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SPEECH:US POLICY TOWARD CYPRUS: AN AGENDA OF COOPERATION
2002-10-29 17:37:16

By US Ambassador to Cyprus, Ambassador Michael Klosson
Excerpts From his Remarks
For the complete text of his remarks go to: Speech by Ambassador Klosson
Cyprus-American Business Association Dinner
October 24, 2002, Nicosia, Cyprus

In the brief two months since my arrival in Cyprus, I've seen first hand the rich and complex interactions between our two countries. I've seen the web of economic, commercial, educational, social and political connections that constitute our relationship. And I've seen the benefits that flow to us both from deeper and stronger cooperation between our two countries.

I've also been told repeatedly that I've arrived in Cyprus at an "interesting time." That indeed is an apt observation. ? When one surveys the landscape, both on and off the island, these indeed are "interesting" times.

The United States does not approach its relationship with Cyprus from a single dimension. Our interests are broad; the relationship is wide-ranging, and poised to become even more so; and our expectations are high. These are the themes, which guide overall American policy, and shape our efforts here in Cyprus as elsewhere in Europe and beyond.

I would like to discuss with you four areas where these strands come together and where the Embassy seeks to make a difference. First, of course, is U.S. support for efforts to achieve a lasting, peaceful settlement of the Cyprus problem. Next is counter-terrorism. As the events of recent weeks illustrate only too vividly, global terrorism remains a worldwide threat. A related third priority is law enforcement cooperation. Finally, I will focus on the U.S.-Cyprus business relationship.

First Priority: A Lasting, Peaceful Settlement of the Cyprus Problem

My first priority is to extend US support for efforts to achieve a lasting, peaceful solution to the Cyprus Problem. No surprise there. Indeed, this has been a consistent theme of U.S. diplomacy and the Embassy?s mission for several decades. A solution would make a vital contribution to regional peace and stability as well as unleash energy for Cypriots to contribute in many areas.

But there is a difference now. The coming months present an historic opportunity -- one that may not repeat itself -- for the two parties to make a breakthrough. EU accession, both for Cyprus and eventually for Turkey, can be a positive and unifying force for the entire region.

That is why these next few months are so crucial for all Cypriots. So much is possible between now and the end of the year. Both a settlement and EU membership are on the horizon. This is an historic moment when all sides must focus creatively and squarely on the greater and long-term good. There can be no doubt that a Cyprus settlement will benefit Cypriots from one end of the island to the other, economically, politically and culturally.

For our part, the U.S. is continually engaged at all levels in support of a comprehensive settlement in Cyprus. We strongly support the UN Secretary General's Good Offices mission, including the critical work of his Special Adviser, and welcome the direct, personal involvement of Secretary General Annan. Our Special Coordinator for Cyprus, Ambassador Tom Weston, will be coming to Cyprus next week for more talks with the parties. We stress to both sides the need for urgency in these negotiations in order to reach an equitable and enduring agreement by the Copenhagen summit.

A comprehensive settlement that meets the legitimate interests of both sides is feasible. Time, however, is not unlimited and the process will have to be intensified. Political and economic security are important catalysts for prosperity. If both sides choose to take advantage of this unique opportunity for a settlement and EU membership, then Cyprus' full economic potential can and will be unleashed.

Second Priority: The Fight against International Terrorism

To protect peace, we must confront the enemies of peace. We must confront international terrorism. With victims from over 80 countries, September 11 was a shocking reminder that no nation is immune from the threat of international terrorism. As such, 9/11 galvanized global action.

Cyprus has been a valuable partner in the international effort to combat terrorism. Its geographic position and regional links make it an especially important member of the international coalition. The Government of Cyprus has risen to the occasion. We have enjoyed its strong support on a multitude of levels: from upgrading the physical security and police presence around Embassy facilities; to improved security measures at ports and airports; tighter Customs controls; and cooperation from the Attorney General and the Central Bank on stemming the financing of terrorism. We deeply appreciate this level of commitment, just as we look to strengthen our cooperation even further. The nature of the threat leaves no room for less than an all-out effort.

Third Priority: Law Enforcement Cooperation

Like terrorism, crime is a transnational threat with the potential to undermine economies and destroy institutions that govern our daily lives and international relationships. That is why law enforcement cooperation is another focal point for Embassy efforts.

Cyprus has long been an important regional banking center. As it prepares for EU membership, Cyprus is also modernizing its tax, insurance and securities laws to compete regionally in the full range of financial services. The same competitive advantages that make Cyprus attractive as a regional banking center may also attract financial crime. As recent stock market scandals have shown, those financial crimes may well involve related companies operating in both our countries under cross-ownership arrangements. Law enforcement cooperation is a critical element of any successful prosecution of international financial fraud.

Fortunately, the Government of Cyprus has undertaken several steps in recent years to raise its guard against financial crimes, especially international money laundering. A prime example is Cyprus' adoption of international standard anti-money laundering legislation. Cyprus has an active financial intelligence unit, which you know as MOKAS. MOKAS cooperates closely with leading international bodies and has an especially close working relationship with our own Financial Crimes Enforcement Network. Cyprus has the tools in place. The next step is to strengthen enforcement with more dedicated resources.

Fourth Priority: Strong Commercial Relations

My final priority is to enhance commercial relations between our two countries, in harmony with Cyprus' EU accession. Cyprus and the US already enjoy excellent commercial relations. Many of you can attest to that from personal experience. The US was the number one exporter to Cyprus last year -- nearly $370 million in exports. US brands, like Kellogg's, Athletes Foot, Nike and McDonalds are well represented on the island. US services also abound. US firms have expressed interest in or are bidding on government tenders worth over $2 billion. Next year, Eurocypria will take delivery of new Boeing 737s.

Even in the two brief months I have been in Cyprus, we have scheduled meetings with a steady flow of American business representatives from world-class companies such as Bechtel, Bell, Boeing, Pfizer, Raytheon, and Sikorsky. All of these different relationships reinforce the economic bonds between our two countries.

In harmony with Cyprus' EU accession -- that is a key phrase. Cyprus' EU accession has the potential to enhance our relationship even further. Together the US and the EU represent 50% of the global economy. Trade and investment flows between us total some $1.4 trillion annually.

As an EU member, Cyprus can leverage that relationship for its own benefit. US-EU negotiations cover a wide range of issues to facilitate two-way trade and investment. For example, we are working closely to establish mutual recognition of each other's regulatory and licensing standards on an industry specific basis to simplify the regulatory compliance burdens on businesses selling in both markets. EU harmonization itself sets predictable rules and standards that enhance the competitiveness of Cyprus and facilitate US-Cyprus trade and investment.

Clearly, Cyprus will be an important stakeholder in the US-EU commercial relationship. Issues like labeling and traceability requirements, Commission competency over investment and aviation agreements, even steel subsidies will now have a direct impact on Cyprus.

The United States looks forward to working with Cyprus, as it becomes an active participant in EU decisions. Many of your ministries in the future will see Embassy officers knocking on their doors to discuss a whole new agenda of issues. We have seen that even small countries play an important role in the full range of US-EU economic and commercial issues. There may well be opportunities for coalitions among other like-minded new members on issues of particular importance to Cyprus and the US. Together, we can ensure that Cyprus benefits from the vibrant and dynamic US-EU trade relationship.

Conclusion
The US and Cyprus have built a strong relationship. It is grounded on a foundation of peace, cooperation and economic development. It is multidimensional and shaped by many of the themes I mentioned at the outset. I hope to expand our relationship further, focusing especially on the four areas I have discussed with you tonight.

Cyprus, many say, is a small place. Yet already I have seen in Cyprus an energy, a richness of heritage and cultures, an economic vibrancy out of all proportion to its size. The next few years will bring momentous new changes to Cyprus.

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