The island fully complies with international conventions and European legislation against money laundering, Omirou said in a letter to his euro-area counterparts and to European Parliament President Martin Schulz.

The International Monetary Fund, the Council of Europe and the Organization for Economic Cooperation and Development have all given Cyprus high scores for the country’s adoption and implementation of the measures, he added.

Cyprus has been in the spotlight after certain EU leaders suggested investment flows between Russia and Cyprus are disproportionate, creating the suspicion that laundering may be behind the transactions.The indebted island, eager to secure a full bailout from the EU and the International Monetary Fund, denies the claims.

In his letter, Omirou argued that Cyprus is not used by Russian oligarchs to deposit illegal money. Moreover he said Cypriot banks are subject to strict controls for opening accounts and for transferring funds, with lenders supervised by the Central Bank of Cyprus and by extension the European Central Bank.

Given its EU membership, Russian companies use the island as a transit hub for investing across Europe and for listings on the London Stock Exchange. The reason why Cyprus appears as the biggest investor in Russia is because Russian capital in the form of dividends comes to Cyprus and is reinvested in Russia, Omirou said.

The House Speaker cited statistics in a bid to debunk allegations that business activities here are dominated by Russia. He said for example that only three of more than 80 shipping companies registered on the island belong to Russians, compared with 36 owned by Germans, while Canadian energy firms invest in Russia via Cyprus and Israelis invest in the Russian and Ukrainian property markets via the country.

The holding company model of Cyprus is similar to that of Malta, Luxembourg and the UK while the country’s low tax regime, which compares to that of Ireland and Luxembourg, was approved by the EU when Cyprus joined the bloc in 2004, Omirou said.

Moreover, he said, although the corporate tax rate here is nominally the lowest in the EU, the rate is actually higher when one factors in additional fees that foreign corporations are subject to. Omirou’s letter is part of a drive abroad – decided by parliament recently - to counter claims the island is a money-laundering haven.

On the occasion of the ‘Parliamentary Week on the European Semester’ – which began yesterday and wraps up today - a number of Cypriot deputies are currently in Brussels for contacts with MEPs and EU officials.

Chairman of the House Finance Committee and DIKO MP Nicholas Papadopoulos met with the group of the Progressive Alliance of Socialists and Democrats in the European Parliament, while DISY deputy Christos Stylianides took part in a meeting of the European People’s Party. Greens MP George Perdikis participated in a meeting of the Greens Group in the European Parliament.

Finance Minister Vassos Shiarly will be in the Hague this week briefing the Dutch parliament on the specifics of Cyprus’ bailout request; he is also expected to explain Cyprus’ compliance with anti-money-laundering regulations and the exchange of tax information.

Source: Cyprus Mail