THE LEGAL REGIME OF THE CASPIAN SEA: VIEWS OF THE LITTORAL STATES Legal Issues
by Farid Rauf oglu Shafiyev
The Caspian Sea is the largest closed water body in the world and is surrounded by five states--Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. It has an area of 440,000 square kilometers with an ultra-depth of 1,025 meters, a length of 1,440 kilometers from north to south and width of 320 kilometers from east to west. Due to fluctuations in the water level, which over the past century has oscillated significantly, those figures are not constant.
The mineral resources of the Caspian Sea attract the most attention, and not only from the littoral states. U.S. Energy Department experts estimate that the Caspian region's oil reserves comprise 200 billion barrels (about 16 percent of the world reserves).  While some emphasize the big potential of the Caspian oil resources, others refer to more modest figures. Those observers who are skeptical about the volume of Caspian oil say that it will, at most, reach 5 percent of the world demand.
Geopolitical and economic interests stand behind the disputes surrounding the significance of the Caspian oil resources. Some circles do not want to see Western oil companies in the Caspian region. Others, such as traditional oil producing and exporting countries, may be less than happy about the emergence of new competitors.
The country most interested in diminishing the quantity of the Caspian oil is Armenia. As is well known, a significant portion of the Caspian oil reserves belongs to Azerbaijan, against whom Armenia has territorial claims--namely, Nagorno-Karabakh region of Azerbaijan. This territory and six other Azerbaijani regions are occupied by Armenia. Although a ceasefire has been held for seven years, the conflict has still not been resolved. Logically, pro-Armenian circles worldwide, foreseeing the possibility that, as a result of multi-million investments from the West, the geopolitical situation in the region may shift in favor of Azerbaijan, are interested in distracting the attention of the Western world from the Caspian oil deposits.
Even if the volume of the Caspian oil reserves is modest, it may have an impact, and not only on the Caspian region. The significance of the Caspian region's oil reserves "lies in the field of energy security. Additional supplies, even at the modest levels of output, can make an important contribution to limiting the market power of the major producers as well as reducing to some extent the percentage of world oil production subject to disruption. Therefore, this marginal oil can bring about a lowering of prices and can enhance energy security." 
Neither should the navigational value of the Caspian Sea should be underestimated. The Caspian Sea is connected to the Black, White and Baltic Seas via the Volga-Dnepr-Don rivers channels. Moreover, the TRASECA project, which will create a Eurasian communication route through the Caspian region, means that it is impossible to overestimate the significance of the Caspian Sea's geographic position.
Although historically called a sea, the majority of geologists classify the Caspian Sea as a lake. But legal experts are inclined to classify it as a closed sea. What difference does it make, and for whom? The issue is neither a purely legal or geological.
Since the collapse of the Soviet Union, the Caspian Sea, which was previously shared by the Soviet Union and Iran under bilateral treaties of 1921 and 1940 , has had to be shared by the five littoral states: Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. These have not been able to reach on how to divide the sea and its resources. Classifying the Caspian Sea as a sea or lake can have an impact on the principles of its delimitation among them.
Should the Caspian Sea be classified as a sea, the provisions of the United Nations Convention on the Law of the Sea of 1982 (UNCLOS) will be applicable. According to the relevant UNCLOS provisions, each littoral state would have a territorial sea with the breadth not exceeding twelve miles, an exclusive economic zone not exceeding 200 miles and a continental shelf. Bearing in mind, however, that the maximum width of the Caspian Sea does not exceed 200 miles, Article 15 of UNCLOS mandates that the territorial sea of States with opposite or adjacent coasts must not extend "beyond the median line every point of which is equidistant from the nearest points on the baselines from which the breadth of the territorial seas of each of the [two] States is measured."
Should the sea be classified as a lake, in the absence of an international convention on the subject, international customs as evidence of a general practice accepted as law will be the primary source for establishing the Caspian Sea's legal regime. The practice of delimiting lakes between/among littoral states overwhelmingly shows that lakes are divided so that each costal state has an exclusive sovereignty over the biological and natural resources, water surface and shipping in the national sectors, which are formed by outlining a median line and the external border of the respective sectors. For example, these principles were generally applied in the division of the Great Lakes between the United States and Canada, Lake Chad among Cameroon, Chad, Niger and Nigeria, Lake Malawi among Malawi, Mozambique and Tanzania, and Lake Geneva between Switzerland and France.
There are examples of joint ownership of lakes by littoral states. For example, Lake Titicaca is jointly owned by Bolivia and Peru. This approach, however, is more the exception than the rule.
The headline of an article in the New York Times--"It's a Sea! It's a Lake. No. It's a Pool of Oil--reveals one of the major issues behind the fuss over the Caspian Sea's legal regime. "A weird linguistic quarrel has big-money consequences." Indeed, if determining the legal regime of the Caspian Sea did not have implications for profits that might be gained from the Caspian resources, the problem would already have been resolved.
Because of the complex of interests involved--among them political, geopolitical, economic and geological--the littoral states have different views on the principles to be applied to the delimitation of the Caspian Sea. Without considering such interests, it is impossible to understand the states' stands regarding the Caspian Sea's legal regime. Who will be entitled to what portion of the Caspian Sea is important to both the littoral states and others. The Caspian natural resources provide and opportunity to the newly independent states--including Azerbaijan, Kazakhstan and Turkmenistan--to boost their economies and thereby strengthen their political independence.
At the outset of the dispute, Iran and Russia (which, following the collapse of the Soviet Union, became its successor state with respect to international treaties, among other things) insisted on applying the provisions of the bilateral treaties of 1921 and 1940 on all five littoral states in connection with the delimitation and use of the Caspian Sea. In particular, they both believed that, in light of provisions of the 1921 and 1940 treaties, the Caspian Sea should be under joint ownership and exploited on a condominium basis.
Azerbaijan and Kazakhstan oppose this approach are Azerbaijan--as did Turkmenistan initially, before it changed its position. To support their opposition to the Iran-Russia stance, they argue that the treaties of 1921 and 1940 defined the Caspian Sea as the Soviet-Iranian Sea and established a border along the Astara-Gasan-Kuli line, which de facto divided the Caspian Sea in two national sectors. Thus, in the view of Azerbaijan and Kazakhstan, the 1921 and 1940 treaties do not contain any provisions that support the joint ownership and condominium arrangement.
Moreover, there is some evidence of the de facto division of the Caspian Sea into Soviet and Iranian sectors in the 1950s and 1960s and the application of norms of international maritime law to the Caspian Sea. For example, Iran adopted the Law on the Continental Shelf of July 19, 1955, article 2 of which stipulated that "provisions of international law pertaining to a closed sea are applicable to the Caspian Sea." 
It is relevant here to point out that while Iran agreed with Kuwait to establish international boundaries between the two states in the Persian Gulf while ignoring Iraq, Iran at the same time objects to "any delimitation of the continental shelf in the Caspian Sea that is carried out by other States while excluding Iran." 
Azerbaijan and Kazakhstan would like to establish a new legal regime for the Caspian Sea. Azerbaijan backs the complete delimitation of both seabed and surface while Kazakhstan leans toward dividing the seabed and jointly sharing the surface. Turkmenistan does not seem to hold any firm position.
For the past decade, the views of all littoral states concerning the legal regime and delimitation of the sea have been changing to some extent. Some of these states have reconsidered their initial positions out a desire for compromise and because of changes in geopolitical interests in the region. But while the gaps between the littoral states have narrowed, there is still no consensus. The following overview attempts to show the evolution of their positions in the 1990s.
In 1994, the Russian Federation stated: "The Caspian Sea lacks a natural link to the world's ocean and seas and is thus a land-locked body of water. The norms of international maritime law, particularly those pertaining to a territorial sea, exclusive economic zone and continental shelf, are not applicable to it. There is thus no basis for unilateral claims relating to the establishment of zones of this type in the Caspian or for the introduction of elements of their regimes." 
Russia further stated that prior to the conclusion of a new agreement between all the littoral states on a legal regime for the Caspian Sea, the former Soviet republics would be bound by the provisions of the 1921 and 1940 Soviet-Iranian treaties. Those treaties provide for free navigation in the Caspian Sea by vessels flying the flag of a coastal state and unimpeded fishing in its waters, with the exception of the ten-mile coastal zone, in which fishing is reserved for vessels of the corresponding State.
Since 1994, the Russian position has changed. During a meeting of five littoral states in Ashgabat, Turkmenistan on November 11-12, 1996, Russian Foreign Minister Yevgeny Primakov declared that Russia was ready to agree on the forty-five nautical miles of jurisdictional areas and to acknowledge the rights of the littoral states to exploit petroleum in areas they claimed to be their national sectors.
Two years later, Russia and Kazakhstan signed an agreement on dividing national seabed sectors  by which the parties agreed that "the seabed of the northern part of the Caspian Sea and the subsoil thereof, without prejudice to the continued common use of the water's surface, including protection of the freedom of navigation, agreed fishing quotas and environmental protection, shall be delimited between the Parties along a median line adjusted on the basis of the principle of justice and the agreement of the Parties. The adjusted median line is based on a line equidistant from the agreed baselines; it includes sectors that are not the same distance from the baselines and are determined by taking into account of islands and geological features as well as other circumstances and geological expenditure incurred." 
A similar agreement was reached between Azerbaijan and Russia three years later during Russian President Vladimir Putin's visit to Baku on January 9-10, 2001, when the presidents of the two countries signed a declaration on the principles of cooperation in the Caspian Sea.
Economic interests, especially concerns over the active participation of Western oil companies in the exploitation of oil and gas deposits in the region, may be considered one of the key factors that forced Russia to reconsider its initial position and attempt to find a solution of the problem around the Caspian Sea's legal regime. On April 21, 2000, during a discussion of the Caspian Sea problem in the Kremlin's Security Council, President Putin stated: "We must understand that the interest of our partners in other countries--Turkey, Great Britain and the United States--toward the Caspian Sea is not accidental. This is because we are not active. We must not turn the Caspian Sea into yet another area of confrontation, no way. We just have to understand that nothing will fall into our lap out of the blue, like manna from heaven. This is a matter of competition and we must be competitive." 
Iran believes that the 1921 and 1940 Soviet-Iranian treaties establish the legal regime for the Caspian Sea and in light of those treaties the mineral resources in the Caspian seabed and subsoil belong to all the coastal states.  Iran supported joint ownership of the Caspian Sea and its utilization on a condominium basis.
In an attempt to find a compromise with other littoral states, Iran has agreed to reconsider the condominium approach. Currently, it proposes to divide the Caspian Sea among the littoral states into five equal parts (20 percent for each littoral state), regardless of the length of the coastal line of the littoral state.
Iran, like Russia, is concerned about the former Soviet republics activities to exploit mineral resources of the Caspian Sea with the Western oil companies. In this context, on February 5, 1998 the foreign ministers of Iran and Russia issued a joint statement opposing the possible construction of any trans-Caspian pipelines (that is, Kazakhstan-Azerbaijan, Turkmenistan-Azerbaijan). To justify their stand, both countries often raise concerns about the Caspian's sensitive ecological balance.
Kazakhstan leans toward applying certain provisions of UNCLOS to the Caspian Sea, taking into account the Caspian Sea's specific features. Kazakhstan has expressed the view that the Caspian Sea meets the definition of an enclosed or semi-enclosed sea as provided in article 122 of UNCLOS. Therefore, it proposes that the seabed and its resources be delimited among all Caspian states along a median line in accordance with the international maritime law.
Kazakhstan's position is that each Caspian state should independently carry out the exploitation of mineral resources in its exclusive economic zone, the territorial waters and fishing zones under the national jurisdiction of each Caspian state should be of the agreed width, the remaining part of the sea and its surface should be open to free navigation of ships of the littoral states, fishing and the use of the biological recourses should be carried out in the respective fishing zones and also by setting quotas and issuing licenses for fishing activities, landlocked Caspian states should be entitled to use Russian waterways on the basis of separate agreements with the Russian Federation in order to have an outlet to other seas and oceans. 
Turkmenistan's position has changed significantly during the last few years. Initially, Turkmenistan was inclined to divide the Caspian seabed as well as surface but insisted that both issues--seabed and surface division--be considered together.
A joint statement made by the presidents of Kazakhstan and Turkmenistan on February 27, 1997, reads as follows: "Until Caspian states reach an agreement on the regime of the Caspian Sea, the parties will adhere to the delimitation of administrative and territorial borders along a line running through the middle of the Sea."  The delimitation described in the statement was made in 1970, when the Soviet Union's Ministry of Petroleum and Gas Industry divided the Soviet part of the Caspian Sea into sectors belonging to the Azerbaijan Soviet Socialist Republic, the Kazakh Soviet Socialist Republic, the Russian Soviet Federative Socialist Republic and the Turkmen Soviet Socialist Republic along a median line. Following the collapse of the Soviet Union, the boarders inherited from such delimitation were reciprocally recognized as the State borders of the newly independent states.
The joint statement also justifies the two states' opposition to the Iranian view. In particular, the statement points out that the Soviet-Iran treaties 1921 and 1940 divided the Caspian Sea between the Soviet Union and Iran along Astara-Gasan-Kuli line leaving outside determination of the borders among the former Union Republics bordering the Caspian Sea. The latter fell within the internal jurisdiction of the Soviet Union, in particular, exclusive jurisdiction of the central government, and, therefore, could not have been a subject of the 1921 and 1940 treaties.
The joint statement further says that the treaties govern only questions relating to merchant shipping and fishing and do not establish the legal regime for the Caspian Sea. The statement, therefore, concludes that Iran's claims to the zones of the newly independent states are unjustifiable under the Soviet-Iranian treaties to which Iran usually refers in supporting its joint ownership/condominium approach and that the Soviet-Iranian treaties do not longer reflect the current state of affairs and cannot serve as a legal instrument binding on the littoral states.
A year after the joint statement of the presidents of Kazakhstan and Turkmenistan, the latter shifted its position toward Iran. On July 8, 1998, the presidents of Iran and Turkmenistan issued the following joint statement: "The two sides reaffirmed that, until finalization of the new legal regime the Treaties of 1921 and 1940 are sole international documents governing legal issues relating to the Caspian Sea. The two sides were of the view that a condominium arrangement for the common use of the Caspian Sea by the littoral states through assuming a sectoral coastal strip as a national zone is the most appropriate basis for the legal regime. In case of division, the two sides emphasized the principle of equal share for all littoral states and equitable exploitation of the resources of the Caspian Sea and the need for preserving a unified legal regime for the sea, on the seabed, and under the seabed." 
The two joint statements, made a year apart, differ significantly. Notably, at the time the Iran-Turkmenistan statement was issued, a dispute arose between Turkmenistan and Azerbaijan over demarcating national zones between the two countries and ownership to Kyapaz  oil deposit. This dispute may have caused Turkmenistan to change its position.
Azerbaijan believes that the Caspian Sea should be considered an international frontier lake without a link to the ocean, surrounded by the territory of five states. As such, it should be divided from a median line, according to the common international practice applicable to international frontier lakes, such as the Great Lakes, Lake Chad, Lake Geneva and some others. Moreover, common international practice shows that not only lakes, but also semi-closed and closed seas, e.g. the Black Sea and the Dead Sea, are delimited among littoral states according to the same principle, that is, from a median line.
At the same time, Azerbaijan does not object to delimiting the Caspian Sea according to international maritime principles, in particular Article 15 of UNCLOS, which regulates delimitation of the territorial seas of states with opposite or adjacent coasts. Azerbaijan's flexibility is explained by the fact that it will still get the same area under its jurisdiction as it would if the Caspian Sea were divided according to the international practice applicable to the division of international frontier lakes.
According to the general principles of Article 15, the sectors' borders of the littoral states would be drawn by a median line, every point of which is equidistant from the nearest points on the baselines from which the breadth of the territorial seas of each state would be measured. It should be noted that some legal experts cite specific provisions of Article 15 of UNCLOS referring to "historic title or other special circumstances" as factors to be applied to delimiting the territorial seas of states with opposite or adjacent coasts. If such provisions of Article 15 are applied to the Caspian Sea's delimitation, the division of the USSR's sector of the Caspian Sea among the Azerbaijan SSR, Kazakh SSR, Russian SFSR and Turkmen SSR in 1970 may meet the requirement of the "historic title or other special circumstances" of Article 15 of UNCLOS.
Azerbaijan's position in this regard is clearly expressed in a statement by the Ministry of Foreign Affairs of Azerbaijan of December 14, 1998 : "In accordance with the principles and rules of international law, the sovereign rights of the littoral states of the Caspian Sea extend to the corresponding national sectors which have been established as a result of the traditional activities of the littoral states in the Caspian Sea. The traditional activities of Azerbaijan and other littoral states in the Caspian Sea are based on established practice and the precedents in their use of the Caspian Sea, and on the rules of international law in this respect. In accordance with the generally recognized rules and principles of international law, and in the absence of other treaty provisions limiting the jurisdiction of the littoral states, the de facto tradition of the use of the Caspian Sea within national sectors on the basis of the recognized customary rules of international law remains in effect. On this basis, each sovereign Caspian State develops the mineral recourses in its own national sector. The Soviet-Iranian Treaties of 1921 and 1940 covering questions relating to navigation and fisheries do not regulate questions relating to the use of the mineral recourses of the Caspian Sea. The Union of the Soviet Socialist Republics and Iran, proclaiming the Caspian Sea to be a sea belonging to the two states, de facto extended their sovereignty over the corresponding national sectors divided by Astara-Gasan-Kuli line." 
Certainly, it is understandable that the position of littoral states with respect to the legal regime of the Caspian Sea mainly depends on what they will gain from such a regime. All of the littoral states will have to make concessions if a consensus is to be reached. A consensus may become the impetus for wider cooperation in the region, which should directly or indirectly benefit all parties concerned. In the meantime, it is up to the regional powers to move towards cooperation with the newly independent countries, which have on numerous occasions expressed a willingness to cooperate.
Developments in the positions of the littoral states, particularly that of Russia, at the beginning of 2001 were promising and gave hope that a compromise in formulating a new legal regime for the Caspian Sea would soon be reached. However, observers were less optimistic following the Russian-Iranian summit this past March. Thus a summit of littoral states, scheduled earlier for April 2001 in Turkmenistan, has been postponed until October 2001.
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3. The Treaty of Amity concluded between Iran and Russian Soviet Federative Republic on February 26, 1921 and the Commerce and Navigation Agreement concluded between Iran and USSR on March 25, 1940.
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7 The Position of the Russian Federation regarding the legal regime of the Caspian Sea. (A/49/475 dated October 5, 1994).
8. The Agreement on the Delimitation of the Seabed of the Northern Part of the Caspian Sea for the Purposes of exercising Their Sovereign Rights to the Exploitation of its Subsoil sihned by the President of Russia and Kazakhstan on July 6, 1998.
9. Agreement on the Delimitation of the Seabed of the Northern Part of the Caspian Sea for the Purposes of exercising Their Sovereign Rights to the Exploitation of its Subsoil signed by the Presidents of Russia and Kazakhstan on July 6, 1998 (A/52/983 dated July 14, 1998).
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13. Joint statement on the questions related to the Caspian Sea signed by the President of Kazakhstan and Turkmenistan in Almaty on February 27, 1997 (A/52/93 dated March 17, 1997).
14. Joint statement of July 8, 1998 by the Presidents of Iran and Turkmenistan (A/53/453).
15. The dispute arose partly because of fluctuation of the Caspian Sea water level that affected the coastal and median lines of the Sea and, consequently, the delimitation of national sectors.
16. Statement regarding an agreement signed between Iran and the Western oil companies--Shell and Lasmo, on geological and geophysical prospecting in the area of the Caspian Sea which also includes an Azerbaijani part of the Caspian Sea. In 1995, Azerbaijan and Russia signed an agreement on exploitation of Kyapaz deposit. However, after a visit of Turkmenistan President Niyazov to Moscow, Russia denounced this agreement.
17. Statement by the Ministry of Foreign Affairs of the Republic of Azerbaijan adopted December 10, 1998 (A/53/741 dated December 14, 1998).
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