Cyprus Mail
Maritime Cyprus

Long wait to see removal of sector’s biggest hurdle

By George Christou

The adverse consequences of the Cyprus problem on shipping is rarely discussed, even though it is the main obstacle to the growth and expansion of the sector. People in the industry occasionally mention that Cyprus shipping would take off in the event of a settlement, because Turkey’s embargo on Cyprus-flagged ships – the main obstacle to the growth of the register – would automatically be lifted.

What makes the success of the sector even more remarkable – it contributes 7 per cent of GDP – is that it has been achieved in spite of the embargo, first imposed by Ankara more than 30 years ago, even before the Cyprus Shipping Chamber had been established. The restrictive measures were first introduced in 1987 and prohibited all Cyprus-flagged ships calling at Turkish ports on the pretext that Turkey did not recognise the Republic of Cyprus.

This illegality was compounded in 1997 when Turkey’s government expanded restrictions to all ships, regardless of their flag, that sailed directly to Turkey from a Cyprus Republic port as well as ships linked to the Republic by ownership or ship management. In other words, Turkish ports were out of bounds for any ships linked to Cyprus.

There were attempts to have the embargo lifted after Cyprus became a member of the European Union but these failed, with Turkey refusing to bow to pressure from the Union to honour its conventional obligations. As the Cyprus foreign ministry explained on its website, “the measures imposed by a country which is linked to the EU by an Association Agreement and a Customs Union and which seeks membership to the EU, seriously hinder private and public interests of the European Union, notably those of the EU ship owners and ship managers.” The legal acts governing Turkey’s relations with the EU “contain substantial provisions which impose on Turkey the legal obligation to lift its embargo against Cyprus shipping,” said the ministry.

The Cyprus government tried to apply pressure on Turkey via the EU when the Ankara Agreement Protocol was signed in July 2005 but while clear references were made to Turkey’s obligations in subsequent agreements with the Union, these were never honoured. Several incidents illustrating the enforcement of Turkey’s restrictive measures against Cyprus shipping, affecting EU interests, were reported to the Republic, which in turn reported them to the EU. Nothing has come of this apart from a reference to the restrictions being included in the European Commission’s annual progress report on Turkey’s accession drive.

The only measure taken against Turkey by the European Commission was the anodyne step not to close Chapter 14 on Transport Policy in the accession negotiations. The Commission’s 2013 progress report states that “as long as restrictions remain in place on vessels and aircraft registered in Cyprus or whose last port of call was in Cyprus, Turkey will not be in a position to fully implement the acquis relating to this chapter (on transport policy).” Even before Turkey’s accession negotiations were put on ice the threat of not closing a chapter was never going to change Ankara’s position.

With the settlement of the Cyprus problem looking very unlikely, it seems the island’s shipping sector will have to live with the embargo, thinking of what might have been if it were lifted. Director of the Cyprus Shipping Chamber Thomas Kazakos, speaking to this paper a while ago, gave a forecast of how shipping would be boosted if the embargo was lifted. “If the Cyprus flag is now about 1,000 ocean-going vessels, another 2,000 ships from our existing membership could register under the Cyprus flag quite fast,” he said.

This may be a long wait.

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