Unfair competition of Green Line trade ‘needs addressing’

The Cyprus Chamber of Commerce (KEVE) on Monday praised the expansion of the product catalogue covered by the Green Line regulation but called on the government to address issues related to unfair competition created by products from areas not under its effective control.

KEVE said it is ready to discuss compensatory measures with the government, stressing its willingness to develop an ad-hoc plan addressing the possible “unfair competition.”

The Green Line regulation, an EU regulation adopted before Cyprus accession in 2004, is a constitutional obligation for the Republic.

The chamber aligns itself with the EU’s stance, stressing that economic cooperation between the communities contributes to a positive climate and aids in the overall resolution of the Cyprus problem.

However, on Monday it pointed out the lack of reciprocity in economic efforts, with sales of Turkish Cypriot products being significantly higher than those of Greek Cypriot products.

KEVE identifies two primary reasons for the reduced sales of Greek Cypriot products in the north.

“Firstly, the requirement for a special licence from Turkish Cypriot businesses before purchasing such products, which is not always granted, leads to a significant decrease in sales,” the statement said.

“Secondly, the imposition of VAT on Greek Cypriot products, which cannot be reclaimed, results in a 19 per cent increase on the products’ cost, rendering them non-competitive.”

Despite longstanding efforts to exempt these products from VAT, the chamber underlined the EU’s persistent refusal, claiming it would violate EU VAT regulations.

“The only solution is for the Republic to take the initiative to rectify this injustice and ensure fair competition,” the statement continued.

KEVE, however, acknowledged the government’s decision to carefully select products in the expanded catalogue to sustain the viability of Greek Cypriot businesses.

At the same time, it urged the government to develop a plan to counteract the identified distortions in product sales and eliminate unfair competition.

As the official advisor to the state on economic matters, KEVE said it has already prepared a plan for compensatory measures, expressing its willingness to discuss it with the government.

According to the chamber, the plan “will eliminate a blatant injustice, foster genuine two-way economic cooperation, contribute to building trust, and assist in resolving the political problem on the island.”