CYPRIOT PRESIDENT CHRISTOFIAS VISIT TO MOSCOW

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003437

SIPDIS

E.O. 12958: DECL: 11/27/2018
TAGS: PREL PGOV EFIN CY RS
SUBJECT: CYPRIOT PRESIDENT CHRISTOFIAS VISIT TO MOSCOW

Classified By: Political Minister Counselor Alice G. Wells for reasons
1.4 (b) and (d).

Summary
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1. (C) During a November 19-20 visit to Moscow, Cypriot
President Christofias met President Medvedev but a scheduled
meeting with PM Putin was canceled. Russia accomplished two
objectives in the eight agreements signed during the visit:
an agreement to request information on financial transactions
between Russian and Cypriot businesses and an endorsement of
Medvedev's European Security Treaty (EST). Discussion of the
Cyprus situation was limited to a paragraph of the joint
political declaration, which supported the May 23 Joint
Statement and called for other entities to allow the UN
process to move forward without interference. The MFA hailed
Cyprus as the first country to endorse, in writing,
Medvedev's EST, a recognition by Moscow that Cyprus is an
ally in future EU deliberations. End summary.

A Full Schedule
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2. (SBU) Russophile Cypriot President Demetris Christofias
held a packed two-day visit to Russia November 19 and 20,
accompanied by the Ministers of Foreign Affairs; Finance; and
Commerce, Industry and Tourism, as well as other officials.
Christofias met President Medvedev, with whom he signed a
series of bilateral agreements, while a planned meeting with
Putin was canceled due to a conflict with Putin's speech at
the United Russia party conference. Christofias also met
with Duma Speaker Boris Gryzlov, Chairman of the Federation
Council Sergei Mironov, and Moscow Mayor Yuri Luzhkov. The
president also received an honorary doctorate from the
prestigious Moscow State Institute for International
Relations (MGIMO). The full agenda reflected Christofias's
longstanding ties to Moscow, where he earned a doctorate in
history (1969-1974),met his wife, and started a family.

Lots of Form, Some Substance
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3. (C) Russia accomplished two objectives during the visit:
an agreement to request on a case-by-case basis information
on Russian account holders in Cyprus, and an endorsement of
President Medvedev's European security proposal. As Vladimir
Milovidov, head of the Russian Federal Markets Service,
explained to the press, the agreement between the Markets
Service and the Cyprus Securities Commission "established
closer cooperation with the country, where a significant
portion of Russian financial institutions are registered, to
tighten control and ensure transparency in their activities."
MFA Cyprus and Greece desk officer, Oleg Bredihin, told us
that the GOR "strongly suspects" a series of Russian firms
use Cyprus as a tax shelter and avenue to move capital
outside the oversight of Russian regulators. He also
highlighted that Cyprus was the first European government to
put into writing support for Russia's proposed European
Security Treaty, including it in the bilateral political
agreement.


4. (C) In all, the parties signed eight agreements: a
political declaration; a memorandum of understanding between
justice ministries on cooperation in investigations; a
technical exchange between ministries of health; the
information exchange agreement between financial regulators
discussed above; a cooperative agreement between ITAR-TASS
and the Cypriot national news service; two memorandums of
understanding between Russian and Cypriot banks; and an
agreement between RosTourism and the Cypriot Ministry of
Commerce, Industry, and Tourism to promote bilateral tourism.
Christofias promised to address Medvedev's concern on entry
visas for Russians to Cyprus, as prior to Cyprus's entry into
the EU, Russians were eligible for visa-free travel.

Cyprus Situation
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5. (C) Discussion was limited on the political situation in
Cyprus. A paragraph was included in the political
declaration supporting the language of the May 23 agreement
and urging external states -- read the EU -- to not get
involved in the process but to leave any action to the UN.
Bredihin dismissed criticism of the declaration, saying that
Turkey and the Turkish Cypriots "will read what they will
into the agreement," and that this should not undermine
Russia's good relations in the region.

Comment
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6. (C) Russia welcomed the Cypriot president in a manner

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that belies the country's size and political might. With the
country's entry into the EU, under the leadership of
Christofias, Russia sees a friend and potential counterweight
in future EU deliberations. The MFA's spin on the visit
highlights Russia's continuing campaign of approaching
European leaders, big and small, on its European security
proposal in the hope of building momentum.
RUBIN