USACC 2012 Investment Guide to Azerbaijan

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LEGISLATIVE BRANCH Established under the 1995 Constitution, the unicameral Parliament or Milli Mejlis consists of 125 seats. Members of Parliament are elected by popular vote to five-year terms. JUDICIAL BRANCH Azerbaijan’s court system consists of three tiers that include the Courts of First Instance, Courts of Appeals and a Supreme Court. The appellate system is divided into three main circuits: the Court of Appeals, which handles civil and criminal appeals in Azerbaijan proper; the Supreme Court of the Autonomous Republic of Nakhchivan, which handles civil and criminal appeals in the Nakhchivan exclave; and the Economic Court, which handles appeals from local economic courts. In addition, the Supreme Court hears all final appeals on lower court decisions. The Constitutional Court has jurisdiction over matters related to the constitutionality of laws, government and National Assembly resolutions, presidential decrees and international treaties.

HISTORICAL OVERVIEW

Stone Age petroglyphs at Gobustan.

Azerbaijan declared independence from the Soviet Union in August 1991. Early independence was marked by Armenian military attacks against Azerbaijan’s NagornoKarabakh region, tremendous economic distress, and internal struggles for power. Heydar Aliyev, elected president in 1993, brought stability to the country, created conditions that allowed a cease-fire with Armenia to be signed, and opened Caspian energy reserves to world markets by inviting foreign companies to prospect for oil and gas in what is now called “The Contract of the Century.” Today, Azerbaijan provides more than one percent of the world’s daily demand for oil through the Baku-TbilisiCeyhan pipeline. In addition, the Baku-Tbilisi-Erzurum gas pipeline has made Azerbaijan a key transit country to move major volumes of gas to European markets in the quest for energy security. Azerbaijan’s energy boom has allowed for the funding of major infrastructure, transportation links and education projects, which are key investments in the country’s plan to stimulate the non-energy sector and achieve long-term sustained growth and economic stability. Azerbaijan’s strategic location has also made it a key Western ally in regional security and stability operations. Azerbaijan is of geostrategic importance to the U.S., providing a critical flow-through point for Caspian oil reserves moving westward to world markets, and as a transportation corridor moving supplies eastward to Afghanistan.

Azerbaijan is one of the oldest sites of modern human habitation in the world, as evidenced by ancient settlements and petroglyphs dating back 20,000 years.

2011 HIGHLIGHTS

In the 12th century, Azerbaijan served as the crossroads of commerce and culture when it became an important link along the Silk Road that moved silk, precious stones, metal and spices between Asia and Europe.

• Azerbaijan became a non-permanent member of the UN Security Council

• A new giant offshore gas field was discovered under the Caspian Sea containing gas and gas condensate reserves of billions, and possibly trillions, of cubic meters.

• The country’s currency reserves grew to over $40 billion

• The poverty level continued to fall, ending the year at below 8 percent

In 1846, Baku drilled the world’s first oil well, more than a decade before America’s first well was drilled in Pennsylvania. By the late 19th century, Azerbaijan was home to the world’s first oil boom. Azerbaijan enjoyed a brief period of independence from Russia, lasting from 1918 with the creation of the

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Azerbaijan Democratic Republic, until Baku was invaded by the Red Army in 1920. For the next seven decades, Azerbaijan was a state within the Soviet Union.

INTRODUCTION TO AZERBAIJAN

Azerbaijan had a number of notable events and milestones in 2011:


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