By Stelios Orphanides
The double taxation avoidance treaty Cyprus signed with Iran in August may prove crucial in the island’s bid to keep the edge in attracting business from the Islamic country after world powers agreed to lift sanctions that crippled its economy, the Institute of Certified Public Accountants of Cyprus said.
“It’s important to note that competitor countries have not signed yet respective treaties with Iran and therefore, there is an advantage in this area which is expected to be particularly beneficial, provided we manage it wisely,” Kyriakos Iordanou, the institute’s general manager said in an emailed interview on Tuesday. “The ratification of this treaty is still pending and we hope that this will happen this year which will allow the implementation of the treaty from January 1, 2017”.
The lifting of the sanctions which covered a wide-range of activities and included shipping, financial services, banking, insurance, oil and the freezing of around $100bn in assets, which are now released, may allow Cyprus to successfully attract a portion of it “as a notable and reliable investment destination,” Iordanou said. “Strengthening cooperation with Iran, may likely help cooperation with other Arab countries, with both financial and political benefits. Additional advantages which may result from this development include a further drop in the oil price, which may help the Cypriot economy in general, and the development of other areas of the economy, such as shipping, tourism and investment funds”.
According to sources with knowledge of the situation, two Iranian shipping companies, the National Iranian Tanker Company and the Islamic Republic of Iran Shipping Lines, already decided to reactivate their presence in Cyprus.
“Cyprus can also serve as a headquarter basis for Iranian companies wishing to operate globally,” the manager of the public accountants’ institute said.
As following the lifting of the sanctions concerning the country’s Iranian programme, other restrictions remain in place concerning the country’s ballistic missile programme, “it is very important to accurately follow the rules with respect to sanctions and related circulars of the ministry of foreign affairs,” Iordanou added.
“Professional bodies, supervisory authorities and financial institutions have strengthened their procedures with respect to preventing and combating money laundering,” he said. “It is in our hand to comply”.
Iordanou added that the strengthening of ties with Iran, a supporter of Hezbollah, the Lebanese Shia militia deemed by the European Union, the United States and Israel as a terrorist organisation, will not necessarily affect ties with other Middle East nations.
“Cyprus can also serve as a bridge for cooperation between Iran and Israel,” he added.