Cyprus's parliament opened an inquiry on Wednesday into the development of spyware on the island, after a draft European Parliament committee investigation report said it was an important export hub for the surveillance industry.
Sophie in't Veld, the rapporteur of the first draft report for a European Parliament committee called PEGA, said on Tuesday that Cyprus was an "attractive place" for selling surveillance technologies, adding that the "abuse of spyware in EU member states is a grave threat to democracy on the entire continent".
The report cited Cypriot officials as saying 'three to four' companies produce spyware on the island.
"It's been confirmed that Cyprus is a greenhouse for companies which produce spyware ... which has political backing," said MP Aristos Damianou of the opposition AKEL party, which sought the parliamentary inquiry.
A government spokesperson did not immediately respond to a request for comment.
Cypriot President Nicos Anastasiades last week said any involvement of Cyprus in spyware surveillance in other countries was 'imaginary'.
Members of his conservative Democratic Rally party have accused the opposition of attempting to sway public opinion ahead of a presidential election in early 2023.
One spyware developer, Israel's NSO group, said in a June 2021 report that its products were "closely regulated by export control authorities in the countries from which we export our products: Israel, Bulgaria and Cyprus".
NSO, which sells its Pegasus spyware to government agencies, says it is a powerful tool in the fight against crime and terrorism.
In a written response to questions put by Reuters in July 2021, Cyprus's ministry of energy, commerce and industry said there was "no information on issuing any export licenses for NSO products to date".