MOSCOW (Pakistan Point News / Sputnik - 08th September, 2020) Russian Foreign Minister Sergey Lavrov will arrive in Cyprus on Tuesday with a visit marking the 60th anniversary of establishment of the diplomatic relations between the two countries.
Lavrov is set to hold meetings with his Cypriot counterpart, Nikos Christodoulides, as well as President Nicos Anastasiades, parliamentary speaker Demetris Syllouris and the leaders of the main political parties. The sides are expected to discuss the situation in the Eastern Mediterranean involving Turkey's actions, sign amendments to a double taxation agreement between Russia and Cyprus, as well as the Program for Consultations between the two ministries of foreign affairs for 2021-2022.
The Cypriot foreign minister told Sputnik in an interview on Monday that he was looking forward to welcoming Lavrov on such an important occasion as the anniversary of establishment of diplomatic ties.
"We will ... sign the Program for Consultations between the two ministries of foreign affairs for the period 2021-2022, indicative of our mutual determination to continue building on the foundations laid 60 years ago. As for the working part of the program, I am looking forward to continuing with the Russian Foreign Minister our frank and open dialogue on a wide range of issues of mutual interest," Christodoulides said.
AMENDMENTS TO RUSSIAN-CYPRIOT DOUBLE TAXATION DEAL
After extended consultations, Cyprus in August agreed to amend the double taxation avoidance agreement with Russia, whose citizens have been important clients of Cypriot banks since the 1990s. The amended agreement will raise the tax on dividend and installment payments from 5 percent to 15 percent, with the exemption for dividends for regulated entities like pension funds and insurance companies, as well as listed companies with specific characteristics. Cypriot Finance Minister Constantinos Petrides has said that the agreement was mutually beneficial and it reassured economic ties between the two nations.
"Important is the signing of the protocol amending the Agreement between the Government of the Republic of Cyprus and the Government of the Russian Federation for the Avoidance of Double Taxation," Christodoulides said in the interview with Sputnik.
According to Neophytos Loizides, a professor in International Conflict Analysis at the University of Kent, the renewed double taxation deal will benefit both Cyprus and Russia.
"Under the current arrangement, Russia will be able to tax at a higher rate (15 percent) on cross-border income and therefore protect its tax base. Cyprus hopes that exemptions will allow it to maintain its position as a key business hub for Russian investment. Similar arrangements are present with other EU members such as Malta, the Netherlands and Luxembourg but Cyprus offers one of the most welcoming environments for international businesses," Loizides told Sputnik.
TENSIONS IN EASTERN MEDITERRANEAN
Special attention is set to be paid to the situation in the Eastern Mediterranean. Christodoulides said he will update his Russian counterpart on Turkey's "provocations" in Cyprus's exclusive economic zone (EEZ) and against Cyprus itself.
Turkey's drilling activities in what Cyprus claims to be its exclusive economic zone in the Eastern Mediterranean have long been a conflicted item on the bilateral agenda as well as in a larger European context. The Cypriot government has slammed Turkey over recent months for conducting seismic surveys in an area of the Mediterranean Sea that Cyprus deems to be part of its own EEZ. Athens has also raised similar concerns to the European Union and the United Nations.
"The visit also provides an opportunity to update Mr. Lavrov, and exchange views in relation to Turkish illegal activities and provocations in the eastern Mediterranean, including the violations of the exclusive economic zone of Cyprus," Christodoulides said, adding that he would brief Lavrov on all the latest developments in the ongoing dispute.
According to Professor Loizides, the solution to the EEZ dispute must be found through bilateral talks and if they fail, then the sides could seek international arbitration.
"International law stipulates that islands have exclusive economic zones but legal practice has also made for exceptions. The [International Court of Justice] ICJ might as well decide in favor of Turkey or point to a compromise but the key issue here is for all countries to insist on the same message towards Ankara on resolving this extremely volatile situation via legal channels and international arbitration. Cyprus (and Greece) will expect Russia to reinforce this message and in the long run, this will be at the benefit of all countries in the region including Turkey," Loizides noted.
In addition, the Russian foreign minister is expected to discuss economic issues, including ways to overcome the economic consequences of the coronavirus pandemic for bilateral exchanges, as well as other international and regional issues.
