US could call on Cyprus to freeze Serb assets

By Jean Christou

THE US government may ask Cyprus to freeze Serb assets held in Yugoslav offshore banks on the island as part of Nato measures against President Slobodan Milosevic.

An official request has not yet been made, but a source at the US embassy in Nicosia said such a possibility could not be ruled out.

Reports yesterday suggested billions of dollars in Yugoslav state funds had been stashed way in accounts in Cyprus, including money belonging to Milosevic himself.

During the Bosnian war and with UN sanctions on the Federal Republic of Yugoslavia, thousands of Serbs settled in Cyprus and hundreds of thousands of pounds were deposited in offshore companies. Around 3,000 Yugoslavs live in Cyprus.

The Central Bank, in line with its secrecy policy relating to the offshore sector, refused to reveal how many of the 36,500 offshore licences issued in Cyprus were granted to Yugoslav companies.

They were no more willing to say how many of the 30 Offshore Banking Units (OBUs) on the island are Yugoslav, although at least four are named on a recent list, including Beogradska Banka in Nicosia.

In the early ‘nineties is was estimated that several thousand Serb-run offshore companies had been granted licences.

But a Central Bank source said the number of Yugoslav companies being granted licences has declined gradually over the past several years.

“After Bosnia, they went back when the exodus of business from the region stopped,” the source said.

He said it was too early to tell whether the Kosovo crisis and Nato attacks would drive business from the region again and back to Cyprus.

But the source was adamant that the US government could not attempt to freeze Yugoslav assets in Cyprus, without a decision by the United Nations.

A representative of a Nicosia law firm which deals with Yugoslav offshore companies said they were not worried by such reports. “It can’t be done,” the representative said.

“The Cyprus government cannot satisfy the request of another country in this way. There would have to be a UN resolution or a change in the law.”

The legal representative said that, in any case, over the past seven or eight years the number of Yugoslav companies in Cyprus has been substantially reduced.

“It is not a big figure any more,” he said, without elaborating further.

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