Letter to the Clerk of the Committee from
the Parliamentary Relations and Devolution Team Foreign and Commonwealth
Office, 14 December 2004
CYPRUS—DIRECT
TRADE AND
PORTS
Following the oral evidence session with Dr
MacShane, the Foreign Affairs Committee asked for supplementary
information on how the direct trade regulation would operate in
practice and how it is proposed to ensure that the objective of
direct trade through sea ports situated in northern Cyprus is
achieved.
The Department for Transport has confirmed that
a ship registered in the United Kingdom or in another Member State,
and flying the flag of that member state, is free to trade to
any part of the world in the absence of any UN sanctions forbidding
entry to any particular state or port. There is currently no UN
or other embargo on trade with northern Cyprus. Trade is already
taking place with various EU Member States via ports in the north,
although the volumes are not that significant. There are various
reasons for this. These include the fact that northern Cyprus
is neither part of the Community Customs Territory since the acquis
is suspended in the north nor is there a relevant third country
or other special trading regime in place. In addition, trade in
any goods which need to be accompanied by formal paperwork is
difficult since, following the Anastasiou European Court
of Justice rulings, the EU does not currently accept the ability
of any authority in the north to provide such documentation.
The direct trade regulation proposed by the
European Commission is intended to address some of these problems.
It will establish a preferential trading regime between the northern
part of Cyprus and the European Union. In general terms, this
allows goods which are either wholly produced or substantially
manufactured in the north to enter the Community Customs Territory
free from customs duties or other charges within the limits of
annual tariff quotas. The Turkish Cypriot Chamber of Commerce
is formally appointed as the body which certifies that the goods
satisfy the rules of origin and that the appropriate checks have
been carried out. Importing Member States bear responsibility
for ensuring that goods from the north satisfy the appropriate
safety and other standards.
The regulation does not specify how the trade
is to take place. UK maritime transport is not subject to prior
Government approval, unlike the provision of international air
services. Therefore it will be for private traders to consider
all the commercial and legal factors, including any implications
for them of the domestic law position of the Republic of Cyprus.
Chris Stanton
Parliamentary Relations and Devolution Team
Foreign and Commonwealth Office
14 December 2004
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