Overview: The Government of Cyprus was responsive to efforts to block and freeze terrorist assets, implemented Financial Action Task Force (FATF) recommendations, and conformed to EU counterterrorism directives. Cyprus continued to allow blanket overflight and landing rights to U.S. military aircraft supporting operations in Iraq and Afghanistan, and provided regular, routine protection for transiting personnel. Since 1974, the northern part of Cyprus has been administered by Turkish Cypriots and proclaimed itself the "Turkish Republic of Northern Cyprus (TRNC)" in 1983. The United States does not recognize the TRNC, nor does any country other than Turkey. The largely porous, lightly patrolled "green line" separating the two sides is routinely exploited for trafficking people, narcotics, and other illicit goods.

Members of the Kurdistan Workers' Party (PKK) engaged in fundraising in Cyprus and transited Cyprus en route to third countries. Cypriot authorities believed there was little risk the group would conduct operations in Cyprus and maintained that the Cypriot government was fulfilling all responsibilities with respect to the EU designation of the PKK as a terrorist organization.

Legislation and Law Enforcement: In November, the Republic of Cyprus Parliament passed a law to bring Cyprus into conformity with European Council terrorism guidelines. The law specified what constituted a terrorist group and formally accepted the list of terrorist organizations compiled by the European Council. The law identified terrorist offenses and corresponding criminal penalties. In October, the Government of Cyprus designated a Counterterrorism Coordinator. In June, an amendment was made to the Constitution with the intent of enabling police to obtain information – provided the Attorney General secured a court order – from telephone and other communications of persons suspected of serious crimes and in the interest of national security.

Countering Terrorist Finance: The United States and Cyprus cooperated closely on anti-money laundering and counterterrorist financing (AML/CTF) issues. The Cypriot Anti-Money Laundering Authority implemented new UNSCR 1267 listings immediately and informally tracked suspect names listed under U.S. Executive Order 13224. The Cypriot government maintained a "Prevention and Suppression of Money laundering Activities Law" that contained provisions on tracing and confiscating assets. In June, Cyprus amended its legislation to enhance its asset freezing and confiscation regime. All financial entities must have a national AML/CTF coordinator who will be responsible for the group's domestic and foreign offices, and banks must have a separate compliance department and apply risk management procedures.

In 2008, the FATF listed the Turkish Cypriot-administered area as a jurisdiction susceptible to money laundering. In February 2009, FATF found "significant progress" had been made. However, implementation of Turkish Cypriot measures to counter AML lagged in 2010.

Regional and International Cooperation: The de facto division of the island has precluded counterterrorism cooperation between the two communities' law enforcement authorities, and between Cyprus and Turkey. In the Turkish Cypriot-administered area, issues of status and recognition inevitably restricted the ability of authorities to cooperate on counterterrorism with international organizations and countries other than Turkey. Turkish Cypriots cannot sign treaties, UN conventions, or other international agreements, and lacked the legal and institutional framework necessary to counter money laundering and terrorist financing effectively. Within these limitations, however, Turkish Cypriots cooperated in pursuing specific counterterrorism objectives.

Cyprus signed the Beijing Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation and the Protocol to the Convention for the Suppression of Unlawful Seizure of Aircraft at the conclusion of an ICAO diplomatic conference in September.


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