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Azerbaijan - US Relations

The United States opened an Embassy in Azerbaijan's capital, Baku, in March 1992. The United States has been actively engaged in international efforts to find a peaceful solution to the Nagorno-Karabakh conflict. The U.S. has played a leading role in the Minsk Group, which was created in 1992 by the Conference on Security and Cooperation in Europe--now the OSCE--to encourage a peaceful, negotiated resolution to the conflict between Azerbaijan and Armenia. In early 1997, the U.S. heightened its role by becoming a Co-Chair of the Minsk Group, along with Russia and France.

In 2007 Azerbaijan granted NATO the permission to use two of its military bases and an airport to "back up its peace-keeping operation in Afghanistan" including support for NATO's "supply route to Afghanistan". The airport and two military bases are slated to be "modernized to meet NATO standards". Washington has confirmed in this regard that it would "support the modernization of a military airport in the framework of the Individual Partnership Action Plan (IPAP) signed between Azerbaijan and NATO.

As the development of these relations promotes the economic and political progress of Azerbaijan, the implementation of Caspian oil and gas projects, the establishment of the trans-regional corridors, communicating Europe and Asia, the cooperation between Azerbaijan and USA is the major element in the integration of the country to the global economic system. The recent developments and new challenges to the international security caused the necessity for the closer cooperation between Azerbaijan and USA. Azerbaijan as the most important partner of USA in the region continues the development of these strategic relations. At the same time, the Azeri leadership is striving to make Azerbaijan a NATO member. As of January 1, 2007 the Army staff and the Baku corps had been operating on the basis of NATO documents.

Azerbaijan is a Western-oriented, Muslim-majority country that plays a key role in the Greater Middle East. The Global War on Terrorism has significantly raised U.S. interests in Azerbaijan, which revolve around three strategic goals: security, political and economic reform, and energy. U.S. Government (USG) priorities in its relations with Azerbaijan include: cooperation in combating terrorism and other trans-border threats; regional stability, especially the peaceful settlement of the Nagorno-Karabakh conflict; a successful transition to a democratic political system and market economy; and, the movement of Azerbaijan's hydrocarbon resources to international markets while ensuring that revenues from these resources lead to broad-based economic growth.

The President's initial waiver of the FREEDOM Support Act (FSA) Section 907 restrictions in January 2002 on most forms of assistance to the Government of Azerbaijan (GOAJ) gave the USG new tools to advance its interests. Since then, USG assistance programs have focused on counter-terrorism, border security, law enforcement, corruption, human trafficking, and economic reform. Azerbaijan has lent its airspace in support of Operation Enduring Freedom (OEF), provided important information-sharing and law-enforcement cooperation, and deployed Azerbaijani soldiers alongside U.S. troops in Kosovo, Afghanistan, and Iraq. Azerbaijan is also the linchpin of the East-West energy corridor and in the future may be an important source of natural gas to European markets.

Azerbaijan is a staunch partner of the U.S. in the Global War on Terrorism, with security cooperation predating the 9/11 attacks. Overflight rights in Azerbaijani airspace are crucial to USG interests as it is the only route into Central Asia outside Russian or Iranian airspace. Azerbaijan also continues to participate in the North Atlantic Treaty Organization (NATO) Partnership for Peace (PfP) and in various U.S. training programs. The USG continues to work with Azerbaijan to strengthen its control of its maritime and land borders against the trafficking of narcotics, small arms, weapons of mass destruction (WMD) components, and other illicit articles. The USG also remains actively engaged, as one of the three co-chairs of the Organization for Security and Cooperation in Europe (OSCE) Minsk Group, in seeking a settlement to the conflict over Nagorno-Karabakh.

USG assistance for democratization and civil society development encourages the GOAJ to honor its international commitments to human rights and create an environment conducive to civil society, independent media, and the conduct of free and fair elections. The USG also seeks to assist the GOAJ in establishing rule of law and the professionalization of government agencies. USG economic reform programs encourage the continued transformation of Azerbaijan's economy to a market-based system integrated with the international economy, and helps develop mechanisms for oil revenue management so that Azerbaijan's economy can integrate increasing energy revenues without suffering hyperinflation.

It is longstanding USG policy that Caspian energy resources should be brought to world markets via multiple pipelines independent of existing Soviet-era monopolies. Azerbaijan, as both a major oil and gas producer and an important transit country, is key to the continued success of this policy. The centerpieces of this strategy are the Baku-Tbilisi-Ceyhan oil pipeline (BTC) and the South Caucasus gas pipeline (SCP). Azerbaijan and Kazakhstan completed an inter-government agreement in 2006 that will establish a system by which Kazakhstan's oil will cross the Caspian by tanker to enter BTC and be shipped onward to world markets. The U.S. strongly supports this project.

The U.S. supports American investment in Azerbaijan. U.S. companies are involved in offshore oil development projects with Azerbaijan and have been exploring the emerging investment opportunities in Azerbaijan in other fields, such as telecommunications.

The United States is committed to aiding a transition to democracy in Azerbaijan and its formation of an open market economy. The Freedom Support Act, enacted in October 1992, has been the cornerstone of U.S. efforts to help Azerbaijan during this transition. Under the Freedom Support Act, the U.S. provided approximately $27 million in humanitarian, democracy, and reform assistance to Azerbaijan in FY 2008.

The U.S. and Azerbaijan have signed a bilateral trade agreement, which entered into force in April 1995 and confers to Azerbaijan the status of most favored nation. The United States also has a bilateral investment treaty with Azerbaijan and in 2008 named Azerbaijan a beneficiary country under the Generalized System of Preferences program.

U.S. humanitarian programs in Azerbaijan focus on community development, health and economic opportunities, and support services, including training and business management consultations for vulnerable populations. Under a new humanitarian initiative, the Department of State EUR/ACE Humanitarian Program plans to complete several Small Reconstruction Projects (SRP) in Azerbaijan. These projects raise the standard of beneficiaries by improving conditions in beneficiary institutions such as schools, clinics, orphanages, and homes for the elderly. This program will also continue to provide non-medical donated assistance to vulnerable groups, especially internally displaced persons (IDPs), throughout Azerbaijan. A new focus on quality health services and practices focuses on better use of health resources and health care practices through health care reform, healthy lifestyles, and the rights and responsibilities of the patient. Technical assistance is being provided to the Ministry of Health to develop policy, legal and regulatory, and finance reforms The U.S. continues its humanitarian demining efforts in Azerbaijan. The Peace Corps, which began working in Azerbaijan in 2003, has 55 volunteers. Some teach English at the secondary level and others work with non-governmental organizations engaged in small and micro enterprise development.