Country Reports on Terrorism 2008 - Cyprus

Cyprus took a clear stand against international terrorism and generally supported U.S. counterterrorism efforts. The government continued to allow blanket overflight and landing rights to U.S. military aircraft supporting operations in Iraq and Afghanistan. Cyprus was responsive to efforts to block and freeze terrorist assets, implemented Financial Action Task Force (FATF) recommendations, and conformed to European Union counterterrorism directives. On August 9, Cypriot authorities arrested Aslan Tayfun Ozkok, a wanted People's Revolutionary Liberation Party Front (DHKP-C, formerly Dev-Sol) member, who was transiting Cyprus from Syria. Ozkok, whom Turkey had placed on red Interpol notice for high crimes committed on behalf of DHKP-C, was subsequently sentenced to eight months in prison in Cyprus for traveling on false documentation.

Cyprus's legal framework for investigating and prosecuting terrorist-related activity remained relatively weak. The United States and Cyprus cooperated closely on terrorist financing and money laundering issues. The Cypriot Anti-Money Laundering Authority (MOKAS) implemented new UNSCR 1267 and 1373 Committee decisions immediately and informally tracked suspect names listed under U.S. executive orders.

While Cypriot agencies responsible for nonproliferation assess only a small risk of illicit materials moving through transit cargo, the United States continued to push for increased maritime cooperation. The Embassy organized and executed training programs to assist Cyprus to create a stronger export control regime and to pursue more proactive nonproliferation enforcement.

The de facto division of Cyprus since 1974 into Greek Cypriot- and Turkish Cypriot-dominated sectors has precluded counterterrorism cooperation between law enforcement authorities in both communities, and between Cyprus and Turkey. The largely porous, lightly-patrolled "green line" separating the two sides is routinely exploited for trafficking people, narcotics, and other illicit goods, and is vulnerable to penetration by terrorist groups. Regular ferry service that began in October 2007 between Latakia, Syria, and Famagusta, in the area administered by Turkish Cypriots, continued to facilitate increased illegal migration into Cyprus and the wider EU.

In the Turkish Cypriot-administered area, issues of status and recognition inevitably restricted the ability of authorities to cooperate on counterterrorism. Turkish Cypriots cannot sign treaties, UN conventions, or other international agreements, and lack the legal and institutional framework necessary to combat money-laundering and terrorist financing effectively. Within these limitations, Turkish Cypriots cooperated in pursuing specific counterterrorism objectives. They regularly alerted the USG to apparent money-laundering efforts through Turkish Cypriot banks by US citizens and in June froze a wire transfer and opened an investigation into the suspect transaction.

In February, pressure from the international community culminated in the Turkish Cypriot-administered area being included as a jurisdiction susceptible to money-laundering by FATF, the global anti-money laundering (AML) body. This designation galvanized Turkish Cypriot "authorities" and bankers, who quickly passed updated AML "laws" bringing offshore banks under the authority of the "Central Bank." A financial investigation unit-equivalent was created and began operations, and a new "law" that would better regulate casinos was pending at year's end. Commercial bankers upgraded their systems for identifying and reporting suspicious transactions and held seminars for other industries on methods to identify possible money-laundering activities. In October, FATF welcomed "significant progress made in the northern part of Cyprus in substantially addressing identified AML deficiencies."

Ethnic Kurdish communities exist on both sides of the island. The Kurdistan Workers' Party has a presence in Cyprus. Its activities generally were fundraising and transit en route to third countries. Authorities on both sides believed there was little risk the group would conduct operations on the island.