Exploring Azerbaijan's Relationship With The European Economic Area

Azerbaijan, officially the Republic of Azerbaijan, is a transcontinental country at the boundary of Eastern Europe and West Asia. It is not a member of the European Economic Area (EEA). However, it has been working to strengthen its relationship with the EEA and the European Union (EU). Azerbaijan is part of the European Neighbourhood Policy (ENP) and the Eastern Partnership initiative, and it maintains positive relations with the Council of Europe. The EU is Azerbaijan's biggest export and import market and is the country's largest foreign investor. The EU and Azerbaijan have collaborated on various political agreements, with the EU-Azerbaijan Partnership and Cooperation Agreement of 1999 being the most notable.

Azerbaijan's relationship with the EU

Azerbaijan is not in the European Economic Area (EEA). However, the country has maintained a positive relationship with the European Union (EU) since gaining independence from the Soviet Union in 1991. Azerbaijan is part of the EU's European Neighbourhood Policy (ENP) and the Eastern Partnership initiative, and a member of the Organisation of the Black Sea Economic Cooperation (BSEC).

Political Cooperation

The EU and Azerbaijan have worked together to conclude various political agreements, the most important of which is the EU-Azerbaijan Partnership and Cooperation Agreement (1999). This agreement aims to enhance trade, investment, the economy, legislation and culture within the framework of the EU-Azerbaijan Partnership and Cooperation.

Economic and Trade Relations

The EU is Azerbaijan's first trading partner, representing 48.6% of Azerbaijan's total trade. The EU is also Azerbaijan's biggest export and import market, with a 60.7% and 31.8% share in Azerbaijan's total exports and imports, respectively. The EU is a key foreign investor in Azerbaijan, with Foreign Direct Investment (FDI) in the country reaching €4.7 billion in 2013.

Energy Cooperation

Azerbaijan is a strategic energy partner for the EU, currently supplying around 4.3% of the EU's oil imports. The Southern Gas Corridor is a strategic initiative to bring gas from the Caspian Sea to European markets, enhancing the security of energy supplies in Europe. In July 2022, the European Commission signed an agreement with Azerbaijan to increase natural gas imports.

Cultural and Public Diplomacy

Cultural and public diplomacy are key strands of the EU's foreign policy work. The EU Delegation has organized various festivals in Azerbaijan, including the European Film Festivals, the "Imagine" Euro Tolerance Festival, and the "Fantazia" Cultural Heritage Festival. These events aim to build cultural links between EU countries and Azerbaijan and promote European values.

Civil Society Dialogue

The EU supports civil society in Azerbaijan through specific thematic instruments such as the European Instrument for Democracy and Human Rights (EIDHR) and the Non-State Actors Programme. Civil society and NGOs are considered vital for democracy, human rights, the rule of law, good governance, and sustainable development.

Migration Management

The EU and Azerbaijan have cooperation frameworks in place, such as the Readmission and Visa Facilitation Agreements, which aim to enhance Azerbaijan's capacities in migration and border management.

Future Prospects

Discussions on updating the legal basis for relations between the EU and Azerbaijan have been ongoing since 2018. While Azerbaijan is not a member of the EEA, the positive relationship and close cooperation between the two indicate a potential for further integration and collaboration in the future.

The EU-Azerbaijan Partnership and Cooperation Agreement

Azerbaijan is not in the European Economic Area (EEA). However, it has been working closely with the European Union (EU) since 1991, and the two parties have maintained a positive relationship over the years.

Political Dialogue and Cooperation:

The agreement establishes a partnership between the EU and Azerbaijan, with the shared objectives of strengthening political dialogue, enhancing economic cooperation, and promoting sustainable development. Regular political dialogue is to be held between the parties, fostering closer ties and supporting political and economic reforms in Azerbaijan. The agreement also recognises the importance of regional cooperation and encourages initiatives that promote cooperation and mutual confidence among the countries of the Transcaucasus region.

Trade and Investment:

The PCA promotes free trade and investment between the EU and Azerbaijan. It ensures the reciprocal elimination of quantitative restrictions on goods traded between the two parties, with goods traded at market-related prices. The agreement also includes provisions for the cross-border supply of services, aiming to gradually allow the supply of services by companies established in one party's territory to the other party. Additionally, it grants national treatment to companies, ensuring non-discriminatory treatment in areas such as working conditions, remuneration, and dismissal for legally employed individuals.

Economic Cooperation:

The agreement establishes economic cooperation between the EU and Azerbaijan, contributing to the economic reform, recovery, and sustainable development of Azerbaijan. This cooperation includes areas such as human resource development, enterprise support, agriculture, energy, transport, tourism, and regional cooperation. The EU provides technical assistance to Azerbaijan in various sectors, including privatisation, financial services development, and legislative approximation with EU standards.

Standards and Regulations:

The PCA promotes the alignment of Azerbaijan's standards and regulations with those of the EU. This includes areas such as customs law, company law, banking law, intellectual property rights, protection of workers' rights, environmental protection, and transport. The EU provides technical assistance to support Azerbaijan in implementing these measures and improving its legislative framework.

Financial Cooperation:

The agreement includes provisions for financial cooperation in the form of technical assistance grants from the EU to Azerbaijan. This assistance aims to accelerate Azerbaijan's economic transformation and is provided within the framework of the EU's Technical Assistance to the Commonwealth of Independent States (TACIS) programme.

Institutional Provisions:

The agreement establishes a Cooperation Council and a Cooperation Committee to supervise its implementation and make appropriate recommendations. It also sets out rules for dispute settlement and mutual assistance in customs matters between the administrative authorities of the EU and Azerbaijan.

Cultural Cooperation:

The PCA promotes cultural cooperation between the EU and Azerbaijan, including the exchange of information and experience in the protection and maintenance of historical and cultural sites. It also encourages cultural exchanges between institutions, artists, and other individuals working in the arts.

Human Rights and Democracy:

The agreement includes provisions for cooperation on matters relating to the establishment and reinforcement of democratic institutions, the rule of law, and the protection of human rights and fundamental freedoms according to international law and OSCE principles. This cooperation takes the form of technical assistance programmes and training to support the drafting and implementation of relevant legislation, improve the functioning of the judiciary, and enhance the electoral system.

Prevention of Illegal Activities and Immigration:

The PCA establishes cooperation between the EU and Azerbaijan to prevent and control illegal activities, including economic crimes, corruption, and the illegal trade of goods. It also includes provisions for preventing and controlling illegal immigration, with both parties agreeing to readmit their nationals who are illegally present in the other's territory.

Azerbaijan's role in the Southern Gas Corridor

Azerbaijan is not in the European Economic Area (EEA). However, it has been identified as a strategic energy partner for the EU, currently supplying around 4.3% of the bloc's oil imports.

The SGC is a crucial energy infrastructure project, providing European countries with an alternative to Russian gas and supporting Europe's decarbonization objectives. The corridor is approximately 3,500 kilometres long, with a total investment of around $35-45 billion. The main supply source is the Shah Deniz gas field in the Caspian Sea, which is expected to produce 16 billion cubic meters of gas annually for Europe, in addition to the 10 billion cubic meters produced by the first stage of the project. The field is located about 2,500 meters above sea level and will involve the laying of 500 kilometres of subsea pipelines.

The SGC has been described as a "paradigm shift towards collaborative energy governance," where mutual interests converge to forge a path toward a more sustainable future. It serves as a platform for enhanced energy partnership between Azerbaijan and the EU, with the corridor's shareholders including companies from several European countries.

The SGC has faced criticism and protests from environmentalists and human rights activists. There are concerns about the environmental impact of the project, such as the removal of historical olive groves in Italy. Additionally, human rights organizations have accused the Azerbaijani government of using the project to fund oppressive structures and arrest journalists and activists on false charges.

Despite these controversies, the SGC remains a significant undertaking, with the participation of seven governments and 11 companies. It has altered the energy landscape in Europe by providing a new source of gas supplies from the Caspian Sea.

EU-Azerbaijan visa agreements

Azerbaijan is not a member of the European Economic Area (EEA). However, the country has been strengthening its relationship with the European Union (EU) since 1991. In 1996, formal relations with the EU began with the signing of the EU-Azerbaijan Partnership and Cooperation Agreement (PCA), which came into force in 1999.

In November 2013, the EU and Azerbaijan signed a visa facilitation agreement in Vilnius, Lithuania, which came into force on 1 September 2014. The agreement aims to facilitate people-to-people contact and enhance economic, humanitarian, cultural, and scientific ties by simplifying the visa issuance process for citizens of both parties. It reduces the required documentation, provides for multiple-entry visas, shortens processing times, and reduces or eliminates fees for specific groups of citizens.

The agreement establishes a simplified procedure for issuing visas, valid for up to 90 days per 180-day period, to citizens of the EU and Azerbaijan. It covers various categories, including close relatives, official delegates, students, journalists, participants in scientific and cultural activities, and others. The agreement also outlines the issuance of multiple-entry visas with a validity of up to five years for specific groups, such as close relatives and permanent members of official delegations.

The EU-Azerbaijan visa facilitation agreement also includes provisions for fee exemptions for specific categories of applicants, such as close relatives, official delegates, students, and participants in scientific and cultural activities. Additionally, it sets a processing fee of EUR 35 for visa applications, with the option for a service fee of up to EUR 30 if an external service provider is involved.

The agreement emphasizes the importance of efficient visa handling, with consulates taking decisions on visa requests within 10 calendar days, extendable to 30 days in exceptional cases. It also addresses situations where citizens of either party lose their identity documents while in the territory of the other, allowing them to depart without a visa or other authorisation.

The EU-Azerbaijan visa facilitation agreement is a testament to the growing relationship between the EU and Azerbaijan, aiming to foster increased interaction and cooperation between the two entities.

Azerbaijan's role in the Eastern Partnership Program

Azerbaijan has been part of the Eastern Partnership initiative since 2009. The country has maintained a positive relationship with the European Union (EU) over the years, with the EU being Azerbaijan's first trading partner and biggest export and import market. The EU is also Azerbaijan's largest foreign grant donor and investor, providing over 600 million euros of bilateral EU assistance since 1992.

Azerbaijan's cooperation with the EU in energy and trade remains one of the country's policy priorities. Azerbaijan is a strategic energy partner for the EU, supplying around 4.3% of the EU's oil imports. The Southern Gas Corridor, a strategic initiative to bring gas from the Caspian Sea to European markets, is a key example of this cooperation. The EU has also supported Azerbaijan in other energy projects, such as the Baku-Ceyhan oil pipeline.

In addition to economic cooperation, the EU and Azerbaijan have worked together on various political agreements, the most important being the EU-Azerbaijan Partnership and Cooperation Agreement (1999). This agreement aims to enhance trade, investment, the economy, legislation, and culture within the framework of the partnership. The EU has also supported Azerbaijan in its efforts to join the World Trade Organization (WTO) and provided assistance in the form of technical support, grants to civil society, and access to global EU programmes such as Erasmus+.

The EU has also been an important partner in promoting civil society in Azerbaijan. The Eastern Partnership Civil Society Forum, held in Brussels, is a unique multi-layered regional civil society platform that aims to promote European integration and facilitate reforms and democratic transformations in the six Eastern Partnership countries, including Azerbaijan.

However, there are challenges in the relationship. Azerbaijan's confidence in the EU has been shaken by recent political changes, including Brexit and the rise of far-right and nationalist parties in the European Parliament. Additionally, the EU's passive approach to addressing Azerbaijan's security concerns, especially regarding the long-standing Karabakh conflict with Armenia, has pushed Azerbaijan to seek assistance from Russia.

Overall, Azerbaijan's role in the Eastern Partnership Program is characterized by close economic and political cooperation with the EU, with the country seeking to strengthen its relationship with Europe and balance its relations with other regional powers.

Frequently asked questions