Cyprus-Forum.com

[brother]

New Green Line trade deal in 3-4 days

Financial Mirror Online
Wednesday, February 02,  2005, 14.00

President Tassos Papadopoulos said that his government has drafted a new document with amendments to the ‘Green Line Regulation’ that will benefit the Turkish Cypriots and could pave the way for full implementation of bi-communal trade.

The Green Line regulation, which regulates trade between the two sides of Cyprus, was adopted in the week after the April referendum but took until August to be implemented. Late last year, the EU proposed that the regulation be amended to improve the flow of commerce.

"The final text of our proposals will be ready in three to four days," Papadopoulos told a gathering of foreign correspondents.

Though admitting that there have been "some difficulties" in implementing the regulations for the free movement of goods, Papadopoulos revealed that the new proposals do not violate any EU regulations.

"We proposed that VAT be removed from the responsibility of the seller and these be moved to the buyer," he said. “This way they are not forced to register on our VAT service.”

The issue of VAT had been a particular bone of contention with Turkish Cypriot traders, who have been lobbying the EU for a compromise.

"I believe the EU will accept most of the amendments which are to the benefit the Turkish Cypriots, not us. It is going to be a cost for the government in lost revenue."

The President also referred to the 259 million euros in aid to the Turkish Cypriots, an amount which would go towards the financial integration of the Turkish Cypriots and the reunification of the island.

The Turkish Cypriots have been unwilling to accept the financial aid package without the direct trade regulation that would allow them to trade directly with EU countries. But direct trade is resisted by the government because the EU law which it would fall under refers to “third countries and territories”.

The government has also been at pains to ensure that the Republic of Cyprus has control over how the financial aid money is distributed.

"The 259 million euros can be spent tomorrow, mostly on infrastructural projects," said the President.

"The financial protocol was proposed by the Cabinet in September. The money is there to be taken. I see no reason why this money has not been used, it has to be used within 2005 or the Turkish Cypriots risk losing the whole amount in aid."

Papadopoulos blamed Turkish Cypriot leader Mehmet Ali Talat for the non-implementation of the aid. "Talat said in Brussels that he would  not accept the money unless his condition of direct trade was accepted."

The term ‘direct trade’ is not accepted by the Greek Cypriots.

"In order for Turkish Cypriots to export goods direct from their illegal ports to the EU, they need preferential treatment as this is given to third countries. We cannot accept another ‘state’," Papadopoulos explained.

This, he said, is a political obstacle and not connected to the financial protocol.

"The total Turkish Cypriot exports are worth 50 mln euros, of which 25 mln are citrus fruit exported mainly to former Soviet republics.

"How many containers can they fill for these 25 million euros worth of goods - several hundred, at most five container vessels?"

This alone, Papadopoulos explained, will not make Famagusta port viable. “It cannot survive on just five vessel calls a year.”

"Even if the city is rebuilt it will still take five years and CYP 2 bln worth of materials, most of which will not arrive through the port.

The Turkish Cypriots can export directly through us. We even proposed allocating part of Larnaca port and allowing the Turkish Cypriots to have their own port workers and administrative staff.

Repeating earlier offers, he said, "we could open Famagusta port to both communities, but under joint administration, even as a foundation registered in an international jurisdiction, under E.U. or other management."

In the case of direct flights into the north, once again cannot be achieved on many grounds, as the cost of flight, added fuel, insurance of an aircraft flying to an unrecognised destination, are all practically impossible. “And who will fly all the way from the U.S., anyway?"

"Even Cyprus Airways tried [direct flights to the U.S.] a few years ago with Gulf Air, a financially strong airline. They still lost about CYP 5 mln in one year."

[brother]

One step closer?
By Stefanos Evripidou


Parties meet on expediting EU’s trade measures

A DEAL was struck yesterday on the Green Line regulation, between European Commission official Leopold Maurer and the government, it was reported last night.

Based on the proposals tabled by the government, the transport of goods would be allowed through the government-controlled areas, without the Turkish Cypriots paying VAT to the state.

The tax would be paid to the destination country and products would not have to be registered with the VAT commissioner since they would be shipped to Europe.

Any Turkish Cypriot imports should come through the country’s legal points of entry while the EU regulation would stipulate the trade of fish and manufactured products.

On top of that, it was agreed to increase the number of cigarettes allowed through from the north to two packets and alcohol to one litre.

Individuals would also be allowed to spent up to 135 euros on personal purchases with a special clause ascertaining that this would not be exploited for commercial reasons.

Maurer, who is head of the Commission team for Cyprus, spent yesterday meeting with House President Demetris Christofias, Turkish Cypriot politician Mustafa Akinci, Government spokesman Kypros Chrysostomides and members of the Chamber of Commerce and Industry (KEVE).

The day before he met with United Nations officials, Turkish Cypriot ‘foreign minister’ Serdar Denktash, prime ‘minister’ Mehmet Ali Talat and representatives of the Turkish Cypriot Chamber of Commerce.

Maurer has said his mission was to exchange points of view on the implementation of the Green Line regulation and discuss various technical issues.

The government has said it is willing to make concessions on the regulation to allow as many Turkish Cypriot products as possible to cross over to the south to be exported to EU countries.

President Tassos Papadopoulos gave the order to his negotiating team to ignore any bureaucratic or economic concerns and make it as easy as possible for Turkish Cypriots to trade their goods with the EU via the ports and airports of the south.

According to Turkish Cypriot press, Talat told Maurer during their meeting that the existing Green Line regulation was inadequate and needed changes. He also highlighted the importance of allowing direct trade between the north and the EU.

The government has consistently refused to approve the direct trade regulation proposed by the Commission, though it gave the go-ahead for a proposed financial package worth 259 million euros to go towards assisting Turkish Cypriots.

For the time being, the one regulation is coupled with the other, and unless there is agreement on direct trade, Turkish Cypriots won’t see a cent of the aid.

Chrysostomides yesterday accused Talat of “punishing Turkish Cypriots by not accepting the immediate implementation of the financial package, insisting instead on receiving political gains”.

Maurer was reported in Turkish Cypriot press saying that the two regulations on direct trade and financial assistance were not on the agenda of the Luxembourg EU Presidency, which ends in June, and followed by the UK.

Maurer is due to leave this morning. The government says a “new and improved” regulation on Green Line trade will be fine-tuned and ready for finalisation within a month.

Meanwhile, one firm is already offering consultancy services for those wishing to do trade across the dividing line. The MGC Group of Companies has undertaken to offer consultancy services for the promotion of internal trade between Greek and Turkish Cypriots as is provided for within the relevant EU regulation.

[brother]

Cyprus, EU agree measures to boost trade across Green Line
AFP: 2/4/2005
NICOSIA, Feb 4 (AFP) - The European Commission and the Cypriot government have reached a deal to boost trade between the island's divided Greek and Turkish Cypriot communities, officials said Friday.

The new regulations raise from 30 euros to 135 euros the duty-free ceiling on goods that can be taken from one side to the other, including a litre of alcohol and two packets of cigarettes for personal use.

An original EU proposal had set the bar at 175 euros and 200 cigarettes, but the internationally recognised Greek Cypriots pushed for a compromise.

It is not yet clear whether the Turkish Cypriots will accede to the deal for trade across the UN-controlled buffer zone, known as the Green Line.

The preliminary accord was struck during the visit of a European Commission delegation headed by Leopold Maurer.

Maurer said "we are very happy about the progress we have achieved here in Cyprus," also welcoming an agreement struck by both sides to open more crossing points to facilitate trade and people movement.

"We came here with the main objective to make progress on the Green Line regulation. Not only do we have now an agreement on the outstanding points but we also think it is very important that we will have two more crossing points, the very important Ledra Street and the also important Zodhia," said Maurer.

The capital's pedestrian-only Ledra Street is cut in half, symbolising Nicosia as Europe's last divided capital.

Zodhia will provide easier access to the Greek Cypriot south for Turkish Cypriots living in the northern town of Morphou and vice versa.

EU-funded de-mining will go ahead in the UN-controlled bufferzone at Zodhia, while the main concern at Ledra is the danger of dilapidated buildings left unkept in no-man's land during more than 30 years of division.

Also included in the trade accord are "wholly obtained goods and processed goods originating in the northern part of the island, while "obstacles in the trade for agricultural products such as citrus will be removed," said an EU statement.

The trade agreement is expected to come into effect by mid-February.

EU-approved Green Line trade was introduced last year to help bring the poorer north out of economic isolation after a divided Cyprus joined the European Union on May 1.

Brussels has sought to "reward" the Turkish Cypriots for backing a UN reunification plan at a referendum last April, after the blueprint's rejection by Greek Cypriots ensured the island's north stayed out in the cold.

The Turkish Republic of Northern Cyprus is recognised only by Ankara, and the Greek Cypriots are wary that any direct links between Brussels and the north would undermine the sovereignty of the government in the south.

But Turkish Cypriots insist that opening up the Green Line does not go far enough in lifting the north's economic isolation and have petitioned for direct trade and travel links.

However, according to a recent study, the amount of money going north in 2004 could have reached as much 125 million dollars, from foreign tourists and Greek Cypriots, and the thousands of Turkish Cypriot labourers who cross over to work daily and take their earnings home.

Cyprus has been divided since 1974 when Turkish troops invaded the island's northern third following an Athens-orchestrated coup to unite the island with Greece.

[magikthrill]

YOu know the more I read about Papadopoulos the more I like about him.

[-mikkie2-]

While Mr Talat and Mr Gul are pointing fingers at the EU for not living up to their 'promises' Tassos has quietly been undermining the need for 'direct' trade.

He's been slowly pulling the rug from under them and they haven't realised! So much for their 'one step ahead' policy.

It is obvious that European and International law will need to be broken if direct trade is to be realised. Why try to fight this when the same can be achieved via the green line? As always it is all political.

[brother]

I gree with your statement mikkie but surely they must realise what is going on.