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MEMO/10/174

Brussels, 12 May 2010

ENP Country Progress Report 2009 – Azerbaijan

The Commission published on 12 May 2010 the so-called neighbourhood package, consisting of an overall assessment of five years of implementation of the European Neighbourhood Policy (ENP), 12 country reports on developments in 2009, including one on Azerbaijan, and a sector report.

In 2009 Azerbaijan made some progress in the implementation of the ENP Action Plan, notably in areas related to economic and social governance. It fared comparatively well during the year despite the global financial crisis, which allowed the government to increase social spending and capital investment. Progress was also made in the aviation through the signature of the horizontal air services agreement and fight against money laundering. However, only limited progress was made as regards the accession to the World Trade Organisation (WTO). There was no substantial progress with respect to the protection of human rights and fundamental freedoms. Cases of intimidation of journalists and persons critical of the authorities continue to be reported as well as questionable legal proceedings against political activists.

In 2010 further efforts are needed in the field of political dialogue and reforms, including justice sector and the strengthening of the rule of law, notably the independence of judiciary. Proper implementation of the adopted legislation in all areas, continued efforts to fight corruption, notably by enforcing the relevant legislation, would be of key importance.

Negotiating directives for a future Association Agreement were adopted by the EU on 10 May 2010.

Political dialogue and governance, including CFSP

Ratification of two UN Convention and protocols: on the Rights of Persons with Disabilities and against Torture. The Commissioner for Human Rights (Ombudsman) was designated as the implementing mechanism for the Protocols.

In March 2009 an Amnesty Act was adopted covering more than for 9,000 persons, including some opposition journalists The President pardon in December covered 99 persons including journalists critical of the government.

In 2009, Azerbaijan aligned with 56 out of 138 EU’s Common Foreign Security Policy (CSFP) declarations it had been invited to join.

The dialogue for negotiating a peaceful resolution of the Nagorno-Karabakh conflict intensified considerably at the highest level in 2009.

Economic integration and trade

  • In 2009 the economy grew strongly by 9.3 % of the GDP and inflation was 2%.

  • EU’s trade with Azerbaijan decreased in 2009: EU exports fell by 22.1% and imports by 31.2%, as a result of the global slow-down. The EU is Azerbaijan’s main trading partner (53.7 % share in its overall trade in 2008).

  • Azerbaijan benefits from the EU Generalised System of Preferences Plus (GSP+) for the years 2009-2011.

  • In January 2010 Azerbaijan became an affiliate member of the European Committee for Standardisation (CEN).

  • In 2009, the European Commission authorised Azerbaijan to export caviar to the EU as from 2010, thereby replacing a transitional bilateral regime.

Promoting mobility, fighting irregular migration

Within the Eastern Partnership, the Commission wants to further improve the mobility of bona fide business people, tourists, students and academics and intends to propose launching negotiations on Visa facilitation and readmission agreements, when conditions are met.

The Azerbaijani State Migration Service, which became fully operational in 2008, was granted the status of a law enforcement body and a third regional branch was set up.

The national legal framework on fight against trafficking in human beings was improved – a shelter for children victims of trafficking was opened in October and a special agency was formed. Azerbaijan signed in February 2010 relevant convention of the Council of Europe.

Sector cooperation - examples

Energy: Energy is the main revenue basis for the country and 99% of its total exports to the EU are hydrocarbons. Azerbaijan is committed to play a role in strengthening the EU’s energy security, in particular by supporting the development of the Southern Gas Corridor.

Environment: The Regional Environmental Centre for Caucasus (REC) was consolidated both financially and in terms of internal organisation. It promotes capacity building and cooperation between various stakeholders.

Business climate: Azerbaijan reduced considerable the time needed for the registration of companies from 105 days in 2004 to 10 days in 2010. In June 2009, a package of 46 amendments to the Tax Code was adopted aimed at strengthening the protection of taxpayer’s rights, strengthening tax administration, improving tax control and reducing the burden on taxpayers, including businesses.

A new Anti-Money Laundering law was adopted in February 2009. A financial intelligence unit became operational under the Central Bank.

Transport: Azerbaijan signed in July 2009 the horizontal air services agreement which brings existing bilateral agreements with EU Member States in line with the EU law. A working arrangement on safety cooperation was also signed with the European Aviation Safety.

Education: In 2007-2009, thanks to Erasmus Mundus grants 118 Azerbaijani students and academics could pursue studies in EU universities for up to three years.

EU–Azerbaijan – BACKGROUND

THE POLICY

The European Neighbourhood Policy governs the relations between the EU and Azerbaijan. In 2009 the EU launched the Eastern Partnership, the Eastern dimension of the ENP framework, aiming at substantially upgrading engagement with the six Eastern neighbours via:

- Bilateral track, whose objectives include the establishing of Association Agreements with Deep and Comprehensive Free Trade Areas, once conditions have been met, as well as progress on visa and mobility issues

- Multilateral track (i.e. intergovernmental platforms and Flagship Initiatives).

This approach allows for gradual political association and deeper economic integration.

FACTS AND FIGURES

1999: EU-Azerbaijan Partnership and Cooperation Agreement entered into force.

2006: EU- Azerbaijan Action Plan was approved

2006: EU-Azerbaijan Memorandum of Understanding on a strategic partnership in the field of energy.

2009: Azerbaijan ratified the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions

2009: Neighbourhood Investment Facility - Azerbaijan is eligible for three regional projects for a total value of € 24 million in support of the energy and the private sectors

2007-2010: The ENPI1 envelope for Azerbaijan stands at € 88 million

2011-13: The indicative ENPI envelope of € 122.5 million announced by the Commission

More info at:

http://ec.europa.eu/world/enp/documents_en.htm

http://ec.europa.eu/external_relations/azerbaijan/index_en.htm

http://ec.europa.eu/world/enp/index_en.htm

1 :

the European Neighbourhood Partnership Instrument


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