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U.S. Department of State
1996 International Narcotics Control Strategy Report, March 1997
United States Department of State
Bureau for International Narcotics and Law Enforcement Affairs
CYPRUS
I. Summary
Cypriots do not produce or consume significant amounts of narcotics, but
hashish use by young Cypriots and tourists is growing. Drug traffickers use
Cyprus as a meeting place to broker deals, taking advantage of its relatively
sophisticated business and communications infrastructure. Cyprus strictly
enforces tough antidrug laws, and police and customs authorities maintain
excellent relations with US and other foreign government officials. Cyprus
previously ratified the Council of Europe Convention on Laundering, Search,
Seizure and Confiscation of the Proceeds from Crime; legislation to implement
the Convention was passed in April 1996. In response to its obligations under
the law, Cyprus has established a money laundering investigations unit,
comprised of representatives of the Attorney General's office, the Director of
Customs and the Chief of Police. Authorities also have circulated customer
identification regulations to the commercial banks. US officials expect the
Government of Cyprus to complete development and promulgation of other
regulations related to the new law in 1997. Cyprus does monitor the
importation and exportation of chemicals for local markets; however, Cyprus'
geographic location and the free-port status of its two main seaports make it
an ideal transit country for trade in chemicals and most goods between Europe
and the Middle East. Cyprus is a party to the 1988 UN Drug Convention.
II. Status of Country
Cyprus' strategic location in the Eastern Mediterranean and its current status
as a gateway to and from Lebanon and elsewhere make it a convenient stopover
for traffickers, especially from Lebanon and Turkey. Highly developed
business and tourism facilities, a modern telecommunications system, and the
fourth-largest merchant shipping fleet in the world also serve to attract
traffickers to Cyprus. Here they negotiate deals with third-country buyers,
conceal heroin and cannabis resin in the substantial container traffic
transshipped through Cyprus and take advantage of air connections to transship
currency and bullion to and from Europe. Still low by international
standards, drug-related crime is rising.
Cyprus has attracted over 25,000 offshore companies from all over the world,
more than 2,500 of which are Russian. Cyprus' success as an international
offshore center has made it vulnerable to international money laundering
activities. Reports in the local and foreign press have suggested that the
Russian mafia, among others, is using Cyprus for money laundering, although
such claims are difficult to prove. The Central Bank of Cyprus believes its
monitoring of monetary activities in general, and its concerted efforts to
combat money laundering in recent years, have reduced money laundering
activity, some of which would be drug related. However, it is possible that
money launderers use the legitimate facilities of Cyprus to further their
activities in other countries.
Cypriot law now carries a maximum prison term of one year for drug users under
25 years of age with no police record. Sentences for drug traffickers range
from four years to life, depending on the substances involved and the
offender's criminal record. Cypriot law allows the confiscation of
drug-related profits and allows the freezing of profits or a special
investigation of the suspect's financial records, although no assets have ever
been seized under this law.
III. Country Action Against Drugs in 1996
Policy Initiatives. In April, the Cypriot Parliament passed the
Prevention and Suppression of Money Laundering Activities Law of 1996, which
expands the definition of money laundering to include proceeds of drug and
non-drug-related serious crimes. The Government of Cyprus has issued
"guidance notes" (regulations) to banks on the customer identification
requirements of the new law. Other guidance notes are currently being
prepared. The government has established a money laundering investigations
unit, comprised of representatives of the Offices of the Attorney General,
Director of Customs and Chief of Police, in line with the new money laundering
law.
Law Enforcement Efforts. Cyprus aggressively pursues drug seizures,
arrests, and prosecutions for drug violations. Cyprus focuses on major
traffickers when the opportunities are available, and readily supports the
international community in its efforts. There have been no significant
changes in the structure of the Cypriot law enforcement agencies. Cypriot
police are generally effective in their law enforcement efforts; their
techniques and capacity are restricted by a shortage of financial resources.
International enforcement cooperation is limited somewhat by the political
division of the island into the internationally recognized Republic of Cyprus
in the south and the "Turkish Republic of Northern Cyprus," which is
recognized only by Turkey, in the north. The Republic of Cyprus authorities
have no relations with Turkish Cypriot enforcement authorities in the north.
Turkish Cypriots have their own law enforcement organization, responsible for
the investigation of all narcotics-related matters. These Turkish Cypriot
authorities have shown a willingness to pursue narcotics traffickers and
provide assistance when asked by foreign law enforcement authorities.
Corruption. Corruption in Cyprus is limited. There is no evidence of
senior or other officials facilitating the production, processing or shipment
of drugs.
Agreements and Treaties. A new extradition treaty between the US and
Cyprus was signed in June, which will replace the 1931 US-UK Extradition
Treaty currently in force for Cyprus. The ratification process is under way
in both countries. Consultations on implementation and other mutual legal
assistance matters will continue into 1997. There is no mutual legal
assistance treaty (MLAT) in force between Cyprus and the US. Cyprus is a
signatory to the 1988 UN Convention and the Council of Europe Convention on
Laundering, Search, Seizure and Confiscation of the Proceeds from Crime.
Cultivation/Production. The only known production is the limited, but
increasing, cultivation of cannabis for individual use and, on a smaller
scale, for resale. Cypriot authorities are working to eliminate such
cultivation and abuse.
Drug Flow/Transit. No significant increase has been observed over the
last year. Cyprus police believe their efforts in combating drug trafficking
have mostly converted Cyprus from a drug transit point to a broker site for
dealers. This change is likely also the result of improved conditions in
Lebanon. Lebanese containerized freight now moves directly to third countries
without transiting Cyprus. However, there were occasions in 1996 when
kilograms of heroin seized in London were identified as transiting northern
Cyprus from Turkey. In addition, Cyprus has become a transit point for
cocaine transported by commercial air from Brazil via Cyprus to the Middle
East and the former Soviet Union.
Domestic Programs. Drug abuse is relatively rare in Cyprus. Hashish is
the most commonly encountered drug, followed by heroin and cocaine, all of
which are available in most major cities. Users consist primarily of young
people and tourists. Recent increases in drug use have prompted the
government to actively promote demand reduction programs through the school
system and social organizations, occasionally with DEA-Nicosia participation.
Drug treatment is available.
IV. US Policy Initiatives and Programs
The USG is working to:
- support the Cyprus Government's efforts to deter money laundering
activities in Cyprus;
- encourage the Cyprus Government to enhance the authority of police and
customs officials to investigate narcotics violations;
- encourage Cyprus Customs authorities to be vigilant in their efforts to
prevent trafficking groups from utilizing the free ports of Larnaca and
Limassol to conceal the diversion of precursor chemicals;
- with the assistance of the Cypriot authorities, gather intelligence on and
destroy major trafficking organizations that are responsible for the
production, transportation, and distribution of illegal drugs destined for the
US and other world markets. These efforts include the recovery of profits
from the sale of drugs.
Bilateral Cooperation. There are no bilateral agreements in place at this
time.
The Road Ahead. The USG anticipates continued excellent cooperation from
both the Cyprus police and Cyprus customs officials in our drug enforcement
efforts. The USG expects to track closely government efforts to prevent the
use of Cyprus' offshore sector as a money laundering center, and especially to
track the influence/effect of Russian organized crime on Cyprus.
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