Bijlagen bij COM(2020)239 - Verslag over de uitvoering van Verordening 866/2004 en over de situatie die het gevolg is van de toepassing van deze verordening in 2019

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Annex, Table VII.

allowed to cross, of whom the highest number were Turkish citizens (147). In accordance with the relevant provisions of Protocol 3 to the Act of Accession of the Republic of Cyprus, the ESBA authorities refused to allow foreign nationals, mainly from from the USA, Ukraine, Russia, and Australia, who arrived via the northern part of Cyprus, to cross the Green Line.9 These persons were directed to crossing points outside the ESBA to undergo checks as per the Republic of Cyprus' entry requirements.

Sovereign Base Area (SBA) officers continued to describe their co-operation with the Republic of Cyprus as excellent.

Away from the crossing points, the SBA Police conducted risk-based, intelligence-led patrols to counter irregular migration. These patrols were supplemented by patrols from SBA Customs and military personnel. During the reporting period, new surveillance technology was installed along the course of the ESBA boundary where it constitutes the Green Line. The ESBA also began the process to recruit signficant numbers of personnel for deployment at the crossing points and for surveillance of the Green Line.

Four "unauthorised crossing points" in or near the village of Pergamos, which are used by local residents and farmers, are particularly difficult to control. As mentioned in previous reports, these "unauthorised crossing points" remain an area of concern and a suitable solution in line with Article 5 (2) of Protocol No 3 to the 2003 Act of Accession should be found.10 The SBA authorities increased surveillance of the “unauthorised crossing points” during the reporting period.

2. CROSSINGOFGOODS

2.1.       Value of trade

Under Article 4 of the Green Line Regulation, goods may be introduced from nongovernment controlled areas into government controlled areas, provided that they meet the criteria set out in Article 411 and are accompanied by a document issued by the Turkish Cypriot Chamber of Commerce. Pursuant to Article 8 of Commission Regulation (EC) No 1480/200412, the Turkish Cypriot Chamber of Commerce and the authorities of the Republic of Cyprus reported on a monthly basis on the type, volume and value of goods for which accompanying documents had been issued.

According to statistics provided by the TCCoC, the total value of goods for which accompanying documents had been issued amounted to EUR 6,313,011 (previously: EUR 5,405,121). Those figures indicate an increase of 17% in the overall value of goods for which accompanying documents had been issued compared to 2018.

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Nationals of USA: 90, of Ukraine: 135, of Russia: 83, of Australia: 37.

OJ L 236, 23.09.2003, p. 940.

Paragraph 1 of Article 4 sets out that the goods need to be wholly obtained in the areas not under

effective control of the Government of the Republic of Cyprus or have undergone their last, substantial,

economically justified processing or working in an undertaking equipped for that purpose in the areas

not under the effective control of the Government of the Republic of Cyprus.

Commission Regulation (EC) No 1480/2004 of 10 August 2004, OJ L 272, 20.8.2004, p. 3.

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According to statistics provided by the Republic of Cyprus, the total trade value of goods with accompanying documents which actually crossed the Line increased by 12% to EUR 5,464,237 (previously: EUR 4,856,892).

Although not covered by the scope of the Green Line Regulation, trade from the government controlled areas to the northern part of Cyprus decreased significantly by around 35%, from EUR 1,151,723 in 2018 to EUR 748,237 in 2019 according to figures from the Cyprus Chamber of Commerce and Industry (CCCI). Trade from the government controlled areas to the northern part of Cyprus represents 13.7 % of the trade in the opposite direction (23.7 % in 2018).

The Turkish Cypriot community continued to apply a trade regime that in principle "mirrors" the restrictions of the Green Line Regulation. Turkish Cypriot stakeholders identified the protection of local businesses as the main reason for this. Moreover, goods can only be traded from the government controlled areas to the northern part of Cyprus once an “import permit” has been issued. This trade regime regime is, however, not always consistently applied.

2.2.        Type of goods

In 2019, the nature of traded products remained largely stable. Plastic products continued to be the most traded item, followed by fresh fish, construction materials and wooden furniture.13 The trade in potatoes remained low due to another poor harvest in the northern part of Cyprus.

New products, such as prefabricated containers, hotel slippers and electrical cables, were introduced.

2.3.        Obstacles and difficulties concerning the movement of goods

Obstacles to trade across the Line continue to persist, which, in the views of the Commission

and Turkish Cypriot operators, form a reason

for the limited level of trade.

As mentioned in previous reports14, the issue of Turkish Cypriot commercial vehicles crossing to the government controlled areas is still not solved and, to date, no Turkish Cypriot commercial vehicles above 7.5 tonnes can cross the Line unless they have fully acquis-compliant documents issued by the Republic of Cyprus. The authorities of the Republic of Cyprus have informed the Commission that they have put in place dispositions to facilitate the process for Turkish Cypriots to obtain roadworthiness certificates and professional driving licences. The Commission is convinced that a solution to the issue would significantly contribute to increasing the level of trade as it would ease the transport of goods. It would furthermore strengthen contact between Cypriot economic operators thus contributing in an important manner to enhancing trust between both communities. The Commission will

13 14

Annex, Table IV.

See for instance the ninth, tenth, eleventh, twelfth, thirteenth, fourteenth and fifteenth annual reports on

the implementation of the Council Regulation EC No 866/2004 and the situation resulting from its

application.

continue to engage with the authorities of the Republic of Cyprus and the Turkish Cypriot community with a view to identifying a solution to this issue.

As reported in previous years, the authorities of the Republic of Cyprus do not allow the crossing of processed food products and materials for contact with food due to concerns raised by health services regarding the production process in the northern part of Cyprus. These concerns were explained in a letter sent by the Republic of Cyprus on 23 May 2019, citing the duty of safeguarding public health and reiterating the Government’s readiness to continue co-operating with the Commission on the matter. The Commission has confirmed to the Republic of Cyprus that these products are permitted under the applicable legal framework to cross the Green Line and should not be banned by the authorities of the Republic of Cyprus. While they may take samples of the products at crossing points for further analysis, in line with the application of the Green Line Regulation, they should not prevent all processed food from crossing. The Commission proposed implementing a mechanism that facilitates the crossing of processed foods and materials for contact with food while addressing additional safety considerations. The Commission regrets that discussions requested by the Commission to find a solution did not take place during the reporting period. The Commission remains deeply concerned with regard to the correct implementation of the Green Line Regulation concerning processed food and will pursue this matter further with the authorities of the Republic of Cyprus.

As in previous years, Turkish Cypriot traders have continued to report difficulties in having their products stocked in shops and advertising their products and services in the government controlled areas, which hinder trade. Traders continue to report on a reluctance among Greek Cypriots to purchase Turkish Cypriot products. In addition, it was mentioned that traders from both communities are faced with many administrative problems when wishing to enter into business with the other community; for example, Turkish Cypriots trading across the Green Line encounter difficulty in opening accounts with banks in the government-controlled areas. The economic operators from both sides need to be free to engage in trade relations, based on their business requirements.

2.4.       Smuggling of

The

goods

smuggling of goods remained widespread, reflecting the difficulty of controlling irregular movements across the Line.

In 2019, the Republic of Cyprus made 2,315 seizures of smuggled goods (previously: 1,711), an increase of 35%. This increase in detections was attributed to more targeted and unannounced inspections. There was a significant increase in smuggling of agricultural and dairy products. On the other hand, in 2019 there was a decrease in the quantities of cigarettes and hand-rolling tobacco seized by the Republic of Cyprus at the Green Line: 311,980 cigarettes and 302,863 gr. of hand-rolling tobacco (previously: 469,870 cigarettes and 587,513 gr.). There was also a decrease in detections of goods violating intellectual property rights. Other items seized included alcohol, cars, fuel, medicines and pesticides. Seven prosecutions were brought in the District Court for smuggling. Cases of smuggling of small

quantities of cigarettes were usually dealt with through the imposition of an administrative penalty and forfeiture.

In 2019, the ESBA authorities recorded an increase in the number of seizures of smuggled goods within the ESBA; 653 seizures were made, compared to 555 in 2018. The increase in detections was attributed to the deployment of new surveillance technology along the ESBA boundary and impoved intelligence analysis. As in 2018, cigarettes and hand-rolling tobacco were the items seized most frequently.

Concerning the traditional supply of the Turkish Cypriot population of the village of Pyla, located in the Buffer Zone (Art 4 (10) Green Line Regulation), the quantities of construction materials, fish, cigarettes etc. were monitored and recorded by the ESBA administration.

2.5.     Facilitation of trade

The Commission continued to seek ways of enhancing trade across the Line.

In July 2015, the Commission adopted a proposal for amending the Green Line Regulation. The objective of the proposal is to establish the manner in which the control mechanism for goods covered by a name registered under Regulation (EU) No 1151/2012 would be applied in the areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control.15 This proposal for amendment was still pending at the end of the reporting period. The proposal is based on the common understanding on a temporary solution for Halloumi/Hellim, to be implemented pending the reunification of Cyprus, reached under the guidance of President Juncker during his visit to Cyprus on 16 July

2015.16

Some Turkish Cypriot consignors of fresh fish continued to report difficulties with meeting the deadlines set for veterinary inspections of fresh fish at the Agios Dhometios crossing point. The authorities of the Republic of Cyprus proposed looking into the establishment of a notification mechanism to alert the veterinary authorities to the imminent arrival of a consignment.

The TCCoC continued to express a general interest in the lifting of the prohibition of trade in all live animals and animal products, to the extent that these products comply with EU rules and regulations. The Republic of Cyprus has repeatedly expressed its willingness to examine the possibility of expanding the list of goods that can cross to the government controlled areas. However, no developments took place during the reporting period.

The Commission encourages economic operators to take advantage of business opportunities and welcomes the intense efforts undertaken by the Cyprus Chamber of Commerce and Industry and the Turkish Cypriot Chamber of Commerce.

COM/2015/0380 final - 2015/0165 (NLE). http://europa.eu/rapid/press-release_MEX-15-5402_en.htm

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2.6.       Union goods taken back to the areas under the effective control of the

Government of the Republic of Cyprus after passing through the areas which are not under its effective control.

The Republic of Cyprus authorities reported that 3,217 items were taken back to the government controlled areas after having passed through the non government controlled areas. It was mentioned that these crossings run smoothly and that most of the movement takes place to and from the Kato Pyrgos-Karavostasi and Astromeritis-Zhodia crossing points.

3. CONCLUSIONS

The control of the Line at the authorised crossing points by the authorities of the Republic of Cyprus and the SBA remained satisfactory. The number of persons irregularly crossing the Line increased substantially; irregular migration represents a serious concern for the Republic of Cyprus. The Commission continues to consider that stability, predictability and legal certainty of the requirements at the crossing points, and the free movement of EU citizens are of paramount importance.

In 2019, the value of trade across the Line increased by 12% to EUR 5,464,237 from 4,856,892 EUR, while the value of goods for which accompanying documents were issued increased by 17% from EUR 5,405,121 to EUR 6,313,011. Plastic products continued to be the most traded item, followed by fresh fish, construction materials and wooden furniture.

The Cyprus Chamber of Commerce and Industry and the Turkish Cypriot Chamber of Commerce continued to co-operate with a view to bringing economic benefits to both communities.

During the reporting period, certain obstacles to trade remained. The Republic of Cyprus continued not to authorise the crossing of Turkish Cypriot commercial vehicles above 7.5 tonnes; no developments took place in 2019. Equally, the Republic of Cyprus still does not allow the crossing of processed food products and materials for contact with food due to concerns raised by health services regarding the production process in the northern part of Cyprus. The Commission has confirmed to the Republic of Cyprus that these products are permitted under the applicable legal framework to cross the Green Line and should not be banned by the authorities of the Republic of Cyprus. The Commission proposed implementing a mechanism that facilitates the crossing of processed foods and materials for contact with food while addressing additional safety considerations. The Commission regrets that no substantive discussion of this issue took place with the authorities of the Republic of Cyprus during the reporting period. The Commission remains deeply concerned with regard to the correct implementation of the Green Line Regulation concerning processed food and will pursue this matter further with the authorities of the Republic of Cyprus.

Overall, and while the Green Line Regulation continues to provide a workable basis for allowing the passage of persons and goods to and from the government controlled areas of the Republic of Cyprus, the Commission continues to be concerned that trade in general is at a low level. The Commission considers that removing the obstacles to trade mentioned in this

hopes that the work of the two Chambers to enhance contacts between the two business communities will lead to increased economic ties.

Against this background, the Commission continues to rely on the co-operation of the Republic of Cyprus and the SBA to ensure effective implementation of Council Regulation (EC) No 866/2004. The Commission will continue to monitor the implementation of the Regulation.