US embassy cable - 04YEREVAN2216

UNCLAS YEREVAN 002216 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, PREL, PGOV, AM 
SUBJECT:  RUSSIAN-GEORGIAN BORDER CLOSING "NOT 
TRAGIC" BUT COSTLY FOR ARMENIA 
 
 
1. (U) Sensitive But Unclassified.  Please protect 
accordingly. 
 
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SUMMARY 
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2. (SBU) As a result of the Russian-Georgian border 
closure roughly one thousand trucks bound for 
Armenia are stuck at the Verkhniy Lars border 
crossing point between Russia and Georgia. 
According to Deputy Minister of Trade Tigran 
Davtyan, the situation "is not tragic--but will 
create some additional costs."  The closure has 
created significant difficulties for the companies 
that currently have large shipments halted at the 
border:  to reroute now will add thirty percent to 
transport costs and is bureaucratically cumbersome. 
Importers are rerouting new shipments though the 
Ukraine, which will add about 10 percent to 
transport costs for Russian goods.  The GOAM has 
approached the Russian government "at the highest 
level" to solve the situation at recently as October 
6, but to no avail.  The Russian government 
maintains that the closed border is an issue of 
terrorism control and, while expressing sympathy for 
the impact on Armenia, has offered no timeline to 
reopen the border.  End Summary. 
 
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GEORGIA - RUSSIA BORDER CLOSED AFTER BESLAN ATTACKS 
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3. (SBU) The Russian government closed the Verkhiny 
Lars border crossing with Georgia immediately 
following the September 1 attack at the Beslan 
School.  In an official visit to Armenia at the 
beginning of October, Sergey Mironov, Chairman of 
the Russian Federation Council, stated that the 
border closure was mandated by the existing threat 
of terrorism in North Ossetia and was not directed 
against cargo transport to Armenia.  Russian 
officials have told the GOAM that Russia has a 
legitimate concern that terrorists are entering 
North Ossetia from Georgia. 
 
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ARMENIA TO DIVERT RUSSIAN IMPORTS THROUGH BLACK SEA 
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4. (SBU) The lion's share of Armenia's imports 
transit Georgian territory, and nearly all imports 
from Russia (15 percent of Armenia's imports) came 
across the Verkhiny Lars border before September 1. 
Nearly one thousand trucks bound for Armenia are 
currently at the border awaiting special permission 
to continue into Armenia.  According to Davtyan, in 
a few exceptional cases the Russian border guards 
permitted some trucks to cross in the first days of 
the closure, but now the border is completely 
closed.  Importers are beginning to reroute trucks 
through the Ukraine to the Georgian seaport of Poti, 
and then overland to Armenia, adding thirty percent 
to transport costs for those trucks currently stuck 
at the border. 
 
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CLOSURE VIEWED AS MORE OR LESS PERMANENT 
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5. (SBU) The GOAM notes that the Russian government 
has not provided them a timeline for reopening the 
border.  Although Armenia and Russia are strategic 
allies, the GOAM has accepted Russia's explanation 
for the closure and the Ministry of Trade has told 
Armenian importers to seek alternative import 
routes.  Although the closure is hurting those 
companies that currently have goods halted at the 
border, the long-term effects will be slight 
additional transport costs on Armenian's imports 
from Russia. 
RICHTER