Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests








Prepared for Members and Committees of Congress



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 the dependence of these states 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. The Bush Administration
supports 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 the U.S. Global War on Terror, the U.S. military in 2002 began providing equipment
and training for Georgia’s military and security forces. Azerbaijani troops participate in
stabilization efforts in Afghanistan and Iraq, and Armenian and Georgian personnel have served
in Iraq. Georgia’s troops left Iraq in August 2008, to help provide homeland security in the wake
of Russia’s invasion and partial occupation of Georgia. A ceasefire provides for Russian troops to
withdraw from areas outside of Georgia’s breakaway Abkhazia and South Ossetia, and for the
deployment of observers from the European Union. Although Russia recognized the
independence of Abkhazia and South Ossetia, the United States and virtually all other nations
have upheld Georgia’s sovereignty and territorial integrity.
Key issues in the 2nd Session of the 110th Congress regarding the South Caucasus are likely to
focus on supporting Georgia’s integration into Western institutions, including NATO;
Azerbaijan’s energy development; and Armenia’s independence and economic development. At
the same time, concerns might include the status of human rights and democratization in the
countries; the on-going Armenia-Azerbaijan conflict over the breakaway Nagorno Karabakh
region; and threats posed to Georgia by Russia’s military actions in August 2008 and its
diplomatic recognition of Georgia’s breakaway South Ossetia and Abkhazia regions. Congress
will likely scrutinize Armenia’s and Georgia’s reform progress as recipients of Millennium
Challenge Account grants. Some Members of Congress believe that the United States should
provide greater attention to the region’s increasing role as an east-west trade and security corridor
linking the Black Sea and Caspian Sea regions, and to Armenia’s inclusion in such links. 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. Others urge caution in adopting
policies that will heavily involve the United States in a region beset by ethnic and civil conflicts.






Most Recent Developments.............................................................................................................1
Backgr ound ..................................................................................................................................... 1
Overview of U.S. Policy Concerns..................................................................................................2
Post-September 11..............................................................................................................3
Operations in Iraq...............................................................................................................4
After the August 2008 Russia-Georgia Conflict.................................................................4
The South Caucasus’s External Security Context...........................................................................5
Russian Involvement in the Region..........................................................................................5
Caspian Energy Resources..................................................................................................6
Military-Strategic Interests.................................................................................................7
The Roles of Turkey, Iran, and Others......................................................................................9
Obstacles to Peace and Independence...........................................................................................10
Regional Tensions and Conflicts.............................................................................................10
Nagorno Karabakh Conflict...............................................................................................11
Civil and Ethnic Conflict in Georgia................................................................................13
Economic Conditions, Blockades, and Stoppages..................................................................20
Democratization Problems and Progress.................................................................................21
Arme nia ........................................................................................................................ .... 21
Azerbaij an ..................................................................................................................... .... 23
Georgi a .............................................................................................................................. 26
U.S. Aid Overview........................................................................................................................27
U.S. Assistance After the Russia-Georgia Conflict.................................................................28
U.S. Security Assistance................................................................................................................29
U.S. Trade and Investment............................................................................................................32
Energy Resources and U.S. Policy..........................................................................................32
110th Congress Legislation............................................................................................................35
Figure 1. Map of the Region..........................................................................................................40
Table 1. U.S. Foreign Aid to the Region, FY1992-FY2008, and FY2009 Request......................39
Author Contact Information..........................................................................................................40






In his state of the union address on November 5, 2008, Russian President Dmitriy Medvedev
asserted that the “tragedy” of the August 2008 Russia-Georgia conflict “was a consequence of the
U.S. administration’s arrogant course that is intolerant of criticism and relies on unilateral
decisions.” He stated that Russia’s “moral principles” include “the protection of small nations.
And recognizing the independence of [Georgia’s breakaway] South Ossetia and Abkhazia is, by
the way, an example of such protection.” He emphasized that “we really proved, including to
those who sponsored the existing regime in Georgia, that we are able to defend our citizens, that 1
we can indeed defend our national interests and efficiently fulfil our peacekeeping obligations.”
On November 2, 2008, Russian President Medvedev hosted talks between Armenian President
Serzh Sargisyan and Azerbaijani President Ilkham Aliyev on a settlement of the conflict over
Azerbaijan’s breakaway Nagorno Karabakh region. Little progress in reaching a settlement was
reported, but a joint communique upheld a continued mediating role for the so-called “Minsk
Group” of member states of the Organization for Security and Cooperation in Europe (OSCE).
At a press conference in Azerbaijan on October 2, 2008, Deputy Secretary of State John
Negroponte was repeatedly asked whether the United States would render assistance to
Azerbaijan if Russia invaded. Negroponte responded that he hoped that such a situation would
never emerge, but that “as you saw from [the U.S.] response and the European response to the
situation in Georgia, we did many things to show solidarity with that country, including after 2
events occurred a significant program to help the reconstruction and the repair in that country.”

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.
All three 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 3
Union collapsed in 1991.

1 Johnson’s Russia List, November 6, 2008.
2 U.S. Department of State. Press Availability by Deputy Secretary Negroponte in Azerbaijan, October 2, 2008.
3 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.





The Caucasus Region: Basic Facts
Area: The region is slightly larger than Syria: Armenia is 11,620 sq. mi.; Azerbaijan is 33,774 sq.
mi.; Georgia is 26,872 sq. mi.
Population: 15.8 million, similar to Netherlands; Armenia: 2.97 m.; Azerbaijan: 8.18 m.;
Georgia: 4.63 m. (The World Factbook, July 2008 est.). Over a million people from the region are
migrant workers in Russia and elsewhere.
GDP: $103.1 billion: Armenia: $17.15 b.; Azerbaijan: $65.47 b.; Georgia: $20.5 b. (World
Factbook, 2007 est., purchasing power parity)


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, which was signed with amendments into law in October

1992 (P.L. 102-511).


In June 2006, Deputy Assistant Secretary of State Matthew Bryza stated that the United States has
three inter-related sets of interests in the region: “we’re not embarrassed to say that energy is a
strategic interest. We [also] have ... traditional security interests—meaning fighting terrorism,
fighting proliferation, avoiding military conflict, and restoring (or preserving, in some cases) the
territorial integrity of the states of the region.... And then we have a third set of interests, in ...
democratic and market economic reform ... based on our belief that stability only comes from
legitimacy. And legitimacy requires democracy on the political side and prosperity on the
economic side.” Assistant Secretary of State Daniel Fried testified in June 2008 that “we want to
help the nations of this region travel along the same path toward freedom, democracy, and
market-based economies that so many of their neighbors to the West have traveled.... We do not
believe that any outside power—neither Russia nor any other—should have a sphere of influence
over these countries. No outside power should be able to threaten, pressure, or block the
sovereign choice of these nations to join with the institutions of Europe and the transatlantic 4
family.”
In addition, U.S. policy toward the South Caucasus states has included promoting the resolution
of conflicts between Armenia and Azerbaijan over Azerbaijan’s breakaway Nagorno Karabakh

4U.S. Says Aliyev, Kocharyan Must Show ‘Political Will,’” RFE/RL, June 23, 2006. U.S. House of Representatives.
Committee on Foreign Affairs. Hearing: The Caucasus, Frozen Conflicts and Closed Borders. Testimony of Daniel
Fried, June 18, 2008.





(NK) region and between Georgia and its breakaway regions of Abkhazia and South Ossetia.
Since 1993, successive U.S. Special Negotiators for Eurasian Conflicts have helped in various
ways to try to settle these “frozen” conflicts. (In early 2006, the State Department eliminated this
post and divided its responsibilities among the Deputy Assistant Secretary of State and the Office 5
of Caucasus Affairs and Regional Conflicts.) Congressional concerns about the NK conflict led
to the inclusion of 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” (on waiver authority, see
below). Provisions in FY1996, FY1998, and FY1999 legislation eased the prohibition by
providing for humanitarian, democratization, and business aid exemptions.
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 should not be 6
subordinated to interests in energy and anti-terrorism.
Other observers believe that U.S. policy now requires more active engagement 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 would benefit U.S. relations with other Islamic countries,
particularly Turkey and the Central Asian states. 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, Caspian
Energy Resources).
In the wake of September 11, 2001, the United States 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

5 According to a report by the State Department’s Office of the Inspector General, the added duties of the Office of
Caucasus Affairs and Regional Conflicts and the relevant deputy assistant secretary were not accompanied by increased
staff support, and “some mis-communications and divergence of expectations between [the State Department] and the
[U.S. Embassy in Azerbaijan] have occurred as a consequence. U.S. Department of State. Report of Inspection:
Embassy Baku, Azerbaijan, Report Number ISP-I-07-40A, September 2007.
6 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.





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 sixty 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. President Bush has exercised the waiver annually, most recently in March 2008.
Since late 2002, Azerbaijan has contributed troops for peacekeeping in Afghanistan. In October
2008, Azerbaijan’s legislature approved doubling the number of troops deployed to Afghanistan
to about 100. Georgia contributed about 50 troops during Afghan elections in late 2004-early
2005. In late 2007, Georgia’s President Saakashvili stated that Georgia intended to send troops to
support NATO in 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 re-building 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 infantry company (currently 150 troops) is
embedded with the U.S. Marines at the Hadithah Dam and provides perimeter security and force
protection. 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. One
special forces battalion was stationed near Baqubah and provided security for two bridges and
three forward operating bases. The other battalion was stationed at the International Zone in
Baghdad and provided security for the U.N. assistance mission. All 2,000 troops were pulled out
in August 2008 in connection with the Russia-Georgia conflict (see below). Armenia began
sending personnel to Iraq in January 2005, where 46 currently serve in a transportation platoon
that carries out convoy missions; an engineer team that performs road reconnaissance, manages
explosive materials storage and destruction, clears roads, and acts as a part of a quick reaction
force with the El Salvadorian Battalion; and a medical team that works in the Polish Field
Hospital.
In the wake of the Russia-Georgia conflict (see below), Vice President Cheney visited Georgia
and Azerbaijan in early September 2008. In Georgia, he stated that “[President Mikheil
Saakashvili] and his democratically elected government can count on the continued support and
assistance of the United States.” He pledged U.S. aid to help Georgians “to overcome an invasion
of your sovereign territory, and an illegitimate, unilateral attempt to change your country’s
borders by force.... We will help [you] to heal this nation’s wounds, to rebuild this economy, and 7
to ensure Georgia’s democracy, independence, and further integration with the West.”
In Azerbaijan, he stated that “the United States has deep and abiding interests in [Azerbaijan’s]
well being and security.” He averred that the United States is “committed to achieving a

7 The White House. Office of the Vice President. Remarks by Vice President Cheney and President Saakashvili of
Georgia After Meeting, September 4, 2008.





negotiated solution to the NK conflict, a solution that starts with the principle of territorial
integrity, and takes into account other international principles. Achieving a solution is more
important now than ever before; that outcome will enhance peace and stability in the region, and
Azerbaijan’s security, as well.” He praised Azerbaijan’s cooperation with Western countries in the
energy sphere and thanked Azerbaijan for its contribution to the global war against terrorism. He
also voiced U.S. support for “the people of Azerbaijan in their efforts, often in the face of great
challenges, to strengthen democracy, the rule of law, and respect for human rights, and to build a 8
prosperous, modern, independent country.”

After Vladimir Putin became president in 1999, Russia appeared to place great strategic
importance on increasing, or at least maintaining, influence in the South Caucasus region. Several
developments since 2003, however, appeared to complicate these 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
regions (including Chechnya), and Russia’s agreement to close its remaining military bases in
Georgia. This declining Russian influence appears to have been reversed as a result of the August

2008 Russia-Georgia conflict.


The Putin-Medvedev 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 its unresolved NK conflict and grievances
against Turkey. Georgia long attempted to transform Russia’s military “peacekeeping” in the
breakaway regions into international peacekeeping. Azerbaijan has been concerned about
Russia’s ties with Armenia, has worked to ensure that its energy resources are not controlled by
Russia, and has limited Russia’s military presence. Until late 2006, it appeared that Azerbaijan
valued having some cooperative relations with Russia, and criticized Georgia’s inability to
maintain such ties with Russia. However, Azerbaijani-Russian relations seemed to cool somewhat
after late 2006 when Russia’s demands for higher gas prices and moves against migrant workers
contributed to greater solidarity between Azerbaijan and Georgia. They appeared to warm
somewhat following the August 2008 Georgia-Russia conflict, perhaps as part of Baku’s
recognition of Russia’s enhanced influence in the region (see below, Russia-Georgia Conflict).

8 The White House. Office of the Vice President. Remarks by Vice President Cheney and President Aliyev of the
Republic of Azerbaijan After Meeting, September 3, 2008.





NATO’s September 21, 2006, approval of an “Intensified Dialogue” with Georgia on reforms
needed that might lead to membership appeared to contribute to heightened concerns in Russia
about NATO enlargement and about an increased U.S. presence in the South Caucasus. Later that
month, Georgian-Russian tensions appeared to come to a head after Georgia arrested four Russian
servicemen on charges of espionage and plotting to overthrow the Saakashvili government.
Although Georgia soon handed over the servicemen, Russia retaliated in a form viewed as
troubling by many international observers, including cutting off financial flows to Georgia,
severing direct transport and postal links (Russia had banned imports of Georgian wine, mineral
water, and other agricultural products in spring 2006), ending the issuing of visas, raiding ethnic
Georgian-owned businesses, expelling hundreds of Georgians, and compiling lists of ethnic
Georgians in the public schools.
Russia’s announcement in late July 2007 that it would ease some visa restrictions raised hopes of
a thaw in Georgia-Russia relations, but such hopes were quickly dashed in early August 2007.
Georgia alleged that some aircraft were tracked on its radars as they entered the country’s
airspace from Russia, and that one launched a missile which failed to detonate. A group of experts
from Latvia, Lithuania, Sweden, and the United States concluded that one aircraft entering from
Russia dropped a Russian-designed KH-58 (NATO designation AS-11 Kilter) anti-radar air to 9
surface missile.
Russia has tried to play a dominant role in future oil production and transportation in the Caspian
Sea region. At the May 2002 U.S.-Russia summit, the two presidents issued a joint statement
endorsing multiple pipeline routes, implying Russia’s non-opposition to plans to build oil and gas
pipelines from Azerbaijan to Turkey that do not transit Russia. In early 2004, however, a Russian
official stated that Putin wanted to ensure that the greatest volume of Caspian energy flowed 10
through Russia. A U.S.-Russia Strategic Framework Declaration, issued in April 2008,
reaffirmed the goal of enhancing the “diversity of energy supplies through economically viable 11
routes and means of transport.”
In early 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. In late

2006, Russia again requested price hikes for 2007. In the case of Georgia, Russia’s state-


controlled Gazprom gas firm announced in late 2006 that it would cut off gas supplies to Georgia
by the end of the year unless Georgia agreed to a 100% price hike or sold its main gas pipeline to
Gazprom. However, Georgia negotiated an agreement to receive some Azerbaijani gas via the
new South Caucasus Pipeline (SCP, see 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

9Report from the International Group of Experts Investigating the Possible Violation of Georgian Airspace and the
Recovered Missile Near Tsitelubani, Georgia, 6 August 2007, August 14, 2007; Second Independent Inter-
Governmental Expert Group (IIEG-2). Report Investigating Possible Violations of Georgian Airspace and the
Recovered Missile near Tsitelubani, Georgia, 6 August 2007, August 20, 2007; States News Service, Press Conference
by Russian Federation, August 21, 2007; CEDR, August 8, 2007, Doc. No. CEP-950011.
10 The White House. Office of the Press Secretary. Joint Statement by President George W. Bush and President
Vladimir V. Putin on the New U.S.-Russian Energy Dialogue, May 24, 2005. For the statement by Viktor Kalyuzhny,
Putins Special Envoy to the Talks on the Legal Status of the Caspian Sea, see CEDR, April 6, 2004, Doc. No. CEP-17.
11 The White House. Office of the Press Secretary. US-Russia Strategic Framework Declaration, April 6, 2008.





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 (however, agreement was
reached to provide the same amount of Russian electricity as in 2006, but at a higher price). In the
Winter of 2007-2008, Georgia again had to purchase some gas from Gazprom at higher prices, to
supplement that supplied by Azerbaijan.
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. However, Georgia reportedly blocked Russian gas transit to South
Ossetia. Azerbaijan has substantial interests in Georgia’s continued stability and independence,
including because Georgia is a pipeline and railway corridor to Europe that does not transit
Russia, Iran, or Armenia.
Russia’s armed presence in the South Caucasus has been multifaceted, including thousands of
military base personnel, “peacekeepers,” and border troops. The first step by Russia in
maintaining a military presence in the region was the signing of the Commonwealth of
Independent States (CIS) Collective Security Treaty (CST) by Armenia, Russia, and others in

1992, which pledges the members to consult in the event of a threat to one or several members,


and to provide mutual aid if attacked (Azerbaijan and Georgia withdrew in 1999). Russia also
secured permission for two military bases in Armenia and four in Georgia. Russian border troops
guard Armenia’s borders with Turkey and Iran. The total number of Russian troops in Armenia
has been estimated at about 3,500. Armenia has argued that its Russian bases provide for regional
stability by protecting it from attack. About 90,000 Russian troops also are stationed nearby in the 12
North Caucasus. 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 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
military intervention by Russia inside Georgia. Georgia launched a policing effort in its northern
Pankisi Gorge in late 2002 that somewhat reduced tensions over this issue. In February 2004,
Saakashvili reportedly pledged during a Moscow visit to combat “Wahabbis” (referring to Islamic
extremists) in Georgia, including those hiding in the Gorge and others that Russia alleged were
transiting Georgia to fight in Chechnya. In April 2006, Azerbaijan convicted 16 people on charges
that they had received terrorist training from Al Qaeda operatives in the Pankisi Gorge. Russia’s
security service reported at the end of November 2006 that it had killed Al Qaeda member Faris
Yusef Amirat (aliases included Abu Haf and Amzhet). It alleged that he had hidden in the Pankisi
Gorge during the winter of 2005-2006, had operated in Chechnya in the summer of 2006, and was 13
returning to the Gorge when he was killed in Russia’s Dagestan region.

12 The Military Balance 2008. London: International Institute of Strategic Studies, February 5, 2008.
13 CEDR, November 27, 2006, Doc. No. CEP-358003. For background, see CRS Report RS21319, Georgia’s Pankisi
Gorge: Russian Concerns and U.S. Interests, by Jim Nichol.





At the June 2007 summit of the Group of Eight (G-8) industrialized countries, President Putin
proposed that President Bush consider using Russia’s Soviet-era missile radar in Qabala as an
early warning system. Putin claimed that the radar would be able to detect possible tests by Iran
of a missile that could target Europe, and would render unnecessary or premature U.S. plans to 14
build a radar site in Czech Republic and an interceptor missile site in Poland. A U.S., Russian,
and Azerbaijani delegation toured the radar site in September 2007. The United States did not
deem the radar as capable of substituting for facilities in Czech Republic.
As part of ceasefire agreements between Georgia and its breakaway regions in the early 1990s,
Russia as the mediator sent military “peacekeepers” to Abkhazia and South Ossetia. Russia’s
“peacekeeping” role at that time received at least tacit approval from world governments and
international organizations. 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 also below, 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 close two of the bases (at Gudauta and Vaziani) by July 2001, and to complete
negotiations during 2000 on the status of the other two bases (at Batumi and Akhalkalaki). NATO
signatories hesitated to ratify the amended Treaty until Russia satisfied these and other conditions.
On July 1, 2001, Georgia reported that Russia had turned over the Vaziani base. Russia declared
in June 2002 that it had closed its Gudauta base, but that 320 troops would remain to support 15
Russian “peacekeepers” taking leave at the base. Georgia objects to this stance (see below).
The Georgian legislature in March 2005 passed a resolution calling for Russia to agree by mid-
May on closing the bases or face various restrictions on base operations. This pressure, and
perhaps the U.S. presidential visit (see above), spurred Russia to agree with Georgia in late May
on setting the end of 2008 as the deadline for closing the bases. Putin explained that his military
General Staff had assured him that the bases were Cold War-era relics of no strategic importance 16
to Russia. On June 27, 2007, Russia formally handed over the Akhalkalaki base to Georgia’s
control. On November 21, 2007, the Russian Foreign Ministry proclaimed that the Batumi base
had been closed and that Russia had “fully” accomplished its obligations to Georgia on the
withdrawal of military facilities. Georgia continued to protest that the Gudauta base retained
some Russian forces and equipment and had not been handed over to Georgia’s control.

14 CEDR, March 5, 2007, Doc. No. CEP-358007; May 17, 2007, Doc. No. CEP-4009; May 24, 2007, Doc. No. CEP-
950157; June 7, 2007, Doc. No. CEP-950369.
15 A Russian military analyst reported in early 2007 that there also were nine aircraft and ten helicopters atairbase
Gudauta. CEDR, May 3, 2007, Doc. No. CEP-305001.
16 CEDR, May 24, 2005, Doc. No. CEP-378001. In June 2007, two Russian mountain brigades consisting of about
4,500 troops began to deploy near Georgias borders, ostensibly to enhance security after the base closures. RIA
Novosti, June 26, 2007.





Following the August 2008 Russia-Georgia conflict, Russian officials announced that two army
brigades, each consisting of approximately 3,800 troops, would be deployed to new military bases
in Abkhazia and South Ossetia in line with Friendship and Cooperation Treaties signed by Russia
with these regions. In addition to these army brigades, Russian border troops reportedly will be
deployed along the regional borders with Georgia, and separatist militias will be incorporated into 17
the Russian armed forces. The European Union has maintained that these forces far exceed the
limits permitted by the Russia-Georgia ceasefire accords (which call for the numbers to match
pre-conflict deployment levels of about 2,500 Russian “peacekeepers” in Abkhazia and 1,000
Russian “peacekeepers” in South Ossetia). Russia maintains that this ceasefire provision has been
superceded by the authority of “independent” Abkhazia and South Ossetia to decide on their own
basing arrangements.
The United States has generally viewed Turkey as able to foster pro-Western policies and
discourage Iranian interference in the South Caucasus states, though favoring 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 views Turkey as a major ally against such influence, and to
balance Armenia’s ties with Russia. 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 include Turkey’s rejection that there was
an Armenian genocide in 1915-1923 and its support for Azerbaijan in the NK conflict. Georgia
has an abiding interest in ties with the approximately one 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. New pipelines delivering oil and gas westward
from the Caspian Sea reflect cooperation between Azerbaijan, Georgia, and Turkey.
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. A major share of the world’s Azerbaijanis reside
in Iran (estimates range from 6-12 million), 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. Iran has growing
trade ties with Armenia and Georgia, but its trade with Azerbaijan has declined. 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. Some thawing in
Azerbaijani-Iranian relations occurred in 2005-2006 with the long-delayed opening of an
Azerbaijani consulate in Tabriz and leadership summits.
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’s efforts to
improve relations with Azerbaijan have appeared to be jeopardized, however, by its reported

17 Pavel Felgenhauer, “Georgian Officials Admit They Misread Russian Intentions,” Eurasia Daily Monitor, October
30, 2008. Felgenhauer, a Russian military analyst, warns that the total number of Russian troops and weapons deployed
in the regions may well be more than the number of troops and weapons possessed by Georgia.





suppression of rising dissent among “Southern Azerbaijanis.” U.S. policy aims to contain Iran’s 18
threats to U.S. interests.
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. The EU took the international lead in mediating the
August 2008 Russia-Georgia conflict and in deploying observers after the ceasefire (see below).
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 region.

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 on-going 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/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 has led to the virtually complete displacement of ethnic Armenians from
Azerbaijan and vice versa. 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. Efforts by ethnic minorities to secede are primary security concerns for all three
states. NK relies on economic support from Armenia, and Abkhazia and South Ossetia from
Russia.

18 See CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.





Since 1988, the separatist conflict in Nagorno Karabakh (NK) has resulted in about 15,000
casualties and hundreds of thousands of refugees and displaced persons in Armenia and
Azerbaijan. The U.N. High Commissioner for Refugees has reported that at the end of 2007, there 19
were still about 4,600 people considered refugees or displaced persons in Armenia. Armenia has
granted citizenship and acted to permanently house most of the ethnic Armenians who fled
Azerbaijan. The Azerbaijani government reported in April 2008 that there were 572,500 internally 20
displaced persons in the country. The non-governmental International Crisis Group estimates
that about 13-14% of Azerbaijan’s territory, including NK, is controlled by NK Armenian forces 21
(The World Factbook estimates about 16%). The OSCE’s “Minsk Group” of concerned
member-states began talks in 1992. A U.S. presidential envoy was appointed to these talks. A
Russian-mediated cease-fire was agreed to in May 1994 and was formalized by an armistice
signed by the ministers of defense of Armenia and Azerbaijan and the commander of the NK
army on July 27, 1994 (and reaffirmed a month later). The United States, France, and Russia co-
chair meetings of the Minsk Group.
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 “core principles.” The Minsk
Group co-chairs issued a statement and made other remarks in April-July 2006 that revealed some
of their proposals for a settlement. These included the phased “redeployment of Armenian troops
from Azerbaijani territories around NK, with special modalities for Kelbajar and Lachin districts
(including a corridor between Armenia and NK); demilitarization of those territories; and a
referendum or population vote (at a date and in a manner to be decided ...) to determine the final 22
legal status of NK.” International peacekeepers also would be deployed in the conflict area.
On November 29, 2007, then-Undersecretary of State Nicholas Burns, Russian Foreign Minister
Sergey Lavrov, and 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 proposals, after the location where
the draft text was presented) that had resulted from three years of talks and to begin “a new phase 23
of talks” on a comprehensive peace settlement.
Although the text was not released, Azerbaijani Foreign Minister Elmar Mammadyarov
reportedly claimed that the principles uphold Azerbaijan’s territorial integrity and NK’s
autonomous status as part of Azerbaijan. Armenia’s then-Foreign Minister Vardan Oskanyan

19 U.N. High Commissioner for Refugees. 2007 Global Trends: Refugees, Asylum-seekers, Returnees, Internally
Displaced and Stateless Persons, June 2008. The NGO Amnesty International has raised concerns that refugees and
displaced persons in Azerbaijan face prejudice and segregation. They are more likely to be unemployed and in poverty.
Azerbaijan: Displaced then Discriminated Against—the Plight of the Internally Displaced Population, June 28, 2007.
20 Norwegian Refugee Council. Internal Displacement Monitoring Center. Country Page: Azerbaijan, at
http://www.internal-displacement.org/idmc/website/countries.nsf.
21 International Crisis Group. Nagorno-Karabakh: Viewing the Conflict from the Ground, September 14, 2005; CIA
World Factbook. Azerbaijan, online at https://www.cia.gov/cia/publications/factbook/geos/aj.html.
22 OSCE. Statement by the Minsk Group Co-Chairs, July 3, 2006.
23 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.





asserted, on the other hand, that the principles supported Armenia’s insistence on respecting self-
determination for NK. Many observers suggest that progress in the talks may occur only after the 24
current electoral cycle concludes in Armenia and Azerbaijan.
In March 2008, the peace process faced challenges from a ceasefire breakdown along the NK
front that reportedly led to some troop casualties and from the passage of a resolution by the U.N.
General Assembly that called for Armenia to “immediately and unconditionally” withdraw from
“occupied” Azerbaijani territory. In the former case, each side blamed the other for breaking the
ceasefire. In the latter case, the resolution introduced by Azerbaijan in the U.N. General Assembly
was approved with a vote of 39 for and 7 against, with 100 abstentions. The United States voted
against the resolution in part because according to Deputy Assistant Secretary of State Matthew
Bryza it violated the provisions of the Basic Principles (see above) and thus harmed the peace
process.
On May 6, 2008, France hosted a meeting between the Armenian and Azerbaijani foreign
ministers. The foreign ministers also met with the Minsk Group co-chairs. No details were made
available to the public. Armenian President Serzh Sarkisyan and Azerbaijani President Ilkham
Aliyev met briefly on June 6, 2008, while attending a meeting of the Commonwealth of
Independent States in St. Petersburg, Russia. The presidents stated that a certain degree of trust
had been reached during their first meeting, and they agreed that talks should continue on settling
the NK conflict.
Perhaps troubling, Azerbaijan staged a major military parade in late June 2008, at which Aliyev
stated that “the Azerbaijani people are tired of these [peace] talks.... We should be ready to
liberate our territories by military force at any moment.” Answering a congressional inquiry about
similar statements by Aliyev, Assistant Secretary of State Fried stated that U.S. diplomats had
advised Aliyev that such statements harm the peace process, that renewed conflict would
jeopardize Azerbaijan’s energy exports, that “in the judgment of the United States,” Azerbaijan 25
does not have military superiority, and that neither side could win in a renewed conflict. In the
wake of the Russia-Georgia conflict in early August 2008 (see below), Armenian President
Sarkisyan asserted that “the tragic events in [Georgia’s breakaway South Ossetia region] confirm
that every attempt in the South Caucasus to look for a military answer in the struggle for the right 26
to self-determination has far-reaching military and geopolitical consequences.”
Deputy Assistant Secretary Bryza reportedly stated on September 18 that the Minsk Group peace
process faced an uncertain period, since Russia had acted aggressively in the South Caucasus and
its reputation had been harmed, but that he hoped that the Minsk Group talks could continue. In
any event, he stated, the United States would continue to encourage the peaceful settlement of the

24 CEDR, December 10, 2007, Doc. No. CEP-950390; December 13, 2007, Doc. No. CEP-950360; December 19,
2007, Doc. No. CEP-950339.
25 U.S. House of Representatives. Committee on Foreign Affairs. Hearing: The Caucasus, Frozen Conflicts and Closed
Borders. Testimony of Daniel Fried, June 18, 2008.
26 Open Source Center. Europe: Daily Report, August 27, 2008, Doc. No. EUP-085016. However, Armenias former
Foreign Minister Oskanyan maintained in late 2006 that Article 4 of the CIS Collective Security Treaty (“in case an act
of aggression is committed against any of the member-states, all other member-states will render it necessary
assistance, including military, as well as provide support with the means at their disposal through an exercise of the
right to collective defense) pertains to aggression from outside the CIS, so does not pertain to the Armenia-Azerbaijan
conflict (since Azerbaijan is a member of the CIS). Interview, October 26, 2006.





conflict.27 On October 14, Secretary Rice dismissed speculation that the Minsk Group had
become obsolete as the mediating body.
Turkish Prime Minister Recep Tayyip Erdogan visited Russia, Georgia, and Azerbaijan in mid- to
late August 2008 to propose the formation of a “Caucasus Stability and Cooperation” group to
discuss regional peace, economic cooperation, and energy security, and which would include
Turkey, Russia, Georgia, Azerbaijan, and Armenia, but would exclude the United States and the
EU. Turkish President Abdullah Gul visited Armenia and Azerbaijan in early September to further
discuss forming the group and to mediate the NK conflict. Armenian President Sargisyan
welcomed Turkey’s efforts as an attempt to create a favorable atmosphere in the region, but on
September 11 called for continuing the Minsk Group talks.
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 were granted Russian citizenship 28
and most appeared to want their regions to be independent or to become part of Russia.
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. Georgian officials and
other observers raised concerns that this directive tightened and flaunted Russia’s jurisdiction
over the regions.
A meeting of the U.N. Security Council (UNSC) on April 23, 2008, discussed these Russian
moves. Although the Security Council issued no public decision, the United States, Great Britain,
France, and Germany stated that same day that they “are highly concerned about the latest
Russian initiative to establish official ties with ... Abkhazia and South Ossetia without the consent
of the Government of Georgia. We call on the Russian Federation to revoke or not to implement

27 CEDR, September 18, 2008, Doc. No. CEP-950389.
28 Vladimir Socor, Eurasia Insight, November 20, 2006. According to Rossiyskoye Voyennoye Obozreniye (Russian
Military Review), published by the Defense Ministry, 80% of residents of Abkhazia are citizens of Russia, and most
voted in the December 2007 Russian legislative election. CEDR, April 21, 2008, Doc. No. CEP-358004.





its decision.”29 On April 29, 2008, the Russian foreign ministry claimed that Russia’s actions had
been taken to boost the basic human rights of residents in the regions. (For other Russian actions
during 2008 specific to a breakaway region, see below.)
In July 1992, Abkhazia’s legislature declared the region’s effective independence, prompting an
attack by Georgian national guardsmen. In October 1992, the U.N. Security Council (UNSC)
approved the first U.N. observer mission to a Eurasian state, termed UNOMIG, 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. A
Quadripartite Commission (QC) was set up to discuss repatriation and 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. In late 1997, the sides agreed to set up a Coordinating Council (CC) to discuss cease-
fire maintenance and refugee, economic, and humanitarian issues. The QC met periodically and
addressed grievances not considered by the CC. Abkhazia had resisted holding CC meetings since
2001. The two sides finally held some CC meetings in mid-2006 but rising tensions led to the
suspension of the meetings in August 2006.
The 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. A “New Friends” group was formed in

2005 (members included Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, Moldova, Poland,


Romania, and Sweden) to advocate increased EU and NATO attention to a settlement. Sticking
points in talks included Georgia’s demand that displaced persons be allowed to return to
Abkhazia, after which an agreement on autonomy for Abkhazia would be negotiated. The
Abkhazians insisted on recognition of their independence as a precondition to large-scale
repatriation.
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. President Saakashvili asserted
that the action marked progress in Georgia’s efforts to re-establish its authority throughout
Abkhazia, and he directed that the Abkhaz “government-in-exile” make the Gorge its home.
Georgia claimed that only police were deployed in the Gorge, but Abkhazia asserted that military
troops were present, in violation of the cease-fire agreement.
Regular Georgia-Abkhazia peace talks were suspended in October 2006. Abkhazia called for
Georgia to remove the government representatives and alleged military forces. In October 2006,
the UNSC criticized Georgia for introducing military forces into the Kodori Gorge in violation of
cease-fire accords and for other “militant rhetoric and provocative actions” and called on it to
abide by the accords. Some violations by Abkhaz forces were also criticized. The UNSC stressed

29 “Germany, Great Britain, France, U.S.A. and Germany Passed Communique, Black Sea Press, April 24, 2008.





the “important” and “stabilizing” role played by Russian peacekeepers and UNOMIG.30 The U.N.
Secretary General subsequently stated that Georgia appeared not to have heavy military weaponry
in the Gorge. The Friends of the U.N. Secretary General hosted meetings in Germany in June

2007 and Switzerland in February 2008 that urged the sides to abide by the existing cease-fire 31


agreement and to renew talks under existing formats.
In March and April 2008, President Saakashvili proposed new peace initiatives that included
international guarantees of autonomy for Abkhazia, quotas for Abkhaz representation in Georgian
executive and legislative bodies, the establishment of a special economic zone in the Gali region,
and more active involvement by the international community and Russia in a peace settlement.
The initiatives were rejected by the de facto Abkhaz authorities.
In March and April 2008, unmanned aerial vehicles (UAVs) from Georgia were shot down over
Abkhazia. Georgia claimed that Russians shot down the UAVs, but the Abkhaz claimed that they
shot them down. The Russian foreign ministry asserted that the UAVs had a military surveillance
mission and were banned under the 1994 ceasefire agreement, but the Georgians asserted that
they were non-threatening and permitted. After an investigation, UNOMIG concluded in late May
2008 that at least one of the UAVs had been shot down by a fighter jet flying into Abkhazia from
Russian airspace. UNOMIG stated that Georgia should not fly the UAVs over Abkhazia, but also
termed the shootdown by the Russian air force “fundamentally inconsistent” with the Abkhaz-
Georgia ceasefire agreement. At a closed meeting of the UNSC on May 30, 2008, Georgia stated
that it would end the flights of the UAVs.
The United States and others in the international community also 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. There also would be added military equipment and checkpoints. The ministries claimed
that the increases were necessary to counter the presence of a Georgian youth camp in a restricted
zone near the Abkhaz border, the flight of Georgian UAVs over Abkhazia, and a buildup of
Georgian “military forces” and police in the Kodori Gorge, which they alleged were preparing to
attack the de facto Abkhaz government. The defense ministry asserted that any Georgian
“violence against Russian peacekeepers and Russian citizens ... will be met with an appropriate 32
and robust response.” Georgia’s speaker objected that an increase in the number of
“peacekeepers” should be a subject of negotiation, and termed it another move toward Russia’s 33
“annexation” of Abkhazia. 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 34
possible Georgian attacks on Abkhazia. NATO reported on April 28, 2008, that its members
“support Georgia’s territorial integrity and regard Abkhazia as Georgia’s inseparable part. NATO

30 U.N. Security Council. Resolution 1716 (2006), Adopted by the Security Council at Its 5549th Meeting, October 13,
2006.
31 U.N. Secretary General. Report of the Secretary-General on the Situation in Abkhazia, S/2007/15, January 11, 2007;
S/2007/182, April 3, 2007; S/2007/439, July 18, 2007; S/2007/588, October 3, 2007; S/2008/38, January 23, 2008;
S/2008/219, April 2, 2008. He stated in his July 2007 report that UNOMIG had seen what appeared to be a Georgian
military truck in the upper Kodori Gorge.
32 CEDR, April 29, 2008, Doc. No. CEP-950318. By late 2007, Russia had bolstered its “peacekeeping forces by
deploying some pro-Russia Chechen troops from the Zapad battalion.
33 CEDR, April 29, 2008, Doc. No. CEP-950329.
34 ITAR-TASS, May 6, 2008.





members believe that the unilaterally biased Russian peacekeeping contingent should be 35
withdr awn.”
Russia-Georgia tensions appeared to deepen in mid-May 2008 when the U.N. General Assembly
approved a resolution introduced by Georgia that called for displaced persons to be permitted to
return to Abkhazia and to reclaim their property. Tensions heightened in late May 2008 after
Russia announced that about 400 railway construction troops were being sent to Abkhazia for
“humanitarian” work. The U.S. State Department responded that the “announcement is
particularly difficult to understand,” in light of Georgia’s peace proposals, and objected that such
troops were not part of Russia’s “peacekeeping” force. 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 Deputy Assistant Secretary Bryza, the railway was used in August by 36
Russia when its troops moved into Georgia.
.
In late June 2008, growing concerns about Georgian-Russian tensions led the “Friends of the
U.N. Secretary General” to work out a new draft peace plan for Abkhazia. The plan was formally
presented by German Foreign Minister Frank-Walter Steinmeier in July to EU, Georgian, Abkhaz,
and Russian leaders. Indicating the shift in the policy of the United States and other Friends,
Deputy Assistant Secretary Bryza stated on July 21 that the Friends considered that Russian
“peacekeepers” might continue to work with UNOMIG in Abkhazia (if Russia and Georgia
agree), but that these forces would be “complemented” by a joint Abkhaz-Georgian police force, 37
“with international oversight, be it U.N. or EU oversight.” Russia appeared at first to support the
peace plan, but during Steinmeier’s visit to Moscow on July 18-19, Russian President Dmitriy
Medvedev reportedly called for the retention of the existing ceasefire talks and Russia’s
“peacekeeping” role.
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. A Joint
Control Commission (JCC) composed of Russian, Georgian, and North and South Ossetian
emissaries promoted a settlement of the conflict, with the OSCE as facilitator. According to one

35 CEDR, April 28, 2008, Doc. No. CEP-950444.
36 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.
37 Brian Whitmore, Interview with U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs
Matthew Bryza, RFE/RL, July 21, 2008.





estimate, some 45,000 ethnic Ossetians and 17,500 ethnic Georgians resided in a region that, 38
according to the 1989 Soviet census, at that time contained over 98,000 residents.
In 2004, President Saakashvili increased pressure on South Ossetia by tightening border controls,
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 July 2005, President Saakashvili announced a new peace plan for South Ossetia that offered
substantial autonomy and a three-stage settlement, consisting of demilitarization, economic
rehabilitation, and a political settlement. South Ossetian “president” Eduard Kokoiti rejected the 39
plan, asserting in October 2005 that “we [South Ossetians] are citizens of Russia.” The JCC in
May 2006 agreed on economic reconstruction projects estimated to cost $10 million, and the next
month, the OSCE sponsored a donor’s conference that raised these funds. A Steering Committee
composed by the sides to the conflict and donors met in October 2006 to discuss project
implementation. In April 2007, Kokoiti praised Russia’s unilateral aid efforts and accused the
Steering Committee of dallying (see also below).
In November 2006, a popular referendum was held in South Ossetia to reaffirm its
“independence” from Georgia. The separatists reported that 95% of 55,000 registered voters
turned out and that 99% approved the referendum. In a separate vote, 96% reelected Kokoiti. The
OSCE and U.S. State Department declined to recognize these votes. In “alternative” voting
among ethnic Georgians in South Ossetia (and those displaced from South Ossetia) and other
South Ossetians, the pro-Georgian Dmitriy Sanakoyev was elected governor, and a referendum
was approved supporting Georgia’s territorial integrity.
In March 2007, President Saakashvili proposed another peace plan for South Ossetia that
involved creating “transitional” administrative districts throughout the region—ostensibly under
Sanakoyev’s authority—which would be represented by an emissary at JCC or alternative peace
talks. Each side accused the other in mid-2007 of blockading water supplies in South Ossetia and
other “provocations,” including failure to hold JCC meetings. The OSCE Steering Committee
financed the building of a water pipeline. In July 2007, President Saakashvili decreed the
establishment of a commission to work out South Ossetia’s “status” as a part of Georgia. The JCC
finally held a meeting (with Georgia’s emissaries in attendance) in Tbilisi, Georgia, in October
2007, but the Russian Foreign Ministry claimed that the Georgian emissaries made unacceptable

38 Georgia: a Toponymic Note Concerning South Ossetia, The Permanent Committee on Geographic Names, January
2007.
39 CEDR, October 7, 2005, Doc. No. CEP-15001. CEDR, December 12, 2005, Doc. No. CEP-27204. South Ossetians
who were citizens of Russia voted in the 2004 Russian presidential election, and a poster in South Ossetia afterward
proclaimed thatPutin is our president.” Many South Ossetians voted in the 2007 Russian Duma election and the 2008
Russian presidential election. CEDR, December 3, 2007, Doc. No. CEP-950289; February 28, 2008, Doc. No. CEP-
4015.





demands in order to deliberately sabotage the results of the meeting.40 No further meetings had
been held before the outbreak of conflict between Russia and Georgia in August 2008.
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 41
Tskhinvali and other areas.
On August 8, Russian President Dmitriy Medvedev denounced Georgia’s incursion into South
Ossetia, asserting that “women, children and the elderly are now dying in South Ossetia, and most
of them are citizens of the Russian Federation” (Russia had granted citizenship to much of the
population). He stated that “those who are responsible ... will be duly punished.” 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. President Bush stated on August 9 that
“Georgia is a sovereign nation, and its territorial integrity must be respected. We have urged an
immediate halt to the violence [and] the end of the Russian bombings.” 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 Georgian town of Gori and 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, 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 42
aggressor has been punished and suffered very heavy losses.” Medvedev endorsed some
elements of a European Union (EU) peace plan presented by visiting French President Nicolas
Sarkozy. On August 15, the Georgian government accepted the French-brokered 6-point cease-
fire that left Russian forces in control of South Ossetia, Abkhazia, and “security zones” in 43
undisputed Georgian territory. The six points include 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 are permitted to implement security measures in the
zone of the conflict until international monitors are in place), and to open international
discussions on ensuring security and stability in Abkhazia and South Ossetia.
Russia undertook a pullback of military forces on August 22. However, substantial forces
remained in areas around South Ossetia’s and Abkhazia’s borders with the rest of Georgia and

40 CEDR, November 1, 2007, Doc. No. CEP-950449.
41 See also CRS Report RL34618, Russia-Georgia Conflict in South Ossetia: Context and Implications for U.S.
Interests, by Jim Nichol.
42 ITAR-TASS, August 12, 2008. On September 11, Prime Minister Putin stated that Georgia’s aggression was answered
bya well-deserved mighty punch” by Russia. ITAR-TASS, September 11, 2008.
43 See CRS Report RL34618, Russia-Georgia Conflict in South Ossetia: Context and Implications for U.S. Interests, by
Jim Nichol, August 29, 2008.





near the port of Poti, resulting in condemnation by the United States, NATO, and the EU that
Russia was violating the ceasefire accord. Further condemnation by the international community
occurred in the wake of President Medvedev’s August 26 decree officially recognizing the
independence of South Ossetia and Abkhazia. Nicaragua is the only country that has followed suit
in extending diplomatic relations to Abkhazia and South Ossetia.
On September 8, 2008, visiting French President Nicolas Sarkozy and Russian President Dmitriy
Medvedev signed a follow-on ceasefire accord that fleshed out the provisions of the 6-point peace
plan. It stipulated that Russian forces would withdraw from Georgia’s port of Poti and adjacent
areas by September 15; 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 Organization for
Security and Cooperation in Europe would remain; and that the number of international observers
would be increased by October 1, to include at least 200 observers from the European Union
(EU), and perhaps more later. The EU has called for Russia to permit these observers to patrol in
Abkhazia and South Ossetia. Russia’s position is that these observers cannot patrol in the regions
without the approval of the regions, and the regional leaders have refused to permit such patrols.
In a press conference after signing the accord, President Medvedev asserted that Russia’s
recognition was “irrevocable.” Although Sarkozy strongly implied that the international
conference would examine the legal status of Georgia’s breakaway Abkhazia and South Ossetia,
Medvedev pointed out that the regions had been recognized as independent by Russia on August 44
26, 2008, and stated that disputing this recognition was a “fantasy.” The Russian defense
minister called for retaining “around 3,800” Russian troops in Abkhazia and the same number in
South Ossetia. These numbers differ from troop ceilings permitted under the early 1990s ceasefire
agreements of up to 3,000 Russian “peacekeepers” in Abkhazia and about 1,000 in South Ossetia 45
(including Russian troops and those ostensibly from Russia’s North Ossetia region). Russian
military bases reportedly were being established in the regions, in violation of Russia’s 1999
commitment under the CFE Treaty to close its military bases in Georgia (Russia had announced
in mid-2007 that it was unilaterally suspending compliance with the Treaty).
The EU deployed over 200 monitors by October 1, 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. New EU and OSCE monitors, as well as UNOMIG and OSCE observers
who previously patrolled in the regions, have been blocked from entering the regions. A
conference to discuss security, repatriation, and status issues was disrupted at its inaugural session
on October 15 when Russian, Abkhazian, and South Ossetian emissaries boycotted or walked out
of various meetings during the day. Another session is planned for November 18.
On August 13, President Bush announced that Secretary Rice would travel to France and Georgia
to facilitate adoption of the peace plan and that Defense Secretary Robert Gates would direct
urgent humanitarian aid deliveries to Georgia. On September 3, Secretary Rice announced a $1
billion multi-year aid package to help Georgia rebuild (see below). Vice President Cheney visited

44 Open Source Center. Central Eurasia: Daily Report(hereafter CEDR), September 28, 2008, Doc. No. CEP-950425;
CEP-950440.
45 Conor Humphries,Russia Establishes Ties with Georgia Regions,” Agence France Presse, September 9, 2008;
Russia to Base 7,600 Troops in Georgian Regions,” Deutsche Presse-Agentur, September 9, 2008.





Georgia on September 4 to ensure that “America will help Georgia rebuild.... [Saakashvili] and
his democratically elected government can count on the continued support and assistance of the 46
United States.”
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. Although gross domestic product (GDP)
began to rebound in the states in the mid-1990s, the economies remain fragile. Investment in oil
and gas resources has fueled economic growth in Azerbaijan in recent years at the expense of
other sectors of the economy. Widespread poverty and regional conflict have contributed to high
emigration from all three states, and remittances from these emigres have provided major support 47
for the remaining populations.
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 48
territory to Armenia. According to the U.S. Embassy in Baku, Azerbaijan’s Nakhichevan
exclave “is blockaded by neighboring Armenia.” Iran has at times obstructed bypass routes to
Nakhichevan. The CIS imposed an economic embargo on Abkhazia from 1996 until early 2008.
Since 2006, Russia has severely 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. Georgia severely restricts road
traffic to and from South Ossetia. 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, Georgia cut off gas transit from Russia to South Ossetia. Russia has
been building a 110-mile gas pipeline from North Ossetia to South Ossetia to avoid transiting
Georgia.
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

46 The White House. Office of the Vice President. Remarks by Vice President Cheney and President Saakashvili of
Georgia After Meeting, September 4, 2008.
47 A. V. Korobkov, “Migration Trends in Central Eurasia, Communist and Post-Communist Studies, No. 2, 2007, pp.
169-89.
48 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 servicein a week.” Azerbaijan and Turkey oppose a transit route through
Armenia, despite Armenias offers not to use the railway for its own goods or to impose transit tariffs. The Export-
Import Bank Re-authorization 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. In March 2008, Armenian President-elect
Serzh Sargisyan reportedly stated that Armenia might be able to use the railway, and argued that the railway is
designed more as a means of bypassing “much larger countries (presumably Russia) than Armenia. CEDR, March 12,
2008, Doc. No. CEP-950482.





Consolidated Appropriations for FY1997 (P.L. 104-208)49 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 are designed to convince a nation such as Turkey to allow
the transit of U.S. aid to Armenia.
The World Bank, in a report assessing the quality of democratic governance in over 200 countries
during 2007, ranked Georgia as perhaps among the better-performing one-half of the countries in 50
terms of government effectiveness and regulatory quality. On four other indicators—51
accountability, stability, rule of law, and anti-corruption—Georgia ranked slightly below world
norms but had made progress in recent years. Georgia also ranked slightly above Armenia on all
indicators except stability and regulatory quality, according to the World Bank. Armenia ranked
as perhaps among the better-performing one-half of the countries in terms of regulatory quality,
but was below world norms on other indicators, although some progress was registered in terms
of stability. Azerbaijan was deemed to rank below the other two regional states on all indicators,
but seemed to have made some progress in effectiveness and regulatory quality. Recent
developments in democratization in the region are discussed below.
In November 2005, constitutional changes were approved by 93.2% of 1.5 million voters, with a
65.4% turnout. A small delegation of monitors from the Parliamentary Assembly of the Council
of Europe (PACE) reported observing ballot-box stuffing and few voters. Opposition parties 52
boycotted the vote. Before the vote, the Venice Commission of the Council of Europe (COE)
had suggested that the changes would provide a “good basis for ensuring ... respect for human
rights, democracy and the rule of law, and would pave the way to further European integration,”
if implemented. In January 2007, PACE praised progress in passing legislation implementing the
constitutional reforms and urged Armenia to hold free elections.
A legislative election was held on May 12, 2007, and five parties cleared a 5% vote hurdle to win
90 seats that were allocated through party list voting. One other party won 1 of the 41 seats
subject to constituency voting. The party that had won the largest number of seats in the 2003
election—the Republican Party of Armenia—won a near majority (64 of 131 seats) in 2007. Two
opposition parties won 16 seats. According to the final report of observers from the OSCE, COE,
and the EU, the legislative elections “demonstrated improvement and were conducted largely in
accordance with OSCE commitments....” However, the observers raised some concerns over pro-
government party domination of electoral commissions, the low number of candidates in
constituency races, and inaccurate campaign finance disclosures. They reported some counting

49 P.L. 104-208, Sec. 559, amends the Foreign Assistance Authorization Act of 1961.
50 Government effectiveness refers to “the quality of public services, [and] the quality of the civil service. Regulatory
quality refers to policies that promote a market economy. The World Bank. Governance Matters 2008: Worldwide
Governance Indicators, 1996-2007, June 24, 2008.
51 Accountability refers to “the extent to which a countrys citizens are able to participate in selecting their government,
as well as freedom of expression, freedom of association, and a free media. Governance Matters 2008, June 24, 2008.
52 PACE. Constitutional Referendum in Armenia: General Compliance Marred by Incidents of Serious Abuse,
November 28, 2005.





irregularities at the precinct level, and assessed counting “as bad or very bad” at one-third of
territorial electoral commissions. The report raised concerns that these vote-counting problems 53
harmed public confidence in the results.
The two parties that won the most votes in the May 2007 election—the Republican Party of
Armenia and the Prosperous Armenia Party—announced that they would form a coalition to
cooperate on legislative tasks and the formation of the government. They also agreed to jointly
back one candidate for the upcoming 2008 presidential election. Incumbent President Kocharyan
was at the end of his constitutionally limited second term in office. The two parties signed a side
agreement with another party that won many votes—the Armenian Revolutionary Federation—on
its participation in the coalition, although it reserved the right to run its own candidate in the
presidential race. President Robert Kocharyan appointed defense minister Serzh Sargisyan as
prime minister on June 7, 2007.
Armenia’s presidential election was held on February 19, 2008. Prime Minister Sargisyan was
nominated by the Republican Party and endorsed by outgoing President Robert Kocharyan. He
ran against eight other candidates. According to final results issued by the Central Electoral
Commission on February 24, Sargisyan was the winner with 52.82% of 1.67 million votes cast,
followed by Levon Ter-Petrossyan with 21.5% and Arthur Baghdasaryan with 16.7%.
Election observers from the Organization for Security and Cooperation in Europe (OSCE), the
Council of Europe (COE), and the European Parliament (EP), issued a final report (with a more
negative assessment than given in a preliminary report) that the election “mostly met OSCE
commitments ... in the pre-election period and during voting hours,” but that “serious challenges
to some commitments did emerge, especially after election day. This displayed an insufficient
regard for standards essential to democratic elections and devalued the overall election process. In 54
particular, the vote count demonstrated deficiencies of accountability and transparency....”
According to the report, the election offered voters a genuine choice among the nine candidates.
However, problems included the absence of a clear separation between government and party
functions. A large majority of territorial and precinct electoral commission members were linked
to the Republican and Prosperous Armenia parties or the presidential administration. Media gave
Sargisyan a great deal of positive coverage and Ter-Petrossyan a large volume of negative
coverage. The Central Electoral Commission “routinely dismissed” most campaign complaints in
closed sessions, raising concerns about the effectiveness of the complaint process. The lack of
public confidence in the electoral process was compounded by appearances of irregularities in
vote counting, which was assessed by the observers as bad or very bad in some 16% of polling
stations visited. Other discrepancies in vote counting were revealed during recounts in some
precincts. The final report also raised concerns about “implausibly high” voter turnout claims at
several precincts.
Demonstrations by oppositionists claiming that the election was not free and fair were forcibly
suppressed by military and police forces in the capital of Yerevan on March 1. Street battles and

53 OSCE. Office of Democratic Institutions and Human Rights (ODIHR). Parliamentary Elections, Republic of
Armenia, 12 May 2007: Final Report, September 10, 2007. PACE. Ad Hoc Committee of the Bureau of the Assembly.
Report: Observation of the Parliamentary Elections in Armenia, Doc. 11312, June 20, 2007. See also CRS Report
RS22675, Armenia’s Legislative Election: Outcome and Implications for U.S. Interests, by Jim Nichol.
54 OSCE. International Election Observation Mission. Presidential Election, Republic of Armenia, 19 February 2008:
Final Report of the OSCE/ODIHR Election Observation Mission, May 30, 2008.





looting were reported later in the day. The government reported that ten people were killed, that
dozens were injured, that many of the demonstrators were armed, and that they had received
orders to overthrow the government. President Robert Kocharyan declared emergency rule in
Yerevan late on March 1, which provided for government control over media and a ban on public
meetings and party activities. Authorities arrested or detained dozens of opposition politicians and
others. On March 12, Deputy Assistant Secretary of State Matthew Bryza called for the
government to “to cease arrests of political leaders” and to “restore media freedom and then to lift
the state of emergency as soon as possible, and then finally launch a nationwide roundtable ...
including all major political parties to chart the course forward to strengthen Armenia’s 55
democracy.”
The state of emergency was lifted on March 21, but a new law limited political rallies. Also on
March 21, the Republican Party, Rule of Law Party, Prosperous Armenia Party, and the Armenian
Revolutionary Federation signed an agreement to form a political coalition. In his April 9, 2008,
inaugural address, Sargisyan stated that “we will build a strong, proud, and democratic state of
Armenia where all are equal under the law.” He named Central Bank chairman Tigran Sargisyan
as the prime minister, and announced that a new coalition government would be composed of the 56
four parties.
The Parliamentary Assembly of the Council of Europe (PACE) passed a resolution on April 17,
2008, that called for a “credible international investigation” of events surrounding the Armenian
government crackdown on demonstrators on March 1, 2008. The resolution called for the release
of demonstrators and others who it claimed were arrested “on seemingly artificial and politically
motivated charges,” and urged wide political dialogue between pro-government and opposition
parties. The resolution also called for the repeal of the new law restricting freedom of assembly
and suggested that PACE consider at its next session in late June 2008 suspending the voting
rights of the Armenian delegation, “if no considerable progress has been made on these
requirements by then.”
In June 2008, the Armenian legislature created a commission to investigate the events of March 1
and amended the law on assemblies. Reportedly, of nearly one hundred people detained in
connection with the events of March 1, most have been tried and have received prison sentences,
probation, fines, or acquittals. In late June 2008, PACE postponed a decision on Armenia for six
months to give the country more time to implement the assembly’s reform suggestions. In
October 2008, Ter-Petrossyan announced the suspension of demonstrations for the time being.
Changes to the election law, some in line with proposals from the Venice Commission, were
approved by the legislature in June 2005, including those making it easier for people to become
candidates for a November 6, 2005, legislative election. However, the deputies rejected some of
the most significant proposals, including a more equitable representation of political interests on
electoral commissions. In May and October 2005, Aliyev ordered officials to abide by election
law, and authorities permitted some opposition rallies. The October decree also led legislators to
approve marking hands and permit outside-funded NGOs to monitor the election, as advocated by
PACE. After the election, the U.S. State Department issued a statement praising democratization

55 “Armenia: Key U.S. Diplomat Calls For Roundtable In Wake Of Clashes,Radio Free Europe, March 12, 2008.
56 ITAR-TASS, April 9, 2008.





progress, but urging the government to address some electoral irregularities.57 Repeat elections
were scheduled for May 2006 in ten constituencies where alleged irregularities took place.
According to OSCE election monitors, the repeat race appeared to be an improvement over the
November election, but irregularities needed to be addressed, including interference by local
officials in campaigns. The ruling Yeni Azerbaijan Party won 62 seats, the independents 44, and 58
Musavat 5. The remaining 14 seats were held by several small parties.
During the run-up to the 2005 legislative election, authorities arrested several prominent officials
on charges of coup-plotting. Some critics of the arrests claimed that the defendants included
former cohorts of Heydar Aliyev or others who simply opposed President Ilkham Aliyev’s
policies. Although arrested on suspicion of coup-plotting, several officials instead were convicted
on lesser charges. One sensational trial involved Farhad Aliyev, former minister of economic
development (no relation to Ilkham Aliyev), who was among those arrested in 2005. He was tried
along with his brother, Rafiq (a businessman), and 17 others and was convicted on charges of
embezzlement in October 2007 to ten years in prison. He claimed that he was prosecuted because
of his advocacy of closer Azerbaijani ties with the United States and the EU, economic reforms,
and anti-corruption efforts. Senator John McCain and Representatives Gary Ackerman and Alcee
Hastings were among those in Congress concerned about due process in the case (see below, 59

110th Congress Legislation).


Meeting with visiting President Ilkham Aliyev in late April 2006, President Bush hailed the
“alliance” between the two countries and Azerbaijan’s “understand[ing] that democracy is the
wave of the future.” After the U.S. visit, the Azerbaijani foreign minister stated that it marked
Azerbaijan’s emerging role as the major power in the South Caucasus region. Some human rights
and other observers criticized the summit as providing undue U.S. support to a nondemocratic 60
leader. Answering this criticism, Deputy Assistant Secretary Bryza stated in June 2006 that “just
because Azerbaijan hasn’t gone as far as we would like on democracy doesn’t mean we’re going
to ignore our energy interests or our military interests. That’s not to say that our energy interests
or our military interests or our counter-terrorism interests are driving us to ignore democracy.... 61
We have to pursue a balance.”
The NGO Committee to Protect Journalists in December 2007 ranked Azerbaijan among the top 62
five countries in the world in terms of the number of imprisoned journalists. President Aliyev
amnestied five journalists in December 2007, but several others remained imprisoned. Among
recent cases, Qanimat Zahidov, the editor-in-chief of the opposition newspaper Azadliq, was

57 U.S. Department of State. Press Statement: Azerbaijan Parliamentary Elections, November 7, 2005. See also CRS
Report RS22340, Azerbaijan’s 2005 Legislative Election: Outcome and Implications for U.S. Interests, by Jim Nichol.
58 OSCE/ODIHR Mission. Press Release: Partial Repeat Parliamentary Elections in Azerbaijan Underscore
Continuing Need for Electoral Reform, May 15, 2006.
59 Eurasia Insight, October 30, 2006; Congressional Record, March 29, 2007, pp. E708-709. See also PACE.
Committee on the Honoring of Obligations and Commitments by Member States of the Council of Europe, Honoring of
Obligations and Commitments by Azerbaijan, Explanatory Memorandum, Doc. 11226, March 30, 2007.
60 The White House. Office of the Press Secretary. President Bush Welcomes President Aliyev of Azerbaijan to the
White House, April 28, 2006; CEDR, May 2, 2006, Doc. No. CEP-950092; Council on Foreign Relations. A
Conversation with Ilkham Aliyev, April 26, 2006.
61 RFE/RL, June 23, 2006.
62 Committee to Protect Journalists. Special Report 2007: One in Six Jailed Journalists [Worldwide] Held Without
Charge, December 5, 2007.





sentenced to four years in prison on March 7, 2008, of “hooliganism,” for defending himself from
an attacker, who received a lesser sentence.
A presidential election was held on October 15, 2008. In early June 2008, the legislature approved
changes to the electoral code, including a reduction of the presidential campaign season. Some of
the amendments to the electoral code approved by the legislature were recommended by the
Venice Commission, an advisory body of the Council of Europe. However, other
recommendations of the Venice Commission were not considered, including those on eliminating 63
the dominance of government representatives on election commissions. Critics charged that the
four-week campaign period was too short a time for candidates to present their platforms. The
opposition Azadliq (Freedom) party bloc decided on July 20 that it would boycott the election on
the grounds that the election laws were not fair, their parties faced harassment, and media were 64
constrained. This bloc includes the Popular Front Party (Reform), the Liberal Party, and others.
In early September 2008, the Azadliq bloc joined with other parties to form an Opposition
Cooperation Center (OCC) coalition, including the Musavat Party, the Civil Development Party,
and the Public Forum for the Sake of Azerbaijan.
Besides President Aliyev, six other politicians were able to gather 40,000 valid signatures to be
registered as candidates for the presidential election. Some government officials and observers
have suggested that these candidates are “new constructive opposition leaders,” as opposed to
those in opposition parties that boycotted the election.
Incumbent President Aliyev won a resounding victory, gaining nearly 89% of the vote. According
to a preliminary report by election monitors from OSCE/ODIHR, the Parliamentary Assembly of
the Council of Europe (PACE), and the European Parliament (EP), the election “marked
considerable progress toward meeting OSCE and Council of Europe commitments and other
international standards but did not meet all ... the principles of a meaningful and pluralistic
democratic election.” The observers commended a peaceful voting process that was “well
organized and efficient,” but were critical of a “lack of robust competition and of vibrant political
discourse facilitated by media,” and the decision by some opposition parties to boycott. The
observers also raised concerns that there appeared to be “significant procedural shortcomings [in 65
vote counting] in many cases, and manipulation in some instances.” EU Council President
Nicolas Sarkozy appeared more critical, issuing a statement on October 17 that “the elections still
do not satisfy international standards of democracy, particularly as regards the organization of
public debate, the conduct of polling, and the counting of votes.” The Azerbaijani Foreign Affairs
Ministry retorted that the statement was “biased” and did “not contribute to building trust” 66
between Azerbaijan and the EU.

63 European Commission for Democracy Through Law (Venice Commission). Joint Interim Opinion on the Draft
Amendments to the Electoral Code of the Republic of Azerbaijan. 74th Plenary Session, March 14-15, 2008, Opinion
no. 390/2006, CDL-AD(2008)003, March 18, 2008.
64 Open Source Center. Central Eurasia: Daily Report (hereafter CEDR), April 24, 2008, Doc. No. CEP-950216.
65 OSCE/PACE/EP. Republic of Azerbaijan Presidential Election, 15 October 2008: Statement of Preliminary Findings
and Conclusions, October 16, 2008.
66 EU. Statement of the Presidency of the EU on the Presidential Election in Azerbaijan, October 17, 2008; CEDR,
October 22, 2008, Doc. No. CEP-950288. See also CRS Report RS22977, Azerbaijan’s October 2008 Presidential
Election: Outcome and Implications, by Jim Nichol.





Georgia experienced increased political instability in the early 2000s as President Shevardnadze
appeared less committed to economic and democratic reforms. Polls before a November 2, 2003
legislative race and exit polling during the race suggested that the opposition National Movement
(NM) and the United Democrats (UD) would win the largest shares of seats in the party list vote.
Instead, mostly pro-Shevardnadze candidates were declared winners. Demonstrators launched a
peaceful “rose revolution” that led to Shevardnadze’s resignation on November 23. Russia and
the United States appeared to cooperate during the crisis to urge Georgians to abjure violence.
UD and NM agreed to co-sponsor NM head Saakashvili for a January 4, 2004, presidential
election. He received 96% of 2.2 million popular votes from a field of five candidates. OSCE
observers judged the vote as bringing Georgia closer to meeting democratic electoral standards.
Legislative elections were held in March 2004 involving 150 party list seats (winners of district
seats in November retained them). NM and the “Burjanadze Democrats” ran on a joint list and
captured 67.2% of 1.53 million votes, giving the bloc a majority of seats, seemingly ensuring firm
legislative support for Saakashvili’s policies. The OSCE judged the election as the most
democratic since Georgia’s independence.
President Bush visited Georgia on May 9-10, 2005, and praised its “rose revolution” for
“inspiring democratic reformers” and freedom “from the Black Sea to the Caspian and to the
Persian Gulf and beyond.” President Saakashvili hailed the Bush visit as marking “final
confirmation that Georgia is an independent country whose borders and territory are inviolable”
and stressed that the U.S.-Georgian “partnership” ultimately was based on “our shared belief in 67
freedom” and was the reason Georgia had sent troops to Iraq to end “enslavement” there.
Increased political instability in Georgia in late 2007 raised questions in the United States, NATO,
and elsewhere about whether the country could sustain its democratization progress.
Oppositionist activities appeared to strengthen after the detention on corruption charges of former
Defense Minister Irakli Okruashvili in late September 2007, in the wake of his sensational
allegations that Saakashvili had once ordered him to kill prominent businessman Badri
Patarkatsishvili. Several opposition parties united in a “National Council” that launched
demonstrations in Tbilisi on November 2 to demand that legislative elections be held in spring
2008 (instead of in late 2008 as set by a constitutional change approved by the NM-dominated
legislature), and that Saakashvili resign. On November 7, police and security forces forcibly
dispersed demonstrators, reportedly resulting in several dozen injuries. Security forces also shut
down the independent Imedi (“Hope”) television station, which had aired opposition grievances.
Saakashvili declared a state of emergency for 15 days, giving him enhanced powers. He claimed
that the demonstrations had been part of a coup attempt orchestrated by Russia, and ordered three
Russian diplomats to leave the country.
U.S. and other international criticism of the crackdown may have played an important role in
Saakashvili’s decision to step down as president on November 25, 2007, so that early presidential
elections could be held on January 5, 2008, “because I, as this country’s leader, need an

67 The White House. Office of the Press Secretary. President and President Saakashvili Discuss NATO, Democracy,
May 10, 2005. See also Saakashvili’s remarks in CEDR, May 4, 2005, Doc. No. CEP-26020.





unequivocal mandate to cope with all foreign threats and all kinds of pressure on Georgia.”68 At
the same time, a plebiscite was to be held on whether to have a spring or fall legislative election
and on whether Georgia should join NATO. Imedi renewed its broadcasts on December 12, and
became for a time the main television outlet for opposition candidates in the election. Saakashvili
ran against five other candidates. Georgia’s Central Electoral Commission reported on January

13, 2008, that Saakashvili had won over 53% of the vote, and he was inaugurated on January 20,


2008. In a preliminary assessment, the OSCE stated that the election broadly met its standards,


but that troubling irregularities needed to be addressed. The plebiscite endorsed holding a spring

2008 legislative election and Georgia’s aim to join NATO (See also CRS Report RS22794,


Georgia’s January 2008 Presidential Election: Outcome and Implications, by Jim Nichol).
A legislative election was held on May 21, 2008. Twelve parties and blocs were registered to
compete for 75 seats to be allocated by party lists and 75 seats by single-member constituencies.
The dominant NM pledged to reduce poverty and argued that its stewardship had benefitted the
country. The main opposition bloc, the United Opposition Movement, called for President
Saakashvili to resign from office and claimed that NM was subverting the electoral process to
retain power. The Central Electoral Commission announced that NM won the largest share of the
party list vote and also 71 of 75 constituency races, giving it a total of 119 out of 150 seats in the
legislature. The United Opposition won a total of 17 seats, the opposition Christian Democrats six
seats, the opposition Labor Party six seats, and the opposition Republican Party two seats. Some
observers argued that the opposition had harmed its chances by failing to unite in one bloc and
that the NM also benefitted from several popular businessmen who ran on its ticket in
constituency races.
International observers from the OSCE and other European organizations concluded that the
Georgian government “made efforts to conduct these elections in line with OSCE and Council of
Europe commitments,” but “a number of problems ... made this implementation uneven and
incomplete.” Among the problems were wide variations in the populations of single-mandate
electoral districts, which the observers stated “undermines the fundamental principle of the
equality of the vote,” a ban on self-nominated candidates, the use of government resources for
campaign purposes, the lack of balance in media coverage, a “contradictory and ambiguous” 69
electoral complaint and appeal process, and troubling irregularities in vote-counting. At a large
rally on May 26, a leader of the United Opposition, Levan Gachechiladze, reportedly declared
that the election had been falsified and should be annulled. Most United Opposition deputies have
refused to attend legislative sessions.

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-FY2005 (the others are Russia, Ukraine, and Kazakhstan, which have received sizeable
Comprehensive Threat Reduction funds). See Table 1. U.S. assistance to the region FY1992-
FY2007 amounts to about 14% 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.

68 CEDR, November 8, 2007, Doc. No. CEP-950428.
69 OSCE. International Election Observation Mission. Georgia: Parliamentary Elections, 21 May 2008, Statement of
Preliminary Findings and Conclusions, May 22, 2008.





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. Congress also has called for humanitarian aid to be
provided to NK, which has amounted to $29 million from FY1998 through FY2007. Besides
bilateral aid, the United States contributes to multilateral organizations such as the International
Monetary Fund and the World Bank that aid the region.
In January 2004, Congress authorized a major new global assistance program, the Millennium
Challenge Account (Section D of P.L. 108-199). A newly established Millennium Challenge
Corporation (MCC) deemed that Georgia was eligible as a democratizing country for assistance,
even though it did not meet criteria on anti-corruption efforts. In September 2005, MCC signed a
five-year, $295.3 million agreement (termed a “compact”) with Georgia to improve a road from
Javakheti to Samtskhe, repair a gas pipeline, create a small business investment fund, set up
agricultural grants, and improve municipal and rural water supply, sanitation, irrigation, roads,
and solid waste treatment. The MCC reported in July 2008 that it had so far disbursed $51.3
million to Georgia. 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.
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 70
shortfalls, the MCC and Armenia signed the compact, and it went into force in September 2006.
The MCC reported that as of the end of September 2008 it had disbursed $22.5 million to
Armenia. 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 response, the
Armenian government stated that it would devote $16.8 million of its own funds to carry out
initial road-building during 2008. MCC has indicated that it is waiting to the end of 2008 see if 71
Armenia makes progress on political reforms.
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 $38.36 million in direct humanitarian assistance to Georgia (as of
September 5). The Defense Department announced on September 8 that it had completed its
naval and air delivery of urgent humanitarian supplies to Georgia.

70 Millennium Challenge Corporation. 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, http://www.mca.gov. See also
Armenian Foreign Ministry. Oskanyan Thanks MCC for Millennium Compact, January 12, 2006
http://www.armeniaforeignministry.com.
71 Emil Danielyan,Armenia to Finance Road Project Frozen by U.S., Armenia Liberty, July 14, 2008.





On September 3, Secretary of State Rice announced a multi-year $1 billion aid plan for Georgia.
According to the State Department’s Deputy Director of Foreign Assistance Richard Greene, the
Administration envisaged that over one-half of the funds could be allocated from FY2008-
FY2009 budgets, and that the remainder for FY2010 could be appropriated by “the next Congress
and the next administration.” The Administration envisaged that its proposed $1 billion aid
package would be in addition to existing aid and requests for Georgia, such as FREEDOM
Support Act and Millennium Challenge Corporation (MCC) funds. 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 72
safeguarding Georgia’s continued economic growth.
Besides the envisaged aid, the White House announced that other initiatives might possibly
include broadening the U.S. Trade and Investment Framework Agreement with Georgia,
negotiating an enhanced bilateral investment treaty, proposing legislation to expand preferential
access to the U.S. market for Georgian exports, and facilitating Georgia’s use of the Generalized
System of Preferences. White House encouragement also was central to the elaboration by the
IMF of a $750 million aid package for Georgia (as described above, in the “International 73
Response” section).
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, appropriates an additional $365
million in aid for Georgia and the region for FY2009 (beyond that provided under continuing
appropriations based on FY2008 funding) for humanitarian and economic relief, reconstruction, th
energy-related programs and democracy activities (see also below, the “110 Congress
Legislation” section).
At the EU and World Bank-sponsored donors’ conference on October 22, 2008, USAID
Administrator Henrietta Fore announced that the United States would “make available by the end
of 2008 approximately $720 million of the $1 billion we have pledged.” Of this $720 million,
$250 million would be provided for direct budget support, $100 million for urgent civilian
reconstruction and stabilization needs, and up to $80 million for economic reconstruction. Also
included in the $720 million are funds “already redirected to assist Georgia: $100 million in new
funding for Georgia’s Millennium Challenge Corporation Compact [and] $150 million in
Overseas Private Investment Corporation support to make affordable mortgages available.” She 74
also pledged more humanitarian aid for the winter.

The United States has provided some security assistance to the region, and bolstered such aid
after September 11, 2001. In testimony in March 2005, Gen. James Jones, then-head of U.S.
European Command (EUCOM), stated that “the Caucasus is increasingly important to our
interests. Its air corridor has become a crucial lifeline between coalition forces in Afghanistan and

72 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.
73 Venla Sipila, “IMF, U.S. Confirm Financial Assistance to War-Torn Georgia, Global Insight, September 4, 2008.
74 U.S. Department of State. U.S. Pledges $1 Billion in Assistance to Georgia, October 22, 2008.





our bases in Europe. Caspian oil, carried through the Caucasus, may constitute as much as 25
percent of the world’s growth in oil production over the next five years ... This region is a
geographical pivot point in the spread of democracy and free market economies to the states of 75
Central and Southwest Asia.”
EUCOM initiatives in the region have included the Sustainment and Stability Operations Program
(SSOP) in Georgia, the South Caucasus Clearinghouse, and the Caspian Regional Maritime
Security Cooperation program. The 16-month SSOP was launched in early 2005 as a follow-on to 76
the Georgia Train and Equip Program (GTEP). SSOP was funded at $60.5 million in FY2005.
SSOP provided training for four battalions (2,000 troops), in part to support U.S.-led coalition
operations. In July 2006, the United States announced that the SSOP would be extended another 77
year and funded at $30 million. Prior to the Russia-Georgia conflict, the U.S. was providing th
initial military training to Georgia’s 4 Brigade for its eventual deployment to Iraq in Winter 78

2008. The Defense Department planned to budget approximately $35 million for this training.


The Clearinghouse aims to facilitate cooperation by sharing data on security assistance among
both donor and recipient countries. Gen. Bantz John Craddock, then-Commander of EUCOM,
testified in March 2008 that the Caspian Regional Maritime Security Cooperation program aims
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 are targeted to create an organic ability within Azerbaijan to ‘observe, evaluate, and 79
respond’ to events in their maritime domain.” (This program appears to combine elements of the
former Caspian Guard and Hydrocarbons programs.) The United States acknowledged in late

2005 that it had supplied two maritime surveillance radars to help detect and direct interdiction of 80


illicit weapons of mass destruction and other trafficking in the Caspian Sea. In November 2004,
Gen. Charles Wald, then-deputy head of EUCOM, suggested that the Administration was
exploring the establishment of “cooperative security locations” (CSLs)—sites without a full-time
U.S. military presence that would be used for refueling and short-duration deployments—in 81
Azerbaijan or Georgia.
In the wake of the August 2008 Russia-Georgia conflict that severely damaged Georgia’s military
capabilities, NATO’s Supreme Allied Commander for Europe, Gen. Craddock, visited Georgia on
August 21 to survey the destruction of infrastructure and military assets. The Department of

75 U.S. Senate. Committee on Armed Services. Testimony by Gen. James Jones, March 1, 2005. See also CRS Report
RL30679, Armenia, Azerbaijan, and Georgia: Security Issues and Implications for U.S. Interests, by Jim Nichol.
76 U.S. officials explained that the $64 million GTEP carried out in 2002-2004 would help Georgian military, security,
and border forces to combat Chechen, Arab, Afghani, Al Qaeda, and other terrorists who allegedly had infiltrated
Georgia. Some of these terrorists allegedly had fled U.S.-led coalition operations in Afghanistan, so the GTEP was
initially linked to OEF. Other reported U.S. aims include bolstering Georgias ability to guard its energy pipelines and
ensuring internal stability. The program formally ended in April 2004.
77U.S. Allocates $30 mln for SSOP Army Training Program, Civil Georgia, July 17, 2006.
78 Senate Armed Services Committee. Hearing on the Georgia-Russia Crisis: Implications and U.S. Response.
Testimony of Eric S. Edelman, Under Secretary of Defense for Policy, September 9, 2008.
79 U.S. Senate. Committee on Armed Services. Statement of General Bantz J. Craddock, March 13, 2008.
80Two Radar Stations Become Operational in Azerbaijan under the U.S.-Funded Caspian Guard Initiative,
International Export Control Observer, Center for Non-proliferation Studies, Monterey Institute of International
Studies, November 2005.
81 Vince Crawley, Army Times, November 22, 2004.





Defense later sent teams to evaluate Georgia’s economic, infrastructure, and defense needs. In
October 2008, Congress authorized $50 million for FY2009 for security assistance for Georgia th
(P.L. 110-417; see below, the “110 Congress Legislation” section).
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
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. On
September 21, 2006, NATO approved Georgia’s application for “Intensified Dialogue” with the
alliance, ostensibly because of Georgia’s military reform progress, although NATO also
emphasized that much more reform work needed to be done before Georgia might be considered
for NATO membership.
Although the United States reportedly urged that Georgia be considered for a Membership Action
Plan (MAP; preparatory to membership), NATO’s Riga Summit in November 2006 reaffirmed 82
support for an intensified dialogue to assist Georgia in implementing reforms. 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, 83
and stated that the issue of a MAP for Georgia would be revisited in December 2008. The
NATO Freedom Consolidation Act of 2007, signed into law in April 2007 (P.L. 110-17), urged
NATO to extend a MAP for Georgia and designated Georgia as eligible to receive security
assistance under the program established by the NATO Participation Act of 1994 (P.L. 103-447)
(see also below, Legislation). Troops from Armenia, Azerbaijan, and Georgia have served as
peacekeepers in NATO-led operations in Kosovo, and Azerbaijan supports NATO-led operations
in Afghanistan. In mid-April 2008, Georgia withdrew its 150 peacekeepers from Kosovo.
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-
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. In FY2005, the conference report (H.Rept. 108-792) on H.R.
4818 (P.L. 108-447; Consolidated Appropriations) directed that FMF funding for Armenia be
boosted to match that for Azerbaijan (from $2 million as requested to $8 million). The Members
appeared to reject the Administration’s assurances that the disparate aid would not affect the
Armenia-Azerbaijan military balance or undermine peace talks.
Apparently in anticipation of similar congressional calls, the Administration’s FY2006 foreign aid
budget requested equal amounts of FMF as well as IMET for each country. However, the FY2007

82 NATO. North Atlantic Council. Riga Summit Declaration, November 29, 2006. President Bush stated that the United
States supported Georgia’s NATO membership. “Remarks By President Bush In Riga, Latvia, PR Newswire,
November 28, 2006. Sen. Richard Lugar urged soon granting Georgia a MAP and suggested that NATOs 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.
83 See also CRS Report RL34701, NATO Enlargement: Albania, Croatia, and Possible Future Candidates, by Vincent
Morelli et al.





and FY2008 budget requests called for more such aid for Azerbaijan than for Armenia. Under
enacted appropriations provisions, equal amounts of such aid were provided in FY2007.
Consolidated appropriations for FY2008 (P.L. 110-161) specified equal amounts of FMF ($3
million) for each country. The continuing resolution for part-year FY2009 appropriations (P.L. th
110-329), generally calls for funding in line with that of FY2008 (see below, the “110 Congress
Legislation” section).

The Bush Administration and others maintain 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
rampant corruption in the three regional states otherwise has discouraged 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.
The U.S. Energy Department reports estimates of 7-13 billion barrels of proven oil reserves, and 84
estimates of 30-48 trillion cubic feet of proven natural gas reserves in Azerbaijan. Critics argue
that oil and gas from Azerbaijan will amount to a tiny percent of world exports of oil and gas, but
the Administration argues that these exports will nonetheless boost energy security somewhat for
European customers currently relying on Russia.
U.S. policy goals regarding energy resources in Central Asia and the South Caucasus are reflected 85
in the Administration’s 2001 energy policy report. They include supporting the sovereignty of
the states, their ties to the West, and U.S. private investment; breaking Russia’s monopoly over oil
and gas transport routes by encouraging the building of pipelines that do not traverse Russia;
promoting Western energy security through diversified suppliers; assisting ally Turkey; and
opposing the building of pipelines that transit Iran. The report recommended that the President
direct U.S. agencies to support building the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, expedite use
of the pipeline by oil firms operating in Kazakhstan, and support constructing a gas pipeline to
export Azerbaijani gas. Since September 11, 2001, the Administration has emphasized U.S.
vulnerability to possible energy supply disruptions and has encouraged Caspian energy
development.

84 U.S. Department of Energy. Energy Information Administration. Azerbaijan Country Analysis Brief, December
2007.
85 The White House. The National Energy Policy Development Group. Reliable, Affordable, and Environmentally
Sound Energy for America’s Future, May 16, 2001.





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 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. Azerbaijani media reported at the end of May 2006 that the first tanker on-loaded
oil at Ceyhan. Reportedly, some Azerbaijani oil reaches U.S. markets.
At the end of October 2008, the first oil from Kazakhstan started to be pumped through the BTC
pipeline. Reportedly, about 70,000 bpd of Kazakh oil is being barged across the Caspian Sea to
the BTC pipeline. In addition, some Kazakh oil is barged to Azerbaijan to be shipped by rail to
Georgia’s Black Sea port of Batumi. During the August 2008 Russia-Georgia conflict, some rail
shipments of Azerbaijani and Kazakh oil were disrupted.
A gas pipeline from Azerbaijan to Turkey (termed the South Caucasus Pipeline or SCP) was
completed in March 2007, and exports initially are planned to be 233 billion cubic feet per year.
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. To diversify export routes, Azerbaijan began an oil swap arrangement with
Iran, involving the barging of 5,000-10,000 bpd to Iran’s Neka seaport and Iran’s shipments of
equivalent amounts from a Persian Gulf port.
Some observers argue that the completion of the BTC and SCP has boosted awareness in the 86
European Union and the United States of the strategic importance of the South Caucasus. In
mid-November 2007, Greek Prime Minister Kostas Karamanlis and Turkish Prime Minister Rejep
Tayyip inaugurated a gas pipeline connecting the two countries. The ceremony was attended by
Azerbaijani President Ilkham Aliyev and U.S. Energy Secretary Samuel Bodman. Since some
Azerbaijani gas reaches Greece, the pipeline represents the first gas supplies from the Caspian
region to the EU. If a pipeline extension is built to Italy, this Turkey-Greece-Italy (TGI) pipeline
could permit Azerbaijan to supply gas to two and perhaps more EU members, providing a source
of supply besides Russia.
In March 2007, Azerbaijan and the United States signed a memorandum of understanding on
energy cooperation that called for discussions on the proposed TGI pipeline and a potential EU-
backed Nabucco gas pipeline from Turkey to Austria. In June 2007 and at subsequent forums,

86 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.





Deputy Assistant Secretary Bryza has urged building the TGI and Nabucco gas pipelines and a
trans-Caspian gas pipeline, so that Azerbaijani and Central Asian gas could be transported to
Europe. He has argued that these routes would be more economical than routes through Russia. In
August 2007, the U.S. Trade Development Administration granted Azerbaijan $1.7 million to
fund feasibility studies on building both an oil and a gas pipeline across the Caspian Sea to link to
the BTC pipeline and the SCP. The Nabucco pipeline has faced numerous delays, some of them
attributable to Russia’s counter-proposals to build pipelines that appear to reduce the efficacy of
the Nabucco pipeline and questions about supplies for the pipeline (see below). Latest EU
planning calls for construction on the Nabucco pipeline to begin in 2010 and be completed in

2013.


Some analysts raise concerns that without a trans-Caspian gas pipeline, there will not be enough
Azerbaijani gas to fill either the TGI or Nabucco pipelines, and argue that Iran also should be 87
considered as a gas supplier. Others suggest that Azerbaijan will be able to supply at least most
of the needed gas for both the TGI and Nabucco pipelines, because of recent promising
indications that there may be a huge new reservoir of gas off the Caspian seacoast. Highlighting
this point, Deputy Assistant Secretary Bryza stated in March 2008 that “we now believe as an
official U.S. Government view ... that Azerbaijan has enough gas to fill TGI, to launch Nabucco,
and perhaps even to fill Nabucco.” He stressed, nonetheless, that the United States also backed a 88
trans-Caspian gas pipeline as an additional source of supply for TGI and Nabucco.
Putin reached agreement in May 2007 with the presidents of Turkmenistan and Kazakhstan on the
construction of a new pipeline to transport Turkmen and Kazakh gas to Russia. This agreement
appears to compete with U.S. and EU efforts to foster building a trans-Caspian gas pipeline to
link to the SCP to Turkey. It also appears to compete with U.S. and EU efforts to foster building 89
the Nabucco gas pipeline from Turkey to Austria.
On March 19, 2007, Armenian President Robert Kocharyan and Iranian President Mahmoud
Ahmadinejad inaugurated an 88-mile gas pipeline from Tabriz in Iran to Kadjaran in Armenia.
Initial deliveries reportedly will be 14.1 billion cubic feet per year of Iranian (and possibly
Turkmen) gas. The Russian-controlled ArmRosGazprom joint venture operates the Iran-Armenia
pipeline. Work has started on the second part of the pipeline, a 123 mile section from Kadjaran to
Ararat. When it is completed in early 2009, 88.3 billion cubic feet of gas per year will be
supplied. Some of this gas will be used to generate electricity for Iran and Georgia, but the

87 U.S. Department of State. Transcript: U.S. Official Discusses Energy Security Agreement with Azerbaijan, March 22,
2007; Associated Press, June 6, 2007.
88 U.S. Department of State. Trans-Caspian and Balkan Energy Security: Matthew Bryza, Deputy Assistant Secretary
of State for European and Eurasian Affairs, On-the-Record Briefing with Greek Media, March 18, 2008.
89 According to some observers, Russia’s efforts to discourage the building of a trans-Caspian gas pipeline included an
agreement with Turkey in December 1997 that Russia would build a trans-Black Sea pipeline (termed “Blue Stream”)
to supply gas to Turkey. By building this pipeline, Russia hoped to discourage Turkey from importing Caspian Sea
region or Middle Eastern gas, which could be trans-shipped to Europe, according to these observers. Despite these
Russian efforts (the Blue Stream project was completed in 2005), Turkey still signed a framework agreement in 1998
and a gas supply agreement in May 1999 with Turkmenistan that envisaged the building of either a pipeline traversing
Iran or a trans-Caspian route through Azerbaijan and Georgia (a gas pipeline from Tabriz to Ankara began operating in
2001, but Turkmen gas is not being sold to Turkey through this pipeline). In September 1999, Turkmenistan also joined
Azerbaijan, Georgia, and Turkey in signing a declaration on a trans-Caspian gas pipeline. Plans at that time for a trans-
Caspian gas pipeline, however, were derailed in 2000 by a clash between Turkmenistan and Azerbaijan over how much
gas each nation could ship through the Baku-Turkey leg of the prospective gas pipeline, and by Turkmenistans
rejection of proposals from a consortium formed to build the trans-Caspian leg of the pipeline.





remainder may satisfy all Armenia’s other consumption needs, removing its dependence on 90
Russian gas transported via Georgia.

P.L. 110-329 (H.R. 2638)
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009. Introduced
on June 7, 2007. Signed into law on September 30, 2008. Division B, Title 2, Chapter 1 provides
an additional $365 million for the “Economic Support Fund,” to be made available for assistance
for Georgia and the region for humanitarian and economic relief, reconstruction, energy-related
programs and democracy activities, and which may be transferred to, and merged with, funds
appropriated under the headings “Assistance for the Independent States of the Former Soviet
Union” and “International Disaster Assistance,” of which up to $8 million may be transferred to,
and merged with, funds made available for “International Broadcasting Operations” for
broadcasting to Georgia, Russia and the region. Provides that none of the funds made available in
prior Acts making appropriations for foreign operations may be reprogrammed for assistance for
Georgia.
P.L. 110-417 (S. 3001)
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009. Sec. 1207 extends the
1207 authority through September 30, 2009. Authorizes the Secretary of Defense to provide
services to, and transfer defense articles and funds to, the Secretary of State for reconstruction,
security, or stabilization assistance to Georgia. Provides that up to $50 million in assistance may
be provided to Georgia, without that assistance counting against the authorized annual funding
limit. Introduced on May 12, 2008. Passed the Senate on September 17, 2008. Passed the House
on September 24, 2008. The Senate agreed to the House amendment on September 27, 2008.
Signed into law on October 14, 2008.
P.L. 110-17 (S. 494, Lugar)
The NATO Freedom Consolidation Act of 2007. Endorses NATO enlargement and the timely
admission of new NATO members. Urges NATO to extend a Membership Action Plan for
Georgia. Designates Georgia as eligible to receive security assistance under the program
established by the NATO Participation Act of 1994 (P.L. 103-447). Introduced on February 6,
2007. Ordered to be reported without amendment by the Foreign Relations Committee on March

6, 2007 (H.Rept. 110-34). Passed the Senate on March 16, 2007. Passed the House on March 26,


2007. Signed into law on April 9, 2007 (P.L. 110-17).


P.L. 110-53 (H.R. 1, Bennie Thompson)
Implementing the 9/11 Commission Recommendations Act of 2007. Introduced on January 5,
2007. Passed the House on January 9, 2007. Passed the Senate with an amendment in the nature
of a substitute on July 9, 2007. Conference report (H.Rept. 110-259) agreed to in the Senate on
July 26 and in the House on July 27. Signed into law on August 3, 2007 (P.L. 110-53). Title 21

90 Platt’s Commodity News, May 31, 2007.





calls for the executive branch to promote democratization and respect for human rights in
nondemocratic and democratic transition countries. Sec. 2033 calls for expanding scholarship,
exchange, and library programs in predominantly Muslim countries to enhance respect for
democracy and human rights.
P.L. 110-161, H.R. 2764 (FY2008)
Consolidated Appropriations Act for FY2008. On December 17, 2007, the House considered two
amendments to H.R. 2764 as received from the Senate. The first amendment inserted a
Consolidated Appropriations Act covering eleven regular appropriations bills, including Division nd
J: Department of State, Foreign Operations, and Related Programs. The 2 amendment dealt with
emergency supplemental military funding. Agreed to in the House on December 17, 2007. The
Senate offered an amendment to House amendment 2, and concurred with House amendment 1.
On December 19, the message on the Senate action was received in the House. The House agreed
with the Senate amendment to the House amendment 2, and the bill was cleared for the White
House. Signed into law on December 26, 2007. Calls for $58.5 million in Freedom Support Act
aid for Armenia, $19 million for Azerbaijan, and $50.5 million for Georgia. Also provides equal
amounts of $3 million each for Armenia and Azerbaijan in Foreign Military Financing (all
amounts are subject to a budget rescission of .81%, to be applied with some discretion on a
country-by-country basis). Restates exceptions to Section 907 of the FREEDOM Support Act.
Provides that funds made available for the Southern Caucasus region may be used,
notwithstanding any other provision of law, for confidence-building measures and other activities
in furtherance of the peaceful resolution of the regional conflicts, especially those in the vicinity
of Abkhazia and Nagorno Karabakh.
H.Res. 102/H.Res. 155 (Crowley)/S.Res. 65 (Biden)
Condemns the assassination of Turkish-Armenian journalist and human rights advocate Hrant
Dink. H.Res. 102 was introduced and referred to the Committee on Foreign Affairs on January
29, 2007. H.Res. 155 was introduced and referred to the Committee on Foreign Affairs on
February 12, 2007. S.Res. 65 was introduced and referred to the Foreign Relations Committee on
February 1, 2007. Ordered to be reported with an amendment in the nature of a substitute on
March 28. 2007. Placed on the legislative calendar on March 29, 2007.
H.Res. 106 (Schiff)/S.Res. 106 (Durbin)
Calls on the President to ensure that the foreign policy of the United States reflects appropriate
understanding and sensitivity concerning issues related to human rights, ethnic cleansing, and
genocide documented in the United States record relating to the Armenian Genocide. H.Res. 106
was introduced on January 30, 2007. S.Res. 106 was introduced on March 14, 2007. H.Res. 106
was ordered to be reported by the House Foreign Affairs Committee on October 10, 2007.
H.R. 2869 (Pitts)
The Central Asia Education Enhancement Act of 2007. Directs the Secretary of State to establish
a pilot program of public policy internships in the United States for undergraduate and graduate
students from Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan,
Turkmenistan, and Uzbekistan. Introduced and referred to the Foreign Affairs Committee on June

26, 2007.





H.Con.Res. 409 (Shimkus)
Expresses the sense of Congress that Georgia and Ukraine are strong allies that have made
important progress in the areas of defense, democratic, and human rights, and that the United
States should take the lead in supporting the awarding of a Membership Action Plan to Georgia
and Ukraine at the NATO Foreign Ministers’ meeting in December 2008. Introduced on
September 9, 2008. Referred to the House Foreign Affairs Committee.
H.Con.Res. 421 (Schwartz)
Calls on the International Olympic Committee to designate a new venue for the 2014 Winter
Olympic Games. Introduced on September 18, 2008. Referred to the House Foreign Affairs
Committee.
H.Con.Res. 430 (Hastings)
Expresses the sense of Congress that the policy (popularly known as the “Stimson Doctrine”) of
the United States of not recognizing territorial changes effected by force, should continue to be
the guiding foreign policy of the United States in diplomatic discourse. Urges Russia to withdraw
its recognition of South Ossetia and Abkhazia as independent countries and to refrain from acts
and policies that undermine the principle of inviolability of borders and territorial integrity.
Introduced on September 25, 2008. Referred to the House Committee on Foreign Affairs.
H.R. 6851 (Hastings)
Republic of Georgia Enhanced Trade Assistance, Economic Recovery, and Reconstruction Act of
2008. Authorizes assistance to facilitate trade with, reconstruction efforts, and economic recovery
in Georgia, which are necessitated by the destruction and disruption caused by the August 2008
Russia-Georgia war. Authorizes to be appropriated $500 million to remain available until
expended. Introduced on September 9, 2008. Referred to the House Foreign Affairs Committee
and the Financial Services Committee.
H.R. 6911 (Berman)
Stability and Democracy for Georgia Act of 2008. Authorizes assistance to meet the urgent
humanitarian needs of the people of Georgia, and for other purposes. Introduced on September

16, 2008. Referred to the House Foreign Affairs Committee. Committee mark-up completed.


S. 3567 (Clinton)
Calls for establishing a Commission on the conflict between Russia and Georgia to examine the
causes of the conflict and make recommendations on U.S. policy toward Russia, Georgia, and
other countries in the region. Calls for the Commission to have nine members and to operate for
six months. Introduced on September 24, 2008. Referred to the Senate Foreign Relations
Committee.
S.Res. 690 (Kerry)
Expresses the sense of the Senate concerning the conflict between Russia and Georgia. States that
irrespective of the origins of the recent conflict in Georgia, the disproportionate military response
by Russia is in violation of international law. States that Russia’s actions in Georgia have





diminished its standing in the international community and should lead to a review of multilateral
and bilateral agreements. Calls on the United States to provide rebuilding aid and support
democracy in Georgia, and to reaffirm that Georgia will eventually become a member of NATO.
Introduced and passed by the Senate on September 27, 2008.
S.Res. 33 (Lugar)
Urges the U.S. government to open negotiations on a free trade agreement with Georgia to
eliminate tariffs and non-tariff barriers on trade in goods. Introduced and referred to the
Committee on Finance on January 18, 2007.
H.Con.Res. 183 (Hastings)
Calls on the Azerbaijani government to release Farhad Aliyev and Rafiq Aliyev from detention
pending a fair and open trial. Introduced and referred to the House Committee on Foreign Affairs
on July 12, 2007.
S.Res. 391 (Lugar)
Calls on the President to express support for the planned presidential election in Georgia with the
expectation that such election will be held in a manner consistent with democratic principles.
Introduced and referred to the Committee on Foreign Relations on December 6, 2007. Agreed to
by the Senate on December 13, 2007.
S.Res. 439 (Lugar)/H.Res. 997 (Wexler)
Expresses the strong support of the Senate for NATO to enter into a Membership Action Plan
with Georgia and Ukraine. Senate version introduced on January 31, 2008. Agreed to by the
Senate on February 14, 2008. House version introduced on February 25, 2008. Passed the House
on April 1, 2008.
S. 2563 (Lugar)
Authorizes the extension of nondiscriminatory treatment (normal trade relations treatment) to the
products of Azerbaijan. Introduced and referred to the Committee on Finance on January 29,

2008.


S.Res. 523 (Biden)
Expresses the strong support of the Senate for the NATO declaration at the Bucharest Summit
that Ukraine and Georgia will become members of the Alliance. Urges the foreign ministers of
NATO member states at their upcoming meeting in December 2008 to consider favorably the
applications of the governments of Ukraine and Georgia for Membership Action Plans.
Introduced on April 21, 2008. Passed the Senate on April 28, 2008.
H.Res. 1166 (Wexler)/S.Res. 550 (Biden)
Expresses the sense of the House/Senate regarding provocative and dangerous statements and
actions made by officials of the government of the Russian Federation concerning the territorial
integrity of the republic of Georgia. Condemns recent decisions made by the Russian government
to establish ‘official ties’ with the breakaway regions of Abkhazia and South Ossetia, calls upon





the Russian government to disavow this policy, which gives the appearance of being motivated by
an appetite for annexation, and calls for all countries to eschew rhetoric that undermines the peace
process. The House version also calls for a NATO Membership Action Plan for Georgia and for
the United Nations to investigate the shootdown of unmanned aerial vehicles over Abkhazia.
House version introduced on April 29, 2008. Passed the House on May 7, 2008. Senate version
introduced on May 2, 2008. Approved by the Senate on June 3, 2008.
H.Res. 1187 (Shuster)
Promotes global energy supply security through increased cooperation among the United States,
Turkey, Azerbaijan, and Georgia, by diversifying sources of energy, and implementing certain oil
and natural gas pipeline projects for the safe and secure transportation of Eurasian hydrocarbon
resources to world markets. Introduced on May 13, 2008, and referred to the House Committee
on Foreign Affairs.
H.R. 6079 (Schiff)
Calls on the President and Secretary of State to urge Turkey to immediately lift its ongoing
blockade with Armenia. Directs the Secretary of State to submit a report outlining the steps taken
and plans made by the United States to end Turkey’s blockade of Armenia. Introduced on May

15, 2008, and referred to the House Committee on Foreign Affairs.


S.Res. 612 (Biden)
Expresses the sense of the Senate that President Bush, Russian President Medvedev, and other
participants in the upcoming 2008 Group of Eight (G8) Summit in Japan should work together to
foster a more constructive relationship, and that the Russian government should eschew behaviors
that are inconsistent with the Group’s objectives of protecting global security, economic stability,
and democracy. Among such behaviors, the resolution mentions Russia’s attempts to undermine
the territorial integrity of Georgia through its support for Georgia’s breakaway regions of South
Ossetia and Abkhazia, and Russia’s act of shooting down an unmanned Georgian aircraft that was
flying over Abkhazia on April 20, 2008. Introduced and passed by the Senate on July 14, 2008.
Table 1. U.S. Foreign Aid to the Region,
FY1992-FY2008, and FY2009 Request
(millions of dollars)
South Caucasus FY1992-FY2007 FY2007 Budgeted FY2008 FY2009
Country Budgeted Aida Aida Estimateb Requestb
Armenia 1,746.08 71.64 64.41 29.9
Azerbaijan 753.26 74.85 28.4 26.9
Georgia 1,898.64 131.58 66.44 69.22
Regional 38.73 2.0
Total 4,436.71 280.07 159.25 126.02
Percent 13.6 14 33 29
Sources: State Department, Office of the Coordinator for U.S. Assistance to Europe and Eurasia, January 2008; State
Department, Congressional Budget Justification for Foreign Operations, FY2008.
a. FREEDOM Support Act and Agency budgets.





b. FREEDOM Support Act and other Function 150 funds. Includes Peace Corps funding but does not include
Defense or Energy Department funding, funding for exchanges, or Millennium Challenge Corporation
programs in Armenia and Georgia.
Figure 1. Map of the Region
Source: Map Resources. Adapted by CRS.
Jim Nichol
Specialist in Russian and Eurasian Affairs
jnichol@crs.loc.gov, 7-2289