Despite limited resources, Cyprus took a clear stand against international terrorism and 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. However, the government raised concerns about the allegations in a Council of Europe report identifying Cyprus as a "staging post" for U.S. rendition flights. Cyprus was generally supportive of international efforts to block and freeze terrorist assets, implemented Financial Action Task Force (FATF) recommendations, and conformed to EU directives on counterterrorism. In 2005, the Director of the Cyprus Central Intelligence Service (KYP) drafted and submitted to parliament legislation to restructure, modernize, and strengthen Cyprus's intelligence-gathering capabilities.
Third-country nationals comprised approximately ten percent of the Republic of Cyprus population, and the asylum community was growing. The government had concerns that this population was a potential source of recruits for terrorist groups looking to extend their reach into Europe. Moreover, the UN-patrolled "Green Line" dividing north and south is relatively porous. Immigration controls were uneven, and it was relatively easy for asylum seekers to cross from the Turkish Cypriot-administered area. Such conditions posed a potential vulnerability and access point for terrorist groups seeking entry into an EU member state (the EU's "acquis communitaire" currently is suspended in the north of Cyprus).
Cyprus's eastern Mediterranean location and the large volume of container traffic moving through its ports made the island potentially convenient for terrorist organizations seeking transshipment points for WMD and other items of concern. While Cypriot agencies responsible for nonproliferation assessed there was only a small risk that illicit materials might move through transit cargo, the United States continued to work for increased maritime cooperation.
In addition to EXBS activities, there was increased collaboration between the U.S. Embassy and the U.S. Defense Threat Reduction Agency (DTRA) in providing antiterrorism programming to Cyprus through the Department of Defense's International Counterproliferation Program (ICP). In October, the ICP provided an "Executive Seminar" on terrorist applications of weapons of mass destruction for 40 senior Republic of Cyprus officials.
The Kongra Gel/Kurdistan Workers' Party (KGK/PKK) maintained an active presence throughout Cyprus and reportedly used the island as both a fundraising and transit point. Experts estimated the Kurdish community in the government-controlled area to number 1,500. Among Kurdish-origin Turkish settlers in the north, the KGK/PKK reportedly enjoyed significant support. Cyprus maintained that it was fulfilling all responsibilities with respect to the EU designation of the KGK/PKK as a terrorist organization. Authorities in both the area under government control and in the area administered by Turkish Cypriots believed there was little risk the KGK/PKK would conduct operations on Cyprus and were reluctant to take any action that they perceived could make the island a potential target for PKK action. In addition, Turkish authorities believed that the large Turkish troop presence in the north acted as a significant deterrent to open KGK/PKK activity.