Congress is currently debating how to reform the manner in which the United States imposes economic and trade sanctions on other nations. One sanction that deserves immediate repeal by Congress is Section 907 of the Freedom Support Act of 1992. Section 907 prohibits direct U.S. assistance to Azerbaijan unless the President of the United States certifies to Congress that Azerbaijan is “taking demonstrable steps to cease all blockades and other offensive uses of force against Armenia and Nagorno-Karabakh.”

The Section 907 sanctions have never reflected political or diplomatic reality in the Caucasus region. Furthermore, conditions that existed in 1992 when the sanctions were imposed have changed dramatically. The following facts underscore this point:

- Azerbaijan has made strong and internationally recognized commitments and demonstrable steps towards a permanent, peaceful solution to the Armenia-Azerbaijan conflict, a requirement for the lifting of the sanctions.

- Since the passage of Section 907, Armenia has emerged as the aggressive nation. It has invaded and today occupies a sizable portion of the internationally recognized sovereign territory in Azerbaijan. This aggression has created almost 1 million Azerbaijani refugees.

- Neither the United States, the United Nations, any country in the world, nor any international organization recognizes Nagorno-Karabakh as either an independent state or as part of Armenia.

Section 907 is misguided and counter-productive. It has resulted in an American policy that punishes the victim of aggression (Azerbaijan) while rewarding the aggressor (Armenia). It tilts U.S. foreign policy in a regional conflict and prevents the United States from playing a positive role as an honest broker in search of a peaceful, permanent solution. Moreover, Section 907 impedes political, commercial and security relationships between the United States and Azerbaijan one of the most pro-Western nations of the former Soviet Union at a crucial time in the country’s difficult nation-building process.

Issue Background

Nagorno-Karabakh is a mountainous, multi-ethnic region located totally within the borders of Azerbaijan. In February 1988, Armenian nationalists in the region sought to be incorporated into Armenia by declaring their independence from Azerbaijan. In November of the same year, Armenia illegally declared Nagorno-Karabakh a part of the Republic of Armenia. Following the independence of both Azerbaijan and Armenia in 1991, the latter unleashed a full-scale war. By the end of 1993, and continuing to today, Armenia occupied approximately 20 percent of Azerbaijani territory, including 13 percent outside of Nagorno-Karabakh.

The Armenian armed forces conducted notorious ethnic cleansing on the seized Azerbaijani lands. Today, Armenians are the only ethnic group that resides in the occupied territories.

In response to these atrocities, the international community undertook the following efforts to mediate the conflict:

- The United Nations Security Council adopted four resolutions demanding the immediate, complete and unconditional withdrawal of all Armenian troops from occupied territories in Azerbaijan.

- In 1992, a peace process was instituted by the Organization for Security and Cooperation in Europe (OSCE). Referred to as the Minsk Process, this initiative is being co-chaired by the United States, France and Russia, with active participation of several other European governments.

- A cease-fire agreement was signed in 1994 and has largely prevented further violence. However, Armenian troops still occupy Nagorno-Karabakh and surrounding Azerbaijani territory. Nearly 1 million Azerbaijani citizens have been forcibly displaced from their homes and are refugees in their own country. This figure represents about 14 percent of the entire Azerbaijani population -the highest percentage of any national population in the world living as refugees and displaced persons.

- The peace process reached a critical moment at the Lisbon Summit in December 1996, when the OSCE brokered an agreement based on three principles:
(1) recognition of the territorial integrity of Azerbaijan and Armenia;
(2) legal status of Nagorno-Karabakh, defined in an agreement based on self-determination which confers on Nagorno-Karabakh the highest degree of self-rule within Azerbaijan, and
(3) guaranteed security for Nagorno-Karabakh and its whole population.

In 1997, the so-called Lisbon Principles were followed-up with a proposal by the Minsk Group cochairmen that called for a two-stage peace process:
(1) the withdrawal of all occupying Armenian armed forces from Nagorno-Karabakh and surrounding areas of Azerbaijan, and the return of all refugees to their homes, and
(2) a negotiation and determination of the final legal status of Nagorno-Karabakh within Azerbaijan.

The OSCE proposal was endorsed by 53 of the 54 OSCE member nations, including the United States and Azerbaijan. Only Armenia withheld support.

While Armenia refused to endorse the so-called Lisbon Principles, then Armenian President Levon Ter-Petrosian did express support for the two-stage peace process proposed by the Minsk Group cochairmen. As a result of this position, Armenian hard-liners forced President Ter-Petrosian from office in early 1998. Mr. Robert Kocharian, a former leader of Nagorno-Karabakh’s Armenian community, was elected President of Armenia on March 30, 1998. Immediately upon taking office, Kocharian rejected the cochairmen’s proposals and instead put forward recommendations that could subvert the Minsk process. One of these suggestions was to establish a framework for direct negotiations between the Government of Azerbaijan and Armenian leaders in Nagorno-Karabakh. Such a proposal cannot be acceptable to Baku until Armenia recognizes the territorial integrity of Azerbaijan.

Led by the Russian co-chairman of the Minsk process, another proposal was put forward - the “common state” proposal. This was rejected by Azerbaijan, because to the extent the “common state” concept has any meaning, it represents a rejection of previous OSCE work to resolve the conflict, including the Budapest and Lisbon summits decisions in 1994 and 1996 respectfully. If OSCE’s Minsk Group were to pursue the “common state” concept, it would represent a significant political victory for the hard-liners in Armenia. In fact, the “common state” concept simply plays into the Armenian hard-liners’ game plan of trying to get the international community to treat Nagorno-Karabakh as a separate entity from Azerbaijan as a way of promoting either independence or union with Armenia.

Azerbaijan’s position is that a solution must be realized through the OSCE Minsk process. At the end of these negotiations, Nagorno-Karabakh must remain a part of Azerbaijan, although it will have broad autonomy.

In recognition of Azerbaijan’s position, the three co-chairs - the United States, Russia and France - have since de-emphasized the “common state” proposal, and are considering it along with the Lisbon proposal in search of a plan that all sides can agree upon.

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