What Interests Has Russia in Cyprus?

Cyprus became home to thousands of Russians, but Putin regime may have greater interest in the small nation, The Guardian comment.

Last month, a mysterious Russian transport ship sought refuge during a storm, in the Cypriot port of Limassol. On board of MS Chariot were hidden four containers loaded with 60 tons of ammunition for AK-47 machine guns and rocket launchers. Load came from Rosoboronexport, the state company holding a monopoly on Russia’s arms exports. The buyer was none other than the Syrian government.

As an EU member since 2004, Cyprus would have to retain goods, simply because it is a flagrant violation of the embargo imposed by the EU strictly on supply Syria with military equipment after the Government has been directly involved in violent repression and crimes against its own citizens and anti-government protesters.

However, Cypriot officials allowed the ship to leave port in return for vague assurances that it will change its route. But the captain did fill the vessel and walked briskly to the Syrian port of Tartus, where he delivered the goods doubtful.

Cyprus does not want to upset Russia

Critics argue that the enigmatic story is further proof that Cyprus does not want to stir up discontent Moscow, which is why adopt an attitude “shameful servitude” to it. But the angry Cypriot reluctance Vladimir Putin is to understand, comment on The Guardian. Cyprus Kremlin promised but not yet handed over a 2.5 billion euro loan to save the economy. Also, Russia has always been a strong supporter of Cyprus in the UN Security Council.

So many Russians live in Limassol, a port and an attractive old town, that resort was nicknamed “Limassolgrad”. There’s even a newspaper, radio station and two schools in Russian. Russian-speaking Cypriot population is approximately 35,000 to 40,000 people.

“Limassol is part of the Russian Federation”, said Artyom, a waiter at a restaurant. Why so many Russians came here? “First and mpozitele are small. Second, it is easy for Russians to get visas,” said the waiter.

Tax haven

Moreover, large amounts of currency reserves of Russia are kept abroad in Cyprus. More than 25% of bank deposits and almost one third of foreign investment from Russia. Investors Russian companies use to create “buffer” to take advantage of low corporate tax rate of Cypriots, only 10%. Many of these funds are then reinvested back into Russia (1.4 billion euros in 2008), thereby avoiding Russian taxes. Cypriot authorities vehemently deny, however, that the island would be a haven for Russian money laundering.

But many analysts are skeptical: “We speak Russian money they are washed through Cyprus. Russian Mafia Cyprus intensively used for this purpose, why not benefit Russia as Cyprus to record an economic downturn,” said Hubert Faustmann, Professor of Education European University of Nicosia.

Limassol guard hills are studded with luxury villas, many of them owned by Russians. Locals complain that Russian capital injection led to an increase in prices.

Ordinary Russians who live in Cyprus claim that the island offers which do not provide Russia: protection against a corrupt bureaucracy. Life in sunny Cyprus, they add, it is preferable to that of Putin in a Russia dominated by greed and cold, where there is certainly legal protection.

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