Identifier
Created
Classification
Origin
07TBILISI1574
2007-07-02 15:24:00
UNCLASSIFIED
Embassy Tbilisi
Cable title:  

Georgia Bi-Weekly Update June 29

Tags:  PREL PGOV PHUM GG 
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DE RUEHSI #1574/01 1831524
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TO RUEHC/SECSTATE WASHDC 6872
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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

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