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Diplomacy in Action

VI. Assessments Required by the Silk Road Strategy Act of 1999


U.S. Government Assistance to and Cooperative Activities with Eurasia
Bureau of European and Eurasian Affairs
January 2003
Report
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The Silk Road Strategy Act of 1999, which amends the Foreign Assistance Act of 1960 and was enacted as part of the FY 2000 Foreign Operations, Export Financing, and Related Programs Appropriations Act, requires that this annual report:

  • identify the progress made in fulfilling the policy objectives laid out in the Silk Road Strategy Act;
  • evaluate the degree to which U.S. Government-funded assistance to Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan has helped accomplish the objectives laid out in the Silk Road Strategy Act;
  • provide a "description of the progress being made by the United States to resolve trade disputes registered with and raised by the United States embassies in each country, and to negotiate a bilateral agreement relating to the protection of United states direct investment in, and other business interests with, each country" and
  • recommend any additional initiatives that should be undertaken by the United States to implement the policy and purposes contained in the Silk Road Strategy Act.
This report addresses all of the above items, reporting on progress subsequent to the enactment of the Silk Road Strategy Act in late November 1999.

For an evaluation of the degree to which U.S. Government-funded assistance programs in the Silk Road countries have helped accomplish the objectives laid out in the Silk Road Strategy Act, please see the country assessments in Part II of this report.

The U.S. Department of State has not been made aware of any trade disputes registered with and raised by the U.S. Embassies in the Silk Road countries; however, to make this report more useful, information about investment disputes is provided below, along with a description of progress in negotiating bilateral investment treaties with the Silk Road countries. Additional information can be found in the Section 498A(a)(2) assessments in Part IV of this report.

The U.S. Government is funding robust, ongoing assistance programs in each of the areas addressed in the Silk Road Strategy Act, and does not recommend the implementation of any new initiatives to implement the policy and purposes contained in the Act.

Armenia: The U.S.-Armenia Bilateral Investment Treaty entered into force on March 29, 1996. The Department is unaware of any outstanding investment disputes involving U.S. citizens and the Government of Armenia.

Azerbaijan: The U.S.-Azerbaijan Bilateral Investment Treaty entered into force on August 2, 2001. The State Department is aware of a number of investment disputes between U.S. companies and the Government of Azerbaijan. The U.S. Embassy has offered appropriate assistance to the U.S. companies. Several of the U.S. companies have not contacted the Embassy in some time; the status of their disputes is unknown.

Georgia: The U.S.-Georgia Bilateral Investment Treaty entered into force on August 17, 1997. The State Department is aware of no active investment disputes between a U.S. company and the Government of Georgia.

Kazakhstan: The U.S.-Kazakhstan Bilateral Investment Treaty entered into force on January 12, 1994. The Department is aware of four active investment disputes between U.S. companies and the Government of Kazakhstan (GOK). The U.S. Government has supported, as appropriate, these investors' attempts to resolve the disputes. In one dispute, involving the GOK's refusal to issue a license to a U.S. company for the export of uranium, a U.S. Court of Appeals affirmed the dismissal of the company's suit against the GOK. The claimant, however, still considers the dispute unresolved. A second company, a power producer, negotiated, prior to an expected arbitration ruling in its favor, an agreement with the GOK on the payment of debts owed to the company. The GOK has made uneven progress in fulfilling its obligations under this agreement. A third company obtained a favorable arbitration ruling concerning the expropriation of its oilfield concession and subsequently reached a settlement with the GOK. In a fourth dispute, a U.S. firm claims that the GOK expropriated a real estate development without offering appropriate compensation. This dispute has been submitted to international arbitration.

Kyrgyz Republic: The U.S.-Kyrgyz Republic Bilateral Investment Treaty entered into force on January 12, 1994. The Department is aware of an outstanding investment dispute between a U.S. company and the Government of the Kyrgyz Republic involving an alleged breach of the terms of its telecommunications joint venture agreement. The U.S. Embassy and other U.S. Government officials continue to monitor the case and assist the company, as appropriate, in resolving the dispute. The Government of the Kyrgyz Republic has taken no action, and the U.S. firm has advised that it intends to submit a claim to OPIC.

Tajikistan: Negotiations on a Bilateral Investment Treaty between the U.S. Government and the Government of Tajikistan have been inactive since April 1993. The Department is aware of no active investment disputes between U.S. companies and the Government of Tajikistan.

Turkmenistan: Negotiations on a Bilateral Investment Treaty between the U.S. Government and the Government of Turkmenistan have been inactive since March 1998, pending action by the Government of Turkmenistan. The Department is aware of no active investment disputes involving U.S. firms and the Government of Turkmenistan.

Uzbekistan: The U.S. Government and the Government of Uzbekistan signed a Bilateral Investment Treaty on December 16, 1994. The U.S. Senate gave its advice and consent to ratification on October 18, 2000, after the executive branch gave its commitment not to bring the treaty into force until Uzbekistan undertakes economic reforms so that its policies are not in violation of the treaty's terms. Uzbekistan has completed its domestic ratification process. Entry into force is pending exchange of instruments of ratification, following satisfactory economic reforms by the Government of Uzbekistan. The Department is aware of six active investment disputes between U.S. companies and the Government of Uzbekistan. Two involve seizures of the companies' imported goods. Four other disputes involve various forms of seizure of materials, harassment of employees, and unfair treatment of currency exchanges and other contractual conditions. The U.S. Embassy is monitoring these cases and is providing all appropriate assistance.



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