JOINT STAFF WORKING PAPER Implementation of the European Neighbourhood Policy in 2010Country report: Azerbaijan  JOINT STAFF WORKING PAPER Implementation of the European Neighbourhood Policy in 2010Country report: Azerbaijan
Date: 2011-05-25
Institutions: European Commission, High Representative of the Union
Subjects: Azerbaijan, European neighbourhood policy, State aid, association agreement, bilateral agreement, democracy, economic reform, human rights, political cooperation, political reform

EUROPEAN COMMISSION 

HIGH REPRESENTATIVE OF THE
EUROPEAN UNION FOR 
FOREIGN AFFAIRS AND 
SECURITY POLICY

Brussels, 25.5.2011 
SEC(2011) 640 final 

JOINT STAFF WORKING PAPER 

Implementation of the European Neighbourhood Policy in 2010 
Country report: Azerbaijan 

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JOINT STAFF WORKING PAPER 

Implementation of the European Neighbourhood Policy in 2010 
Country report: Azerbaijan 

1. 

OVERALL ASSESSMENT 

Azerbaijan  and  the  EU  first  established  contractual  relations  in  1996  through  a  Partnership 
and  Cooperation  Agreement  which  entered  into  force  in  1999.  On  that  basis,  the  EU-
Azerbaijan  European  Neighbourhood  Policy  Action  Plan  (ENP  AP)  was  approved  in 
November 2006 for a period of five years.  

In  2010,  EU-Azerbaijan  meetings  took  place  at  the  level  of  the  Cooperation  Council,  the 
Cooperation Committee and the three subcommittees. The subcommittee on Justice, Freedom 
and Security and Human Rights and Democracy met for the first time during the year.  

This  document  reports  on  the  progress  made  in  implementing  the  EU-Azerbaijan  ENP  AP 
between  1  January  and  31  December  2010,  although  developments  outside  this  reporting 
period are also taken into consideration when deemed relevant. It is not a general review of 
the  political  and  economic  situation  in  Azerbaijan.  For  information  on  regional  and 
multilateral sector processes, please refer to the sectoral report. 

Within  the  Eastern  Partnership  (EaP),  the  EU  and  Azerbaijan  continued  to  strengthen  their 
relations.  Following  the  adoption  of  negotiating  directives  for  an  Association  Agreement 
(AA),  the  negotiations  were  launched  in  July  2010  in  Baku  and  have  made  good  progress 
during  the  reporting  period.  This  Agreement  is  conceived  by  both  Parties  as  illustrating  the 
most  advanced  and  ambitious  approach  to  the  Eastern  Partnership  vision  of  association, 
including  a  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  and  a  comprehensive 
programme of  approximation  to  EU  acquis.  The  negotiations  on  a  DCFTA  will  start,  in  the 
same  framework,  once  the  necessary  conditions  have  been  met.  These  include  Azerbaijan’s 
joining  of  WTO.  In  this  respect,  no  progress  has  been  made  in  the  negotiations  on 
Azerbaijan’s accession to the World Trade Organisation (WTO). 

Overall,  Azerbaijan  made  some  progress  in  implementing  the  ENP  AP,  in  particular  in  the 
area  of  macro-economic  stability  and  efforts  to  address  poverty  and  attain  socio-economic 
equilibrium.  

However,  Azerbaijan  needs  to  make  significant  further  efforts  to  meet  the  Action  Plan 
commitments  in  the  field  of  democracy,  including  electoral  processes,  the  protection  of 
human rights and fundamental freedoms and the independence of the judiciary. In this respect 
the EU noted with concern an increasing number of reported arrests of youth activists in the 
country  in  February,  March  and  April  2011  and  other  measures  of  intimidation  as  well  as 
restrictions on the freedom of expression and assembly. 

Azerbaijan has launched an anti-corruption campaign in early 2011 and will need to continue 
efforts in this context.  

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Progress  was  noted  in  the  fight  against  organised  crime,  terrorism  and  illicit  trafficking. 
Progress was also made on gender equality with the adoption of a law on domestic violence. 

Azerbaijan  suffered  less  than  the  other  Eastern  neighbourhood  countries  from  the  global 
economic  crisis,  and  was  less  constrained  in  achieving  the  objectives  of  the  AP.  However, 
while  the  general  economic  policy  stance  was  prudent  and  broadly  adequate,  little  was 
achieved  in  the  area  of  structural  transformations.  The  main  macroeconomic  challenge 
remains  the  diversification  of  the  economy  away  from  the  hydrocarbon  sector  and  the 
monopolisation of the economy.  

Good progress was made in the field of energy cooperation, including Azerbaijan’s support to 
the  Southern  Gas  Corridor.  In  January  2011,  during  the  visit  of  European  Commission 
President  Barroso  to  Baku,  a  Joint  Declaration  on  the  Southern  Corridor  was  signed, 
demonstrating the commitment of both sides to ensuring energy supplies to the European gas 
market.  

Negotiations on a peaceful solution of the Nagorno-Karabakh conflict continued at the highest 
level,  with  some  progress,  in  particular  regarding  the  exchange  of  prisoners  of  war,  as  a 
necessary confidence building measure to further advance the process. An increased number 
of incidents of exchanges of fire and casualties on the line of contact continued to be reported. 
This remains a cause for serious concern. 

2. 

POLITICAL DIALOGUE AND REFORM  

Democracy and rule of law  

The  conduct  of  the  parliamentary  elections  held  on  7  November  2010  was  not  sufficient  to 
constitute meaningful progress in the democratic development of the country. A large number 
of international observers monitored the elections. Several shortcomings were observed in the 
course of the electoral process, including the high rejection rate of registration of opposition 
candidates  and  the  restricted  campaign  environment,  with  intimidation  of  opposition 
candidates  and  their  supporters.  Changes  in  the  electoral  code  in  June  2010  meant  a 
shortening of the election period from 75 to 60 days and a reduction in the campaign period 
which  started  23  days  before  the  election  day.  Amendments  also  included  the  abolition  of 
state  funding  for  candidates,  who  had  to  resort  to  other  means  to  finance  the  campaigns. 
Overall, these measures prevented the creation of a level playing field for all candidates. In 
addition,  on  election  day,  additional  shortcomings  were  observed  including  ballot  stuffing, 
multiple voting and flawed counting of votes. There was no progress regarding the concerns 
raised by the Council of Europe (CoE) Venice Commission in the context of bringing the law 
on the municipalities into line with the constitutional amendments introduced in 2008.  

Apart from the implementation of a number of training programmes, no tangible progress was 
made with respect to civil service reform. However, recognising the need to advance further 
in  this  field,  the  EU  and  Azerbaijan,  in  the  context  of  the  EaP,  took  steps  towards  the 
the  Comprehensive  Institution  Building  (CIB)  programme,  aimed  at 
launching  of 
strengthening key areas of the Azerbaijani civil service. 

The Constitutional Law on Normative Legal Acts was adopted in June 2010. The purpose of 
this law is to combine in a single legal instrument all the important rules for producing state 
norms. It addresses the preparation, drafting, adoption, publication and bringing into force of 

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normative legal acts and facilitates the regulation of legislative work and cooperation between 
the  legislative  and  executive  branches  of  power.  The  law  is  expected  to  improve  the  legal, 
material and formal quality of Azerbaijan’s legislation.  

With respect to the functioning of the judiciary, the lack of independence, inefficiency, lack of 
transparency and levels of corruption remained serious concerns which need to be addressed. 
Nevertheless, some steps were taken in the area of judicial reform. The Law on Courts and 
Judges  was  amended  to  decentralise  the  justice  administration,  including  through  the 
establishment  of  Serious  Crimes  Courts  in  all  regions.  The  establishment  of  Administrative 
Courts also constitutes a further important development.  

Amendments  were  also  made  to  the  Law  on  Lawyers  and  Advocates  by  lifting  the  bar 
examination  for  lawyers  and  judges  who  want  to  become  advocates  and  introducing 
provisions on the organisation of the bar on ethical standards. Provisions were also introduced 
to entrust execution officers with implementing decisions of all courts and imposing fines for 
non-execution of court decisions. Additionally, an increase in the number of judges by 25 % 
up to 600 was decided. Despite this positive development, even more judges are needed. The 
Judicial Legal Council was strengthened. The establishment of the Academy of Justice made 
slow progress. Meanwhile, there was no progress at all with regard to the establishment of a 
system of specialised juvenile justice.  

Uneven  progress  was  made  in  the  fight  against  corruption.  Progress  is  noted  in  meeting 
several  of  the  2006  recommendations  of  the  Group  of  States  against  Corruption  (GRECO) 
with  regard  to  public  sector  human  resources  management  issues.  However,  in  its  2010 
evaluation focusing on incriminations and transparency of party funding, GRECO concluded 
that  significant  shortcomings  remain  in  the  legislation  and  its  effective  application, 
particularly  regarding  the  criminalisation  of the  phenomenon.  There  is  a  perception  that  the 
level of corruption has increased over the last three years, with Azerbaijan being ranked the 
highest  among  CIS  countries  for  corruption.  It  is  noted,  however,  that  an  anti-corruption 
campaign was launched by the president in early 2011. 

Human rights and fundamental freedoms 

The  Commissioner  for  Human  Rights  (Ombudsman)  was  reappointed  for  a  second  seven-
year term in May 2010. The same person may hold the post for not more than two terms. The 
regional centres of the Ombudsman’s office were also strengthened.  

No  progress  or  even  deterioration  of  the  situation  was  noted  in  the  field  of  freedom  of 
expression  and  media  freedom.  Since  2009  the  ranking  of  press  freedom1  in  the  country 
dropped by six points. The overall situation of media in the country was characterised by lack 
of  media  pluralism  and  a  pro-government  bias  of  mainstream  media  outlets,  harassment  of 
judicial  proceedings  against  media 
and  violence  against 
representatives. 

journalists,  questionable 

A  parliamentary  vote  in  December  2010  rejected  a  plan  to  create  an  Ombudsman  for  news 
and information, although the 2005 Right to Information Law stipulates that such a function 
should be established six months after its enactment. There was no progress in amending the 
criminal  code  to  abolish  defamation,  which  constitutes  a  legal  barrier  to  freedom  of 

1 Reporters without Borders (October 2010) 

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expression in the country. Cases of harassment of journalists and political activists expressing 
independent  views  continue  to  be  regularly  reported.  The  Press  Council  remains  under  the 
strict  control  of  the  authorities.  Furthermore,  the  existence  of  a  “blacklist”  of  newspapers 
published by the Press Council allows discriminatory  actions  to  be  taken.  But  in  November 
2010 the two youth activists, who had been imprisoned for two and a half years charged with 
hooliganism, were released following an appeal. At the same time no progress was noted in 
implementing  the  ruling  of  the  European  Court  of  Human  Rights  of  22  April  2010  with 
respect to an imprisoned journalist whose rights to freedom of expression and information and 
right to a fair trial had been violated. 

Further progress was made in upgrading the material infrastructure of the prison/penitentiary 
system and the conduct of law enforcement staff improved. However, widespread torture and 
ill-treatment continued to be reported. No progress was made in the direction of the right to 
individual complaints under Article 22 of the UN Convention against Torture.  

No progress was observed with respect to freedom of assembly. In addition to restrictions for 
political parties and rallies in relation to the parliamentary elections (see above), the breaking 
up of demonstrations and gatherings of religious or non-political nature was also noted during 
the reporting period. No progress was made regarding freedom of association. Following the 
amendments  made  in  2009  to  the  Law  on  non-governmental  organisations  (NGOs), 
difficulties  continued  to  be  observed  with  respect  to  registration  of  NGOs.  Following  legal 
amendments  introduced  in  May  2009  regarding  the  law  on  freedom  of  religion,  religious 
groups  were  obliged  to  register  by  1  January  2010.  In  the  course  of  the  year,  there  were 
several  reported  cases  of  harassment  of  religious  groups  in relation  to  religious  meetings  or 
the distribution of religious literature.  

The lack of protection of property rights is a matter of concern. There are reports of illegal 
expropriation  and  evictions  without  residents’  consent  in  connection  with  large-scale 
infrastructure developments, particularly in Baku. 

In the area of gender equality and empowerment of women, progress was noted as the Law 
on  Prevention  of  Domestic  Violence  and  Protection  of  Victims  of  Domestic  Violence  was 
adopted in October.  According to the law, domestic violence complaints will be considered 
by  the  relevant  authorities  and  prosecution  will  be  carried  out  in  accordance  with  criminal 
procedures.  Furthermore, the law foresees the establishment of special shelters for victims of 
domestic  violence.  In  addition,  the  parliamentary  elections  in  November  2010  led  to  an 
increase  in  the  share  of  female  candidates  from  11%  to  16%,  compared  to  the  previous 
parliamentary elections. The number of female members of parliament increased from 14 to 
20 members as a result. In October 2010 the CoE Convention on Action against Trafficking in 
Human Beings entered into force.  

Cooperation on foreign and security policy; conflict prevention and crisis management  

Since June 2007, Azerbaijan has been invited to align with  CFSP declarations on a case by 
case  basis.  In  2010,  Azerbaijan  aligned  with 18  out  of 44  CFSP  declarations  which it 
was invited  to  join.  There  was  intense  political  dialogue  with  the  government  in  2010, 
including through two Political and Security Committee political dialogue meetings in June 
and September 2010.  

There  were  no  developments  in  the  direction  of  accession  to  the  Rome  Statute  of  the 
International Criminal Court (ICC). 

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Parliament adopted the Law “on participation of the Republic of Azerbaijan in peacekeeping 
operations”  in  May  2010.  The  law  provides  for  Azerbaijan's  participation  in  peace-keeping 
operations in line with the UN Charter, thus observing the principles of international law and 
international agreements.  

Strengthening regional cooperation  

The Southern Caucasus Integrated Border Management (SCIBM) promoted by the EU among 
Georgia,  Armenia  and  Azerbaijan  started  in  March  2010  (See  chapter  on  cooperation  on 
justice,  freedom and security).  The  Regional  Environmental  Centre  (REC)  for  the  Caucasus 
carried  out  regional  activities  in  2010,  including  in  the  fields  of  information  and  public 
participation, environmental policy and local environmental action plans (See chapter 6, part 
on environment). 

Contributing to a peaceful solution of the Nagorno-Karabakh conflict 

Negotiations within the Minsk Group for a peaceful settlement continued with the Presidents 
of  Armenia  and  Azerbaijan  holding  three  bilateral  meetings  in  2010.  At  their  meeting  in 
Astrakhan in November, both Presidents agreed to exchange prisoners of war and bodies of 
dead servicemen. However, courageous steps by both sides will be needed if a resolution to 
the conflict is to be found. 

In autumn 2010, the Minsk Group Co-Chairs intensified their activities with a visit to the Line 
of  Conduct.  A  Field  Assessment  Mission  to  the  territories  surrounding  Nagorno-Karabakh 
also took place. A joint statement by the OSCE Minsk Group together with the Presidents of 
Azerbaijan and Armenia during the OSCE Summit in Astana in December 2010 stressed that 
the ”time has come for more decisive efforts to resolve the Nagorno-Karabakh conflict” and 
that  a  peaceful  resolution  to  the  conflict  is  the  only  way  to  bring  real  reconciliation  to  the 
peoples of the region. However, tensions remain and the situation continues to be fragile. An 
increased  number  of  incidents  of  exchanges  of  fire  and  casualties  on  the  line  of  contact 
continued to be reported and remains a cause for concern. 

In  support  of  the  negotiations  led  by  the  OSCE  Minsk  Group,  an  EU-funded  project  to 
contribute to the peaceful resolution of the Nagorno-Karabakh conflict was launched in June 
2010. The project supports activities in the area of media, public policy and conflict affected 
groups. 

3. 

ECONOMIC AND SOCIAL REFORM 

Macroeconomic framework and functioning market economy  

In  2010,  real  GDP  growth  slowed  to  5%  compared  with  9.3%  GDP  growth  in  2009.  The 
slowdown  was  mainly  due  to  weak  expansion  in  oil  production,  following  the  rapid  rise  in 
2009  which  had  been  driven  principally  by  increased  production  from  the  Azeri-Chirag-
Guneshli oilfields in the Caspian Sea. Growth in the non-oil sector outpaced growth in the oil 
sector (7.9% against 1,8% in real terms). The oil sector had driven exceptional growth rates in 
recent years. It expanded by an annual average of 37% in the period 2005-2009 and currently 
accounts for around half of country’s GDP and over nine/tenths of its exports. Both exports 
and investment bounced back after contracting in 2009. Exports in 2010 rose by 14,5% driven 
by increasing global demand and higher oil and gas prices. Investment rose by 6% linked to a 
slight recovery in foreign direct investment (FDI). The relatively small services sector, which 

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makes  up  approximately  30%  of  GDP,  continued  to  expand,  mainly  driven  by  hotels, 
restaurants  and  the  communications  sector.  The  agricultural  sector  contracted  by  2.5  % 
following poor yields in potato and grain products related to heavy flooding. 

Despite the weak expansion in oil production, the trade balance ran a surplus of around 38% 
of GDP in 2010, compared to 34% of GDP in 2009. Higher oil prices boosted export revenue 
and dwarfed increases in import spending. The assets of the State Oil Fund of the Republic of 
Azerbaijan  (SOFAZ,  the  overseas  windfall  fund)  rose  to  Manat  17.4  billion  (EUR  16.3 
billion)  at  the  end  of  2010,  making  the  fund  roughly  equal  to  40%  of  GDP.  The  current 
account  surplus  rose  above  26%  of  GDP  compared  to  23%  in  2009.  External  public  debt 
remains  low  at  about  10%  of  GDP.  Higher  international  commodity  prices  and  the  adverse 
impact of flooding earlier in the year contributed to a steep rise in inflation (7.4% compared to 
0.6% in 2009). Food products were most affected. 

In  response  to  the  inflationary  pressure,  the  Central  Bank  of  Azerbaijan  (CBA)  raised  the 
refinancing rate by one percentage point to 3% in November 2010 and to 5% in March 2011. 
The increase followed a period of significant monetary easing, in which from October 2008 
the refinancing rate had been reduced by 13 percentage points. In spite of the reduction in the 
refinancing  rate,  average  lending  interest  rates  remain  high  at  around  20%;  high  financing 
costs  remain  an  obstacle  to  development,  particularly  for  smaller  enterprises.  The  Manat 
remained stable against the Euro and the US dollar, helped by higher oil prices and a growing 
current account surplus. 

The Government’s 2010 budget targeted a narrowing of the non-oil deficit at the same time as 
allowing for tax cuts. The budget deficit remained broadly similar to 2009 at around 15% of 
the GDP, excluding transfers from SOFAZ. When SOFAZ transfers were taken into account, 
the  deficit  was  0.9%  of  GDP.  Government  consumption  was  reined  back  in  2010  after  the 
marked  expansion  in  2009.  This  supported  the  government's  pledge  not  to  increase 
expenditure despite rising oil revenues in order to promote greater fiscal sustainability in line 
with the Action Plan objective of maintaining a stable non-oil fiscal deficit. Revenue declined 
as  a  percentage  of  GDP  compared  to  2009,  under  the  influence  of  several  tax  reductions 
which took effect from January 2010. These included cutting the rate of profit tax from 22% 
to  20%;  lowering  the  maximum  rate  of  income  tax  to  30%  from  35%;  and  raising  the 
threshold at which small firms are subject to profit tax.  

In  order  to  diversify  the  economy,  the  authorities  continued  to  improve  the  business 
environment and enhance competitiveness.  Transport infrastructure was further improved, in 
particular the railway corridors. 

Employment and social policy 

The official unemployment rate rose slightly from 0.9% in 2009 to 1.0% in 2010. According 
to the survey-based ILO methodology 6% of the total labour force is without a job. 

On the basis of an inquiry by the Human Rights Commissioner (Ombudsman), the Constitutional 
Court included imperative clauses in the Labour Code providing for the preservation of salaries of 
juveniles during vocational and in-service training. The Law “On Compulsory Insurance against 
Occupational Accidents and Loss of the Ability to work as a Result of Professional Diseases” was 
adopted. 

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Informal  employment  makes  up  an  important  segment  of  the  economy  in  Azerbaijan  and 
labour rights are often violated, especially in the private sector. Occupational accidents are a 
cause  for  concern.  The  Law  on  Compulsory  Insurance  against  Occupational  Accidents  is 
therefore a positive addition to the existing Labour Code. 

In September 2010 Azerbaijan took several measures to reduce poverty, including increasing 
allowances  to  Internally  Displaced  Persons  (IDPs)  and  to  other  low  income  groups,  and 
raising the minimum salary and basic pension of workers in certain public sector institutions.  

In  September  2010,  the  president  also  signed  a  decree  to  strengthen  the  social  security  of 
those  on  low  incomes.  Allowances  will  be  granted  to  people  with  health  problems  that  are 
related to work, industrial accidents or military service, and to disabled children. 

On  social  inclusion  and  protection,  new  rules  on  the  pension  system  entered  into  force  in 
July 2010. The retirement age for men will be raised incrementally to 63 years by 2012, and 
that of women will be raised from 57 to 60 years by 2016. The base pension was increased as 
of  September  2010.  The  Azerbaijani  parliament  adopted  several  amendments  to  the  law  on 
pensions, which took effect from 1 January 2010.  

During 
implementation of the part of the ENP AP related to agriculture.  

the  reporting  period,  no  significant  developments  occurred  regarding 

the 

4. 

TRADE-RELATED ISSUES, MARKET AND REGULATORY REFORM 

After the 2009 decline, bilateral trade bounced back during the reporting period: compared 
to the previous year exports of Azerbaijani products to the EU increased by 33%, while EU 
exports  to  Azerbaijan  rose  by  45.6%.  However,  there  were  no  improvements  in  terms  of 
diversification of exports, as 99.2% of Azerbaijani exports to the EU still consist of mineral 
fuels. 

Azerbaijan made only limited progress towards accession to the WTO, which is the first pre-
condition  for  the  EU  to  consider  starting  negotiations  with  Azerbaijan  on  a  DCFTA.  The 
eighth meeting of the Working Party took place in December 2010.  

No significant developments occurred as far as the implementation of the customs related part 
of the ENP AP is concerned. The revised Customs code has yet to be adopted. The customs 
service  still  needs  to  make  additional  efforts  as  far  as  the  enforcement  of  the  existing  legal 
framework and the implementation of the concept of trade facilitation are concerned. 

Azerbaijan made some progress on the free movement of goods and technical regulations. 
Since  January  2010  Azerbaijan  has  become  an  observer  in  the  European  Committee  for 
Standardisation (CEN).  

Regarding  sanitary  and  phytosanitary  issues,  Azerbaijan  continued  to  work  towards 
accession  to  the  WTO  and  harmonisation  with  the  norms  of  the  Codex  Alimentarius.  This 
process  included  some  approximation  with  EU  rules.  The  upgrading  of  laboratories  and 
training of experts continued in 2010. In order to meet the AP objectives, facilitate trade and 
prepare  for  a  possible  future DCFTA  with  the  EU,  Azerbaijan  would  have  to  make 
considerable  further  progress,  particularly  with  regard  to  approximation  of  legislation,  its 
effective implementation and the enforcement and strengthening of administrative capacity.  

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Azerbaijan  took  the  first  steps  in  the  implementation  of  the  "Action  Plan  on  the  re-
organisation  of  education  on  accounting  and  audit  at  high  schools  and  secondary  schools, 
and application of a certification system verifying the professional level of education in 2010-
2012 in view of transition to the international and national accounting standards". The plan is 
the last stage of the reform launched in 2003. 

Concerning financial services, the CBA reduced the reserve requirements for domestic and 
foreign  currency  deposits  of  commercial  banks  from  12%  to  0.5%,  and  increased  deposit 
insurance coverage from 6,000 to 30,000 manat (EUR 28 000), to ensure sufficient liquidity 
and  strengthen  confidence  in  the  banking  sector.  In  a  sign  of  potential  weakness,  non-
performing loans rose sharply in 2010, approaching 5% of all loans, albeit from a low base. A 
new law on non-bank credit institutions was implemented in February 2010, creating a legal 
framework and strengthening the central bank’s supervision of this embryonic sector. 

The CBA was also working on plans to further consolidate the banking system in Azerbaijan 
and  to  enhance  competition  among  banks.  The  law  on  non-bank  credit  organisations  was 
promulgated in February 2010. It created a legal framework for non-bank  credit institutions 
and strengthened the CBA’s supervision of the sector. The non banking credit organisations 
require licensing by the CBA and those mobilising collateral deposits must seek approval for 
opening  branch  offices. CBA  has  been  given  the  responsibility  to  define  the  prudential 
standards and requirements, such as minimum capital or loan loss provisions, under the aegis 
of the current law. In November 2010, the president approved the law on investment funds. 

Other key areas 

In  September  2010  the  ministry  of  taxes  approved  a  regulation  on  tax  appeals.  Under  the 
terms of this regulation a Board, composed by members to be appointed by the minister, will 
examine appeals on tax matters, including allegations of corruption and tax audits and report 
to the minister. Azerbaijan continued to expand the network of agreements on avoidance of 
double taxation with EU member states: two agreements entered into force in 2010, one with 
Luxembourg and one with Italy, bringing the number of agreements to 17.  

In the field of the competition policy, draft amendments to the competition law continued to 
be discussed in the parliament.  

There is a minor development to report on the legal or institutional framework for intellectual 
property  rights  as  the  Geneva  Act  of  the  Hague  Agreement  Concerning  the  International 
Registration of Industrial Designs entered into force in December 2010. Azerbaijan ranked 8th 
in the software piracy study conducted by an independent expert organisation in May 2010, 
with 88% of pirated software in use.  

The  public  procurement  system  is  over  10  years  old  and  well  established,  but  requires 
modernisation,  as  demonstrated  by  tenderers'  complaints  of  lack  of  transparency. SIGMA, 
carried out at the request of the State Procurement Authority, a needs assessment to identify 
required reforms. 

In 2010 a Global Assessment of the National System of Official Statistics of the Republic of 
Azerbaijan  was  jointly  undertaken  by  the  European  Commission,  the  European  Free  Trade 
Association (EFTA), and the UN Economic Commission for Europe (UNECE). A three-year 
action  plan  for  the  implementation  of  1993  SNA  and 2008  SNA was  initiated  in 2009. The 
dissemination of statistics via Internet has recently significantly increased. 

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On  enterprise  policy,  the  implementation  of  the  State  Programme  on  Socio-Economic 
Development  for  2009-2013  continued  in  2010.  The  private  sector  continued  to  suffer  from 
bureaucratic  obstacles  in  registration  and  licensing  procedures  and  from  corruption,  which 
affected small and medium-sized enterprises (SMEs) in particular. 

In  spite  of  the  need  to  improve  inspection  systems  in  the  area  of  public  internal  financial 
control, there were no new developments in the period under review.  

5. 

COOPERATION ON JUSTICE, FREEDOM AND SECURITY 

A  first  meeting  of  the  EU-Azerbaijan  Subcommittee  on  Justice,  Freedom  and  Security  and 
Human Rights and Democracy was held in Baku during two days in November and December 
2010, underlining the strong mutual willingness to deepen relations in these policy areas. 

in 

to  participate 

Azerbaijan  continued 
the  Southern  Caucasus  Integrated  Border 
Management  (SCIBM)  regional  programme,  the  implementation  of  which  began  in  March 
2010.  The  Border  Service  Academy  was  inaugurated  in  August  2010  to  train  officers  and 
border  guard  staff  in  modern  border  management  techniques  and  approaches.  New  and 
reconstructed  border  crossing  points  were  opened  during  the  year.  In  September  2010, 
Azerbaijan signed an agreement on its state border with the Russian Federation, as well as an 
addendum on its delineation.  

On migration, Azerbaijan tightened visa issuance procedures with the entry into force of the 
Presidential  Decree  on  Matters  Concerning  Issuance  of  Visas  for  Foreigners  and  Stateless 
Persons Arriving in Azerbaijan, which restricts the categories of travellers who may receive a 
visa on arrival into the country. These rules differ from EU legislation and practice. For the 
first time, Azerbaijan enforced a labour immigration quota of 10.700 in 2010. 

Regarding  the  fight  against  organised  crime  and  terrorism,  in  March  2010  Azerbaijan 
ratified the CoE Convention on Cybercrime which entered into force in July. The signature of 
the  Additional  Protocol  concerning  the  criminalisation  of  acts  of  a  racist  and  xenophobic 
nature committed through computer systems is still pending. Moreover, the CoE Convention 
on  the  Protection  of  Children  against  Sexual  Exploitation  and  Sexual  Abuse,  which 
Azerbaijan signed in 2008, has not yet been ratified.  

Work  continued  in  the  fight  against  trafficking  in  human  beings  in  the  context  of  the 
National  Action  Plan  to  Fight  against  Trafficking  in  Human  Beings  (2009-2013).  The 
ministry  of  interior  and  the  State  Committee  for  Family,  Women  and  Children’s  Affairs 
organised  a  roundtable  with  civil  society  input  and  contributions  in  September  2010. 
Azerbaijan  signed  and  ratified  the  2005  CoE  Convention  on  Action  against  Human 
Trafficking, which entered into force in October 2010. 

With regard to the fight against drugs, Azerbaijan continued to implement the five year action 
programme  (2007-12)  on  combating  drug  addiction  with  a  particular  emphasis  on  law 
enforcement and cooperation with its partners of the Community of Independent States (CIS). 
In July 2010, it attended a CIS expert meeting on drug trafficking and organised crime with a 
view  to  developing  future  cooperation  programmes  on  capacity  building.  In  October  2010, 
Azerbaijan  participated  in  the  ENP  regional  seminar  on  the  EU  drug  monitoring  system 
organised  by  European  Monitoring  Centre  for  Drugs  and  Drug  Addiction  and  the  European 
Commission in Brussels.  

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Azerbaijan  continued  the  fight  against  money  laundering  within  the  context  of  the  2009 
Anti-Money  Laundering  law.  The  financial  intelligence  unit  under  the  Central  Bank  began 
addressing  the  issues  highlighted  by  CoE  Moneyval  committee  during  the  previous  year, 
which  resulted  in  some  improvement  in  the  country’s  control  regime.  As  was  the  case  in 
2009, the CoE Convention on Laundering, Search, Seizure and Confiscation of the Proceeds 
from Crime and on the Financing of Terrorism remained unsigned. Moreover, Azerbaijan did 
not  sign  the  2003  Protocol  to  the  CoE  Criminal  Law  Convention  on  Corruption,  which 
criminalises  the  active  and  passive  bribery  of  domestic  and  foreign  arbitrators  and  jurors. 
There  is  a  continuing  need  to  expedite  cooperation  with  relevant  experts  and  international 
financial institutions in order to address all issues of concern.  

With  regard  to  cooperation  in  criminal  and  civil  law  matters,  the  signature  of  the  Second 
Additional Protocol to the European Convention on Mutual Assistance in Criminal Matters is 
still  pending.  No  further  developments  took  place  regarding  Azerbaijan’s  accession  to  the 
1980  Hague  Convention  on  the  Civil  Aspects  of  International  Child  Abduction  and  to  the 
1996  Convention  on  Parental  Responsibility  and  the  Protection  of  Children.  Moreover, 
Azerbaijan  did  not  sign  the  Additional  Protocol  to  the  CoE  Convention  on  the  Transfer  of 
Sentenced  Persons  nor  ratify  the  European  Convention  on  the  Transfer  of  Proceedings  in 
Criminal Matters.  

The ministry of justice signed a Memorandum of Understanding with the Dutch ministry of 
justice  on  cooperation  in  criminal  matters  in  August  2010.  In  September  2010,  Azerbaijan 
hosted  a  meeting  of  the  heads  of  security  services  of  CIS  countries.  However,  in  2010 
Azerbaijan  had  not  yet  signed  two  important  Hague  Conventions  on  international  judicial 
cooperation,  namely  the  1965  Convention  on  the  Service  of  Documents  and  the  1970 
Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. 

As  regards  data  protection,  in  May  2010  Azerbaijan  signed  and  ratified  the  1981  CoE 
Convention on the Protection of Individuals with regard to Automatic Processing of Personal 
Data.  Azerbaijan  has  yet  to  sign  and  ratify  the  2001  Additional  Protocol  on  supervisory 
authorities and trans-border data flows. Azerbaijan adopted the Law on Personal Data, which 
regulates  the  collection,  processing  and  protection  of  personal  data  and  lays  down  the 
responsibilities of state bodies, local authorities and other entities dealing with these data. 

6. 

TRANSPORT, ENERGY, ENVIRONMENT, THE INFORMATION SOCIETY, RESEARCH AND 
DEVELOPMENT 

In  the  transport  sector,  improving  infrastructure  remains  an  important  priority  for 
Azerbaijan.  Azerbaijan  stepped  up  investments  and  signed  major  loan  agreements  both  to 
improve  road  infrastructure  (in  particular  to  expand  the  Baku-Shemakha  highway)  and  to 
modernise railway infrastructures and upgrade rolling stock.  

In  the  railway  sector,  Azerbaijan  approved,  in  February  2010,  regulations  transforming 
Azerbaijan Railways into a closed joint-stock company with the view to converting it into a 
holding company at a later stage. In July 2010 the Government approved the "State program 
on development of the railway system in Azerbaijan in 2010-2014". Azerbaijan Railways also 
acquired more powers in decision making and in attracting investors. A computerised ticket 
sales system was introduced in August 2010. In the road sector, Azerbaijan amended the law 
on traffic rules in July 2010 in order to introduce lower speed limits. In the aviation sector the 
process  on  preparation  of  negotiations  on  the  aviation  agreement  EU-  Azerbaijan  has  been 

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initialised.  In  the  maritime  sector,  Azerbaijan  continued  to  invest  in  improving  its  maritime 
fleet,  maritime  ports  and  their  hinterland  connections.  In  March  2010,  Azerbaijan  launched 
the construction of a new shipbuilding plant in the Garadagh district of Baku. Also in March 
2010, Azerbaijan signed a project to construct a Baku Bay marine bridge aimed at closing the 
centre of the city for cargo traffic. 

Azerbaijan  and  the  EU  stepped  up  energy  cooperation  including  on  the  basis  of  their 
Memorandum  of  Understanding  on  a  strategic  partnership  in  the  field  of  energy.  In  April 
2010,  the  Energy  Commissioner  visited  Baku.  Azerbaijan  confirmed  that,  although  it  is 
pursuing  export  diversification,  the  EU  remains  its  priority  destination  for  energy  exports. 
Azerbaijan sustained oil and gas exports particularly through the oil and gas pipelines Baku-
Tbilisi-Ceyhan  (BTC)  and  Baku-Tbilisi-Erzurum.  In  2010,  oil  from  Turkmenistan  was 
shipped over the Caspian Sea and exported through the BTC pipe. In June 2010, Azerbaijan 
and  Turkey  reached  agreement  on  a  framework  for  gas  pricing  and  transit  through  Turkey. 
This is a key step in the development of the major Shah-Deniz-II gas field and the strategic 
Southern  Gas  Corridor.  In  September  2010,  negotiations  started  on  future  gas  exports  from 
Shah-Deniz  II.  Azerbaijan  continued  the  exploration  and  development  of  new  gas  and  oil 
fields.  It  actively  participated  in  the  Caspian  Development  Corporation  study  funded  by  the 
EU, the European Investment Bank and the World Bank.  

In  January  2011,  on  a  visit  to  Azerbaijan,  Commission  President  Barroso  and  President 
Aliyev signed a Joint Declaration on gas delivery for Europe. 

endorsed 

the  AGRI 

In  September  2010,  the  Heads  of  State  of  Azerbaijan,  Georgia  and  Romania,  as  well  as  the 
Hungarian  Prime  Minister, 
(Azerbaijan-Georgia-Romania 
Interconnection) project. Its aim is to export liquefied natural gas from Azerbaijan, through a 
Georgian Black Sea terminal, to Romania and beyond. A feasibility study is being conducted. 
In September 2010, SOCAR (State Oil Company of Azerbaijan) and Russian Gazprom agreed 
to  increase  gas  exports  to  Russia  in  2011  to  two  billion  cubic  metres.  Azerbaijan,  Georgia, 
Lithuania,  Poland  and  Ukraine  continued  work  towards  a  Euro-Asian  Oil  Transportation 
Corridor. Azerbaijani, Bulgarian and Georgian companies further studied the possibilities of 
developing compressed natural gas supply to the EU across the Black Sea from the Georgian 
coast.  In  July  2010,  Turkey  and  SOCAR  agreed  to  construct  a  gas  pipeline  for  supplies  to 
Nakhichevan via Turkey. Azerbaijan consolidated its participation in the Extractive Industry 
Transparency Initiative, aiming at transparency of oil and gas revenues.  

Azerbaijan continued to implement its state programme on fuel-energy complex development 
for  2005-2015,  including  by  further  preparing  new  energy  sector  legislation.  SOCAR 
strengthened its presence in the region, for example by establishing further petrol stations in 
Georgia,  opening  its  first  station  in  Ukraine  and  developing  plans  to  build  a  refinery  in 
Turkey.  In  2010,  Azerbaijan  also  constructed  and  rehabilitated  its  electricity  and  gas 
infrastructure.  It  initiated  the  construction  of  the  Black  Sea  Electricity  Transmission  Line 
(Azerbaijan-Georgia-Turkey).  

Azerbaijan  remained  committed  to  using  more  renewable  energy.  In  2010,  the  new  State 
agency of alternative and renewable energy sources, established in 2009, became operational. 
In Gobustan region, it started to develop a pilot renewable park of 5 MW based on wind, solar 
and  biogas  power.  It  continued  implementing  energy  efficiency  measures  and  started 
preparing an energy efficiency strategy. In January 2010, Azerbaijan amended the rules on the 
storage and the use of radioactive materials and also trained nuclear experts.  

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Regarding  climate  change,  Azerbaijan  continued  preparing 
Communication to the UN Framework Convention on Climate Change.  

its  Second  National 

Azerbaijan took steps to prepare Clean Development Mechanism (CDM) projects, even if so 
far  no  CDM  project  has  been  registered  at  the  UN  level.  Azerbaijan  is  encouraged  to  fully 
implement the Cancun agreement and in particular devise a low carbon development strategy 
including update information on target or actions that it will implement. The EU continued to 
provide support to Azerbaijan to implement the Kyoto Protocol. 

In the field of environment, the President of Azerbaijan declared the year of 2010 “The Year 
of Environmental Protection in Azerbaijan” and launched a campaign to plant 30 million trees 
for  environmental  restoration.  The  National  Environment  Action  Plan  is  still  under 
preparation. The legislative framework continues to require further development, in particular 
as regards implementing legislation. Azerbaijan submitted a National Implementation Plan for 
2007–2020  under  the  Stockholm  Convention  on  Persistent  Organic  Pollutants.  Continued 
attention is required in order to implement existing strategies and plans and to further enhance 
monitoring and enforcement. 

Azerbaijan  established  the  State  Commission  for  Integrated  Water  Management  and 
strengthened  the  environmental  authorities.  Further  strengthening  of  administrative  capacity 
remains  a  major  challenge,  and  coordination  between  authorities  continues  to  require 
attention.  Azerbaijan  took  some  steps  to  promote  the  integration  of  environmental 
considerations into other policy sectors, such as energy.  

Azerbaijan continued to carry out some other activities to provide information to the public. 
Procedures and consultation with the public in the context of environmental assessments and 
licensing remain inadequate.  

There  were  no  significant  developments  as  regards  ratification  of,  or  accession  to,  the 
outstanding relevant Protocols to the UNECE Conventions. Furthermore, the implementation 
of several agreements that have already been ratified requires particular attention. Azerbaijan 
participated  in  regional  cooperation  under  the  Framework  Convention  for  the  Protection  of 
the Marine Environment of the Caspian Sea, the Caspian Environment Programme and also 
the  EU  Water  Initiative.  Cooperation  and  information  exchange  took  place  between  the  EU 
including  on  water,  forestry,  waste  management,  management  of 
and  Azerbaijan, 
environmental information, nature protection and air quality.  

The  REC  for  Caucasus  carried  out  regional  activities  in  2010  including  in  the  fields  of 
information  and  public  participation,  environmental  policy  and  local  environmental  action 
plans. REC also further improved its internal management, fund-raising and visibility in 2010. 
Nevertheless, it carries over a financial shortfall from previous years which is hampering its 
activities.  

Concerning developments in the field of civil protection, there are  activities under the  EaP 
framework. (please see the sectoral report). As regards the Information Society, in August 
2010  Azerbaijan  approved  the  ‘State  Program  on  development  of  communication  and 
information 
the 
technology  for  2010-2012  (Electronic  Azerbaijan)’.  This 
privatisation  of  state  owned  enterprises,  the  creation  of  an  independent  regulator  and  the 
liberalisation of the market. Azerbaijan also adopted an “Action Plan for the Establishment of 
E-government  in  the  Republic  of  Azerbaijan  in  2010-2011”.  There  is  no  clear  separation 
between the commercial activities and the regulatory role of the ministry of communications 

includes 

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and information technologies (MCIT). The state involvement in the sector has decreased only 
slightly, thus hampering the emergence of competition in the fixed and broadband markets. 

MCIT  plans  to  assess  the  use  of  4G  mobile  technologies,  implement  number  portability 
(where a draft is discussed with the operators), and implement the Central Equipment Identity 
Register; e-signature will be implemented by the end of 2010. As part of the State programme 
‘e-Azerbaijan’, by September 2010 the ministry of health had issued approximately 300.000 
electronic health cards. 

Progress  can  be  reported  on  the  digitalisation  of  the  telecommunication  network  (now 
approximately  90%)  and  in  the  reconstruction  of  the  fixed  network.  Regarding  newer 
technologies,  WiMAX  wireless  Internet  access  services  have  become  available  since  the 
launch of commercial operation. 

Investment  and  capacity  in  research  continue  to  remain  modest.  Azerbaijan  continued  to 
increase  the  level  of  participation  in  the  7th  Framework  Programme  (FP7),  although  the 
overall numbers of applications remained low. Applications involving 13 Azerbaijani research 
groups were successful; as of November 2010 they received EUR 500.000 in EU support. 

Azerbaijan  continued  to  participate  actively  in  the  International  S&T  Cooperation  Network 
for Eastern European and Central Asian countries (FP7 IncoNet EECA project), which aims 
to support a bi-regional EU-EECA policy dialogue on science and technology and to increase 
EECA participation in FP7.  

Azerbaijan  is  a  target  country  under  the  new  FP7  International  Cooperation  Network  for 
Central  Asia  and  South  Caucasus  countries  (FP7  IncoNet  CA/SC)  which  was  launched  in 
April  2010  and  which  aims  to  strengthen  and  deepen  the  EU's  S&T  cooperation  with  the 
CA/SC countries, as well as with the Republic of Moldova. 

Azerbaijan  is  also  actively  participating  in  the  Black  Sea  ERA-NET  project,  which  aims  to 
contribute  to  the  coordination  of  EU  member  states’  and  partner  countries’  research 
programmes targeting the extended Black Sea region.  

7. 

PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

In  2010,  work  began  on  a  gradual  review  of  the  legislative  framework  for  the  various 
education sub-sectors following the adoption of a framework education law in 2009. In this 
regard, the ministry of education adopted new regulations on life-long learning in September 
2010  establishing  an  approach  to  human  resource  development,  continuing  education  and 
adaptation of skills to labour market needs. The ministry also established a Working Group on 
the  National  Qualifications  Framework 
in  May  2010  alongside  a  Department  for 
Accreditation dealing with quality assurance in education. Per capita financing was applied to 
higher  education  also  in  order  to  improve  quality  and  enhance  inter-university  competition. 
While  overall  investment  in  education  increased  in  2010,  it  remains  insufficient  to  ensure 
adequate development of human capital that can contribute to economic diversification. 

Higher  education  reform  in  Azerbaijan  continued  to  benefit  from  cooperation  under 
Tempus, with two projects selected under the third Call for Proposals of Tempus IV. For the 
first  time  a  project  will  be  coordinated  by  an  Azerbaijani  higher  education  institution 
(Azerbaijan University of Languages). 

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One  Azerbaijani  student  received  a  scholarship  for  an  Erasmus  Mundus  Masters  Course 
under  Erasmus  Mundus  Action  1  for  the  academic  year  2010-11.  Academic  and  student 
mobility  was  further  facilitated  under  Erasmus  Mundus  Action  2  during  the  same  period 
through the expected award of 30 mobility grants. For the first time, a Jean Monnet grant for 
an interdisciplinary module was awarded to the Azerbaijan Diplomatic Academy, providing a 
basis for future quality public service training. Azerbaijan is encouraged to make full use of 
the available opportunities under Erasmus Mundus. 

In  the  area  of  vocational  training,  work  continued  on  the  adoption  of  State  curriculum 
standards for initial vocational training; strategic planning guidelines for training institutions 
as  well  their  renovation  and  upgrading.  Challenges  remain  with  regard  to  modernisation  of 
technical  infrastructure  and  development  of  teacher  competences.  Capacity  for  reform 
remains limited, particularly in the context of an ageing teaching workforce, while the issue of 
relevance  and  quality  in  training  provision  needs  urgent  examination.  The  Labour  Market 
Review  undertaken  by  the  European  Training  Foundation  in  the  context  of  the  EaP  in 
September 2010 provided pointers for future policy planning.  

In the area of culture, Azerbaijan participated in one project under the 2010 Special Action 
for ENP countries under the Culture Programme. To advance its regional cooperation in the 
framework  of  the  EaP  and  the  Kyiv  Initiative,  Azerbaijan  should  ratify  the  2000  European 
Landscape  Convention  and  the  2005  CoE  Framework  Convention  on  the  Value  of  Cultural 
Heritage for Society. 

Azerbaijani young people and youth organisations continued to benefit from the opportunities 
offered by the Youth in Action Programme, through exchanges, voluntary service and youth 
cooperation activities in non-formal education.  

Azerbaijan pursued  health  sector  reform,  including  in  the  areas  of  healthcare  financing  and 
medical  insurance.  In  February  2010,  in  the  context  of  last  year’s  influenza  A(H1N1) 
epidemic,  the  EY  and  Azerbaijan  established  communication  channels  for  the  exchange  of 
epidemiological  information  in  the  event  of  a  public  health  emergency  of  international 
concern. Azerbaijan attended the EU's global health conference in June 2010. 

8. 

FINANCIAL COOPERATION – 2010 KEY FACTS AND FIGURES 

Cooperation framework 

The  Mid-Term  Review  of  the  programming  document  confirmed  that  the  Country  Strategy 
Paper adopted in 2007 remains a valid framework for cooperation with Azerbaijan. The new 
National Indicative Programme (NIP) 2011-13 for Azerbaijan was adopted in May 2010 and 
has  a  budget  of  EUR  122.5  million.  The  programme  is  geared  towards  supporting  the 
achievement of key policy objectives as outlined in the EU-Azerbaijan AP and pursues three 
priorities:  (1)  democratic  structures  and  good  governance,  (2)  socio-economic  reform  and 
sustainable development, trade and investment, regulatory approximation and reform and (3) 
Partnership and Co-operation agreement and ENP AP implementation, including in the areas 
of energy security, mobility and security. 

The  NIP  2011-13  includes  a  specific  appropriation  to  finance  new  actions  under  the  EaP, 
notably a Comprehensive Institution Building programme (CIB) (with a minimum allocation 
of EUR 19.2 million for Azerbaijan) and the Regional Development Pilot Programme (with a 

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minimum of EUR 9.3 million).. The CIB Framework Document was signed in January 2011 
and identified the following key institutions for support: ministry of foreign affairs, ministry 
of economic development, ministry of justice, Civil Service Commission.  

Implementation 

Implementation of the measures covered by the Annual Action Programmes (AAP) for 2007, 
2008 and 2009 is under way. The AAP 2007 main programme was the Sector Budget Support 
(SBS) in the area of energy efficiency and renewable energies, and substantial progress in the 
implementation  of  this  programme  was  made  in  2010.  Furthermore,  in  December  2010, 
Azerbaijan launched the implementation of the SBS on justice related to the AAP 2008. This 
Programme  is  aimed  at  enhancing  the  regional  courts,  the  Academy  of  Justice  and  the 
penitentiary  sector.  In  August  2010,  the  Financing  Agreement  related  to  AAP  2009  was 
countersigned by the government. 

In 2010 a total of EUR 7 million was committed to Azerbaijan under the bilateral envelope of 
the European Neighbourhood and Partnership Instrument (ENPI). The 2010 AAP focused on 
governance. Twinning projects on agriculture, employment and social affairs, health, finance 
and  trade  have  been  identified  and  are  currently  under  preparation.  Considerable  resources 
have  been  devoted  to  the  financing  of  twinning  operations.  At  the  end  of  2010,  there  were 
four twinning operations ongoing and a further 12 in preparation.  

In  addition  to  the  bilateral  allocation,  Azerbaijan  also  benefited  from  cooperation  activities 
financed under the ENPI inter-regional and regional programmes.  

Under the ENPI-financed Neighbourhood Investment Facility (NIF), one regional project for 
which Azerbaijan is eligible, the "Eastern Partnership-SME Finance Facility", was approved in 
2010, committing EUR 15 million for technical assistance and risk capital. This multi-country 
project is expected to leverage EUR 135 million in loans from European Finance Institutions 
(EIB, EBRD and KfW) to support SMEs in the Eastern neighbourhood region. 

Other  EU  instruments  supplement  the  ENPI  assistance  package.  Azerbaijan  benefited  from 
cooperation activities financed under horizontal instruments such as the European Instrument 
for  Democracy  and  Human  Rights  (EIDHR),  focusing  on  media  freedom  and  freedom  of 
expression,  and  the  Development  Co-operation  Instrument  (DCI)  thematic  programmes, 
including  the  Non-State  Actors  and  Local  Authorities  in  Development  (NSA-LA),  focusing 
on poverty reduction and sustainable development strategies.  

Donor coordination 

In  2010,  the  EU  Delegation  in  Azerbaijan  ensured  the  coordination  of  assistance  activities 
both  within  the  EU  and  with  other  donors.  The  donor  coordination  matrix  contributed  to 
identifying good synergies with the World Bank in the area of public finance.  

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