It even links Cyprus to the sale of conventional arms to Saddam Hussein.
According to reports from New York, the Presidents of the Cyprus Federation of America and PSEKA Peter Papanicolaou and Philip Christopher are to send a letter to the editor of Forbes to protest about the lengthy article that characterises Cyprus as a “good place to make things disappear”.
Under the headline: “Money laundering, gun-running, sex slavery. Is tiny Cyprus your company’s next tax haven?” Forbes said the island had long been a way station for rogues and scoundrels, “where officials have traditionally been willing to look the other way”.
It quoted US officials as saying that Cyprus had come a long way in cleaning up its act and had over the past decade passed laws complying with international standards, To spread the word, delegations of Cypriot tax professionals and chamber-of-commerce officials had travelled in the past year to such places as Shanghai, Beijing, Bangalore, New Delhi and Vienna and as a result, the number of new holding and trading companies registered in Cyprus last year was 14,500, up 70 per cent from 2002.
“To the casual observer, this remote island appears to be a quiet vacation spot, with English speakers, safe streets, pleasant beaches and decent restaurants,” said Forbes. “But Cyprus also became something of an entrepôt for dirty dealings in the Middle East.”
In the 1990s, it said, Cyprus was among 14 countries with businesses that illegally provided Saddam Hussein with conventional weapons. Forbes said this was cited in a report to the CIA on Iraq’s weapons of mass destruction.
Cyprus-registered companies also contracted to buy oil and chemical materials from Iraq in violation of the UN embargo, it said.
“One result of these dirty dealings with Saddam was the UN-backed oil-for-food programme, which itself proved easy to manipulate. Once again Cyprus was in the centre of a storm,” it added, referring to US accusations against Cypriot UN diplomat Benon Sevan.
The article also refers back to the early nineties when Cyprus was a magnet for Russian business, saying that $1 billion a month was flowing out of Russia into Cypriot banks.
“Much of it unclean. The Russian mafia controlled as much as 70 to 80 per cent of all business in the motherland during the mid-1990s, according to a report by Izvestiia. Sending money to havens like Cyprus kept it safe from tax collectors, on-the-take bureaucrats, creditors, other gangsters and shaky Russian banks… Today Russian crime has a different face in Cyprus, where a thriving sex trade draws women from former Soviet states.”
Forbes also refers to the Serbian money that was channelled through Cyprus during the reign of Slobodan Milosevic, and the fact that the law office of President Tassos Papadopoulos had been implicated in setting up some of the companies involved in the scandal.
“Cyprus has also gained notoriety, thanks in part to geography, as a hub for the trade in small arms and ammunition. Year after year, reports the annual Small Arms Survey, produced by the Graduate Institute of International Studies in Geneva, Cyprus imports these goods in quantities that vastly exceed the amount its citizens or military could reasonably use,” said Forbes.
It said that in 2003 Cyprus imported an estimated $185 million worth of revolvers, military rifles and machine guns, putting it second after the US. “The single biggest supplier of arms: Russia. Yet the bulk of goods come from unspecified nations, and it is unclear if the guns ever make it ashore – or are simply invoiced through Cypriot front companies. No one seems to know where the guns go,” it added.
The magazine also criticises Cypriot officials, such as Justice Minister Doros Theodorou, “as one cigarette after another burns slowly in the ashtray in front of him”, pointing the Forbes reporter in the direction of the north. It said the north was an easy target for Cypriot officials. “Such politicians are part of the problem because they refuse to deal with leaders of the occupied areas,” the magazine said.
It did say there had been some interest from US construction and airline businesses, but added that the Cypriots still had to compete with Switzerland. “Even Russian investors are starting to look elsewhere, paying a bit more in taxes in a place like Luxembourg to avoid the stigma of Cyprus,” it said.
