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IdentifierCreatedClassificationOrigin
06NICOSIA2054 2006-12-20 15:50:00 SECRET Embassy Nicosia
Cable title:  

CYPRUS: 2006 COUNTRY REPORT ON TERRORISM

Tags:   PTER ASEC CY EFIN KCRM KHLS KPAO 
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					  S E C R E T SECTION 01 OF 03 NICOSIA 002054 

SIPDIS

SIPDIS

S/CT FOR RHONDA SHORE; NCTC

E.O. 12958: DECL: 12/18/2016
TAGS: PTER ASEC CY EFIN KCRM KHLS KPAO
SUBJECT: CYPRUS: 2006 COUNTRY REPORT ON TERRORISM

REF: STATE 175925

Classified By: Ambassador Ronald Schlicher, Reasons 1.4 (b), (d)



1. (U) Per Reftel, Post offers the following input for the
2006 Annual Terrorism Report. A note on terminology is in
order: Since 1974, Cyprus has been divided de facto into the
Greek Cypriot government-controlled area, comprising the
southern two-thirds of the island, and a northern third,
administered by Turkish Cypriots. For clarity's sake, in
this report we use interchangeably "Cyprus," the "Republic of
Cyprus" ("RoC"), and "the south" when referring to the
internationally recognized, government-controlled zone. We
refer to the north as "the area administered by Turkish
Cypriots" or "the Turkish Cypriot-controlled area." It is
imperative to remember that the so-called "Turkish Republic
of Northern Cyprus" ("TRNC") is not recognized by the United
States or any country other than Turkey. The Embassy point
of contact for this report is Laurent de Winter, who can be
contacted via email at dewinterlm@state.gov.

General Assessment


--------------------------





2. (SBU) Despite limited resources, Cyprus takes a clear
stand against international terrorism and is supportive of
U.S. counterterrorism efforts. The government continues to
allow blanket overflight and landing rights to U.S. military
aircraft supporting operations in Iraq and Afghanistan.
However, the government has raised its concerns about the
allegations in a Council of Europe report identifying Cyprus
as a "staging post" for U.S. counterterrorism rendition
flights. In addition, parliamentarians have called for
inspections of all U.S. Government aircraft landing on the
island. Cyprus is a party to all relevant UN conventions on
terrorism, is generally supportive of international efforts
to block and freeze terrorist assets, has implemented
Financial Action Task Force (FATF) recommendations, and
conforms to European Union (EU) directives on
counter-terrorism. In 2005, the director of the Cyprus
Central Intelligence Service (KYP) drafted legislation to
restructure, modernize, and strengthen Cyprus's
intelligence-gathering capabilities. KYP submitted the
legislation in 2006, but as of December, the parliament had
not passed it.



3. (SBU) Additionally, Cyprus was the first EU member state
to sign a shipboarding agreement with the United States under
the auspices of the Proliferation Security Initiative
Agreement (PSI). Cypriot authorities in September boarded
and searched a Panamanian-flagged vessel, the M/V Gregorio I,
carrying military equipment from North Korea to Syria. They
eventually released its cargo to Damascus, however,
determining it did not constitute proscribed materiel.
Cyprus has been slow to pass a new comprehensive law on arms
sales, but authorities are close to agreement on the language
of the draft legislation. Cyprus's legal framework for
investigating and prosecuting terrorist-related activity
remains relatively weak. In October, however, the
legislature reached a political compromise to amend Chapter
17 of the Constitution, which concerns the right to privacy.
The move paves the way for the government to introduce new
legislation that would permit authorities to conduct
wiretapping and sting operations (currently, evidence
gathered via wiretaps or internet surveillance is not
admissible in court.)



4. (U) The United States and the Republic of Cyprus
cooperate closely on terrorist finance and money laundering
issues. In the area administered by Turkish Cypriots, issues
of status and recognition inevitably isolate and restrict the
ability of Turkish Cypriot authorities to cooperate on
counterterrorism. The "TRNC" cannot sign treaties, UN
conventions or other international agreements. Moreover, the
area administered by Turkish Cypriots lacks the legal and
institutional framework necessary to combat money-laundering
and terrorist financing effectively. Within these
limitations, however, authorities in the Turkish
Cypriot-controlled area have cooperated with the United
States in pursuing specific CT-related objectives.

Safe Haven


--------------------------



NICOSIA 00002054 002 OF 003





5. (U) According to media reporting, the Kurdish Workers'
Party (PKK)/Kongra Gel (KGK) has an active presence on both
sides of Cyprus. The PKK reportedly uses the island as both
a fundraising and transit point. Experts estimate the
Kurdish community in the government-controlled area to number
1,500. Among Kurdish-origin Turkish settlers in the north,
the KGK reportedly enjoys significant support. Cyprus
maintains that it is fulfilling all responsibilities with
respect to the EU designation of the PKK/KGK as a terrorist
organization. Both RoC and Turkish Cypriot authorities
believe there is little risk the PKK/KGK will conduct
operations here and are reluctant to take any action that
might make the island a potential target. In addition,
Turkish authorities believe that the large Turkish troop
presence in the north acts as a significant deterrent to open
PKK/KGK activity. U.S. and Cypriot officials regularly
discuss the PKK/KGK issue.



6. (U) Third-country nationals comprise approximately 10
percent of the Republic of Cyprus population. The asylee
community is large and growing. There is concern here that
this population represents a potential source of recruits for
terrorist groups looking to extend their reach into Europe.
Moreover, the UN-patrolled "Green Line" dividing north and
south is relatively porous. Immigration controls are uneven,
and it is relatively easy for asylum seekers to cross from
the Turkish Cypriot-controlled area to the RoC. This
represents a potential vulnerability and access point for
terrorist groups seeking entry into an EU member state (the
EU "acquis communitaire" currently is suspended in the north.)



7. (U) Turkish Cypriot authorities in 2005 adopted
"legislation" strengthening controls against illegal
immigration and tightening "citizenship" requirements. It is
unclear, however, how well they are implementing the
regulations. Turkish Cypriots contend that they now have a
much better picture of the third-country population crossing
the Green Line toward government-controlled territory.

Terrorist Groups and Organizations on Cyprus


--------------------------





8. (S) While there is no evidence of designated Foreign
Terrorist Organizations (other than PKK/KGK) operating in
Cyprus, there is a sizable and growing Jama'at al-Tabligh
Islamic missionary society (JT) and Jama'at Islami Bangladesh
(JIB) presence on island. Both of these south Asia-based,
fundamentalist Islamic groups have a large following among
the Pakistani, Afghani, Bangladeshi, and Sri-Lankan nationals
resident here. Members of JIB, represented in Cyprus by the
Islamic Forum Europe, raise significant sums of money to send
back to JIB headquarters in Bangladesh. Both the JT and the
JIB preach a very conservative form of Islam with an
anti-western theme. Intelligence and law enforcement experts
believe that JIB, in particular, has had a role in violent
activities in Bangladesh. In addition, there is significant
concern that JT and JIB both have links to Islamic militant
groups in other parts of the world, which might target them
(JT and JIB) for recruitment. While the activities of both
are confined mainly to the government-controlled area of
Cyprus, there is growing evidence they seek to expand their
membership rolls in the north as well.

Cypriot Counterterrorism Cooperation


--------------------------





9. (SBU) Cyprus's eastern Mediterranean location and the
large volume of container traffic moving through its major
ports makes the island potentially convenient for terrorist
organizations seeking transshipment points for WMD and other
items of concern. While RoC agencies responsible for
nonproliferation assess there is only a small risk that
illicit materials may move through transit cargo, the United
States continues to push for increased maritime cooperation.
In encouraging the RoC to create a more cohesive export
control system and to endorse more proactive nonproliferation
enforcement, the Embassy's Export Control and Border Security
(EXBS) office provided training in 2006 to government
enforcement entities. This included courses in Cyprus and
the United States on topics such as air and seaport
interdiction, commodity identification and hazardous material
response, as well as issuance of, and training on, a

NICOSIA 00002054 003 OF 003


nonproliferation database. Participants in the various
programs came from myriad RoC agencies, including Customs,
Police, and Commerce.



10. (SBU) In addition to EXBS activities, 2006 saw increased
collaboration between the Embassy and the U.S. Defense Threat
Reduction Agency (DTRA) in providing antiterrorism
programming to Cyprus through its International
Counterproliferation Program (ICP). Most notably, in October
ICP provided an "Executive Seminar" on terrorist applications
of weapons of mass destruction for 40 senior Republic of
Cyprus officials. This seminar is the precursor to
subsequent ICP training programs, and the Embassy expects
ICP-provided training of RoC
non-proliferation/counterterrorism officials to increase in


2007.



11. (SBU) In the area administered by Turkish Cypriots, the
question of political recognition again complicates the
ability of the U.S., EU, and others to provide help to or
engage in direct cooperation with Turkish Cypriot "Customs"
and "Migration" authorities. Specifically, they require
additional training in the areas of basic inspection and
equipment familiarization/utilization.



12. (U) The United States and the Republic of Cyprus
cooperate closely on issues related to terrorist finance and
money laundering. In 2005, the U.S. Financial Crimes
Enforcement Network (FinCEN) and the Cypriot Financial
Intelligence Unit (MOKAS) signed a Memorandum of
Understanding designed to formalize and enhance their
historically excellent relations. Throughout 2006, MOKAS
proved a reliable Embassy interlocutor in combating terrorist
financing.



13. (SBU) In the north, Turkish Cypriot authorities lack the
legal and institutional framework to meet minimum
international standards with regard to combating money
laundering and terrorist finance. In addition, the north
lacks modern audit control technology, relying instead on
antiquated paper-based systems. Consequently, the Turkish
Cypriot community's financial sector is vulnerable to abuse
by criminals and terrorists.



14. (U) Nevertheless, the Turkish Cypriot community has
taken some steps to prevent terrorist financing within its
banking institutions. For instance, the "TRNC Central Bank"
regularly asks financial institutions to search for assets
linked to individuals or entities whom the U.S. and/or UN
1267 Committee has designated as terrorists. In September,
Turkish Cypriot "parliamentarians" passed "legislation"
designed to prevent money laundering and improve oversight
over casinos, offshore banks, and currency exchange firms.
The law appears a great improvement over the prior regulatory
regime, but its effectiveness is as yet indeterminate.



15. (SBU) The Republic of Cyprus generally responds in a
timely fashion to requests for assistance regarding threats
against the Embassy. On two occasions in November, for
example, the Embassy sought help, and each time, RoC police
conducted independent, serious investigations. The Embassy
has not always agreed on the punitive action the government
has taken vis-a-vis suspected perpetrators, however. As a
European Union member, Cyprus must comply with certain EU
regulations that grant great protections to criminal suspects.
Schlicher