Russian president signs 15 agreements boosting bilateral ties with Cyprus

By Menelaos Hadjicostis, AP
Thursday, October 7, 2010

Cyprus, Russia boost ties with 15 agreements

NICOSIA, Cyprus — Russian President Dmitry Medvedev signed 15 agreements boosting bilateral ties with Cyprus on Thursday, including a key accord abolishing double taxation that officials hope will be a boon to investment in both countries.

Medvedev said overall investment from Cyprus to Russia has exceeded $50 billion (€37.5 billion) and that the double taxation agreement would further enhance economic cooperation.

Cyprus is a major conduit of investment into Russia with many Russian-owned offshore companies operating on the island, and the accord removes a long-standing thorn in bilateral relations.

Russia had blacklisted Cyprus in early 2008 on claims that it was not cooperating enough in exchanging information on bank assets, leading to tax evasion.

Medvedev said the new accord makes such business activity more transparent, allowing for better monitoring. He said Cyprus would be removed from the Russian Central Bank’s black list.

Cyprus President Dimitris Christofias, the Soviet-educated former leader of the island’s communist-rooted party, said the two countries have worked together to lift any “shadows” encumbering deeper economic cooperation.

“I think that the agreement … creates all the preconditions to end whichever problems and to enhance cooperation on investment and economic transactions with great clarity,” said Christofias. “We look ahead, and our relations are as clear as the sky above Cyprus.”

Russian investment to Cyprus has reached $16 billion (€11.5 billion), Cypriot Foreign Minister Markos Kyprianou said, citing Russian figures.

Revenue from Russian holiday makers also has helped buoy the tourism-reliant Cypriot economy amid the current economic crisis. Statistics show an 80 percent jump in Russian tourist arrivals to the island in August, compared with the same month last year.

Medvedev also inaugurated a branch of VTB Bank subsidiary Russian Commercial Bank in the capital, Nicosia, and addressed a Cyprus-Russia business forum.

Medvedev, who is the first Russian head of state to visit the ethnically divided island, reiterated Moscow’s support for long-running reunification talks.

Cyprus was split into an internationally recognized Greek Cypriot south and a breakaway Turkish Cypriot north in 1974, when Turkey invaded in response to a short-lived coup by supporters of union with Greece.

Two years of peace talks have produced limited progress on complex issues such as arrangements on private property lost during the war.

Greek Cypriots envision a future federation with a strong central government, while Turkish Cypriots seek a looser union.

The Greek Cypriot government has long relied on Russian backing in past peace drives, and Medvedev said Moscow’s support for a reunified Cyprus with a single sovereignty remains unchanged.

Christofias thanked Medvedev for Russia’s position, saying: “For us, the support of the Russian Federation, one of the permanent members of the U.N. Security Council, is invaluable.”

Medvedev said Russia’s growing commercial and political relations with Turkey “don’t pose a threat” to Cyprus. In May, Turkey and Russia signed 17 cooperation agreements, including the construction of Turkey’s first nuclear power plant near the Mediterranean coastal town of Akkuyu.

Medvedev was to leave Cyprus Thursday night.

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