07TBILISI1574, Georgia Bi-Weekly Update June 29

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Reference ID Created Released Classification Origin
07TBILISI1574 2007-07-02 15:24 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

DE RUEHSI #1574/01 1831524
R 021524Z JUL 07

E.O 12958: N/A 
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 cros
border transportation of currency and bearer-negotiable 
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. 


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