Publication: Monitor Volume: 3 Issue: 134

Moscow informed the Chechen government yesterday that Russian prime minister Viktor Chernomyrdin had signed the customs agreement between Russia and Chechnya. The decision to sign the accord was made after the two sides resolved differences on the status of the "Sheikh Mansur" (formerly "Severny") airport outside Djohar-gala and agreed on a scheme for customs control on Chechnya’s borders.

Meanwhile, talks have intensified on another important economic question. A Chechen delegation arrived in Moscow yesterday with the authority to sign an agreement on banks as early as today if the Russian side accepts Chechnya’s proposed compromise wording on a last remaining unresolved point. Then, all the obstacles to the signing of a trilateral agreement between Moscow, Djohar-gala, and Baku on the transit of "early" Azerbaijani oil through Chechen territory will be removed. (Russian news agencies, July 9)

Chechnya has consistently negotiated to be considered as an equal partner in any agreement on the transit of Caspian Sea oil. (See Monitor, July 8) Moscow agreed to that condition on June 30, and Baku followed on July 4. The Russian media then predicted that the trilateral agreement would be signed within days in either Moscow or Baku. (Kommersant-daily, July 4, Nezavisimaya gazeta, July 5) But Chechen representatives did not arrive in either capital; instead, Chechen president Aslan Maskhadov unexpectedly announced that an agreement on the transit of oil could be signed only "together with the rest of the economic documents" — i.e., the customs and banking agreements. (Kommersant-daily, July 5)

The explanation seems to be that Chechnya seeks to get the most out of its sole lever of economic pressure on Russia (the transit of Caspian oil through its territory), and intends to sign the trilateral agreement only after extracting as many concessions as possible from Russia. In this connection, the weekly "Kommersant" has suggested that Moscow’s unexpected consent to the trilateral agreement may in fact have inspired a sharp increase in the activities of American oil companies with an interest in the "western variant" — i.e., the transit of Caspian Sea oil through Georgia. Moscow, of course, prefers the "northern" variant, which passes through its own territory. According to Kommersant, Moscow is anxious to clear the way for the oil to pass through Chechnya before the Georgian and Azerbaijani leaders visit Washington. (Kommersant, July 8) First Deputy Prime Minister Boris Nemtsov confirmed yesterday that Moscow will welcome "any agreement with Chechnya" so long as it ensures the secure operation of the oil pipeline from Baku to Novorossiisk "and we [Russia] do not lose Caspian Sea oil." (Itar-Tass, July 9)

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