Communication from the Commission - Annual Report on the implementation of Council Regulation (EC) 866/2004 of 29 April 2004 and the situation resulting from its application
Date: 2007-09-21
Institutions: European Commission
Subjects: Cyprus, activity report, animal product, border control, customs regulations, free movement of goods, free movement of persons

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.9.2007 
COM(2007) 553 final 

COMMUNICATION FROM THE COMMISSION 

Annual Report on the implementation of Council Regulation (EC) 866/2004 of 29 April 
2004 and the situation resulting from its application 

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COMMUNICATION FROM THE COMMISSION 

Annual Report on the implementation of Council Regulation (EC) 866/2004 of 29 April 
2004 and the situation resulting from its application 

Introduction 

Council Regulation (EC) 866/2004 of 29 April on a regime under Article 2 of Protocol 10 to 
the Act of Accession1 (hereafter: Green Line Regulation, GLR) provides in Article 11 (1) that 
“the Commission shall report to the Council on an annual basis, starting not later than one 
year  after  the  date  of  entry  into  force  of  this  Regulation,  on  the  implementation  of  the 
Regulation  and  the  situation  resulting  from  its  application,  attaching  to  this  report  suitable 
proposals for amendment if necessary”.  

The Green Line Regulation has been operational since 1 May 2004. It defines the terms under 
which the provisions of the EU law apply to the movement of goods and persons across the 
line between the areas of the Republic of Cyprus in which the Government of the Republic of 
Cyprus does not exercise effective control and the areas in which it does. 

This report covers the period 1 May 2006 - 30 April 2007. 

1. 

IMPLEMENTING MEASURES 

On  4  May  2007,  just  after  the  period  covered  by  the  report,  the  Commission  adopted  a 
Decision  lifting  prohibitions  on  the  movement  of  certain  animal  products  on  the  island  of 
Cyprus  under  Council  Regulation  (EC)  No  866/2004  and  laying  down  conditions  for  the 
movement  of  those  products.  This  Commission  Decision  determines  conditions  for  trade  in 
honey and fresh fish across the Green Line.2 

2. 

CROSSING OF PERSONS 

According  to  Art  2  of  the  Green  Line  Regulation  the  Republic  of  Cyprus  “shall  carry  out 
checks  on  all  persons  crossing  the  line  with  the  aim  to  combat  illegal  immigration  of  third 
country  nationals and  to  detect  and  prevent any threat to public security and public policy. 
Such  checks  shall  also  be  carried  out  on  vehicles  and  objects  in  the  possession  of  persons 
crossing the [Green] Line” whereas Art 3 states that "effective surveillance shall be carried 
out by the Republic of Cyprus all along the Line, in such a way as to discourage people from 
circumventing checks at the crossing points." 

2.1. 

Crossing at crossing points 

The  Regulation  provides  for  a  stable  legal  framework  for  the  free  movement  of  Cypriots, 
other EU citizens and third country nationals who cross the Green Line at the crossing points. 
According  to  the  available  data,  788,823  Greek  Cypriots  crossed  from  the  government-
controlled areas to the northern part of Cyprus and 1,348,215 Turkish Cypriots crossed from 
the northern part of Cyprus to the government-controlled area during the reporting period. In 
the  first  six  months  of  the  reporting  period,  in  total  812,756  Turkish  Cypriots  crossed  the 

1 

2 

OJ  L  161,  30.4.2004,  p.  128.  Regulation  as  last  amended  by  Commission  Regulation  (EC)  No 
1283/2005 (OJ L 203, 4.8.2005, p. 8). 
Commission Decision 2007/330/EC of 4 May 2007, OJ L 123, 12.5.2007, p. 30. 

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Green Line, in the second half of the reporting period this number fell to 535,459, a decrease 
of more than 30 %.3 4 The number of Cyprus Police personnel working directly at the crossing 
points was raised from 54 (2005) to 61 (2006). 

No major incidents were reported as regards the daily crossing of people at the check points. 
The  Commission  received  sporadic  complaints  from  EU-citizens  regarding  intrusive  checks 
on persons and confiscation of personal documents at the crossing points. The Customs Code 
of  the  Republic  of  Cyprus  allows  customs  officials  to,  inter  alia,  search  persons,  detain  or 
seize goods and arrest without a judicial warrant any person whom the customs officer finds 
committing,  or  attempting  to  commit,  any  offence  provided  by  the  customs  or  other 
legislation punishable with imprisonment including the case of suspicion of illegal purchase 
or use of Greek Cypriot property in the northern part of Cyprus. 

In  October  2006,  the  Parliament  of  the  Republic  of  Cyprus  adopted  an  amendment  to  the 
Penal  Code  which  penalises  any  illegal  use  (including  rent)  of  property  with  a  sentence  of 
seven  years  of  imprisonment.5  Given  that  some  78%  of  the  private  property  in  the  northern 
part  of  Cyprus  is  Greek  Cypriot  property,  this  amendment  caused  concern  in  the  Turkish 
Cypriot community. The authorities of the Republic of Cyprus seem to follow a policy of not 
applying  the  amendment  to  ordinary  Turkish  Cypriot  citizens  resulting  in  a  lack  of  legal 
certainty. The impact of this legislation on the crossings of Turkish Cypriots will have to be 
closely monitored. 

3 
4 

5 

See Annex VII 
According  to  the  authorities  of  the  Republic  of  Cyprus,  no  records  are  kept  for  the  return  of  Greek 
Cypriots to the government-controlled areas and for the return of Turkish Cypriots to the northern part 
of Cyprus. See Annex VII 
The  "Law  for  the  Amendment  of  the  Criminal  Code"  was  published  in  the  Official  Gazette  on  20 
October 2006.  

Section 303A in its now amended form reads:  
"(1) 

(2) 

(a) 

(b) 

(c) 

(d) 

(3) 

Any person who with intent to defraud, deals in immovable property belonging to another is guilty of a 
felony and is liable to imprisonment for seven years.  
For the purposes of the present section a person shall be deemed to be dealing in immovable property 
where  
[that person] sells to another, or rents to another, or mortgages to another or encumbers in any way, or 
makes available for use by another immovable property, or 
advertises  or  otherwise  promotes  the  sale  or  renting  out  or  mortgaging  or  charging  in  any  way  to 
another of immovable property or the use thereof by another, or 
concludes  an  agreement  for  the  sale  to  another,  or  the  renting  out  to  another,  or  the  mortgaging  to 
another,  or  the  charging  in  any  way  to  the  benefit  of  another,  or  the  use  by  another  of  immovable 
property, or 
accepts  the  immovable  property  which  is  the  object  of  the  dealing  as  this  is  defined  in  the  present 
subsection.  
For the purpose of the present section, a person acts with intent to defraud if, when committing any of 
the acts set out in subsection (2), that person knows or, under the circumstances, should reasonable have 
known, that he does not have the consent of the registered owner of the immovable property, or of any 
other person who has the lawful authority to grant such consent."  

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2.2. 

Illegal migration across the Green Line 

The  number  of  third  country  nationals  crossing  the  Green  Line  illegally  remains  an  area  of 
serious concern. The analysis of figures from the Republic of Cyprus Police indicates that, of 
all those who crossed the Green Line illegally, 36.4 %6 had evidently a Turkish visa in their 
passport7. The Republic of Cyprus Police reported the following main countries of origin of 
illegal immigrants: Syria (46.3 %) and Iran (9.2 %). 

According to the data submitted by the authorities of the Republic of Cyprus the number of 
illegal immigrants detained after crossing the Green Line increased from 725 in 2002 to 3796 
in  2003  and  5287  in  2004  before  decreasing  again  to  a  level  of  5191  in  2005  and  3778  in 
2006.  In  the  reporting  period  2844  illegal  immigrants  (more  than  97 %  of  all  illegal 
immigrants  detained)  are  reported  by  the  Cypriot  Police  to  have  entered  the  government-
controlled areas across the Green Line, whereas about 2% are reported to have entered via the 
Eastern  Sovereign  Base  Area  and  less  than  1 %  directly  into  the  government-controlled 
areas.8 The assessment of the entry route into the government-controlled areas by the Cyprus 
Police is based on: 

•  documents;  

•  statements by the immigrants themselves;  

•  presumption  based  on  country  of  origin  (it  is  presumed  by  Cyprus  Police  that  all 
immigrants  from  certain  countries  (e.g.  Pakistan  and  Syria)  enter  the  government-
controlled areas through the northern part of Cyprus due to what are considered to be close 
links of these countries with Turkey)9.  

According to the Cyprus Police, the majority of illegal immigrants later apply for asylum (the 
number of asylum seekers increased from 950 in 2002 to 4410 in 2003 and up to 9860 in 2004 
before falling to 7746 in 2005 and 4545 in 2006). 

The reasons for this decrease in numbers of both third country nationals illegally crossing the 
Green Line and individuals applying for asylum include: 

•  better  cooperation  between  the  Police  of  the  Republic  of  Cyprus  with  UNPOL  and 

UNFICYP and with the Cypriot National Guard; 

•  intensified  surveillance  of  the  Green  Line  with  helicopters10  and  with  the  staff  of  local 
Police Stations and of the Aliens and Immigration Department of the Police Headquarters; 

•  good cooperation with the authorities of the Eastern SBA, intensified activities of the latter 
since November 2006 to reduce illegal immigration and smuggling of goods and the high 
number of people turned back already at the point of attempted entry;  

6 

7 

8 
9 

10 

The figures of the RoC Police received by the Commission related to those illegal immigrants for whom 
it was in possession of documentation (1513 persons). For the purposes of this report they were brought 
in relation to the overall figure of 2844 illegal immigrants who crossed the Line illegally according to 
the RoC Police (see Annex VI). 
About two thirds of those had according to the RoC Police a Turkish visa which is also valid for the 
northern part of Cyprus and about one third had a Turkish visa which was accompanied by a 'visa' of 
the 'TRNC'.  
See Annex VI 
Confessions and presumption is relevant in those cases where the Cyprus Police is not in possession of 
documentation on the illegal immigrant. 
During  the  reporting  period,  two  helicopters  carried  out  in  total  115  hours  of  patrol  flight,  including 
patrols of the Green Line. 

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•  sharing of intelligence and improved cooperation between the Eastern SBA authorities and 

the Turkish Cypriot Community.  

The latter has now started to accept back significant numbers of illegal immigrants detained in 
the Eastern SBA near the Green Line. Of the around 100 illegal immigrants detained within 
the Eastern SBA, about half were taken back by the Turkish Cypriots, the others were handed 
over to the Republic of Cyprus authorities on the basis of a Memorandum of Understanding. 

In view of the still worryingly high numbers of illegal immigrants, the Commission is of the 
opinion  that  the  surveillance  of  the  Line  conducted  by  the  Republic  of  Cyprus  between  the 
crossing  points  pursuant  to  Art  3  of  the  Green  Line  Regulation  needs  further  strengthening 
without  delay.  The  Commission  has  maintained  a  constructive  dialogue  with  the  relevant 
authorities of the Republic of Cyprus at working level. Several meetings were held in Cyprus 
and a workshop was organised in Brussels in May 2007 focusing in particular on the problem 
of  illegal  migration  across  the  Green  Line  and  offering  the  opportunity  to  discuss  the 
measures to be taken in the near future. 

On this occasion, the representatives of the Republic of Cyprus updated the Commission on 
measures  taken  since  the  last  workshop  in  December  2005.  These  included  enhancing 
cooperation  with  UNFICYP,  UNPOL,  the  SBA  authorities  and  the  Cypriot  National  Guard 
and using helicopters and the staff of local Police Stations and of the Aliens and Immigration 
Department of the Police Headquarters for the surveillance of the Green Line, as referred to 
above. With regard to asylum seekers, the attractiveness of employment possibilities for them 
was reduced and the examination of their applications for asylum was speeded up.  

With regard to surveillance of the Green Line, the Republic of Cyprus is reluctant to take any 
measure which possibly could lead to the Green Line taking on the appearance of an external 
border. Thus, no additional equipment for surveillance of the Green Line was purchased or is 
foreseen and the number of personnel dealing with illegal migratory flows (also police) beside 
the crossing points was not increased. Contrary to the intentions of the Republic of Cyprus as 
reported in last year's Green Line Report, more restrictive rules related to the issuance of visas 
by  the  Republic  of  Cyprus  were  not  introduced  and  a  new  detention  centre  for  illegal 
immigrants has not been established. 

The  Commission  recommends  that  the  authorities  of  the  Republic  of  Cyprus  take  concrete 
steps without delay in order to comply with their obligation under the Green Line Regulation, 
also with a view to the future participation of Cyprus in the Schengen area. While the Green 
Line  does  not  constitute  an  external  border,  the  surveillance  obligations  of  the  Republic  of 
Cyprus on the government-controlled side of the Green Line should be met effectively while 
at the same time minimising any hindrance to contacts between the two Communities. 

3. 

CROSSING OF GOODS 

Value of trade 

3.1. 
Pursuant  to  Art  8  of  the  Commission  Regulation  (EC)  1480/200411,  the  Turkish  Cypriot 
Chamber of Commerce (hereafter: TCCoC) reported on a monthly basis on the type, volume 
and value of goods for which it has issued accompanying documents.  

11 

Commission Regulation (EC) No 1480/2004 of 10 August 2004, OJ L 272, 20.8.2004, p. 3. 

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The authorities of the Republic of Cyprus also communicated the type, volume and value of 
goods  that  have  crossed  the  Line  in  monthly  reports  to  the  Commission.  Those  reports 
included  goods  that  entered  the  government-controlled  areas  through  the  crossing  points  of 
Pergamos and Strovilia, which are under the authority of the Eastern SBA. 

According  to  reports  from  the  TCCoC,  the  total  value  of  goods  for  which  accompanying 
documents were issued in the reporting period amounted to €4,806,100 whereas the value of 
goods actually traded was about €3,380,805.12 With regards to this substantial gap in reported 
figures, the Commission was informed that accompanying documents were sometimes issued 
for an estimated and not an exact quantity of goods and that the quantity and therefore also the 
value of goods which finally crossed the Line was smaller than the figures mentioned in the 
sometimes  cancelled13. 
accompanying  documents.  Moreover,  consignments  were 
Furthermore, the Commission was informed by the TCCoC that the accompanying documents 
were not always presented or checked when the goods were crossing the Line. Concerning the 
latter the authorities of the Republic of Cyprus confirmed that every consignment is checked 
but pointed out that in any case they are not obliged to ask for the accompanying documents 
as the obligation lies with the trader to present them. 

In comparison to the previous reporting period, figures show a large increase in the total value 
of goods crossing the Green Line. According to the reports provided by the authorities of the 
Republic  of  Cyprus,  the  total  trade  value  of  goods  which  actually  crossed  the  Line  almost 
doubled and was about € 3,380,805 compared to € 1,734,770 in the previous reporting period.  

Although  not  covered  by  the  scope  of  the  GLR,  it  may  be  noted  that  trade  from  the 
government-controlled  areas  to  the  northern  part  of  Cyprus  amounted  to  a  value  of 
€ 1,027,688 in the reporting period compared to € 442,408 in the previous one according to 
figures  from  the  Cyprus  Chamber  of  Commerce  and  Industry.  Trade  from  the  government-
controlled  areas  to  the  northern  part  of  Cyprus  therefore  more  than  doubled  but  still  only 
amounts  to  around  one  third  of  the  trade  in  the  opposite  direction.  The  Turkish  Cypriot 
Community  applies  a  licensing  system,  which,  in  principle,  "mirrors"  the  restrictions  of  the 
Green Line Regulation. They only accept, for instance, goods originating in the government-
controlled  areas,  ask  for  accompanying  documents  to  be  issued  by  the  Cyprus  Chamber  of 
Commerce and Industry and do not allow live animals or animal products to cross the Green 
Line. Some derogations were permitted on an unclear, ad hoc basis. 

3.2. 

Type of goods  

The figures on the types of traded goods show a limited number of new products crossing the 
Line into the government-controlled areas. The new types of products did not contribute to a 
significant increase in the trade. 

As in the previous reporting period, vegetables, wooden products and furniture constituted the 
main groups of products traded.14 

Trade across the Green Line during the reporting period was with one exception solely for the 
purpose  of  intra-island  trade.  On  30  April  2007,  a  consignment  of  aluminium  scrap  crossed 
the  Green  Line  and  was  subsequently  shipped  on  to  the  United  Kingdom.  Following  a 
consignment  of  Cyprus  Delights  (confectionery)  in  December  2005,  this  consignment  was 

12 
13 

14 

See Annexes I and II 
See Annex III. In July 2006 two major consignments of potatoes destined to be sent through the port of 
Limassol  to  EU  Member  States  were  cancelled  at  the  last  minute  after  politically  motivated  pressure 
had been exerted on the Turkish Cypriot traders. See also point 3.5. below 
See Annex IV 

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only the second example where goods crossed the Green Line and were subsequently subject 
to an intra-community transaction with another Member State. 

3.3. 

Reported irregularities 

Since May 2006, six cases of irregularities have been reported in which the goods were not 
allowed to cross the Green Line. In four of them the product marking was not in line with the 
requirements and in two of them an accompanying document was not produced.  

3.4. 

Positive developments concerning movement of goods 

During  the  reporting  period,  some  positive  developments  need  to  be  noted  which  gradually 
lifted some barriers which previously used to limit trade across the Line. These developments 
include: 

•  Monthly  'Round  Table  Meetings'  of  the  three  chambers  (Cyprus  Chamber  of  Commerce 
and Industry, CCCI, TCCoC, and Cyprus Turkish Chamber of Industry, CTCI) under the 
auspices  of  the  USAID  funded  EDGE  (Economic  Development  and  Growth  for 
Enterprises)  Project  in  order  to  try  to  find  technical  and  practical  solutions  for  existing 
problems in trade across the Green Line. 

•  The  'Cyprus  Producer  Network',  a  network  of  TC  and  GC  producers,  is  currently  being 
established  with  the  aim  of  increasing  cooperation  and  collaboration  and  providing 
technical assistance, training and advice to ease the constraints to Green Line trade. This 
project,  which  recently  received  funding  by  UNDP-ACT,  also  aims  at  improving 
cooperation  and  collaboration  between  the  participating  chambers  (CTCI,  TCCoC  and 
CCCI). 

3.5. 

Still existing obstacles and difficulties concerning the movement of goods 

Despite these positive developments, many obstacles for trade across the Green Line continue 
to exist.  

Turkish  Cypriot  commercial  vehicles  and  in  particular  lorries  and  buses  still  cannot  move 
freely through the island. The Republic of Cyprus does not accept roadworthiness certificates 
of  commercial  vehicles15  or  professional  driving  licenses16  issued  by  the  Turkish  Cypriot 
Community  (although  it  does  accept  roadworthiness  certificates  for  passenger  cars).  The 
Government  had  proposed  legislation  aiming  at  facilitating  TC  lorries  to  transport  goods 
across the Green Line. Neither in the previous nor in the present legislative term, Parliament 
had  taken  a  decision  on  the  issue  after  protests  from  the  Greek  Cypriot  truck  driver 
organisation. The authorities of the Republic of Cyprus do provide various forms of help for 
Turkish  Cypriots  to  make  use  of  the  government’s  own  services.  The  Ministry  of 
Communications  and  Works,  for  instance,  employs  a  Turkish  Cypriot,  who,  amongst  other 
tasks,  acts  as  an  interpreter  for  licence  examinations  and  takes  care  of  announcements  in 
Turkish  Cypriot  newspapers.  However,  the  response  of  Turkish  Cypriot  lorry  drivers  is 
limited.  A  more  liberal  approach  on  the  side  of  the  authorities  of  the  Republic  of  Cyprus 
would enhance economic co-operation between both communities across the Green Line.  

The Commission received some complaints from Turkish Cypriot traders regarding delays in 
clearing  of  goods  crossing  the  Line  including  particularly  consignments  of  potatoes.  These 
delays  were  explained  by  the  authorities  of  the  Republic  of  Cyprus  as  resulting  from  the 
requirement in the Green Line Regulation to examine consignments and, where applicable, to 

15 
16 

Of all Turkish Cypriot lorries with a maximum gross weight exceeding 3.5 tons 
In case of all Turkish Cypriot lorries with a maximum gross weight equal to or exceeding 7.5 tons 

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replace the 'Report of phytosanitary inspection' by a plant passport. Assurance was given to 
the Commission that these checks will in the future be carried out within two to three working 
days. In  addition, traders are  free to transport the potatoes to  refrigerated  warehouses in the 
government-controlled  areas  while  the  checks  continue,  although  the  potatoes  remain  under 
surveillance of the customs authorities. 

The  Commission  also  received  some  complaints  from  Turkish  Cypriot  traders  that  the 
authorities  of  the  Republic  of  Cyprus  sometimes  request  the  presentation  of  a  commercial 
invoice  in  addition  to  the  obligatory  accompanying  documents.  The  authorities  of  the 
Republic  of  Cyprus  informed  the  Commission  that  all  customs  officials  of  the  Republic  of 
Cyprus received a letter informing them that "taking into consideration that the presentation 
of  an  invoice  is  not  obligatory  for  the  movement  of  goods,  it  is  confirmed  that  …  the 
presentation of an invoice is not demanded for goods crossing the Line". This instruction has 
been  repeated  on  the  occasion  of  regular  training  of  customs  officials  of  the  Republic  of 
Cyprus. 

At  the  end  of  the  reporting  period,  a  major  consignment  of  about  3800  tons  of  potatoes 
(almost a quarter of the whole spring harvest in the northern part of Cyprus and comprising 
the  harvest  of  almost  50  local  potato  growers)  were  to  cross  the  Green  Line  and  possibly 
subsequently  to  be  shipped  through  the  port  of  Limassol  (situated  in  the  government-
controlled  areas)  to  other  EU  Member  States.  However,  following  pressure  from  within  the 
Turkish Cypriot community on the growers and the Turkish Cypriot traders, this Green Line 
trade was finally cancelled. 

Difficulties for Turkish Cypriot traders to stock their products in shelves of supermarkets in 
the  government-controlled  areas  and  to  advertise  in  parts  of  the  press  in  the  government-
controlled areas were reported as other examples of barriers which could limit trade across the 
Line.  Additional  examples  of  barriers  reported  to  the  Commission  included  the  occasional 
practice of the authorities of the Eastern SBA of asking for accompanying documents in the 
case where goods are destined for the traditional supply of the Turkish Cypriot population of 
the village of Pyla located within the Buffer Zone. In this very specific case, in derogation of 
the  standard  rules,  no  accompanying  document  is  needed  according  to  Art  4  (10)  of  the 
Regulation. 

In addition, representatives of the Turkish Cypriot community also raised concerns about the 
low ceiling as regards facilities for shopping for persons crossing the Line. Currently, Art 6 
(1) of the GLR stipulates that goods purchased in the northern part of Cyprus contained in the 
personal luggage of persons crossing the Line shall be exempt from turnover tax and excise 
duty provided they have no commercial character and their total value does not exceed € 135 
per person. 

Representatives of the UK informed the Commission that the services of the authorities of the 
Eastern SBA face practical difficulties in handling goods requiring a phytosanitary certificate 
due to a lack of appropriate technical facilities. The Republic of Cyprus has offered the use of 
its facilities. 

It  appears  that  there  is  widespread  smuggling  of  goods  across  the  Green  Line,  notably  at 
illegal "crossing points" used by local residents and farmers (e.g. of the villages of Pyla and 
Pergamos  within  the  Buffer  Zone)  where  surveillance  is  insufficient.  According  to  some 
observers, the volume of smuggled goods might even exceed that of legal trade.  

The problem  of  smuggling of goods underlines the need for an effective surveillance of  the 
Line by the Government of the Republic of Cyprus.  

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Finally, it should be noted that the overall scale of Green Line trade remains limited. This is 
caused – to a considerable degree – by restrictions in the Green Line Regulation itself. It does 
not allow products brought into the northern part of the island from other EU Member States 
or  Turkey  to  cross  to  the  government-controlled  areas.  This  might  significantly  reduce 
benefits to producers, service providers and consumers north and south of the Green Line, as 
pointed out in a recent World Bank study17. 

3.6. 

Temporary crossing of goods 

As  in  the  previous  reporting  period,  difficulties  were  encountered  as  far  as  the  temporary 
crossing  of  goods  was  concerned.  There  are  four  main  categories  of  goods  where  this  issue 
comes up: 

•  Temporary  crossing  of  goods  needed  for  the  provision  of  a  service  (example:  music 
instruments  of  a  Turkish  Cypriot  rock  band  performing  a  concert  in  the  government- 
controlled areas). 

•  Temporary  crossing  of  Greek  Cypriot  goods  to  the  non  government-controlled  areas 
(example: piece of furniture being repaired and refurbished in the northern part of Cyprus; 
due to its origin requirement, the Green Line Regulation does not allow such products to 
re-enter the government-controlled areas). 

•  Temporary crossing of Turkish Cypriot goods to be exhibited at a fair in the government- 
controlled  areas  (e.g.  Turkish  Cypriot  participation  in  Cyprus'  International  Trade  Fair  is 
steadily decreasing, from 53 Turkish Cypriot traders in 2005 and 16 in 2006 to only 3 this 
year). Additionally the crossing of goods to be distributed as free samples is not permitted 
(as there is no buyer). 

•  Temporary crossing of Turkish Cypriot technical devices to be repaired in the government- 

controlled areas. 

The  Green  Line  Regulation  as  it  stands  does  not  allow  such  transactions.  The  Republic  of 
Cyprus  applies  a  system  of  ad  hoc  derogations.  On  this  basis,  it  is  argued  that  so  far  all 
Turkish  Cypriot  requests  have  been  positively  answered  and  therefore  there  is  no  need  to 
legally  formalize  the  procedure.  However,  the  current  ad  hoc  system  is  not  in  line  with  the 
Regulation and is not transparent and may therefore act as a brake on trade. De lege ferenda 
this issue will be taken up in a planned amendment to the Green Line Regulation.  

Facilitation of trade  

3.7. 
In  November  2006,  the  Value  Added  Tax  Committee18  endorsed  a  simplified  scheme 
applicable  to  Turkish  Cypriot  traders  established  in  the  northern  part  of  Cyprus  who  sell 
goods  directly  to  end  consumers  in  the  government-controlled  areas.  The  scheme  allows 
Turkish  Cypriot  traders  to  account  for  VAT  directly  at  the  Line  for  the  goods  sold  in  the 
government-controlled  areas.  Consequently,  the  Turkish  Cypriot  trader  does  not  have  to  be 
registered for VAT purposes in the government-controlled areas. 

In February 2007, the Commission organised together with the TCCoC a whole day seminar 
aiming  at  raising  awareness  in  particular  amongst  Turkish  Cypriot  traders  about  procedures 
and requirements of Green Line trade 

17 

18 

Study entitled "Sustainability and Sources of Economic Growth in the northern part of Cyprus", 2006, 
financed  within  the  framework  of  EU  funded  programme  "Partnership  for  the  Future"  managed  by 
UNDP. 
Art 398 of Council Directive 2006/112/EC (prior Art 29(2) of Council Directive 77/388/EEC). 

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The following additional measures have been taken to facilitate trade in certain products:  

Potatoes 

After  the  authorisation  had  been  given  in  early  2006  by  the  competent  service  of  the 
Commission for trade in potatoes over the Green Line, some truck loads of potatoes (in total 
approximately 290 tons) destined (only) for consumption in the government-controlled areas 
successfully crossed the Line without major obstacles.19 

Potatoes  are  not  subject  to  tariffs  but  each  lorry  needs  to  be  accompanied  by  a  Report  of 
phytosanitary  inspection,  issued  by  independent  phytosanitary  experts  in  accordance  with 
Annex III of Commission Regulation (EC) No 1480/200420. In order to facilitate potato trade 
across the Line, the Commission ensured the permanent presence of these experts during the 
main harvest season (mid April until mid June). During other periods, their availability was 
guaranteed within a few working days (up to now, 100 % of Turkish Cypriot requests for the 
presence of a phytosanitary expert could be fulfilled). 

The Commission is currently in the process of extending the already existing list of appointed 
independent phytosanitary experts. 

Citrus fruits 

So far no trade in citrus fruits has taken place. 

Independent experts from several Member States appointed by the Commission again carried 
out an annual pre-harvest inspection in autumn 2006. They confirmed the results of previous 
checks  performed  from  2003  to  2005  that  relevant  harmful  organisms  were  not  detected  in 
these  surveys  and  hence  are  deemed  not  to  occur  in  the  northern  part  of  Cyprus.  The 
Commission  envisages  continuing  survey  work  as  a  collateral  monitoring  activity  besides 
inspections  and  controls  of  orchards  and  of  consignments  of  citrus  fruit  intended  for  trade 
across the Green Line. 

Honey and fish 

As  reported  above,  on  4  May  2007,  the  Commission  adopted  a  Decision  on  lifting 
prohibitions  on  the  movement  of  certain  animal  products  on  the  island  of  Cyprus  under 
Council Regulation (EC) No 866/2004 and laying down conditions for the movement of fresh 
fish and honey across the Green Line.21 

The Commission is currently in the process of appointing independent Member States' experts 
who,  in  accordance  with  Annexes  I  and  II  of  the  Commission  Decision,  must  inspect  the 
Turkish Cypriot fishing vessels from which fresh fish is landed for specific hygiene rules for 
food  of  animal  origin  as  well  as  take  10  samples  of  honey  in  the  production  chain  for 
subsequent analyses in specific EU laboratories. 

Wood 

In  February  2007  for  the  first  time  an  independent  phytosanitary  expert  issued  a  Report  of 
phytosanitary  inspection  for  the  crossing  of  a  specific  wooden  pre-fabricated  house. 
According to Art 4(4) of Council Regulation (EC) No 866/2004 and Art 3(1) of Commission 
Regulation  (EC)  No  1480/2004,  which  both  refer  to  Council  Directive  2000/29/EC,  such  a 
procedure  became  necessary  as  this  specific  pre-fabricated  house  was  made  up  of  conifer 
wood originating in Turkey. 

19 
20 
21 

For problems in trade in potatoes not destined for consumption in the RoC see point 3.5. above 
Commission Regulation (EC) No 1480/2004 of 10 August 2004, OJ L 272, 20.8.2004, p. 3. 
Commission Decision 2007/330/EC of 4 May 2007, OJ L 123, 12.5.2007, p. 30. 

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3.8.  Proposals of the Republic of Cyprus concerning enhanced Green Line Trade 

At  the  end  of  March  2007,  the  authorities  of  the  Republic  of  Cyprus  submitted  to  the 
Commission a set of measures aimed at enhancing trade within the framework of the Green 
Line  Regulation.  Most  of  these  measures  are  of  a  unilateral  nature  and  fall  into  the 
competence  of  the  Republic  of  Cyprus.  The  package  includes  also  the  proposal  to  open  the 
Green  Line  for  trade  in  fish  and  honey  as  well  as  milk  and  milk  products.  Whereas  the 
Commission Decision on fish and honey has been adopted in the meantime22, a decision on 
milk and milk products will have to wait until the EU rules regarding food safety will be met 
in the northern part of Cyprus. Assistance to the Turkish Cypriot community in this regard has 
already started.  

Finally,  Cyprus  renewed  its  proposal  to  introduce  a  zero-VAT  rate  for  goods  crossing  from 
the  government-controlled  areas  to  the  northern  part  of  Cyprus.  As  the  Commission  stated 
already in last year's report such zero-rating supplies could only be justified if those were to 
be treated as exports. This is the case irrespective of whether these supplies are called exports. 
If  goods  leaving  for  the  northern  part  of  Cyprus  are  treated  as  exports,  goods  coming  from 
there must equally be treated as imports. Only under these circumstances would the proposed 
change be acceptable.  

Overall, it remains to be seen whether the set of measures will indeed foster Green Line trade 
and  economic  interaction  on  the  island  which  would  be  a  positive  development.  These 
measures,  however,  cannot  be  considered  as  a  substitute  for  the  Commission  proposal  for  a 
Council Regulation on special conditions for trade with the areas of the Republic of Cyrus in 
which  the  Government  of  the  Republic  of  Cyprus  does  not  exercise  effective  control  (so 
called Direct Trade Regulation) which is still pending in the Council. 

4. 

CONCLUSIONS 

The  Green  Line  Regulation  continues  to  provide  a  stable  legal  framework  for  the  free 
movement of Cypriots and other EU citizens who daily cross the Line at the crossing points.  

However, the still high number of persons crossing the Green Line illegally gives reason for 
concern. The Commission is of the opinion that the surveillance conducted by the Republic of 
Cyprus pursuant to Art 3 of the Green Line Regulation needs to be strengthened substantially. 
The Republic of Cyprus is reluctant to meet its surveillance obligation in full as any measure 
which possibly could lead to the Green Line taking on the appearance of an external border is 
politically unacceptable. 

As  regards  goods  crossing  the  Green  Line,  in  comparison  to  the  previous  reporting  period, 
reported  figures  show  a  large  increase  in  total  value.  According  to  reports  provided  by  the 
authorities of the Republic of Cyprus, the total value of goods which actually crossed the Line 
almost doubled and was about € 3.3 million. However, the overall scale of Green Line trade 
still  remains  rather  limited.  In  the  current  reporting  period,  very  few  new  products  were 
introduced, and they did not contribute to a significant increase in the monthly value of trade. 
Only in one single case, goods crossed the Green Line and were subsequently subject to an 
intra-community transaction with another Member State. The limitation to the volume of trade 
is also due to the restrictions in the Green Line Regulation itself, which only allows goods to 
cross  the  Line  that  were  wholly  obtained  in  the  northern  part  of  Cyprus  or  have  undergone 
their last, substantial, economically justified processing or working there. 

22 

Section 3.7 above 

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11 

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Despite  some  positive  developments  concerning  the  movement  of  goods,  several  reported 
cases  confirm  that  there  are  still  many  obstacles  to  the  further  development  of  Green  Line 
trade.  The  Republic  of  Cyprus,  for  instance,  does  not  accept  roadworthiness  certificates  of 
Turkish  Cypriot  lorries  nor  professional  driving  licences  in  case  of  heavy  goods  vehicles 
issued by the Turkish Cypriot Community. Legislation which was pending in the Parliament 
of  the  Republic  of  Cyprus  under  its  previous  legislative  term  and  which  might  have 
constituted  a  step  towards  the  improvement  of  the  current  situation  was  not  pursued.  In 
addition, psychological trade barriers are still significant. 

Pressure  groups  on  both  sides  of  the  Green  Line  are  active  to  prevent  the  development  of 
trade  across  the  Line.  Particularly  regrettable  is  continued  direct  pressure  on  traders  from 
within the Turkish Cypriot community. 

The issue of temporary crossing of goods needs to be taken up de lege ferenda. 

The  Commission  has  carried  out  various  measures  aiming  at  facilitating  trade  across  the 
Green Line, particularly trade in potatoes, citrus fruits, honey and fish and wood. 

The  overall  conclusion  is  that  the  Green  Line  Regulation  continues  to  provide  a  workable 
basis  for  allowing  the  passage  of  goods  and  people  to  and  from  the  government-controlled 
areas  of  the  Republic  of  Cyprus  although  the  flow  of  goods  remains  relatively  limited.  The 
Commission will continue to monitor the implementation of the Regulation. 

EN 

12 

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Technical Annexes 

Annex I 

Overview table summarising the monthly reports of the Turkish Cypriot 

Chamber of Commerce according to Article 8 of Commission Regulation 1480/2004 (EUR) 

of 

Traded 
Products 
Aluminium/ 
PVC 
Products 
Building/ 
Articles 
Stone 
Charcoal 
Chemical 
Products 
Clothing 
Earth/Stone 
Electronic 
Equipment 
Food/Drink 
Handicraft 
products 
Iron/Steel 
Paper 
Products 
Plastering 
machine  and 
material 
Plastic 
Products 
Pre-
fabricated 
buildings 
Raw metal 
Saddlery  and 
Harness 
Vegetables 
Water 
Storage/heati
ng  
Wooden 
products/ 
furniture 
Total 

May 

Jun 

Jul 

Aug 

Sept 

Oct 

Nov 

Dec 

Jan 

Feb 

Mar 

Apr 

Total 

7 773 

21190 

377 867 

6 124 

23 190 

25 657 

4 953 

8 595 

1 314 

2 845 

5 871 

805 

486 184 

19 965 

38 432 

23 535 

16 976 

22 843 

40 250 

41 066 

30 146 

32 233 

49 724 

61 241 

71 921 

448 332 

1 206 
7 888 

1 014 
0 
38 672 

862 
5 735 

0 
10 966 

1 242 
707 
18 339 

0 
2 069 

0 
8 777 

0 
241 
1 790 

1 007 
4 777 

517 
16 764 

1 034 
12 598 

862 
22 034 

0 
10 194 

0 
14 548 
0 

0 
5 164 

0 
7 921 

0 
9 154 

0 
14 175 

0 
13 246 

0 
12 047 

0 
10 590 

0 
14 192 

0 
23 931 

0 
25 507 

1 206 
160 667 

109 
34 862 
1 138 

0 
4 293 

0 
14 946 

1 862 
7 784 
0 

0 
5 082 

603 
9 323 

776 
0 
0 

0 
12 945 

276 
12 903 

0 
0 
0 

0 
5 376 

414 
8 399 

1 800 
0 
0 

0 
982 

617 
8 871 
0 

0 
1 367 

527 
0 
0 

0 
0 
0 

0 
2 806 

0 
5 737 

7 947 
67 013 
59 939 

1 869 
56 333 

0 
21 341 

0 
11 072 

4 647 
15 061 

1 284 
14 412 

9 637 
166 774 

0 

0 

0 

0 

0 

0 

1 724 

0 

0 

0 

4 655 

4 707 

11 086 

17 811 

24 522 

41 518 

27 525 

39 096 

25 456 

36 906 

23 032 

21 126 

32 417 

30 905 

31 301 

351 615 

0 

0 

0 

0 

0 

0 

0 

0 

0 

7 759 

0 

0 

7 759 

12 672 
0 

9 052 
615 

2 715 
0 

34 698 
0 

28 103 
0 

95 603 
0 

38 097 
0 

96 840 
0 

67 707 
0 

79 659 
0 

0 
586 

24 588 
0 

137 167 
0 

158 754 
0 

83 610 
0 

274 526 
0 

387 586 
0 

175 426 
2 759 

244 575 
345 

122 634 
0 

44 190 
0 

32 069 
0 

56 353 
0 

35 552 

565 689 
615 

1 676 487 
3 690 

31 166 

31 802 

39 259 

38 581 

49 217 

71 571 

90 484 

109 241 

51 404 

72 079 

82 448 

56 005 

723 257 

162 631 

197 156 

661 549 

320 485 

310 561 

571 892 

640 962 

472 275 

453 417 

403 236 

308 351 

303 585 

4 806 100 

1 EUR = 0,58 CYP 

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Annex II: Value of goods crossing the Green Line reported by the authorities of the 
Republic of Cyprus (May 2006-April 2007) 

May 

June 

July 

August 

September 

October 

November 

December 

January  

February 

March 

April 

Total 

1 EUR=0.58 CYP

€ 168 836 

€ 128.561 

€ 219 943

€ 278 582

€ 276 110

€ 352 016

€ 469 415

€ 350 421

€ 342 652

€ 274 562

€ 285 252

€ 234 456 

€ 3 380 805 

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ANNEX III: Values of goods which crossed the Green Line and value of goods for which 
accompanying documents were issued by the Turkish Cypriot Chamber of Commerce 

)

R
U
E

(
e
d
a
r
t

f
o
e
u
l
a
V

700000

600000

500000

400000

300000

200000

100000

0

May

June

July

August

September

Value of trade of goods which crossed the Green
Line 
Value of trade for which accompanying documents
were issued 

January

February

March

April

October

November

December

Month

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Annex IV:  Most traded goods 

Other
19%

Building/articles of stone
9%

Aluminium/PVC products
10%

Vegetables
35%

Raw metal11,4
12%

Wooden products/furniture
15%

Vegetables 

Wooden products/furniture 

Raw metal 

Aluminium/PVC products 

Building/articles of stone 

Other: 

Total: 

1 676 487

723 257

565 689

486 184

448 332

906 151

4 806 100

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ANNEX V: Development of most traded goods 

Development of trade of goods with highest trade value

Vegetables
Wooden products/furniture
Raw metal
Aluminium/PVC products
Building/articles of stone

)

R
U
E

(
e
u
l
a
V

450000

400000

350000

300000

250000

200000

150000

100000

50000

0

May

June

July

August

September

October

November

December

January

February

March

April

Month

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ANNEX VI  Illegal immigration for the period 01/05/2006 - 30/04/2007 

MONTH /YEAR 

ILLEGAL 
IMMIGRATION 
(total number)  
(1+3+5) 

ILLEGAL IMMIGRATION / 
ASYLUM SEEKERS via the 
Green Line 

ILLEGAL IMMIGRATION / 
ASYLUM SEEKERS 
directly to the government-
controlled areas (not via the 
Green Line) 

ILLEGAL 
IMMIGRATION via 
the British Sovereign 
Base Areas* 
(5) 

Μay 2006 
June 2006 
July 2006 
August 2006 
September 2006 
October 2006 
November 2006 
December 2006 
TOTAL 
January 2007 
February 2007 
March 2007 
April 2007 
TOTAL 
TOTAL  
(5/2006-4/2007) 

176 
218 
223 
255 
217 
236 
262 
219 
1806 
152 
210 
504 
247 
1113 
2919 

ILLEGAL 
IMMIGRANTS 
(1) 
176 
189 
211 
251 
210 
226 
262 
219 
1744 
150 
201 
502 
247 
1100 
2844 
(97.43%) 

ASYLUM 
SEEKERS 
(2) 
143 
139 
151 
183 
168 
178 
235 
188 
1385 
101 
157 
465 
205 
928 
2313 
(81.32%) 

ILLEGAL 
IMMIGRANTS 
(3) 
0 
1 
2 
1 
0 
8 
0 
0 
12 
1 
6 
2 
0 
9 
21 
(0.72%) 

ASYLUM 
SEEKERS 
(4) 
0 
0 
0 
1 
0 
0 
0 
0 
1 
1 
6 
2 
0 
9 
10 
(47.61%) 

0 
28 
10 
3 
7 
2 
0 
0 
50 
1 
3 
0 
0 
4 
54* 
(1.85%) 

* None of the illegal immigrants who entered from the British Sovereign Base Areas, applied for asylum. 

Source: Republic of Cyprus, Police Headquarters, 18/5/2007  

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ANNEX VII 

CHECKS ON PERSONS AND VEHICLES AT OFFICIAL CROSSING 
POINTS OF THE GREEN LINE FOR THE PERIOD 1/5/2006-30/4/2007 

Greek 
Cypriots 
entering the 
northern 
part of 
Cyprus 

MONTH/ 
YEAR 

Greek 
Cypriot 
vehicles 
entering the 
northern 
part of 
Cyprus) 

TOTAL 
(entries 
and exits) 

VEHICLES 

Turkish 
Cypriot 
vehicles 
leaving the 
northern part 
of Cyprus 
and entering 
the 
government-
controlled 
areas 

PERSONS 

Turkish 
Cypriots 
leaving 
the 
northern 
part of 
Cyprus 
and 
entering 
the 
governme
nt-
controlled 
areas 
166285 

98676 

49483 

56755 

49020 

60986 

52104 

25427 

53453 

36588 

96478 

54996 

33665 

94965 

57114 

31266 

88945 

34219 

05 / 2006 

100720 

139202 

110284 

154126 

153747 

12 / 2006 

11 / 2006 

10 / 2006 

09 / 2006 

07 / 2006 

06 / 2006 

08 / 2006 

255230 
248712 
250604 
249486 
159662 
157475 
137237 
133653 
132734 
126515 
144594 
141136 
1348215 2137038
TOTAL 
Note: According to the authorities of the Republic of Cyprus no records are 
kept for the return of Greek Cypriots to the government-controlled  
areas and for the return of Turkish Cypriots to the northern part of Cyprus 

01 / 2007 

02 / 2007 

03 / 2007 

04 / 2007 

311923 

788823 

26793 

22220 

50477 

17053 

46142 

47694 

18465 

33652 

43670 

16660 

38663 

36729 

22434 

43796 

46417 

27133 

53145 

56417 

47191 

87754 

85959 

89064 

89786 

98177 

84719 

579753 

TOTAL 
(entries 
and exits) 

88380 
88661 
87672 
88692 
74447 
77270 
68362 
50705 
57128 
60456 
75579 
74324 
891676

SOURCE of data: Republic of Cyprus, Operation Office, Police 
Headquarters, 01/06/2007 

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