07TBILISI3098, GEORGIANS ADVANCE PROPOSAL TO SOLVE WTO BORDER

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Reference ID Created Released Classification Origin
07TBILISI3098 2007-12-14 12:06 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO2072
RR RUEHAG RUEHDE RUEHHM RUEHMR RUEHPA RUEHPB RUEHRN
DE RUEHSI #3098/01 3481206
ZNY CCCCC ZZH
R 141206Z DEC 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 8443
INFO RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 04 TBILISI 003098 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/CARC AND EEB/TPP/MTA 
STATE PASS USTR FOR BURKHEAD AND KLEIN 
 
E.O. 12958: DECL: 12/14/2017 
TAGS: ETRD PREL WTO USTR GG RU
SUBJECT: GEORGIANS ADVANCE PROPOSAL TO SOLVE WTO BORDER 
CROSSING ISSUE WITH RUSSIA 
 
REF: TBILISI 1386 
 
Classified By: Ambassador John F. Tefft, reason 1.4(b) and (d). 
 
1. (C) Summary: On December 13, Econoff met with Tamar 
Kovziridze, Deputy Minister of Economic Development and 
Georgia's lead negotiator on WTO issues.  Kovziridze shared 
the text of a proposal by the Georgian government for 
solution of the impasse over border crossings that is the 
basis of a disagreement with the Goverment of Russia that is 
preventing completion of Georgia's bilateral agreement with 
Russia for accession to the WTO.  The agreement envisages a 
joint Russian-Georgian presence at two border crossings in 
Abkhazia and South Ossetia, with international monitoring. 
Realization of such an agreement will be difficult because it 
directly challenges Abkhaz and South Ossetian claims to 
sovereignty and Russia's ambiguous policy toward the 
breakaway regions.  End Summary. 
 
2. (C) In July 2006, the Government of Georgia reopened 
negotiations with the Government of Russia on their 2004 
bilateral agreement for WTO accession.  Border crossings into 
Russia in the breakaway regions of Abkhazia and South Ossetia 
are operating without Georgian permission and Georgia 
contends their operation violates a Russian promise to 
regularize the border crossing's status in the bilateral 
agreement.  WTO procedures require that all bilateral 
agreements be concluded before the accession process can move 
on to multilateral negotiations and finalization of the 
accession.  Although the Russian negotiator, Max Medvedkov, 
has made statements suggesting that Russia can begin the 
multilateral negotiations even if the bilateral agreement 
with Georgia is outstanding, the GOG will oppose any such 
move.  Russia has heretofore claimed that the border 
crossings issue is a political, not a WTO issue.  The issue 
is a sensitive one that will not be easy to solve, because it 
directly touches on Georgia's ability to assert sovereign 
control over areas that are as a practical matter under the 
control of the de facto governments in Sokhumi and 
Tskhinvali. 
 
SIPDIS 
 
3. (C) Kovziridze met with Medvedkov and Russian delegation 
in Geneva on November 22, continuing negotiations that began 
in January 2007.  She told Econoff that the WTO secretariat 
has supported the GOG in its conviction that the border 
crossing issue is a WTO matter, and the GOR has begun to 
concede the point, at least privately.  The latest 
negotiations began to focus on how to solve the problem. 
Georgia presented the Russian delegation with a document 
outlining basic principles and mechanisms for legalization of 
the border crossings (Roki-Lower Zaramag and Gantiadi-Adler). 
 The GOG is now waiting for a Russian response and expects to 
hold further discussions in January 2008. 
 
4. (C) Georgia is not the only country with which Russia is 
negotiating on a bilateral basis.  Saudi Arabia recently 
opened discussions with the Russians after determining that 
it has issues of interest.  The EU also has concerns about 
Russia's adherence to promises made in its bilateral 
agreement, including issues related to timber exports.  At 
the same time, Kovziridze said, the WTO accession working 
group chair is holding informal multilateral "consultations" 
to keep Russia's accession process moving forward.  Normally, 
according to Kovziridze, such consultations are used to 
resolve procedural issues only, but the chair is working on 
some substantive issues.  The GOG is not happy with this, but 
is participating in order to ensure that its interests are 
protected. 
 
5. (C) The text of the Georgian proposal for resolving the 
border crossing issue follows at paragraph six. 
Realistically, resolution of the border crossings issue 
presents significant problems.  The Abkhaz and South Ossetian 
de facto governments are certain to reject the presence of 
Georgian customs officers on what they regard as their 
sovereign territory.  The proposal is also a challenge to the 
Russian side's ambiguous policy of official respect for 
Georgia's territorial integrity and unofficial support for 
the separatists. 
 
6. (C) Begin text of Georgian proposal (please protect): 
 
PROPOSAL OF GEORGIA TO THE RUSSIAN FEDERATION ON THE BASIC 
PRINCIPLES AND MECHANISMS FOR LEGALIZATION AND WTO-CONSISTENT 
ADMINISTRATION OF THE CUSTOMS CHECK-POINTS ROKI-LOWER ZARAMAG 
AND GANTIADI-ADLER ON THE BORDER BETWEEN GEORGIA AND THE 
RUSSIAN FEDERATION IN THE FRAMEWORK OF RUSSIA'S WTO ACCESSION 
PROCESS 
 
 
TBILISI 00003098  002 OF 004 
 
 
November 2007 
Tbilisi, Georgia 
 
Background Information 
 
The present paper was prepared as a follow up to the last 
bilateral negotiations between Georgia and the Russian 
Federation on the 19th of October 2007, Geneva, Switzerland, 
WTO HQ where the sides agre
ed that Georgia would present a 
proposal on the basic principles and mechanisms of 
legalization and administration in a WTO-consistent manner of 
the customs check-points, Roki-Lower Zaramag and 
Gantiadi-Adler, on the border between Georgia and the Russian 
Federation. 
 
The above-mentioned meeting between the negotiating teams of 
Georgia and the Russian Federation took place in the 
framework of Russia's accession process to the WTO and was 
coordinated by the Head of the WTO Accessions division, Mr. 
Arif Hussein. 
 
In summer 2006 Georgia reopened bilateral negotiations with 
the Russian Federation in the latter's accession process to 
the World Trade Organization. In this framework, Georgia's 
only request towards the Russian Federation is the 
legalization and proper functioning of the two illegal 
customs check-points located at Gantiadi-Adler and Roki-Lower 
Zaramag, on the Georgian-Russian border. 
 
The above-mentioned check-points are listed in the Agreement 
between the Government of Georgia and the Government of the 
Russian Federation on Check Points across the Customs Border, 
which was signed on 8 October 1993.  Article 4 of this 
Agreement explicitly states that the Parties will administer 
the opening and closing of the check points across the 
customs border based on mutual agreement. Currently, 
Gantiadi-Adler and Roki-Lower Zaramag check-points are 
operated by Russia without any prior agreement with Georgia. 
 
Georgia's position vis-a-vis Russia results from the 
obligation taken by the Russian Federation towards Georgia in 
the bilateral protocol on the completion of negotiations on 
Russia's accession to the WTO, signed in May 2004, and 
Russia's general WTO obligation regarding customs 
administration. In the Georgia-Russia protocol Russia 
undertook to solve problems related to customs regulation and 
administration related to trade in goods. However, no 
progress was seen for more than two years in the resolution 
of these problems and Russia has yet to comply with its 
general WTO obligation on customs administration. 
 
The existence of unregulated trade through illegally 
functioning check-points - operated by the unilateral 
decision of the Russian Federation - severely violates 
numerous articles of WTO rules and raises serious concerns in 
this respect about WTO compliance.  This paper presents 
Georgia's view on how to ensure legalization and proper 
functioning of 
the two illegal customs check-points of Gantiadi-Adler and 
Roki-Lower Zaramag and is meant to serve as a basis for 
discussion. 
 
Georgia's Proposal 
 
In the framework of Georgian-Russian bilateral negotiations 
on Russia's accession to the World Trade Organization (WTO) 
and with the purpose to legalize and ensure WTO-consistent 
administration of customs check-points Roki-Lower Zaramag and 
Gantiadi-Adler, the Georgian side proposes to establish joint 
control and monitoring over the above-mentioned customs 
check-points. 
 
In addition to bilateral efforts aimed at the legalization of 
trade flows through these two check-points, an appropriate 
level of international involvement should be established to 
ensure compliance with agreed principles.  (Note: 
International involvement in this document means involvement 
of the European Union, OSCE or UN, or joint efforts by these 
organizations.) 
 
Steps to be taken in order to establish a joint monitoring 
mechanism for check-points: 
 
-- Submission of the official proposal of the Georgian side 
to the Russian side on the establishment of the joint 
monitoring mechanism on the two check-points at the 
Georgian-Russian border. 
 
-- Reaching of an agreement between the Georgian and Russian 
 
TBILISI 00003098  003 OF 004 
 
 
sides on establishing the joint monitoring mechanism. 
 
-- Preparation of the joint request by the Governments of 
Georgia and the Russian Federation and its submission to 
international partners in order to ensure their support and 
adequate of level participation in joint efforts. 
 
-- Signing of a trilateral document between Georgia, the 
Russian Federation and an international partner.  The 
document should be legally binding and will serve as a legal 
basis for the joint monitoring without right of withdrawal 
based on a unilateral decision. 
 
-- The parties will exchange diplomatic Notes on the legal 
functioning of Roki-Lower Zaramag and Gantiadi-Adler customs 
check-points in order to create a bilateral legal basis for 
the functioning of these check-points.  The exchange of notes 
will take place only after the signature of a trilateral 
document mentioned above. 
 
Basic principles of joint monitoring: 
 
1. The functioning of the jointly controlled customs 
check-points should be monitored by an international Joint 
Monitoring Mission. 
 
2. Customs clearance on the Georgian part of the customs 
check-points will be implemented according to the Georgian 
legislation. 
 
3. Customs clearance on the Russian part of the customs 
check-points will be implemented according to the legislation 
of the Russian Federation. 
 
4. The customs administrations of the Russian Federation and 
Georgia should ensure that only economic agents registered in 
accordance with Russian and Georgian legislation are allowed 
to import goods into the respective territories. In Georgia's 
case, this entails, among other things, the presentation of a 
certificate of origin issued according to Georgian 
legislation. 
 
5. In case of re-export the parties will only accept customs 
and shipping documents certified only with mutually 
recognized stamps, seals and official signs. 
 
6. In order to simplify customs procedures the registration 
of economic agents and issuance of the certificates of origin 
and other customs documents will be carried out by various 
branches of respective state institutions. 
 
Conditions to be fulfilled for successful functioning of 
joint monitoring: 
 
-- Safety, security and escort of the Joint Monitoring 
Mission's personnel located on the territory of Georgia 
should be guaranteed based on existing legal and security 
arrangements, specificities of which can be subject to 
further discussion between the parties. 
 
-- tri-lateral commission should be created in order to 
assess and evaluate the implementation of joint monitoring 
and produce monthly reports.  This commission should be 
composed of Georgian and Russian officials and 
representatives of international organizations. 
 
-- Free movement of the Joint Monitoring Mission's personnel 
should be ensured through creation of the so-called "green 
corridors". 
 
-- Infrastructure (institutional, personnel, equipment) for 
preventing trafficking, money laundering, and smuggling of 
radioactive and other types of goods should be established 
and maintained. 
 
-- The Government of
 Georgia accepts the obligation to 
finance the construction of the customs facilities on its 
territory. 
 
The Mandate of the Joint Monitoring Mission: 
 
-- The first Joint Monitoring Mission will last for 2 years 
with the possibility of extension based on mutual agreement 
among parties. 
 
-- Joint Monitoring Mission will be staffed with Georgian and 
Russian representatives and experts from international 
organizations. 
 
 
TBILISI 00003098  004 OF 004 
 
 
-- The location of the Head office of the Mission to be 
discussed. 
 
-- Two Field offices will be located on Roki-Lower Zaramag 
and Gantiadi-Adler customs check-points. 
 
Functions of the Joint Monitoring Mission: 
 
-- Ensure that customs rules and procedures are administered 
in accordance with the relevant legislation of Georgia and 
the Russian Federation, and consistent with WTO rules. 
 
-- Prevent trafficking, money laundering, smuggling of 
radioactive and other types of goods. 
 
-- No independent enforcement responsibilities. 
 
-- Ensure transparency and uniformity of customs 
administration via permanent monitoring. On the Georgian 
side, the administration of the concerned check-points will 
be integrated in the system of overall monitoring of the flow 
of goods in Georgia. 
 
-- Oversee customs services as requested by means of checking 
documentation and records (including computer databases). 
 
-- Check suspicious cargo and passengers as requested by 
either side. 
 
-- Introduce customs check-point management and share 
experience in accordance with international standards. 
 
-- Assist in prevention of smuggling (through capacity 
building, special training, and provision of equipment). 
 
-- Carry out risk analysis and provide training regarding the 
same upon request. 
TEFFT

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