Georgia Bi-Weekly Update June 29

UNCLAS SECTION 01 OF 02 TBILISI 001574 SIPDIS SIPDIS E.O 12958: N/A TAGS: PREL PGOV PHUM GG SUBJECT: Georgia Bi-Weekly Update June 29 ¶1. This cable contains current items of political, economic, and social interest concerning Georgia during the weeks of June 16-29. Criminal Procedure Code Moving through Parliament -------------- -------------- ¶2. The Legal Committee of Georgian Parliament is currently introducing non-controversial portions of the new draft Criminal Procedure Code (CPC) in full committee in preparation for the codeQs second reading in Parliament, likely to happen this fall. Parliament passed the CPC in first reading in December 2006, and referred it to the Legal Committee, which held a series of ad hoc Committee meetings with interested Members of Parliament, Government officials, and NGOs. Based on these meetings, the ad hoc Committee members met in Batumi, Georgia in early May to hammer out necessary implementation changes. After this meeting, the ad hoc Committee has held several additional meetings to craft changes to the CPC implementing these changes. We anticipate that the Legal Committee will complete its work on the CPC this summer and introduce the completed CPC for its second reading in September and its final reading later in the fall. The new CPC is considered a key reform in developing a judicial system governed by the rule of law. Saakashvili on Cooperation, Conflicts at BSEC Summit -------------- -------------- ¶3. Leaders from twelve Black Sea states assembled in Istanbul for the fifteenth anniversary of Black Sea Economic Cooperation (BSEC) on June 25. Economic cooperation, energy diversification and trade issues topped the agenda, with discussion of concrete projects to construct a Trans-Caspian gas pipeline and a 7,500- kilometer ring road along the Black Sea coast. Addressing the summit, President Saakashvili focused on the importance of international economic cooperation and energy security, as well as on GeorgiaQs efforts at peaceful resolution of the separatist conflicts, saying QGeorgia will spare no effort to ensure that all ethnic groups, Abkhaz and Ossetians, as well as every citizen of Georgia, enjoy well- being and prosperity.Q Speculation on a Georgian-Russian Deal in South Ossetia -------------- -------------- ¶4. As the BSEC summit was proceeding in Istanbul, the Russian newspaper Kommersant published an article Q- much commented on in Georgia -- claiming that Tbilisi and Moscow had struck a deal. Under its conditions, Georgia would support RussiaQs accession to the WTO, if Russia cut off its relations with South Ossetian separatist leader Eduard Kokoity and supported the Georgian-backed administration of Dmitry Sanakoyev instead. In addition, Georgia would agree to the indefinite presence of Russian peacekeepers in the conflict zone. Both Foreign Ministers, Sergey Lavrov of Russia and Gela Bezhuashvili of Georgia, refuted these claims. Bezhuashvili for his part stressed that Qneither Georgia nor Russia base their policy on journalistsQ opinions.Q He said that Georgia was ready to make compromises, but any concessions it made would not affect the country's strategic interests. NGO Calls for New Anti-Torture Strategy -------------- ¶5. On June 26, UN International Day in Support of Victims of Torture, the NGO RCT/Empathy unveiled its annual report on victims of torture and inhumane treatment in Georgia, and urged Georgia to take the necessary steps to join the Optional Protocol to the UN Convention Against Torture (OPCAT). Georgia ratified the OPCAT in July 2005, but has yet to craft a Georgian anti-torture action plan (to replace the one of 2003-2005). On June 20, the Georgian government created an Interagency Anti-Torture Council to address torture and inhumane treatment, but details of the councilQs operation have not yet been announced. Embassy is following up on this issue. RCT/EmpathyQs goal is for Georgia to establish a National Preventative Mechanism that would permit unannounced visits to all places of detention, something Georgia committed to in signing the OPCAT. MONEYVAL Welcomes Georgian Anti-Money Laundering Measures -------------- -------------- ¶6. The Council of EuropeQs (COE) Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL) has published a new report on Georgia, citing major changes since the previous evaluation in May 2003. The report says that the basic building blocks of a system to combat money laundering and terrorist finance are broadly in place, citing in particular the adoption of the law QOn Facilitating the Prevention of Illicit Income LegalizationQ and the creation of the Financial Monitoring Service. Georgian prosecutors have secured convictions in money laundering cases. Despite the progress, the report TBILISI 00001574 002 OF 002 indicates that Georgia still has work to do. Among the needs is an effective system to detect the physical cross- border transportation of currency and bearer-negotiable instruments. Iran to Invest in Georgia? -------------- ¶7. On June 20 Georgian Foreign Minister Gela Bezhuashvili met with Iranian Deputy Foreign Minister Manuchehr Mohammadi, who was visiting Tbilisi for a Georgian-Iranian roundtable hosted by a think tank. The two ministers reportedly discussed a wide range of bilateral issues, with special emphasis on cooperation in the fields of culture, science and education. Georgian media picked up a story, appearing several days after the visit in Russian newspaper QNezavisimaya Gazeta,Q that Iran plans to invest USD 1 billion in Georgian economy. The Iranian agency Irna reported that GeorgiaQs Ambassador to Iran, Levan Asatiani, confirmed IranQs intention. American Investment to Reconstruct a Tbilisi Landmark -------------- -------------- ¶8. Speaking at the public presentation of the Mtatsminda Plateau project, sponsored by the American-Georgian joint venture GMT Group on June 26, Ambassador Tefft said QGrowing investment is the direct result of GeorgiaQs efforts after the Rose Revolution to reduce obstacles to doing business.Q The project calls for reconstruction of a landmark of Tbilisi, the Funicular Restaurant overlooking the city, which was built in the 1930s and damaged during the civil unrest in 1991. GMT GroupQs partners and the Overseas Private investment Corporation (OPIC) will allocate USD 15 million for the reconstruction project. OPICQs loan agreement for about USD 8 million is scheduled for signing on September 11 at the American Georgia Business CouncilQs annual meeting in Tbilisi. More Kazakh Investment to Georgia -------------- ¶9. On June 13, a group of 16 Kazakh private businesses, including the Chairman of the Board of Directors of the Georgian-Kazakh venture AKSAI BMC, arrived in Georgia for three days of meetings and site visits in Tbilisi and Batumi. Prior to the visit, AKSAI BMC obtained a 25-year license for oil and gas exploration and production works in western Georgia, and plans to invest USD 25-30 million in the initial stage of the exploration. In addition to oil and gas, the company is interested in tourism infrastructure and real estate investment projects in Georgia. AKSAI BMC, founded in 1992, has been involved in oil and gas projects in western Kazakhstan. Since 2005, Kazakh investors, including the state-owned enterprises and banks, have made significant investments in GeorgiaQs telecommunications, oil and gas infrastructure, tourism, and real estate development projects, including United Georgian Telecom, Tbilgazi, Batumi Oil Terminal, several hotels in Adjara, and Likani resort. TEFFT