Cyprus News Agency: News in English (AM), 98-07-12

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From: The Cyprus News Agency at <http://www.cyna.org.cy>

CONTENTS

[01] Moscow, Nicosia to discuss bilateral issues

[02] Cyprus question - Missiles

[03] Cyprus, Russia discussions on taxation agreement to continue

1200:CYPPRESS:01

[01] Moscow, Nicosia to discuss bilateral issues

Moscow, Jul 12 (CNA) -- The Cyprus problem, an agreement between Russia and Cyprus to avoid double taxation and other issues of mutual interest, will be at the focus of President Glafcos Clerides' meetings in Moscow, tomorrow.

President Clerides went to Russia yesterday at the invitation of Moscow mayor, Yury Luzhkov, who greeted him at the airport.

He is guest of honour at the World Youth Games to take place in the Russian capital.

Tomorrow, Clerides is scheduled to meet Russian President Boris Yeltsin, and will then sit at a working lunch given by Foreign Minister Yevgeny Primakov.

On the same day he will meet the Patriarch of Moscow and all Russia Alexy II and will attend the start of the youth games, before returning to Cyprus on Tuesday.

Later today President Clerides will attend a ceremony to take place at the Moscow town hall square to welcome the Olympic flame.

Informed sources told CNA that Moscow is working on some of the provisions of the agreement signed between the two countries in 1982 for the avoidance of double taxation, in order to amend them so that it can benefit from taxes paid by Russian companies based in Cyprus, with investments in Russia.

They said that talks on this issue will continue between officials from the two countries, in the light of the Cyprus President's discussions and the meetings in Moscow by Finance Minister Christodoulos Christodoulou.

Christodoulou went to Moscow on July 9 to discuss the renewal of the agreement to avoid double taxation and is expected to return today.

CNA MA/MM/KN/1998

ENDS, CYPRUS NEWS AGENCY

1300:CYPPRESS:02

[02] Cyprus question - Missiles

Moscow, Jul 12 (CNA) -- The Russian-made surface-to-air missile system S-300, ordered by the government in January 1997, will soon become the property of the Cyprus Republic, according to reliable sources in the Russian capital.

The sources said that this development is expected to give the government more room to manoeuvre about the future handling of the S-300 issue.

The Cyprus government decided to purchase the surface-to-air missiles in a bid to boost its air defence, because of the strong military might Turkey maintains in the northern areas of the Republic it occupies since 1974.

Foreign governments have strongly reacted to the decision and President Glafcos Clerides and US Secretary of State Madeleine Albright have recently exchanged letters on the issue.

The Cyprus government has repeatedly said it would reconsider halting the import of new weapon systems provided progress is made on a schedule leading to demilitarisation or if there is substantive progress in a Cyprus settlement.

Last week Russia completed the training of Greek Cypriot troops in the use of the S-300s and has carried out successful test firings against several firing targets.

Defence Minister, Yiannakis Omirou, who returned from a four-day visit to Russia late yesterday, attended the test.

On his return, Omirou refrained from replying to questions about the S- 300s, but set he was "completely satisfied" with his meetings and "other activities" in Russia.

He also said that in the meeting with his Russian counterpart Igor Sergeyev they decided to implement further the agreement for military and technical cooperation signed between the two countries in 1996.

The sources in the Russian capital told CNA that even though Cypriot guardsmen have been trained in the use of the S-300s, the maintenance of the system will be undertaken by Russians.

They also said that the purchase agreement is not affected by the Cyprus government's proposals for halting the import of this defence weapon.

Referring to efforts to settle the Cyprus problem, the sources said they will continue this month.

They said State Department coordinator for Cyprus, Thomas Miller, is scheduled to visit the island at the end of July.

On July 21st the European Union Austrian six-month rotating presidency envoy for Cyprus, Sir David Hannay, accompanied by an official from the Austrian Foreign Ministry, will be in Cyprus for meetings.

The sources also said that US Presidential Emissary for Cyprus, Richard Holbrooke, who was appointed last year, has indicated his wish to carry on with his mission.

Holbrooke believes he could back efforts for a Cyprus settlement from his post as US permanent representative to the UN, under whose umbrella efforts for a solution are made.

CNA MM/MA/KN/1998

ENDS, CYPRUS NEWS AGENCY

1415:CYPPRESS:03

[03] Cyprus, Russia discussions on taxation agreement to continue

Speaking on his return from Moscow, where he met his Russian counterpart and other officials, Christodoulou described his negotiations as "long" and "difficult".

He said problems have arisen, mainly due to Moscow's effort to tackle is internal economic difficulties and the pressure it is facing from the International Monetary Fund to take measures.

Christodoulou said the Russian government is deciding on a package of measures it will bring before the Parliament aimed at increasing revenue.

"They believe this could be achieved with a change of agreements such as the one they have with Cyprus," he added, noting his disagreement.

However, the Finance Minister underlined that "we have not reached an impasse. We have agreed to continue our negotiations".

Christodoulou, who went to Moscow on July 9, added that a Cypriot delegation will return to the Russian capital on Thursday to continue the talks.

Stressing that cooperation between Cyprus and Russia covers a number of fields, he noted that "both countries have to benefit from our relations, which we must protect".

The Cypriot side believes the agreement, which was signed with the then Union of Soviet Socialist Republics, has to be modernised and renewed.

CNA MAN/MA/KN/1998

ENDS, CYPRUS NEWS AGENCY

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