Former Foreign Minister and MEP for DISY and the European Popular Party, Ioannis Kasoulides, has issued a statement in reply to a recent Forbes article Fantasy Island (04.04.2006). Kasoulides underlines that, while Cyprus does face problems with illegal trade, its problems in the non-occupied areas are of the nature and extend that is found in other Western countries. “To note that there is a problem is Cyprus, is not the same as noting that there is a particular problem in Cyprus,” he underlined. The matter has attracted vicious criticism and unfair comments, that the MEP regrets. Attached below is the letter sent to the editor of Forbes.
Dear sir,
I have read your article Fantasy Island (04.04.2006) with great interest. The issue of money laundering and illicit economic activities in Cyprus has been in the spotlight for some years now.
It is with regret, however, that I need to underline that the article is characterized by severe technical, political and factual errors. The errors in the article are such, that I am sorry to note that the particular article was most unbecoming of your work. Michael Freedman correctly points — albeit in passing — that the most significant issue from the point of view of the Republic of Cyprus, has been the inability to exercise its sovereignty in the Northern part of the island which is occupied by the Turkish Army. Regrettably, the article fails to further differentiate between the Northern occupied areas and the South.
This is not to say that illicit trafficking has not been a significant problem for Cyprus. The Republic has, however, embarked on a major effort, as part of the accession process to the EU, to remedy the severe shortcomings that existed in the past. Not only has Cyprus fulfilled the stringent accession requirements in this regard, but it has also become the first nation to extend an invitation to FATF to investigate the conditions in its territory -an investigation whose outcome was wholly satisfactory for Cyprus. This is not to say that problems in regards to the trafficking of people do not exist, either. Efforts are being taken in earnest to further tackle this problem as well, despite the vast improvements that have been achieved, and in which I personally participated as Foreign Minister during the accession process. While the series of cases cited by Mr. Freedman is not incorrect, dating them is significant, as they all took place long before the Clerides administration initiated its major reform program as part of the accession process.
Given this fact, the citation of cases constitutes little more than anecdotal evidence and one would not find it difficult to produce a similar list of cases from any country (and even city) in west. The fact is, that today off-shore companies that do business in Cyprus, are attracted by a variety of factors, including a good tax structure (fully in line with EU rules), the existence of highly trained and relatively cheap labour to satisfy demand, and the existence of a strong relevant infrastructure. Regulatory arbitrage is not observed as a significant factor.
Beyond those cases cited (which may be true but refer to a situation that no longer exists) I was alarmed to note a severe misunderstanding of the political situation. He blames the Greek Cypriot politicians for failing to engage their counterparts in the occupied parts of Cyprus. This is an unmistakeable sign of complete ignorance of the political situation in Cyprus. Mr. Freedman fails to note that the Republic of Turkey has been legally found to be liable for what happens in the North of the island in a series of legal cases in international courts. What is more, Mr. Freedman seems not to know that the Republic of Turkey does not recognize the Republic of Cyprus, a member of the EU. Perhaps he should explain how the Republic of Cyprus can “deal with” a state that does not recognize it, or, for that matter, how we can “deal with” an occupation regime that bases state functions on the control of the military over civilian life. “Dealing with” Turkish Cypriot leaders, presupposes that the Turkish Cypriot leaders can be engaged, and that the political will to change the situation in the North exists, on behalf of the so-called state in the occupied areas. The crony capitalism that has been repeatedly noted in weak states, reigns in the North, and had politicians of the Republic of Cyprus been able to solve this problem, we would have done it long ago. Although I and my party are among the first to criticize the current administration of Cyprus, we criticize in order to bring about that change which we see as necessary for our citizens. This is what serious politicians do. Mr. Freedman’s criticism, however, is not justified by the facts.
To note that there is a problem is Cyprus, is not the same as noting that there is a particular problem in Cyprus. If Mr. Freedman can cite a single country that can tenably claim to have fully tackled these issues, then I will gladly stand corrected. We, as politicians, feel the burden of responsibility, and hence note that there is a problem, as a matter of principle. We will stop doing so when not a single cent or a single individual is trafficked through our territory. I invite all political leaders of the world to do the same.
Respectfully,
Ioannis Kasoulides, MEP (EPP-ED) and Former Foreign Minister of Cyprus
