January 15 - 21, 2014
6 | CYPRUS | financialmirror.com
Cyprus, Greece and Malta to cooperate on maritime issues Cyprus, Greece and Malta will enhance their cooperation to promote common interests both within and outside the EU, especially in the areas of merchant shipping, Communications and Works Minister Tasos Mitsopoulos sadi on Monday after a joint meeting in Nicosia with his two counterparts, Miltiadis Varvitsiotis and Joseph Mizzi. Mitsopoulos said that the maritime sector is a crucial sector for all three countries, as it is an element of development and creates jobs, adding that it is important to
secure the competitiveness of our fleet and registry. Mitsopoulos expressed the hope that Greece, which chairs the rotating presidency of the European Council, will exercise its influence to achieve common interests and promote them better at a European level. “Our aim is to expand our cooperation with the participation of other countries which have large fleets and registries,” he said. Varvitsiotis said the EU maritime policy is one of the main priorities of the Greek presidency.
“We believe,” he said, “that it is important to maintain the competitive advantage of Europe’s maritime sector and not to adopt regulations that make the EU market noncompetitive.” Varvitsiotis said that the number of people working in the EU maritime sector can expand from 5.5 mln to 7 mln by 2020, if the proper policies are adopted. Imposing taxes in the maritime sector, he added, will only result in the Union losing its competitive advantage.
First trestles at VTT Vassiliko jetty The first of 42 trestles that will make up the 1.2km long jetty at Vassiliko was installed last week to enhance the under-construction oil storage terminal of VTTV. “We are very proud to have successfully completed another phase in the construction of the oil storage terminal. The jetty is unique in the Mediterranean and will be used for loading and unloading ship-tankers with oil products as well as for oil products’ transhipment between shiptankers, which currently takes place in the open sea
with all the risk that this entails. This terminal will be making Cyprus an oil products’ trading hub,” said George Papanastasiou, Managing Director of VTT Vasiliko Ltd. The terminal will serve more than 500 ships per year, which is approximately the number of ships currently being handled at the Port of Limassol. The construction works for the jetty as well as for the first phase of the terminal will be completed in July when the jetty and terminal will be put into operation.
Company House to be digitised by March Sh ou ld we believe it this time ?
President Nicos Anastasiades has been duped by high-ranking civil servants into believing that the office of the Registrar of Companies and Official Receiver will at last be able to operate electronically by next March. However, the matter has been dragging on for more than a decade and some services have yet to be modernised, while the concept of a one-stopshop seems to have been erased. “By March all services will be electronic, and this applies to the companies section, bankruptcies and liquidations
section, and even the intellectual and industrial property section,” the president said. He also said that suggestions by a team of experts of the UK Public Administration and the World Bank on public service reform were ready. These should help overcome significant delays created by the Department’s workload and reduced staff. He also added that staff shortage currently observed in the department will be met by using programmers from the Labour Ministry.
“Too Big to Jail?” By Rakis Christoforou DIRECTOR, RC BUSINESS VALUATION & FORENSIC ACCOUNTING LTD.
As the Cyprus economy is yet to improve, there are thousands of Cypriots leading lives of quiet desperation: without jobs, without resources, without hope. Who is to blame? Was it simply a result of negligence, of the kind of inordinate risktaking commonly called as a “bubble,” or was it the result, at least in part, of fraudulent practices, of financial scandals involving sound risks the fundamental weaknesses of which were intentionally obscured? If it was the former—if the financial crisis is due, at worst, to a lack of caution—then the criminal law has no role to play in the aftermath. If the financial crisis was in no part the handiwork of intentionally fraudulent practices by high-level executives, then to prosecute such executives criminally would be “scapegoating” of the most shallow and despicable kind. But if, by contrast, the financial crisis is in part the product of intentional fraud, financial crime and scandals, the failure to prosecute those responsible must be judged as another failure of the justice system. It would not be striking to anyone in our country, to see once again not a single highlevel executive or official to be successfully prosecuted in connection with the recent financial crisis since we have experienced financial disasters and scandals in the recent past and no one was ever convicted. One
possibility, already mentioned, is that no fraud was committed. This possibility should not be discounted. Every case is different, and I, for one, have no opinion about whether criminal fraud was or was not committed in any given instance. But the stated opinion of some government officials, politicians from most political parties, as well as others is not that no fraud/financial crime was committed. Quite the contrary. It is apparent that the financial institutions and the Central Bank had a part in creating the conditions that encouraged the approval of high risk loans in the real estate market and the increase of the capital base of financial institutions from funds from unsuspected investors. Banks were providing loans to companies and individuals with low incomes who might have previously been regarded as too risky to warrant a loan. As new evidence comes to light with respect to numerous scandals, the signs of misconduct were almost everywhere to be seen. Without giving specific examples, as most cases are now under investigation, the point is that, in the aftermath of the financial crisis, the prevailing view of many people is that the crisis is in material respect the product of scandals and probably fraud involving high ranking officials of: companies, financial institutions, government, political parties, etc. But it seems that the general consensus is that we don’t go after the big companies, at least not criminally, because they are too big to jail and our fragile economy and system might collapse if this happens; and we don’t go after the known individuals, because that would involve the kind of years-long investigations
that as a country we do not have the experience or the resources to pursue. But at the same time a poor citizen can easily be convicted for a minor wrongdoing. To a judge, who takes an oath to apply the law equally to rich and to poor, this excuse— labelled the “too big to jail” excuse—should be disturbing, frankly, in what it says about the apparent disregard for equality under the law. In conclusion, I want to stress again that I do not claim that the financial crisis that is causing so many of us so much pain and despondency was the product, in whole or in part, of fraudulent misconduct and/or financial crimes. But if it is—as various officials and other people assert that it is— then the failure of the government to bring to justice those responsible for such colossal financial crimes bespeaks weaknesses in our judicial system that needs to be addressed. The future deterrent value of successfully prosecuting individuals far outweighs the prophylactic benefits of imposing internal compliance measures that are often little more than window-dressing. It is about time
that our justice system seeks support from the right professional financial investigators in order to proceed with an in depth examination of each one of the alleged recent financial crimes/scandals and bring to justice those who are proved to be responsible. (Rakis Christoforou is the founder of RC Business Valuation & Forensic Accounting Ltd, specialising in the areas of business valuation for the determination of a business worth, and financial forensics involving financial investigations, litigation support on complicated financial issues and damage calculations. The company is also involved in assisting businesses in their debt restructuring and negotiation with banking institutions. For information contact rakis@spidernet.com.cy or visit www.businessvaluations.info)