The modernisation of the Customs Union with Turkey, affects the Cyprus problem, as Ankara refuses to extend its Custom Union with all EU member-states including the Republic of Cyprus.
As the Commission official recalled, relations between Turkey and the EU have frozen since 2019, with the EU ending high level engagement and dialogue with Ankara. He noted however the EU High Representative for Foreign Policy notified the European Council over improvements in the relations requesting the EU Summit to provide directives on the way forward.
But he noted that there have been no developments on the issue as this issue is not included in the European Council’s agenda.
“For the time being, the Council has not discussed the situation of Turkey. As long the EU Council does not discuss the question of Turkey nothing is going to happen,” he added.
Implementing sanctions by Turkey a “top priority”
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Furthermore, the same official described Turkey as a trading partner for the EU, but noted that the implementation of the EU sanctions on Russia and Belarus, following Russia invasion of Ukraine by Turkey remains a “top priority.”
“Turkey is a potential gateway for circumventing these sanctions because it is not difficult for a “letter box company” to be set up and then to make sure that products that shouldn’t go to Russia end in Russia and products that shouldn’t end up in the EU end up in the EU,” he said.
Recalling that Turkish President may have said that he does not want his country to be a gateway for circumventing sanctions, the same official noted that “the language is positive but of course we have to see what happens exactly in practice.”
Cyprus should adopt a FDI screening law
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Moreover the official prompted Cyprus to adopt a draft legislation over the screening of Foreign Direct Investments from third-countries, noting that Cyprus is one of the five member-states that have not yet approved such a law.
It is noted that Cyprus Finance Minister Makis Keravnos has stated that the FDI screening draft law is currently under legal vetting.
“This is important because we want to make sure that all member-states have screening legislation that allows a better cooperation between the member-states,” he said.
The new proposal of FDI screening by the Commission, was adopted as part of the EU economic security package and request member-states to look specifically on certain elements of a proposes FDI covering critical infrastructure, he said.
Cyprus has been divided since 1974 when Turkey invaded and occupied its northern third.
