the pipeline following
objections from Iran and Russia. In September 2011, the Council of the European Union
approved opening talks with Azerbaijan and Turkmenistan to facilitate an accord on building a
trans-Caspian gas pipeline. Such a link would provide added gas to ensure adequate supplies for
the proposed Nabucco and other pipelines. Hailing the decision, EU Energy Commissioner
Günther Oettinger stated that “Europe is now speaking with one voice. The trans-Caspian
pipeline is a major project in the Southern Corridor to bring new sources of gas to Europe. We
have the intention of achieving this as soon as possible.”160 The Russian Foreign Ministry
denounced the plans for the talks, and claimed that the Caspian Sea littoral states had agreed in a
declaration issued in October 2007 that decisions regarding the sea would be adopted by
consensus among all the littoral states (Russia itself has violated this provision by agreeing with
Kazakhstan and with Azerbaijan on oil and gas field development). It also claimed that the
proposed pipeline was different from existing sub-sea pipelines in posing an environmental
threat. In Baku in early April 2012, Lavrov stated that the EU should show “respect” to the
Caspian littoral states, and that it was “unacceptable” for the EU to advocate for a trans-Caspian
pipeline before the littoral states have concluded a convention on the legal status of the sea.161
In June 2012, a Turkmen survey ship was turned back by Azerbaijani naval forces from areas
considered by Azerbaijan to be within its Caspian Sea holdings, raising tensions that appeared to
jeopardize a trans-Caspian pipeline. However, in September 2012, President Aliyev appeared
conciliatory toward Turkmenistan in stating that “if Turkmenistan considers this [trans-Caspian]
project important for itself and views it as a path to the West, then Azerbaijan supports this
idea.”162
At a meeting of the Frankfurt Gas Forum in November 2012, European Energy Commissioner
Guenther Oettinger pointed out that the EU had envisaged the Southern Corridor to carry 45-90
bcm per annum, and that the gas from Shah Deniz phase 2 would only provide a fraction of this
gas. He stated that to meet the EU goal for the Southern Corridor, more gas would be needed, and
stated that Turkmenistan is viewed by the EU as a possible source.
158 “Azerbaijan Warns Of EU “Double Standards” Over Its Need For Reliable Pipeline Gas,” Caspian Review, July 3,
2013; “A Tale of Two Pipelines: Why TAP has Won the Day,” Natural Gas Europe, July 2, 2013.
159 “Azerbaijan Warns Of EU “Double Standards” Over Its Need For Reliable Pipeline Gas,” Caspian Review, July 3,
2013.
160 European Commission, Press Release: EU Starts Negotiations on Caspian Pipeline to Bring Gas to Europe,
September 12, 2011.
161 CEDR, April 4, 2012, Doc. No. CEP-950050.
162 Baku News, September 18, 2012.
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The United States has supported building a trans-Caspian pipeline and stated that no other
country should be able to veto a decision by Azerbaijan and Turkmenistan to build such a
pipeline.
Regional Energy Cooperation with Iran
Because of trade obstructions imposed by Azerbaijan and Turkey, Armenia has endeavored to
build oil and gas pipelines to Iran as a means to diversify its reliance on Russian supplies that
transit Georgia. Azerbaijan sees itself as a regional competitor of Iran in energy development in
the Caspian region. Increasing international sanctions on Iran have reduced Iran’s regional energy
role, while Azerbaijan increasingly has cooperated with Western energy firms to develop and ship
oil and gas to international markets.
Then-President Robert Kocharyan and Iranian President Mahmoud Ahmadinejad in March 2007
inaugurated an 88-mile gas pipeline from Tabriz in Iran to Kadjaran in Armenia. Work was
completed on the second section of the pipeline, a 123-mile section from Kadjaran to Ararat, in
December 2008. The Russian-controlled ArmRosGazprom joint venture built this second section
and operates the pipeline. Initial deliveries reportedly are 10.6-14.1 billion cubic feet of gas per
year, with plans for more gas deliveries in future years. Some of this gas will be used to generate
electricity for Iran and Georgia, but the remainder eventually may satisfy all Armenia’s
consumption needs, alleviating its dependence on Russian gas transported via Georgia.163 An oil
pipeline from Tabriz, Iran, to Yerask, Armenia, is being planned but has faced delays that officials
in both countries have blamed on the effects of international sanctions on Iran’s economy.
In early November 2012, Armenia and Iran began construction of the Meghri Hydroelectric
Power Plant on the Arax River on the Armenian side of the border with Iran, expected to be
completed in 2016. Iran was granted a 15-year cost recovery period for its financing of the
construction through prospective electricity sales. A proposal to build a rail line between the two
countries has been delayed, with officials in both countries blaming the international sanctions
imposed on Iran.
Azerbaijan began sending about 7 billion cubic feet of gas per year at the end of 2005 through a
section of Soviet-era pipeline to the Iranian border at Astara, partly in exchange for Iranian gas
shipments to Azerbaijan’s Nakhichevan exclave. On November 11, 2009, Azerbaijan signed an
accord with Iran to supply 17.7 billion cubic feet of gas annually through the pipeline. These gas
supplies could increase in coming years.
Iran’s Naftiran Intertrade Company (NICO; a state-owned energy firm) has 10% of the shares in
the consortium that developed the SCP. NICO also has a 10% share in the consortium developing
the Shah Deniz gas fields. The Iran Threat Reduction and Syria Human Rights Act of 2012 (P.L.
112-158; signed into law on August 10, 2012) has exempted the Shah Deniz gas field project
from sanctions imposed on joint energy ventures with Iran.
163 Platt’s Commodity News, May 31, 2007.
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113th Congress Legislation
H.Res. 284 (Turner)
Expressing the sense of the House of Representatives with respect to promoting energy security
of European allies through opening up the Southern Gas Corridor. H.Res. 284 was introduced on
June 27, 2013, and was forwarded by the Subcommittee on Europe, Eurasia, and Emerging
Threats to the Committee on Foreign Affairs (Amended) by Unanimous Consent on September
19, 2013.
H.Res. 227 (Valadao)
Calling on the President to work toward equitable, constructive, stable, and durable Armenian-
Turkish relations based upon the Republic of Turkey’s full acknowledgment of the facts and
ongoing consequences of the Armenian Genocide, and a fair, just, and comprehensive
international resolution of this crime against humanity. Introduced on May 20, 2013, and referred
to the Committee on Foreign Affairs. Referred to the Subcommittee on Europe, Eurasia, and
Emerging Threats on June 7, 2013.
S. 1548 (Durbin)
Haiti and Armenia Reforestation Act of 2013. Introduced on September 25, 2013, and referred to
the Committee on Foreign Relations. To provide assistance to the Government of Haiti and the
Government of Armenia to develop and implement, or improve, nationally appropriate policies
and actions to reduce deforestation and forest degradation and improve forest management and
natural regeneration.
H.R. 1960 (McKeon)
National Defense Authorization Act for Fiscal Year 2014. Introduced on May 14, 2013. Passed
the House on June 14, 2013 (H.Rept. 113-102). Placed on the Senate Legislative Calendar on
June 14, 2013. Section 1244, a statement of Congress on defense cooperation with Georgia, raises
concerns that problems of democratization in Georgia could harm bilateral political, economic,
and security cooperation.
Table 1. U.S. Foreign Assistance to the South Caucasus States,
FY1992 to FY2014
(millions of dollars)
FY1992-
South Caucasus
FY2010
FY2011
FY2012
FY2013
FY2014
Country
Budgeted Aida
Actualb
Actualb
Estimateb
Requestb
Armenia
1,951.83 44.42 44.23 37.23 31.58
Azerbaijan
975.75 26.4 20.87 16.22 16.31
Georgia
3,369.33 87.1 85.49 70.07 62.03
Total 6,365.73c 157.92 150.59 123.52 109.92
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FY1992-
South Caucasus
FY2010
FY2011
FY2012
FY2013
FY2014
Country
Budgeted Aida
Actualb
Actualb
Estimateb
Requestb
Percent of Eurasian Aid
16 27 35 30 31
(including Central Asia)
Sources: U.S. Department of State, Office of the Coordinator of Assistance to Europe and Eurasia; Executive
Budget Summary: Function 150 and Other International Programs for FY2014, April 10, 2013; Office of U.S. Foreign
Assistance Resources, Department of State and U.S. Agency for International Development: FY 2013 Post-Sequester
653(a) Initial Allocations, October 2013.
a. Assistance to Europe, Eurasia, and Central Asia (AEECA) and Agency budgets.
b. FY2011 and FY2012 data include AEECA, Foreign Military Financing (FMF), International Military Education
and Training (IMET), Global Health Programs (GHP), International Narcotics Control and Law Enforcement
(INCLE), and Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR) assistance. For
FY2013 and FY2014, AEECA programs were included as part of Economic Support Funds (ESF), GHP, and
INCLE. FY2011-FY2014 data do not include Defense or Energy Department funding, funding for exchanges,
Food aid, or Peace Corps programs. Percentage of funding excludes some Eurasian regional programs
involving the South Caucasus.
c. Total includes $68.82 million in South Caucasus regional funding.
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Armenia, Azerbaijan, and Georgia: Political Developments and Implications
Table 2. U.S. Assistance to the South Caucasus by Year, FY1992-FY2001
(millions of current dollars)
Country FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001
Armenia
74.97 172.39 159.1 114.38 135.23 98.72 116.14 91.86 117.19 102.47
Azerbaijan
1.8 8.42 34.52 26.01 29.96 16.77 41.2 47.22 37.96 48.26
Georgia
29.16 169.01 93.34 105.26 94.41 28.29 123.33 119.51 124.5 151.23
Regional
0.0 0.0 0.0 0.0 0.0 0.0 8.3 0.0 2.0 4.4
Total
105.93 349.82 286.96 245.65 259.6 143.78 288.97 258.59 281.65 306.36
Source: Derived from U.S. Department of State, Office of the Coordinator for Europe and Eurasia.
Notes: Includes all agencies and accounts.
Table 3. U.S. Assistance to the South Caucasus by Year, FY2002-FY2010 (and Totals, FY1992-FY2010)
(millions of current dollars)
Total
(FY1992-
Country FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2010)
Armenia
112.74 105.08 93.19 91.01 88.17 71.91 78.92 69.2 59.16
1,951.83
Azerbaijan 68.89 68.63 79.48 80.11 84.24 79.38 80.05 76.21 66.65
975.75
Georgia
150.44 150.64 148.29 129.1 147.35 131.58 895.67 423.87 154.36
3,369.33
Regional
2.3 1.99
17.71 2.03
11.1 3.0 1.03
12.94 2.03
68.82
Total
334.37 326.34 338.67 302.25 330.86 285.87 1055.67 582.22 282.2 6,365.73
Source: Derived from U.S. Department of State, Office of the Coordinator for Europe and Eurasia.
Notes: Includes all agencies and accounts.
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Armenia, Azerbaijan, and Georgia
Table 4. U.S. Budgeted Humanitarian Assistance to Nagorno Karabakh Provided by
the U.S. Agency for International Development and Other Agencies, FY1998-FY2012
(millions of dollars)
Year
Budgeted
1998
8.6
1999
3.5
2000
2.0
2001
4.4
2002
2.3
2003
1.987
2004
2.0
2005
2.43
2006
1.98
2007
2.509
2008
2.0
2009
1.996
2010
2.0
2011
2.0
2012
2.0
Prior-Year De-obligated
-0.708
Total Budgeted
40.994
Source: Source: State Department. Office of the Coordinator of U.S. Assistance to Europe and Eurasia.
Note: Does not include $480,000 in FY2009 AEECA funding provided for a Track II diplomacy project to
increase cross-border communication and understanding among Armenians, Azeris and Karabakhis, with the goal
of fostering reconciliation in the NK conflict. Does not include $223,000 in FY2010 AEECA Performance Funds
provided for de-mining activities in NK.
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Armenia, Azerbaijan, and Georgia
Figure 1. Map of Caucasus Region
Source: CRS.
Notes: Administrative borders of the former Nagorno Karabakh Autonomous Region.
Author Contact Information
Jim Nichol
Specialist in Russian and Eurasian Affairs
jnichol@crs.loc.gov, 7-2289
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