The Shanghai Cooperation Organisation comprising Russia, the People's Republic of China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan was established on the basis of the April 26, 1996 Agreement on Deepening Military Trust in Border Regions signed by Kazakhstan, Kyrgyzstan, Russia and Tajikistan, on the one side, and the People's Republic of China, on the other side, and the Agreement on the Mutual Reduction of Military Forces in Border Regions, signed on April 24, 1997 by the same countries.
On June 15, 2001, the six heads of state signed the Declaration of the Shanghai Cooperation Organisation at their summit in Shanghai. On June 7, 2002, the heads of the SCO member-states signed the SCO Charter elaborating on the organisation's purposes, principles, structure and main activities and established it officially in accordance with international law. The SCO Charter came into effect on September 19, 2003.
On August 16, 2007, the Treaty on Long-Term Neighborliness, Friendship and Cooperation creating pre-requisites for elevating multi-faceted cooperation on a new level was signed in Bishkek, the capital of Kyrgyzstan.
As of today, the Treaty has been ratified by Kyrgyzstan, the People's Republic of China and Russia.
The Council of SCO Heads of State, the supreme governing body, charts specific priorities and main activities, tackles high-priority issues of the SCO's organisation and operation, those pertaining to its cooperation with other countries and international organisations and examines the most important international issues.
The Council of SCO Heads of Government (Prime Ministers) approves the SCO budget and examines and tackles high-priority cooperation issues primarily in the economic area.
The Council of SCO Foreign Ministers prepares meetings of the Council of SCO Heads of State and adopts decisions on holding SCO consultations on international issues.
The Meetings of SCO Ministers and Department Heads examine cooperation issues in specific areas. The SCO has established coordinating mechanisms between foreign-economic and foreign-trade ministers, transport, education, culture, defence and emergencies ministers. There are also Commissions of Senior Officials and Expert Panels.
SCO member-states' Prosecutors-General, heads of drug-enforcement agencies, customs services, supreme and arbitration courts meet on a regular basis. In 2006, Moscow hosted the first meeting of SCO parliament speakers.
The Council of SCO National Coordinators is responsible for coordinating current SCO activities and facilitating cooperation between ministries and departments of SCO member-states.
Ambassador at Large and Special Presidential Envoy for SCO Affairs Leonid Moiseyev also works as Russian National Coordinator.
The Regional Anti-Terrorism Structure is a permanent body responsible for coordinating cooperation between the concerned SCO agencies under the June 15, 2001 Shanghai Convention on Combating Terrorism, Separatism, and Extremism and other relevant SCO agreements and documents. RATS has two bodies, i.e. the RATS Council and the RATS Executive Committee.
The meetings of Security Council Secretaries are an effective coordinating-consultative mechanism of intra-SCO security cooperation and efforts to cope with new threats and challenges.
As of January 2004, the SCO initiated the following permanent administrative bodies:
- the SCO Secretariat in Beijing headed by a Secretary-General, the chief SCO executive, appointed by the Council of SCO Heads of State for a period of three years on a rotational basis. The current SCO Secretary-General is Bolat Nurgaliyev of Kazakhstan, appointed on January 1, 2007.
- the Regional Anti-Terrorism Structure's Executive Committee in Tashkent is headed by a Director, appointed by the Council of SCO Heads of State for a period of three years on a rotational basis. The current Executive Committee Director is Myrzakan Subanov of Kyrgyzstan, appointed on January 1, 2007.
SCO bodies adopt all resolutions by consensus.
SCO member-states have appointed their Permanent Representatives to the SCO Secretariat in Beijing and the RATS Executive Committee in Tashkent.
In 2004, Mongolia, and in 2005, India, Iran and Pakistan received observer country status with the SCO. Their involvement is regulated by the 2004 Statute on the Status of SCO Observers and the 2006 Regulations for SCO - Observers Cooperation. In 2008, the SCO approved the Regulations for Cooperation Between RATS, States and International Inter-Governmental Organizations with SCO Observer Status.
The August 28, 2008 SCO summit in Dushanbe approved the Statute of SCO Negotiating Partners.
Member-states assume presidency of the SCO for a period of 12 months after a regular SCO summit and until a meeting of the Council of SCO Heads of State on the territory of the presiding state. On August 28, 2008, the Russian Federation assumed presidency of the SCO. In 2009-2010, these functions will be delegated to the Republic of Uzbekistan.
The 2007 SCO budget, approved September 15, 2006 by the Council of SCO Heads of Government (Prime Ministers) in Dushanbe, was $3.7 million. The 2006 SCO budget totaled $3.5 billion.
Under the Agreement, Russia and China each contributed 24% of the budget. Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan contributed 21%, 15%, 10% and 6%, respectively.
On November 2, 2007, the Council of SCO Heads of Government approved the $3.5 million SCO budget for 2008.