WASHINGTON, DC – A law imposing a ban on U.S. financing of a proposed railroad that would bypass Armenia has been signed into law by President George W. Bush, reported the Armenian National Committee of America (ANCA).

“Armenian Americans welcome President Bush’s reaffirmation of America’s principled stand against Turkey and Azerbaijan’s efforts to institutionalize their immoral and illegal blockades of Armenia and Nagorno Karabagh,” said ANCA Executive Director Aram Hamparian.

The President signed the Export-Import Bank Reauthorization Bill (S.3938), which includes a provision on the railroad bypass, on December 22nd. The Senate had voted by unanimous consent on December 6th in favor of a reconciled version of the bill. The House had approved this version on December 1st. Both the House and Senate measures were based on the South Caucasus Integration and Open Railroads Act of 2006 (S. 2461 / H.R. 3361), introduced in the Senate by Rick Santorum (R-PA) and in the House by Rep. Joe Knollenberg (R-MI), the Co-Chairman of the Armenian Caucus.

The proposed new Caucasus rail line – at the urging of Turkey and Azerbaijan – would circumvent Armenia. Promoters of the project have sought, even at the planning stages, to secure U.S. financing for this undertaking, prompting Congressional friends of Armenia to preemptively block such attempts. In October of 2005, the European Commission voiced official opposition to the proposed Caucasus railroad bypass of Armenia. A formal statement by the Commission’s Directorate General for Transport and Energy noted that its construction was both unnecessary and inefficient in light of the existing railroad connecting Kars, Gyumri, and Tbilisi.

On March 8th of this year, responding to a question on the railroad bypass from Rep. Grace Napolitano (D-CA) during a hearing of the International Relations Committee, Assistant Secretary of State Daniel Fried asserted that, “The proposed railway would bypass Armenia and thus not be beneficial to regional integration. We have no plans to support such a railway financially. The Administration has not allocated or expended any federal agency funds or otherwise provided financial support for the intended project.”

The final text of the measure reads as follows:

SEC. 11. PROHIBITION ON ASSISTANCE TO DEVELOP OR PROMOTE CERTAIN RAILWAY CONNECTIONS AND RAILWAY-RELATED CONNECTIONS.

Section 2(b) of the Export-Import Act of 1945 (12 U.S.C. 635(b)) is amended by adding at the end the following new paragraph:

(13) Prohibition on assistance to develop or promote certain railway connections and railway-related connections.

— The Bank shall not guarantee, insure, or extend (or participate in the extension of) credit in connection with the export of any good or service relating to the development or promotion of any railway connection or railway-related connection that does not traverse or connect with Armenia and does traverse or connect Baku, Azerbaijan, Tbilisi, Georgia, and Kars, Turkey.

The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States. Ex-Im Bank’s mission is to assist in financing the export of U.S. goods and services to international markets.