More US energy companies to operate in Cyprus, US Ambassador says

US Ambassador to Cyprus Judith Garber expressed on Wednesday evening her conviction that more US energy companies will operate in Cyprus, joining ExxonMobil and Noble Energy. She was addressing a business dinner of the American Chamber of Commerce in Cyprus, in Nicosia, in the presence of Foreign Minister Nikos Christodoulides.

Garber also said that US national security, Cyprus’ national security and the security and stability in the Eastern Mediterranean region are inextricably linked, and reiterated the position of the United States recognizes the right of the Republic of Cyprus to develop resources in its Exclusive Economic Zone (EEZ).

“We also believe these resources should be equitably shared between the Greek Cypriot and Turkish Cypriot communities. We are concerned about the unlawful activities of the drillship Yavuz, which is operating within the territorial sea of the Republic of Cyprus. This provocative and unlawful step raises tensions in the region. We are confident that these resources can contribute to the overall economic well-being of Cyprus and thus be a positive force for achieving a solution to the Cyprus problem” she added.

Garber also noted that the discovery of hydrocarbons in the EEZ of Cyprus offers great promise and responsibility. We hope, she added, such resources promote prosperity in the entire Eastern Mediterranean region and help to diversify Europe’s energy supply.

The Ambassador said moreover that “we are proud that two American companies – ExxonMobil and Noble Energy – are participating in this game-changing development.”

“I firmly believe other U.S. companies in the energy sector will join them, as Cyprus transitions from discovery of energy resources to the hard task of bringing those resources to market” she added.

Environment that attracts investment

Moreover, she stressed the importance of maintaining an environment that attracts investment, noting that “investors from America and elsewhere always look for predictable, stable environments, with assurances that agreements and contracts will be honored, backed by secure financial institutions to manage income and expenses.”

According to the US Ambassador, there is nothing more valuable to the United States in the fight against corruption than a like-minded partner and said that the Republic of Cyprus has shown itself to be such a partner through its efforts over the past several years to improve its anti-money laundering efforts.

“Last week we had the opportunity to highlight the success of the Republic of Cyprus in strengthening its banking regulations with the visit of the Congressional Delegation from the U.S. House Committee on Financial Services, led by Chair Maxine Waters” she went on.

The Ambassador said moreover that the trilateral initiatives among Cyprus and Greece and their regional partners such as Israel, Egypt, and Jordan were important and encouraging, build resilience and act as a multiplier to attract investment to the region.

She referred to the participation of US Secretary Mike Pompeo in the trilateral gathering last March in Jerusalem with President Anastasiades, Prime Minister Netanyahu, and then-Prime Minister Tsipras. Moreover, she said that Assistant Secretary Frank Fannon, participated in a similar trilateral meeting last month in Athens.

“We will continue to look for opportunities to join such meetings to lend our support as they advance security and prosperity in the Eastern Mediterranean region” the Ambassador said.

From his part, Foreign Minister Nikos Christodoulides said that in the framework of its Economic Diplomacy activities, the Foreign Ministry is cooperating with other national stakeholders in order to inform Cyprus’ international partners – especially in Europe and the US - of the changes that have been taking place over the past few years in the banking sector.

He referred to the extensive efforts that have been made towards the consolidation and modernisation of Cyprus’ banking system, including through the strengthening of the legal framework for Anti-Money Laundering, which, he said, is now fully compliant with EU law and up to speed with international standards.

“This progress needs be communicated effectively to a wide range of political and economic foreign stakeholders and this is a task which the Ministry of Foreign Affairs has also undertaken. At the Ministry of Foreign Affairs, are determined to continue working towards changing false perceptions about Cyprus’ banking sector” the Minister added.

Revision of the Double Tax Treaty

Christodoulides said that Nicosia is strongly advocating the revision of the Double Tax Treaty between Cyprus and the US which was signed in 1984. “The need for amendment arises from the much evolved, OECD-driven international tax landscape over the last 35 years, the globalisation of commerce and investment and the significant business and trade opportunities presented to our two countries following the recent years’ continuing geopolitical developments in the Eastern Mediterranean basin” he added.

The Foreign Minister said finally that the current treaty is based on “old school” tax concepts and provisions and it needs modernising to, foremost, bring it up to speed with all the tax Treaties that the US has concluded since. With Cyprus membership to the EU since 2004, the current treaty includes certain provisions that may not be in line with EU law and EU fundamental freedoms, he concluded.