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


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:

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.