By Jean Christou
THE GOVERNMENT yesterday rushed to dispel fears that Russia might pull the plug on trade with Cyprus over the island’s compliance with EU sanctions on Yugoslavia.
Foreign Minister Yiannakis Cassoulides said it is too soon to make comments on the consequences of the decision to adopt the EU sanctions package.
“It is premature for such anxieties because no action has been taken to justify such concerns,” Cassoulides said.
The threat of Russian capital leaving the island was made by Russian ambassador Georgi Muratov to Antenna television on Wednesday. It was echoed yesterday by communist Akel Leader Demetris Christofias.
Thousands of Russian businesses operate out of Cyprus, many of which have dealings with Yugoslavia.
Speaking at a news conference yesterday, Christofias said his sources had also informed him that Cyprus risked losing some $20 billion in Russian investments for agreeing to impose wide-ranging EU sanctions on Yugoslavia.
Concern was also expressed by House President Spyros Kyprianou, who said he would raise issue at a meeting with President Clerides today.
He said that Cyprus should not adopt decisions taken in a different country and in which it had had no say.
Christofias also warned that the embargo decision, approved by the Council of Ministers on Wednesday, could adversely affect the ratification by the Russian Duma of a tax treaty signed by the two countries last December.
The five-year agreement for the avoidance of double taxation was signed in Nicosia by then Finance Minister Christodoulos Christodoulou and Russian Vice Minister of Finance, Alexei Kutrin. A memorandum concerning bilateral relations in the field of economy was also signed.
The two sides agreed to try and complete the ratification procedure as soon as possible.
“In our opinion it is clear the government decision is not only part of something illegal, but is also an accessory to the crime of genocide against the Yugoslav people,” Christofias said.
Finance Minister Takis Clerides, who is due to meet Muratov today, said the two issues of tax and Yugoslavia were quite separate. “It’s been discussed in the Duma for several months,” he said. “We must not connect the two issues.”
Cassoulides said that the Russians were aware that Cyprus has chosen the path of EU accession. “I think we agreed with Russia. We discussed it with the deputy minister,” he said, referring to the December visit.
He added that it was felt that the Russians understood the situation, and that, having chosen the EU accession path, Cyprus would “have to take the good with the bad”.
Cassoulides repeated that all decisions on Yugoslavia were being taken in the national interest, which meant following the EU line.
Muratov on Wednesday warned the Cyprus government that if it adopted the new embargo, Russian capital could leave the island, which would have serious consequences for Cyprus.
A spokesman at the Russian embassy said yesterday that Cyprus had the sovereign right to decide on its own course and that Muratov’s comments merely expressed the concerns of Russian businessmen on the island.
Government spokesman Costas Serezis said there had been no approach from Russia on this issue.
“The government does not make public comments on comments made by ambassadors in public,” he told journalists at his daily press briefing.
He said, however, that the issue would likely be discussed at the Cabinet meeting next Wednesday.
Cyprus has already agreed to implement an EU oil embargo against Yugoslavia, which is opposed by the House.
The new measures include restrictions on the movement of Yugoslav nationals close to the Milosevic regime and the freezing of Yugoslav assets abroad.
Elements of the embargo can be implemented by the Council of Ministers, but others, like the freezing of assets, may need a change in the law, which could see the sanctions held up at the House whose majority opposes any measures against Yugoslavia.
