This report provides background and analysis on the political and economic situations on Lithuania, Latvia, and Estonia (commonly collectively referred to as the Baltic states), their foreign policies, and U.S. policy toward them. The Baltic states achieved their long-held dream of full independence from the Soviet Union in the aftermath of the failed August 1991 coup by Soviet hard-liners. Since 1991, the these three countries have made great strides in building democracies and free market economies. They have also sought integration into Western economic and security structures, in part because they see themselves as part of the West, in part to protect themselves from instability or a nationalist resurgence in Russia. The Baltic states achieved these goals in 2004, joining NATO in March and the European Union in May. Relations with Russia have not deteriorated since the Baltic states joined NATO, although tensions remain over Russian allegations of discrimination against the large Russian-speaking populations in Estonia and Latvia and other issues. Some in the Baltic states are concerned about continuing Russian influence in their countries, including through large energy companies, Russian organized crime, and Russian intelligence agencies. The U.S. government never recognized the legality of the Soviet Union's 1940 annexation of the Baltic states. After the independence of the Baltic states, the United States pushed strongly for the withdrawal of Russian forces from the Baltic states, sometimes performing a mediating and facilitating role between the Baltic states and Russia. In 2001, the United States strongly advocated Baltic membership in NATO. The United States has provided significant amounts of economic aid to the Baltic states. Due to their success in economic reform, the Administration phased out bilateral aid for Estonia in at the end of FY1996, and did the same for Latvia and Lithuania at the end of FY1999. The United States continues to provide security assistance to the Baltic states to strengthen their armed forces and help them achieve greater interoperability with NATO, as well as to improve their border security and export controls. The Baltic states have been strong supporters of U.S. policy in Iraq, Afghanistan, and the war on terror, and have deployed troops to Afghanistan and Iraq. This report will be updated as events warrant.