U.S. DEPARTMENT OF STATE INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT MARCH 1995 BUREAU FOR INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS CYPRUS I.Summary Cyprus' location in the Eastern Mediterranean and its well developed business, tourism, and communications infrastructure make it a popular meeting point for drug traffickers. Cyprus strictly enforces tough antidrug laws in accordance with the 1988 UN Convention, which it ratified in 1990. Cyprus police and customs authorities cooperated closely with United States authorities in 1994. Cyprus officials are concerned that Cyprus' offshore business sector is being used for international money laundering activities, and monitors some monetary activities to deter such activities. II.Status of Country Cyprus' location in the Eastern Mediterranean and its close proximity to Lebanon and Turkey make it a convenient transit point for Turkish and Lebanese narcotics traffickers. Cyprus' highly developed business and tourism facilities, a modern telecommunications system, and a large merchant shipping fleet further attract traffickers to Cyprus. Traffickers conceal heroin and cannabis resin in the substantial container traffic transshipped through Cyprus, and take advantage of air connections to transship drug-related currency to and from Europe. Although the Government of Cyprus (GOC) does not collect statistics on drug use, authorities believe drug use in Cyprus is relatively low. Hashish is the most commonly used drug, followed by heroin and cocaine. Cyprus has also attracted over 15,000 offshore companies from all over the world, over 2,000 of which are Russian. Cyprus' success as an international offshore center has made it vulnerable to international money laundering activities, particularly by the Russian mafia, and other organized crime groups. The Cyprus Central Bank monitors monetary activities to deter money laundering, but must rely on enforcement of banking regulations to do so. Cypriot law does allow for the confiscation of drug-related profits, though this law has not been actively utilized. GOC customs officials, in cooperation with USG authorities, attempt to monitor the flow of precursor chemicals that transit Cyprus to Lebanon. GOC officials work closely with chemical brokers in Cyprus to monitor chemical shipments. Cyprus authorities believe diversion of chemicals to illicit drug manufacturers is not a significant problem. IIICountry Action Against Drugs in 1994 Policy Initiatives. The Cypriot legislature is reviewing a bill to allow "controlled delivery" of narcotics for drug-trafficking law enforcement investigations and is expected to vote on it in 1995. Accomplishments. In December, the GOC's Central Bank issued regulations extending bank compliance officers' responsibilities to include anti-money laundering procedures. In September, the Cyprus police force organized a task force of financial investigators and Central Bank officials to identify fraudulent financial activtities. The GOC also signed separate bilateral counternarcotics cooperative agreements with the governments of Egypt and the United Kingdom in 1994. Agreements and Treaties. The GOC ratified the 1988 UN Convention in 1990 and is generally meeting the Convention's goals and objectives. The GOC is also party to the 1961 Single Convention, the 1972 Protocol, and the 1971 Convention of Psychotropic Substances. Cyprus cooperates closely with the USG under the 1987 USG-GOC Customs Mutual Assistance Agreement. Law Enforcement Efforts. Narcotics laws are enforced strictly in Cyprus. Cyprus police and customs authorities maintain excellent relations with United States and other foreign government officials. Domestic law enforcement cooperation is limited by the de facto division of northern Turkish speaking Cyprus, an area beyond the GOC's control. Authorities in the government controlled areas have no direct working relations with enforcement authorities in the "Turkish Republic of Northern Cyprus" or with Turkey. Turkish Cypriots have their own law enforcement organization, responsible for the investigation of all narcotics related matters and have carried out seizures and other enforcement activiites in the northern part of Cyprus. GOC officials are concerned about rising drug-related crime. At the end of September 1994, Cyprus police arrested 166 people on drug-related charges, compared with 123 in all of 1993. Cypriot sentencing guidelines call for 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. In 1994, GOC authorities seized 5 kilograms of cannabis (compared to 15 kilograms on 1993), 2.6 kilograms of heroin (compared to 1 kilogram in 1993) and .04 kilograms of cocaine (compared to 4.9 kilograms in 1993). Corruption. Corruption among public officials is not a problem in Cyprus. There are no recorded cases of senior government officials involved in narcotics trafficking-related activities. Cultivation/Production. GOC officials believe small amounts of marijuana are cultivated for personal use. The USG is not aware of any other production or cultivation of drugs in Cyprus. Drug Flow/Transit. The Cyprus police believe illicit drugs, particularly heroin, transit northern Cyprus from Turkey to other parts of Europe. Cyprus is also a transit point for cocaine transported by commercial air from Brazil to Cyprus and destined to the Middle East and countries of the former Soviet Union. Demand Reduction Programs. Recent increases in drug use prompted the GOC to focus more attention on demand reduction efforts and education. In 1994, the GOC increased the number of drug abuse consultative centers in Cyprus. IV. USG Policy Initiatives and Programs In June 1994, the Drug Enforcement Administration (DEA), in cooperation with INL, held two seminars on money laundering for 70 bank officials. DEA also provided money laundering training to Cyprus police officials. In September, DEA, in conjunction with INL, held a drug enforcement seminar for officials of the Cyprus police and customs service. The GOC and USG are negotiating an updated extradition treaty that would supersede the existing one. A memorandum of understanding on the treaty was initialed but the treaty has not yet been concluded. The Road Ahead. The USG looks forward to continued good law enforcement cooperation with the GOC. For the coming year the USG will encourage further efforts to deter money laundering activities in Cyprus, and will continue negotiations on an updated extradition treaty.