Le­gal am­bi­gu­i­ties

Financial Mirror (Cyprus) - - CYPRUS -

Olive farmer An­dreas Fo­tiou steered care­fully along a dusty lane, en route from his vil­lage to nearby groves — lo­ca­tions that could have clash­ing trade regimes, post-Brexit.

He fears he could lose out on vi­tal EU sub­si­dies, and even be forced to pay crip­pling tar­iffs, if Lon­don and Brus­sels fail to fi­nalise a with­drawal agree­ment or trade deal.

Fo­tiou is one of thou­sands of Cypriot farm­ers who work on Bri­tish mil­i­tary bases, part of Bri­tain’s sov­er­eign ter­ri­tory, and which sprawl over about 3% of the Mediter­ranean is­land.

“If the UK leaves the EU on bad terms... (it) spells dis­as­ter for the com­mu­ni­ties that are on the Bri­tish bases,” said the 54-year-old.

“We can­not af­ford to pay ex­tra taxes,” he added, amid un­cer­tainty about tar­iffs that gen­er­ally ap­ply when pro­duce is im­ported from so-called “third party coun­tries” into EU ter­ri­tory.

The Eu­ro­pean Com­mis­sion’s on­line trade and cus­toms data­base flags du­ties of 15.2 per­cent for olive im­ports from na­tions out­side the EU with no agreed trade deals.

His­tor­i­cally, re­la­tions be­tween lo­cal farm­ers and the Bri­tish mil­i­tary have been “ex­cel­lent”, Fo­tiou said, stand­ing in the shade of an olive tree.

“When there are prob­lems we sit at the ta­ble and solve it on the spot.”

But “no one has in­formed us what

Brexit, what the sta­tus will be,” he added.

His pic­turesque vil­lage of Avdi­mou bor­ders Akrotiri — one of two mil­i­tary bases Bri­tain kept on the is­land af­ter Cyprus gained in­de­pen­dence in 1960. The other, Dheke­lia, is in the east.

Olives, grapes and pota­toes are key crops on ex­tended non-mil­i­tarised stretches of these Bri­tish sov­er­eign ter­ri­to­ries, while farm­ers also keep live­stock.

Fel­low vil­lager Con­stantina Pier­oua, who grazes sheep on Akrotiri, said she is stressed about the fu­ture.

“A lot of farm­ers are afraid. Our farm is on the base and maybe we don’t have a job af­ter Brexit — it is a dan­ger­ous sit­u­a­tion for us,” the 41-year-old said.

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600 the Cypriot pro­to­col has now been “de­vel­oped”.

But the Eu­ro­pean Com­mis­sion has long main­tained that “noth­ing is agreed un­til ev­ery­thing is agreed”, in­di­cat­ing that the Cyprus pro­to­col would be in­ap­pli­ca­ble if on­go­ing ne­go­ti­a­tions over the wider UK-EU with­drawal deal fail.

Cyprus’s for­eign min­istry told AFP “the rights and in­ter­ests of Cypri­ots re­sid­ing in the bases should and will be safe­guarded”, even if there is no with­drawal agree­ment.

Cyprus has “plans for ad­dress­ing all sce­nar­ios”, min­istry said in a state­ment to AFP.

It cited the former Bri­tish colony’s 1960 Treaty of Es­tab­lish­ment, which stip­u­lates that there be no cus­toms bar­ri­ers be­tween the bases and the Repub­lic of Cyprus.

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But oth­ers point to un­cer­tain­ties sur­round­ing Cypriot, EU and world trade law. One le­gal ex­pert who has fol­lowed the Cypriot ne­go­ti­a­tions closely said, “the sce­nario of farm­ers pay­ing tar­iffs can­not be ruled out”.

The laws of the EU’s Cus­toms Union ap­ply on the bases, but a key UK par­lia­men­tary com­mit­tee has warned that ar­range­ment will lapse af­ter Brexit.

“Goods will no longer be able to flow freely” be­tween the bases and the Repub­lic of Cyprus, the Eu­ro­pean Scru­tiny Com­mit­tee said in July.

“In­stead, EU law will re­quire Cyprus to ap­ply cus­toms and reg­u­la­tory con­trols on cross­ing be­tween the two for the first time,” it added.

There have also been re­ports that the pas­sage of Bri­tish mil­i­tary sup­plies through Cyprus and onto the sov­er­eign bases could be com­pro­mised by a no-deal Brexit.

The Lon­don daily The Times said in Au­gust that Bri­tish of­fi­cials had con­cluded they would need to ex­tend a small ex­ist­ing port on Akrotiri sig­nif­i­cantly, to avoid com­pli­ca­tions at Cypriot ports.

But one an­a­lyst told AFP that un­der a no-deal sce­nario, the EU would be likely to agree ex­emp­tions.

The bases fall un­der “se­cu­rity co­op­er­a­tion, which both the UK and the EU agree should re­main largely un­af­fected ir­re­spec­tive of fu­ture ar­range­ments”, said Kit Ni­choll, a se­cu­rity an­a­lyst for IHS Markit in Lon­don.

Bri­tain’s Min­istry of De­fence said, “con­struc­tive dis­cus­sions” had taken place with Cyprus “to safe­guard the ef­fec­tive mil­i­tary func­tion­ing of the bases, and min­imise dis­rup­tion and un­cer­tainty for cit­i­zens, busi­nesses, and res­i­dents”.

“We look for­ward to work­ing with the Repub­lic of Cyprus and our Eu­ro­pean part­ners to build an en­dur­ing and mu­tu­ally ben­e­fi­cial fu­ture re­la­tion­ship,” a spokesman said in com­ments emailed to AFP.

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