ENPI Info Centre
May 31 2012

Negotiations on an EU-Azerbaijan Association Agreement to replace the
current ENP Action Plan, which expired at the end of 2011, progressed
at a slow pace last year, and the two sides agreed to an open-ended
extension of the Action Plan, until the Association Agreement is
signed.Negotiations on a Deep and Comprehensive Free Trade (DCFTA)
could not start as Azerbaijan is not a member of WTO - a pre-condition
to the start of DCFTA negotiations. These are some of the conclusions
of the Country Report on how EU-Azerbaijan relations evolved between 1
January and 31 December 2011 released by the European Commission. The
report includes recommendations on how the country can step up the
implementation of the AP.

The report said Azerbaijan needed to make significant further efforts
to meet its Action Plan commitments regarding democracy, including
electoral processes, the protection of human rights and fundamental
freedoms and the independence of the judicial system. It cited the
heavy-handed suppression of a wave of protest actions in Marchas a
major setback on the democratisation and human rights front.

Azerbaijan launched a welcome anti-corruption campaign in early 2011,
but its impact has been modest, the report said. It made progress
in the fight against organised crime, terrorism, illicit trafficking
and money laundering.

Despite the economic slowdown, Azerbaijan made further progress towards
achieving the economic objectives of the Action Plan. The growth in
the non-oil economy, however, was largely driven by oil-financed
public spending rather than by self-sustained development in the
private sector. The report said further vigorous structural reforms
were needed to boost private sector development by improving economic
governance and opening up competition.

The EU and Azerbaijan made good progress in enhancing energy
cooperation including work to develop the Southern Gas Corridor,
with the signature in January 2011 of a Joint Declaration confirming
Azerbaijan's commitment to ensure supplies to the EU.

Negotiations on the Nagorno-Karabakh conflict within the Minsk Group
produced no tangible results in 2011. Amidst increasing tension along
the Line of Contact,mediation efforts resulted in marginal progress
on mechanisms to investigate the violation of the ceasefire agreement.

The report comes up with a number of recommendationswith a view to
sustained implementation of the ENP Action Plan in 2012, in particular
inviting Azerbaijanto:

Extend full cooperation to the PACE rapporteur on political prisoners.

Swiftly implement the Human Rights Action Plan adopted in December

Step up efforts together with Armenia to reach agreement on the Madrid
Principles in accordance with the commitments made by the Presidents
of Armenia and Azerbaijan in the framework of the Minsk Group.

Provide unconditional access for representatives of the EU to
NagornoKarabakh and surrounding regions.

Ensure transparency in implementing the laws governing the process
of demolitions, expropriations and forced evictions in Baku and
the regions.

Adopt the draft law on defamation which provides for the abolition
of criminal liability for defamation and insult.

Bring legislation on elections, freedom of assembly, freedom of
association and media freedom into line with international standards
and ensure its full implementation.

Step up reform efforts in all aspects of the judicial system:
prosecution, trial, sentencing, detention and appeals.

Address outstanding issues in public financial management, notably
on transparency and accountability in relation to the budget cycle.

Implement with determination comprehensive measures to tackle
corruption and to improve the business and investment climate,
including reducing the oligopolistic structure of the economy.

The AzerbaijanProgress Report is part of a set of documents released
by the EU in the framework of its annual assessment of the European
Neighbourhood Policy.

The package also incudes reports on progress in relations between the
EU and its other Neighbours in the East (Armenia, Georgia,Moldovaand
Ukraine), the Report on the Eastern Partnership (EaP) activities
in 2011, which takes stock of the progress in implementation of the
EaP, and the Roadmap to the autumn 2013 EaP Summit, which sets out
the objectives to be pursued in the near future and the expected
achievements. (EU Neighbourhood Info)