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Reportedly

The delegation of Azerbaijan said it was suspending cooperation with the Parliamentary Assembly of the Council of Europe (PACE) following recent developments that led to deteriorating relations. [...]

“During 19 years, from 2001 to 2020, the PACE failed to hold the aggressor state Armenia accountable for its actions contradicting the core values and principles of the Council of Europe. It concerns in particular the blatant disregard for the human rights of the Azerbaijani refugees and IDPs subjected to ethnic cleansing,” the delegation’s statement read, adding that during this period they were told that the PACE was not a right format to discuss conflict-related issues. [...]

The delegation also considered the PACE initiative to challenge its credentials a deliberate and unacceptable attempt to unduly interfere with the ongoing electoral process and to undermine the functioning of democratic institutions in Azerbaijan.

But it's not clear from that piece what is the latter stuff they are alluding to. So what did PACE do recently to piss off Azerbaijan? Who challenged Azerbaijan's credentials and in what way?

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    Not sure that is the specific reason, but just today a German General State Attorney indicted two former members of the Bundestag and PACE representatives of corruption, especially accepting and passing on bribes from Azerbaijan to speak and vote in favor of the country in the assembly.
    – ccprog
    Commented Jan 29 at 16:20

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Azerbaijan’s delegation challenged at opening of PACE session:

The credentials of Azerbaijan’s delegation to the Parliamentary Assembly of the Council of Europe (PACE) have been challenged on substantive grounds on the opening day of the 2024 winter plenary session.

Making the challenge, Frank Schwabe (Germany, SOC) cited political prisoners in the country, the violent displacement of people from Nagorno-Karabakh, the fact that Assembly rapporteurs were unable to visit Azerbaijan at least three times during 2023, and the lack of an invitation to the Assembly to observe the country’s 7 February presidential election. He was supported by at least thirty members of the Assembly, belonging to at least five national delegations as required by the Rules.

The challenge was immediately referred to the Assembly’s Monitoring Committee for report and to its Rules Committee for opinion, and will be debated by the Assembly on the evening of Wednesday 24 January.

Facing expulsion, Azerbaijan quits European parliamentary body

In its January 24 session, PACE resolved not to ratify the credentials of Azerbaijan's parliamentary delegation by a vote of 76 to 10, with four abstentions. The body concluded that the country has "not fulfilled major commitments" stemming from its joining the Council of Europe in 2001.

Each year the parliaments of PACE member countries present the credentials of their delegations, and the assembly votes on their ratification.

"Very serious concerns remain as to [Azerbaijan's] ability to conduct free and fair elections, the separation of powers, the weakness of its legislature vis-à-vis the executive, the independence of the judiciary and respect for human rights, as illustrated by numerous judgments of the European Court of Human Rights and opinions of the Venice Commission," the Assembly said in a resolution.

The Assembly also touched on the humanitarian crisis last year in the then-Armenian-populated Nagorno-Karabakh region, which started with Azerbaijan's blockade of the region, culminated with its military offensive in September, and ended with the mass exodus of Armenians.

"Azerbaijan's leadership 'did not acknowledge the very serious humanitarian and human rights consequences' stemming from the lack of free and safe access through the Lachin Corridor, and [the Assembly recalled] its condemnation of the September 2023 military operation 'which led to the flight of the entire Armenian population of Nagorno-Karabakh to Armenia and to allegations of 'ethnic cleansing,'" the statement read, citing the resolution.

The resolution also accused Azerbaijan of refusing to cooperate with PACE, noting that the organization's monitoring rapporteurs were not allowed to meet political prisoners and not invited to observe the snap presidential election scheduled for next month.

The statement added that the decision only concerns Azerbaijan's parliamentary delegation and that the country remains a member of the Council of Europe.

The Azerbaijani delegation's credentials were challenged on January 22 at the opening of the PACE session by German MP Frank Schwabe, who was supported by thirty members of the Assembly. A day later, PACE's Monitoring Committee issued a report recommending that the credentials not be approved.

Azerbaijan's pro-government media machine then went into action, publishing a series of articles attacking the Council of Europe.

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