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Time to look beyond sun and sand

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Author: 
Peter Stevenson

FACING hard times because of the crisis, with many hotels shutting for the winter due to crippling fuel bills, those in the mountains say it is time for Cyprus to move beyond its sun and sand image and promote all of the island.
It is a stance backed up by presidential candidate Nicos Anastassiades, who is tipped to win. “The region of Troodos is a unique destination, combining natural beauty, streams, waterfalls, amazing footpaths and rare flora and fauna,” he said in a speech given in the Troodos region, during which he revealed his plan to develop the area if he is to be elected.
His plan is to involve the state and local communities, to use European funding programmes and to attract foreign and local investment for the region. Welcome words to the ears of tourist officer for the regional tourist board in Platres Constantinos Constantinou who said all the small communities in the area need to come together as one to battle the plunge in tourism this winter.
Soaring prices for electricity and fuel have led many of the hotels to close for the winter season, while fewer numbers of visitors have had knock on effects on other businesses in the region.
“The community leaders of Platres along with Kakopetria, Agros, Omodos, Pedoulas and Troodos need to cooperate instead of each looking at their own village and what it requires to pull people in,” Constantinou said. “Alone they will struggle to succeed in attracting large numbers but if they work together there is a possibility they could succeed but it also requires vision and ambition,” he added.
Of the hotels that are closing for this year’s winter season Constantinou believes it is the larger hotels that have suffered the most. “Small family run hotels have been able to stay open to a large extent because they don’t hire workers and usually the owners themselves run the hotel and often live in it,” he said. “The larger hotels like New Helvetia and Forest Park have had to close to decrease the loss they are making during this winter period,” he added.
The fall in business at hotels has had a knock-on effect on other businesses in the area with restaurants also reporting low figures for this time of year. “The industry in general is down which is causing a chain reaction as there are less tourists in the area, meaning restaurants are suffering from a lack of business as they cannot sustain themselves through local visitors,” Constantinou said.
Although numbers are down, Constantinou said there is plenty for visitors to see and do once up the mountains. “People are now more specific in their demands, gone are the days when visitors would come, spend a night in a cheap room, enjoy a relatively cheap meal and drink and be happy,” he said. “They are looking for well-organised trips to enjoy the culture and beautiful scenery which exists and if potential visitors are not made aware of what is on offer then more barren winter periods will follow,” he concluded.
The Forest Park Hotel in Platres is among those closing its doors this winter. “We have had to make some changes to the hotel over the winter, nothing too drastic, but to meet CTO (Cyprus Tourism Organisation) regulations we felt that during this lean winter we would attempt to cut some of our losses and close down for a short period,” said owner Marios Skyrianides.
The driving force for this decision was the exorbitantly high costs of electricity and heating fuel that meant running a hotel with 140 rooms was a tall order if the only business he would be getting arrived on Saturday and left on Sunday.
Even though the hotel will reopen its doors on April 1, Skyrianides said something needs to be done to bring tourism back to the area. “The ‘product’, all of the beautiful scenery, the various activities, the great restaurants, exists,” he said. “All that is needed is a small push from the CTO and the government to increase their advertising of the area and what it has to offer,” he added.
Platres Community Leader Panayiotis Papadopoulos said this downturn in tourism had led him and the village’s council members to spring into action. “We are a small community of around 200 people and of course it’s a tall order to expect the Ministry of Commerce, Industry and Tourism to listen to our demands but we couldn’t sit idly by,” he said.
The council visited the ministry last month to present proposals to minister Neoclis Sylikiotis but had yet to hear back from anyone. In their proposal they asked for VAT on electricity and heating fuel to be reduced over certain periods of the year to give the area a much-needed financial push.
The council also suggested a small amount of funds that go towards providing cheaper summer holidays for government employees could be used to fund holidays over the Christmas period to mountain resorts. “We are not asking for much but we feel like our demands have fallen on deaf ears,” he said.
“Currently the cost of electricity and heating fuel has meant the majority of hotels in the area, not only in Platres, will remain shut over the winter period and something needs to be done about it because it’s a real shame if we can’t take advantage of this beautiful area,” he concluded.
One man who has kept his business open in Platres despite working at a deficit is the Edelweiss Hotel owner George Papas, and he feels that the area is suffering from a lack of unity. “We are not many hotel owners, yet we do not see eye-to-eye with each other,” he said. “Many look at their own personal gain instead of trying to look at the bigger picture to help bring in business to the whole area”.
Platres has recently invested in a modern sporting centre with a football pitch, futsal pitch, basketball court and volleyball court but Papas feels with the addition of a swimming pool the village could be a very attractive destination for European football teams during the winter break. “While speaking with members of the AEL team that came up to Platres for pre-season training they told me that although our sports centre is excellent, without a swimming pool it loses some of its appeal with many top teams looking for places with pools,” he explained.
Papas believes the cost of building a swimming pool would be easily recouped if a decision to build it was made. “Unfortunately there are members of our council who have swimming pools in their hotels and don’t want the village to invest in a public pool for fear of losing business,” he said.
“I am a firm believer that what makes this area great is the fabulous hospitality we offer our guests but unfortunately that too is disappearing but if we want to resurrect the tourism industry we must return to the ideals we once held sacred,” he concluded.
The main proposal made by Anastasiades in his speech was the building of a teleferique in the Troodos region to make the whole area more accessible to tourists with parking areas, information centres for the region and stands selling local goods and produce. To offer tourists a different kind of experience he also suggested the creation of themed parks, play-places for children, event spaces, religious monuments, nature trails for pedestrians and cyclists and different cafés and restaurants.
“Our vision is to develop the Troodos region to create jobs and make farming life sustainable, which will not only give residents of the area motivation to remain there but also to bring new residents,” he said.

Hotels in the mountains are closing for winter due to high fuel costs

Mosque charges

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THREE youths, aged 17, 18 and 21, have been charged with vandalising an 18th century mosque in Denia last week, authorities said.
In their testimonies the three Greek Cypriots said they had demolished the north and south walls of the mosque that had only started being restored earlier in the month.
The trio have been charged and released.

Nearly half of computer owners use pirated software

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Author: 
Stefanos Evripidou

FINANCE MINISTER Vassos Shiarly yesterday called on businesses not to use unlicensed or pirated software, arguing that it hurts information technology (IT) businesses, tax revenue and job creation.  

The Finance Ministry and Business Software Alliance (BSA) held a joint press conference yesterday on the protection of intellectual property (IP) rights of computer software.   

According to a 2011 study by BSA on global software piracy, 48 per cent of computer users in Cyprus use unlicensed or pirated software, equating to €14m in losses for software providers. 

Speaking at the event yesterday, Shiarly said Cyprus was also contributing to the Europe-wide effort to clamp down on software piracy, by informing businesses and the public on the importance of legal use of software in the workplace. 

“Copying legal work without the consent of the creator, apart from the fact that it discourages creative people who dedicate time and money to research and development, also deprives the state of revenue since this illegality leads to tax evasion, and a reduction in jobs in research and IT,” said Shiarly.  

In an effort to encourage growth and job creation through research and development, parliament passed an tax amendment law last May, giving incentives to high-tech companies to invest in research and development, such as low tax rates ( up to 2 per cent) and exemptions. 

Luxembourg, the Netherlands, Ireland and the UK have also adopted similar measures to encourage innovative high-tech companies to stay in Europe and attract others from outside the EU-bloc to set up offices in Europe, thereby increasing investment and jobs.  

“Our obligation is to protect the intellectual property of these companies so they feel secure in the European market,” said the minister, noting that legal use of software benefited the state, economy and labour market, reducing unemployment and creating growth through research and development. 

CY pilots say ‘no’ to plan

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Author: 
Poly Pantelides

PILOTS at ailing state carrier Cyprus Airways (CY) disagreed yesterday with a restructuring proposal, which includes a bigger contribution for their members, on the grounds the plan was not viable.

CY’s other unions have agreed to staggered wage cuts starting at 7.0 per cent for up to €1,000 a month and reaching 20.5 per cent for over €6,000 a month.

It is understood that the majority of high earners – the pilots- earn closer to €9,000 and €10,000 a month, and that about half of those impacted earn up to €2,500.

 “We definitely do not have the luxury of time as we’ve said repeatedly. I want to believe and I do believe that we will manage to implement this plan by February 1,” said CY chairman Stavros Stavrou.

Stavrou said he was hopeful all unions – including the pilots’ – could reach a compromise.

He said CY was still discussing outsourcing the catering, cargo handling, and some other departments, but made it clear the airline would maintain control of engineering and maintenance for safety and security reasons.

The unions have said that 272 people would be sacked at a first stage, but Stavrou would not confirm this. 

The pilots’ union PASYPI – which has so far dismissed all restructuring proposals – blamed the management for CY’s troubles, but did not make any counterproposals. PASYPI said it was willing to contribute but could not in all conscience agree to an “ineffective” plan.

“(The pilots) don’t understand that CY is in danger,” the head of the state carrier’s biggest union SYNIKA Andreas Pierides told CyBC yesterday.

Pierides asked the pilots “to take a look at all those people queuing up at unemployment offices and relying on charity”.

Cyprus Airways employs about 1,000 people and the restructuring plan, based on proposals by Air France-KLM, has called for the sacking of 407 staff members.

CY must also propose a compensation figure for those laid off.

The airline has also asked for €73 million to implement the restructuring plan.

The House Finance committee begrudgingly made €16.3 million available to CY last month as part of a share capital increase. The state has a stake of almost 70 per cent in the airline. 

CY has not been able to keep up with competition from cheaper carriers, and with rising fuel costs and has been kept afloat with cash injections in the form of assistance for losses incurred due to a Turkish airspace ban.

Norway helps in money laundering battle

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NORWAY WILL pay near one million euros to strengthen Cyprus’ anti-money laundering capabilities. 

A contract was signed last Friday between the Planning Bureau and the Unit for Combating Money Laundering (MOKAS) for the financing of a project aiming to strengthen MOKAS’ capacities and improve its efficiency to detect money laundering and the financing of terrorism. 

The project will be implemented by MOKAS and cost a total €1,100,882. Norway will provide the majority of funds, 85 per cent, amounting to €935.750, while MOKAS will provide the remaining €165.132. 

The main objective of the project is to automate the analysis and investigation procedure of MOKAS by implementing an IT system to support its core activities. This in turn will enhance the capabilities of the Unit making best use of available information and automatic recognition of relationships between data, information and suspects. 

According to a Planning Bureau press release, enhanced cooperation between law enforcement agencies and information providers is expected to develop policies and tools necessary for the prevention and combating of transnational organised crime, in particular money laundering and terrorist financing.

During the project’s implementation, MOKAS’ Norwegian counterpart, the Financial Intelligence Unit (FIU) of Norway, will exchange knowledge and best practices in the anti-money laundering and counter-terrorism financing area. Members of MOKAS will also make on site visits to the Norwegian FIU, while a memorandum of understanding will be signed by the heads of the two national units as part of enhanced bilateral relations and cooperation.

Discussing the ‘nightmare scenario’

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Author: 
Stefanos Evripidou

THE ARCHITECTS of the Greek sovereign debt writedown are in Cyprus to present their positions on the eurozone debt crisis and the option of a possible debt writedown for Cyprus. 

Dr Mitu Gulati and Lee C. Buchheit will be presenting their joint paper titled: ‘The eurozone debt crisis: the options now, with special reference to Cyprus’, tomorrow at the European University Cyprus Delta Auditorium at 11am until 1pm. 

The two men were described last March by the New York Times (NYT) as the “intellectual fathers of Greece’s intricate bond swap” , noting that it was their joint paper in May 2010 that first proposed a way for Greece to force investors who reject a deal to suffer the same loss as those who agreed. 

Gulati is Professor of Law at Duke University and was instrumental in highlighting the feasibility of a reduction of Greek debt through swaps, by suggesting that collective action clauses allowed enough negotiation room for debtors to come to a deal with their creditors.  

Buchheit is a partner at Cleary Gottlieb Steen & Hamilton LLP and visiting professorial fellow in the Centre for Commercial Law Studies at the University of London. 

He played a leading role in the team of lawyers who managed the new deals between investors and the Greek state and has been vital in providing leverage for indebted countries to compel holdout creditors into deals favourable for the debtor. 

He has also been involved in debt restructuring deals in numerous countries in Latin America and more recently in Iraq and Iceland.

Last year, he was recognised by the Financial Times as one of the ten most ‘Innovative Individuals of 2012’ for his work on the Greek debt restructuring. 

According to the NYT, both men see themselves as “sovereign debt taboo-busters”. And now both are in Cyprus to talk about what politicians and bankers across the board might consider the ‘nightmare scenario’- a sovereign debt haircut to make Cyprus’ public debt more sustainable post-bailout.  

The fact that struggling local banks are in possession of a huge share of government bonds makes what they have to say all the more interesting.   

Cyprus-based economist Fiona Mullen will also give a presentation after Gulati and Buchheit on who owns Cypriot debt and the repercussions of a Cypriot haircut. 

Mullen, the director of Sapienta Economics, has been providing detailed reports on the economy of Cyprus for the past decade, and has written extensively about the existing Cypriot debt and the possible repercussions of its renegotiation. 

The event is organised by the Department of Accounting, Finance and Economics of the European University Cyprus. For more information, contact the Events Office at 22713047 or email: m.christodoulou@euc.ac.cy. 

AG makes an offer to judges in wage cut dispute

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Author: 
Elias Hazou

THE SUPREME Court will reconvene on March 7 to continue hearing the case of the district judges’ appeal, after an offer yesterday by the Attorney-general to broker a deal satisfying both sides.

The judges are challenging two items of legislation passed in late 2011 as part of an austerity package that included reductions to the salaries of state officials, among others. They wish to be exempted from the cuts, arguing that their remuneration is protected by the Constitution.

The lawyers representing the judges have argued that an unconstitutional law cannot not become constitutional because of the reason it was enacted - in this case the economic difficulties faced by the state.

At the hearing last week, the judges reiterated their proposal that, instead of taking a mandatory pay cut, they would make a voluntary contribution from their salary to the state.  They said also their offer would stand irrespective of the court’s ruling.

In court yesterday, Attorney-general Petros Clerides – who represents the state against the judges – made a counter-offer.

Clerides proposed that in his capacity as Attorney-general he would sound out the executive and legislative branches of government, to see whether they would agree to amend the two laws passed in December 2011.

The wording of the laws would be amended so that the judges are omitted from the list of state officials subject to the pay cuts.

But due to the fact the House plenum is in recess and cannot reconvene until after the presidential elections, Clerides said it would be better if the next hearing in the case was delayed until then.

The court agreed and set the date for the next hearing for March 7.

Assuming Clerides gets politicians on board to amend the contentious laws, it’s understood the district court judges would then drop their appeal. They would then voluntarily contribute a part of their income to the state as promised.

Though the end-result might be the same, Clerides’ move avoids a legal battle, which would probably suit all involved.

A court ruling could directly affect the earnings, pensions and retirement bonuses of the very Supreme Court Judges who are being called to make a decision on the appeal. Conversely, the other way to settle the matter would be amend the Constitution – which no one seems to want to touch.

But the catch, the Mail understands, is that Clerides wants a binding commitment from all 90 district judges to make voluntary contributions. He also wants the contributions to be exactly equal to the cuts provided for under the two laws of 2011 as well as subsequent laws to date.

That’s unlikely to go down well with the judges; moreover, it’s still not clear whether the voluntary contributions they have proposed would be the equivalent of the total cuts imposed over the previous two years.

The lows and new lows of the election campaign

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Author: 
Stefanos Evripidou

ONE MIGHT be forgiven for not noticing the election campaigns currently underway ahead of next month’s presidential election. 

This may be one of the most challenging periods in the Cyprus Republic’s short history but the main candidates in the race appear to be adopting a somewhat ‘light’ approach to the campaign, focusing less on solid policy positions and more on taking wild and off-key pot shots at each other. 

Perhaps focus on the second public debate scheduled for last night between the three main contenders- Nicos Anastasiades, Stavros Malas and Giorgos Lillikas- had something to do with the low-calibre exchanges during the day. 

The morning started with the EDEK-backed Lillikas camp issuing a press release about the outspoken psychiatrist, TV personality and newspaper columnist Yiangos Mikellides. 

The good doctor was one of eight people who nominated the DIKO-backed DISY leader Anastasiades as a presidential candidate on January 17.

Mikellides was joined on the day by other notables including popular singer Michalis Hadjiyiannis, Nobel laureate Christophoros Pissarides and the Archbishop’s accountant Yiannos Charilaou.

Lillikas chose instead to use eight unemployed people to nominate him for candidate. The 52-year-old former commerce minister, who along with his wife is worth around €4m, wanted to pass on the message that he truly is a man of the people and is not bound by party allegiances. A quick glance at his CV can confirm the latter.  

So, in yesterday’s not-so-fierce election campaigning, the Lillikas team decided to focus on Mikellides because he has been publishing his musings in a column in Politis newspaper for years, taking a sometimes humorous, sometimes brutal eye to Cypriot society. 

The Lillikas team decided to select and re-publish excerpts of Mikellides’ columns, some of them dating back to 2006 and pose the question to Anastasiades and his supporter, DIKO leader Marios Garoyian, on whether they agree with what the doctor has written in the last seven years. 

In one excerpt from December 2009, Mikellides talks about the return of the late Tassos Papadopoulos into public life but this time through his body which was stolen from its tomb and later found.  

In the column, Mikellides describes the former president as a “master of intrigue”. 

After the 2008 elections, the columnist said he felt “proud of Cypriot people” for voting Papadopoulos out in the first round of the presidential elections, along with EDEK, EVROKO and the Greens “and all those with nationalist tendencies which were leading Cyprus to a Kosovo-isation and partition”.   

In 2006, he slammed those Greek Cypriots who voted ‘no’ in the 2004 Annan plan referendum to protect the value of their properties or their jobs or the status quo,  saying they were all traitors to their country “because they sold half of Cyprus to the Turks”. 

The Lillikas camp asked the two party leaders to state clearly whether they agree with Mikellides’ views since they chose to include him in the list of eight nominees. 

“Is that how they show respect to DIKO members?” asked the Lillikas team. 

It remains to be seen whether the Lillikas camp plan on going through with a fine-tooth comb the thoughts and ramblings of Hadjiyiannis, Pissarides and Charilaou over the last seven years. 

For its part, AKEL- which has put its weight behind the candidacy of former health minister Malas- focused on a memorial over the weekend for a very controversial figure, general Giorgos Grivas, who has been associated with extreme right-wing elements and actions in Cyprus’ history, particularly with EOKA B whose main aim was to replace Cyprus’ new-found independence after 1960 with union with Greece.  

Giorgos Loucaides, AKEL spokesman, said the presence of many DISY representatives at the memorial to honour the founder of EOKA B was insulting and provocative.  

Malas’ spokesman, Takis Hadjigeorgiou, found it interesting that two years ago, Anastasiades had chosen to attend the memorial but this year, he was a no-show. 

Hadjigeotrgiou questioned whether his absence this time round was an effort not to alienate “the democratic voters of DIKO”. 

And finally, DIKO, which seems divided between following the party line and supporting Anastasiades, or backing Lillikas, the former foreign minister in the Papadopoulos government, also released a statement on Lillikas’ efforts to nab DIKO voters. 

DIKO questioned why at an election gathering, supposedly organised by DIKO members, Lillikas used the entire speech to attack the DIKO leadership’s decision to back Anastasiades instead of presenting his policies and proposals as a candidate. 

Let’s hope last night’s debate had more to offer those following the election race.  


Candidates sound off on Cyprus issue

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Author: 
Poly Pantelides

 

THE three main contenders for the presidential elections in February 17 yesterday took on the Cyprus problem for the second televised live debate. 

The scene was set even before the debate started. All three candidates arrived making statements on the 2004 Annan plan and referendum on the proposed solution, overwhelmingly rejected by Greek Cypriots and supported by Turkish Cypriots.

Wearing a purple tie and accompanied by AKEL brass, Stavros Malas arrived first at about 8.50pm with CyBC interrupting the sports section of the news. “I’m the only one with clear views (on the Cyprus problem),” he said.

EDEK-backed Giorgos Lillikas, who arrived almost immediately afterwards wearing a red tie,  said that people had a choice to either validate the Annan plan or make a clean break, a dig at the other candidates who supported a ‘yes’ vote in the referendum. 

DISY leader Nicos Anastasiades – who must have not checked with Lillikas and also wore a red tie – said he was sad his opponents were living in the past. A faint smile barely broke through as he expressed his rhetorical sadness. Anastasiades is backed by DIKO, which was firmly in the “no” camp in 2004.

The Annan plan was the first question for Anastasiades, but he knew it was coming and reading out from his notes tried to argue that his position had always been one of respect for the wishes of the people. 

At a later point in the discussion, Anastasiades became frustrated. “I said this in 2005, 2006 and 2008; not now for political expediencies,” referring to his respect for the results of the referendum on the plan.

Anastasiades was prepared to attack both Malas and Lillikas, having come prepared with examples of how his opponents had also changed tack over the years.

Anastasiades accused Lillikas of being fickle saying his opponent had supported the positions of former UN Secretary General, Boutros Boutros Ghali, who outlined a bizonal and bicommunal federation during the nineties.

Reading out from his notes on Lillikas’ various statements, Anastasiades furrowed his eyebrows and, hands out, declared: “(Lillikas) has a new idea every day!”

Lillikas was not fazed, and kept returning back to the fact he never endorsed the “catastrophic Annan plan”.

“I’m happy that I was on the side of the Greeks of Cyprus at a crucial time,” he said.

Lillikas’ views have been laid out in his 2008 book on the Cyprus problem, he said and kept challenging his opponents to read it so they could discuss it. Those commenting online as the debate wore on could not resist joking. “Is it sold in kiosks too?” one Twitter user asked ironically.

It was the Annan plan as well for Malas who tried to differentiate himself from Anastasiades and stand as a principled man who stuck to his values, as a member of the public in 2004 rather than a politician.

Though Malas said he would “under no circumstance accept” the Annan plan today, he came the closest to stating his position as it now stands which entails a strong federation with a central government that secures Cyprus’ exclusive economic zone. 

Just like on the first debate aired on January 14 on the economy, four journalists – each from TV channels Sigma, Mega, CyBC and Ant1 – posed questions to candidates on a strict time limit, relaxed by 30 seconds to give candidates more time to respond.

The final debate is due on February 11 on the economy and domestic policy.

 

The scene was set before the debate started as all three arrived making statements on the Annan plan

Stabbed man’s body found stuffed in suitcase

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POLICE have arrested two people in relation to a gruesome murder of a Bangladeshi man, 25, after his stabbed and dismembered body was found, yesterday morning, stuffed into a suitcase in the boot of a red Honda Civic. 

The car, belonging to the victim, was in a car park on Eschylou Street, near Plato’s bar, around 150 metres from the flat where he was living. It had been there since Saturday.

The victim had bled to death after being stabbed in the neck, state pathologist Sophoclis Sophocleous said. He reportedly had fingers cut off in one hand, presumably from defending himself, state broadcaster CyBC said. 

The victim’s flatmate and another person were arrested yesterday evening in relation to the death.

Members of Nicosia CID arrived at the scene yesterday morning with two state pathologists, Sophocleous and Nicholas Charalambous, who carried out a post-mortem at the scene.

Police originally received a phone call from a member of public – a Cypriot - informing them of the incident. According to the informant, a Bangladeshi man had told him that in the early hours of Saturday he found his flatmate, dead in his bed. 

In his panic at finding the body, the flatmate decided to place the 25-year-old’s dead body into a suitcase and put it in the boot of the car

Some reports suggested neighbours had overheard a furious row in the flat late on Friday night.

 

Investigators wear mask at the scene

Our View: The painful truth is that we are in a very weak position.

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AN ARTICLE which appeared in yesterday’s edition of Politis revealed that at the last Euro Group meeting, eight days ago, the issue of withdrawing emergency liquidity assistance (ELA) from Cypriot banks was raised. It was the second time in two months that we were faced with this threat which, if carried out, would have led to a collapse of the banks.

It was the threat of the immediate withdrawal of ELA, in the event of no agreement with the troika that obliged President Christofias to make a commitment to the memorandum last November. Eight days ago, with Germany taking the line that the signing of a memorandum would be put off indefinitely, the President of the European Central Bank pointed out that in such a case the ECB would have to cut the access of the Cypriot banks to the ECB. The banks had access to liquidity only as long as a memorandum was on the cards.

The ECB position proved helpful in that it forced the Euro Group to go against Germany’s position and set a date for the signing of a memorandum. Some of the group’s member-states felt that a banking collapse in Cyprus would have caused turmoil in the markets and threatened the stability of the eurozone. The compromise that satisfied the ECB and ensured the continuation of ELA was an agreement on ‘terms of reference’ that were binding for both sides. 

Under the terms, Cyprus agreed to the inclusion in the memorandum of understanding of provisions stipulating the close monitoring of the institutional framework for tackling money laundering and of the institutional framework for transparency. Cyprus also assured that it would be able to cover its financial needs until the end of March. According to the report, the finance ministry has already started work on preparing measures that would be implemented as soon as possible; there are plans to set up a data-base to which foreign countries would have access.

The finance minister’s agreement to the terms of reference is binding for the government so there is no chance President Christofias would scupper it before he leaves office. The terms of reference would also satisfy the German government, which would have to defend its support for the bailout, for which there is strong political opposition, in an election year.

There may be dissatisfaction over the terms in Cyprus, but the painful truth is that we are in a very weak position. Our economic survival is totally dependent on our banks having access to ELA. Our politicians should bear this in mind instead of telling people they would never accept the privatisation of the SGOs or interference of the troika in our energy policy. Only our demagogue president can take this irresponsible stance, as he will not be around to sign the memorandum in March.    

Shiarly: we have nothing to hide

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Author: 
Elias Hazou

 

CYPRUS is ready to agree to any probe regarding its compliance with anti-money-laundering regulations, finance minister Vassos Shiarly said yesterday.

But to date authorities have received no official request for such an investigation, he added.

“We have nothing to hide and we are very clear when it comes to money-laundering issues and to sharing information for tax purposes,” Shiarly said.

He was responding to a Financial Times report claiming Cyprus and its EU bailout lenders were in talks to hire outside investigators to probe the island’s banking system for signs of money laundering.

The paper cited officials involved in the discussions as saying that Shiarly has “in principle” accepted the idea to allay misgivings from lender states on how committed Cyprus is to fighting money laundering and why the island is a magnet for Russian money.

The same officials said also the investigators are likely to come from a foreign consulting or auditing firm. The paper’s sources said the global accounting and advisory group PwC had been mentioned as a possible auditor.

But Shiarly clarified yesterday that any inspection would be carried out by an appropriate international organisation, such as the International Monetary Fund or MONEYVAL.

Should any of these organisations wish to send a mission here in order to compile an updated report on the island’s compliance, Cyprus would have no objection.

“We are willing to welcome them anytime, even tomorrow if necessary,” he said.

Shiarly revealed also that on Thursday he would be in the Netherlands to brief the parliament there on Cyprus’ request for a bailout but also “on other matters that might concern them, such as money laundering and the exchange of [tax] information.”

He is going to the Hague at the invitation of the Dutch parliament.

The Netherlands is among the group of EU nations – along with Germany, Austria and Finland – that are making noises about possible money laundering in Cyprus.

The issue of money laundering in Cyprus, including the notion of a possible inspection, was raised at the meeting of euro-area finance ministers last Monday. Shiarly told his counterparts that the IMF looked at the issue during a September mission, found that the legal framework was in place, and made recommendations for improvements which were immediately adopted by the government.

Shiarly has since stated that the final memorandum for assistance will include a section on money laundering setting out measures that Cyprus must examine, and that this process would be monitored.

Asked if he was concerned about the delay in the signing of a bailout deal, something that might plunge the country deeper into recession, Shiarly said the government could meet both its financing and fiscal needs through March.

Yesterday he was expecting updated data that would show whether the state could meet its obligations for the month of April as well.

The finance minister said Cyprus had held up its side of the bargain with international lenders, having struck a preliminary agreement by late November and then in December passing the relevant laws for the 2013 budget.

Any delays in concluding a final agreement, he noted, were down to the “sensibilities” of certain EU countries but also of the IMF.

Cyprus’ request for a full bailout has apparently been caught in limbo due to disagreements between EU members. But the indebted island has also had to contend with a discussion on how far Moscow should be involved in a bailout.

Russian Prime Minister Dmitry Medvedev yesterday signalled his country’s willingness to help, under certain conditions. The help could come in the form of an extension to a 5-year €2.5 billion loan Moscow granted Nicosia in 2011.

Cyprus said earlier this month it had formally launched a request for a 5-year extension to repay that debt, a step that could take the immediate heat out of Nicosia's financial woes and that, according to a German government document, euro zone finance ministers support.

"We think the main burden to solve these problems should be taken on by Cyprus and the EU states," Medvedev told the German business daily Handelsblatt in an interview held on the sidelines of the World Economic Forum in Davos.

"But we are not refusing to help under certain conditions. The conditions must be agreed first. Before that, there can be no money from us," he added.

Reuters cited a German government document indicating that eurozone finance ministers supported the idea of extending the Russian loan. "The government of Cyprus reported in the Eurogroup (meeting last Monday) that it had asked the Russian Federation for an extension of the existing loan by five years," the document read. "The government of Cyprus has the Eurogroup's support on this."

Last week, European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters it would only be fair for Russia to share part of the burden over Cyprus.

"I would think that as there is significant economic and financial activity by Russia and especially by Russian citizens and businesses in Cyprus, it would be quite fair that Russia is making a contribution," Rehn said.

"We have had contacts with Russia but of course they take their own decisions in their own way," he added.

Medvedev said it was now important for the European Union to put clear demands to Cyprus.

"It would be better if nobody would lose anything. But most of all it is now necessary that the EU formulates its demands clearly on how the Cypriot economy should be cleaned up. Cyprus is more set than countries like Greece."

German Finance Minister Wolfgang Schaeuble is not yet convinced it can be seen as a systemic risk, which is a precondition for a bailout.

Reuters reported yesterday that according to the German weekly Spiegel magazine  the head of the European Central Bank (ECB), Mario Draghi, had clashed with Germany's finance minister over Cyprus, arguing that failure to bail out the island could endanger the wider euro zone.

Spiegel, which gave no sources, reported European Economic Affairs Commissioner Olli Rehnand the chief of the euro zone's bailout fund, Klaus Regling, had sided with Draghi against Schaeuble on the issue of aid for Cyprus.

"A Cypriot bankruptcy would undo the positive news which has recently led to a calming of the mood in the euro zone,"Spiegel quoted Draghi and his colleagues as telling Schaeuble.

 

Vassos Shiarly says to date Cyprus has received no official request for a money-laundering investigation

Sports tourism generates €20m in 2011

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THE Cyprus Tourism Organisation (CTO) is committed to strengthening sports tourism further, its chairman said yesterday, as visitors in 2011 recorded a 19 per cent rise.

CTO chairman Alecos Orountiotis said sports tourism was an asset in its portfolio of alternative forms of tourism, attracting almost 12,900 visitors in 2011 and generating some €20 million in revenues.

“This is why we are determined to work harder, to exert greater collective effort, so that we strengthen the sector of sports tourism,” Orountiotis said.

According to a survey carried out by the CTO, football has the lion’s share when it comes to visitor numbers – 5,918 – followed by swimming with 3,226 and cycling with 2,212.

The average length of stay was around 10.7 nights.

Paphos, Limassol and Larnaca attracted most visitors, the CTO survey said, and Russia, Germany, and Britain were the main sources, chalking up 33 per cent of the total.

Most visits, 39 per cent, were recorded between February and March.

Orountiotis said Cyprus must exploit its good weather conditions, its geography, infrastructure and services to strengthen sports tourism further.

The island’s tourism industry has seen a boom in the past couple of years, mainly driven by a rise in the number of Russian visitors.

Last year saw a 42 per cent growth in tourist arrivals from Russia, which led to 3.0 per cent increase in Cyprus’ overall tourist arrivals.

Last year’s total arrivals were 2,464,908 compared with 2,392,228 in 2011.

The increase in tourist arrivals from Russia was 140,340 - a total of 474,419 people, from 334,079 in 2011.

All parties say their man came out on top. Greens lament no talk of the future

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STATEMENTS made yesterday about the performance of the three main presidential candidates during Monday’s live televised debate raise a challenge. All parties claimed – but cannot all be right – that their candidate came out on top during a discussion on the Cyprus problem ahead of the February 17 elections.

The debate focused on the 2004 referendum on the Annan plan which was rejected by Greek Cypriots and accepted by the Turkish Cypriots.

The three candidates’ supporters yesterday used comparable language to make comparable statements.

“Independent candidate Stavros Malas proved during (Monday night’s) debate that he is the only reliable choice in handling the great challenges our island and people are facing,” said parliamentary spokesman of ruling party AKEL, which supports Malas, Giorgos Loucaides.

“Nicos Anastasiades has once again confirmed he is a serious and responsible leader who can offer prospects and solutions,” said the spokesman of main opposition party DISY, which Anastasiades leads, Harris Georgiades.

“Giorgos Lillikas submitted to the Cypriot people – with clarity – the need for a new national strategy, away from dead-ends, the spineless and ineffective ways of the past,” said the leader of EDEK which is backing Lillikas, Yiannakis Omirou.

But the Green party issued an announcement expressing its disappointment with the debate.

“We expected proposals on the future, not a talk about the past,” the Greens said in an announcement.

“In the case of the Cyprus issue, referrals to the past should have the only goal to acquire knowledge to avoid mistakes… and not for impressionistic purposes and for pre-electoral expediencies,” the announcement said.

The Green party went on to elaborate on its own positions on the Cyprus problem, but its view that the candidates were stuck in the past was corroborated by people on Facebook and Twitter who, in the majority, remained unimpressed.

“Now Live!… The solution of the Cyprus problem. Episode 2567,” one person said on Facebook while one user on Twitter stated the obvious: “This is a discussion on the Annan plan”.

Another asked, “who will take a more detailed position on the FUTURE of the Cyprus issue rather than the failed past?”

Candidates did yesterday speak of the future with Malas referring to the need to “look ahead with specific, pragmatic and viable solutions so that what we all want – the solution to the Cyprus issue – we may manage to bring about”.

Lillikas issued a statement claiming that he did offer a “complete proposal on how to handle the Cyprus issue” based on strategic alliances also bearing in mind the island’s natural gas reserves, using an independent national council, and starting separate negotiations with Turkey and Turkish Cypriots to reverse the international community’s view that the issue “is about distributing power between the two communities”.

Along similar lines, Anastasiades’ spokesman, DISY MP Tasos Mitsopoulos claimed that Anastasiades “avoided divisive recursions to the past” and had put forward specific proposals.

Those proposals also include strategic alliances that bear in mind natural gas reserves and a “framework on a solution” that all parties can agree with.

The next and final televised debate is due on Monday, February 11 on the economy and domestic policy.

More petrol price rises to come

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PEOPLE are trying to use their cars less as fuel prices have risen by about 13 cents a litre in about a month, the head of the petrol station owners’ association Stephanos Stephanou said yesterday.

Stefanou said with consumption tax, VAT and international prices going up, consumers should expect more increases. 

But he said that 13 cents a little in a month was a “very harsh increase”.

“We haven’t seen prices like this in a very long time,” Stephanou said.

He added that some petrol stations report up to 20 per cent decrease in sales, he added.

“It’s very normal for all of us to be saving up,” he said referring to wage cuts across the state and private sector and tax hikes.

One petrol station owner in a busy street in Nicosia said that some people now put in the minimum. “Some people come in asking for two euros’ worth of fuel. I ask them what they’ll do with two euros and they say they just need to get home,” he said.

Petrol stations can set whatever prices they want, and though they often cite an increase in international fuel prices when prices go up, the auditor general has said prices can be higher than expected. And the commerce ministry has said petrol stations are slower to drop prices than they are to raise them.


Police probe drinks racketeering

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Author: 
Elias Hazou

POLICE are looking into possible racketeering being carried out at the expense of licensed distributors of beverages, the force’s spokesman confirmed yesterday.

Police spokesman Andreas Angelides said they are investigating two such cases after receiving complaints from distributors of alcoholic beverages and soft drinks.

The story was first reported by daily Alithia. The paper said a number of established distributors were getting SMS messages warning them to stop supplying this or that establishment otherwise their own premises would be firebombed – or worse.

It’s understood that for the time being detectives have scant leads to go on; tracing the alleged senders of the messages will prove difficult given that pre-paid calling cards were used.

The businessmen on the receiving end of the threats are said to suspect individuals with mob ties who have muscled into the market, either by forcing entertainment establishments to buy from them only or by threatening their former suppliers, or both.

Previously, the distribution of beverages in Cyprus was controlled, but the trade has now been opened up, allowing anyone to set up shop.

Police believe this type of extortion is widespread but is under-reported; victims are typically reluctant to go to the authorities for fear of retaliation.

In addition to straight-out bullying tactics, criminals have developed more subtle ways of placing establishments under their thumb. By branching into private security firms, they can then provide their ‘services’ under a guise of legitimacy.

It’s understood that, despite the passage of legislation last year aimed at cracking down on private security firms, this activity continues unabated.

Loan-sharking is also on the rise, police say. Last Sunday a 32-year-old man was arrested for allegedly charging a 10 per cent ‘vig’, or fee on a loan, per month. The debtor, who filed the complaint, says he borrowed around €12,000 last year and has so far paid back €44,500.

The 67-year-old debtor, a lawyer by profession, told police his lender threatened to harm him because he, unable to meet the payments, was forced to write cheques that later bounced.

The 32-year-old alleged lender, who denies any wrongdoing, has been remanded in custody after appearing in court.

And earlier last week police detained a 68-year-old man from Larnaca after two persons accused him of loan-sharking. Again, the alleged rate charged was 10 per cent.

The police spokesman urged the public to be extra careful when entering into loan deals with non-banking institutions, adding that the maximum lending rate is 6.77 per cent. Anything above that is unlawful.

Allegations Cyprus is a money laundering centre ‘unfounded’

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Author: 
Elias Hazou

ALLEGATIONS that Cyprus is a tax haven and money laundering centre for Russians are “unfounded” and “unjust”, House Speaker Yiannakis Omirou said yesterday.

The island fully complies with international conventions and European legislation against money laundering, Omirou said in a letter to his euro-area counterparts and to European Parliament President Martin Schulz.

The International Monetary Fund, the Council of Europe and the Organization for Economic Cooperation and Development have all given Cyprus high scores for the country’s adoption and implementation of the measures, he added.

Cyprus has been in the spotlight after certain EU leaders suggested investment flows between Russia and Cyprus are disproportionate, creating the suspicion that laundering may be behind the transactions.

The indebted island, eager to secure a full bailout from the EU and the International Monetary Fund, denies the claims.

In his letter, Omirou argued that Cyprus is not used by Russian oligarchs to deposit illegal money. Moreover he said Cypriot banks are subject to strict controls for opening accounts and for transferring funds, with lenders supervised by the Central Bank of Cyprus and by extension the European Central Bank.

Given its EU membership, Russian companies use the island as a transit hub for investing across Europe and for listings on the London Stock Exchange.

The reason why Cyprus appears as the biggest investor in Russia is because Russian capital in the form of dividends comes to Cyprus and is reinvested in Russia, Omirou said.

The House Speaker cited statistics in a bid to debunk allegations that business activities here are dominated by Russia. He said for example that only three of more than 80 shipping companies registered on the island belong to Russians, compared with 36 owned by Germans, while Canadian energy firms invest in Russia via Cyprus and Israelis invest in the Russian and Ukrainian property markets via the country.

The holding company model of Cyprus is similar to that of Malta, Luxembourg and the UK while the country’s low tax regime, which compares to that of Ireland and Luxembourg, was approved by the EU when Cyprus joined the bloc in 2004, Omirou said.

Moreover, he said, although the corporate tax rate here is nominally the lowest in the EU, the rate is actually higher when one factors in additional fees that foreign corporations are subject to.

Omirou’s letter is part of a drive abroad – decided by parliament recently - to counter claims the island is a money-laundering haven.

On the occasion of the ‘Parliamentary Week on the European Semester’ – which began yesterday and wraps up today - a number of Cypriot deputies are currently in Brussels for contacts with MEPs and EU officials.

Chairman of the House Finance Committee and DIKO MP Nicholas Papadopoulos met with the group of the Progressive Alliance of Socialists and Democrats in the European Parliament, while DISY deputy Christos Stylianides took part in a meeting of the European People’s Party.

Greens MP George Perdikis participated in a meeting of the Greens Group in the European Parliament.

And tomorrow Finance Minister Vassos Shiarly will be in the Hague briefing the Dutch parliament on the specifics of Cyprus’ bailout request; he is also expected to explain Cyprus’ compliance with anti-money-laundering regulations and the exchange of tax information.

Government has next three months financing covered

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Author: 
George Psyllides

THE government said yesterday it was on track to cover the state’s financing needs for the next three months, pending finalisation of a bailout that was not expected before March, when the new administration takes over.

At the end of each month we can evaluate our needs again, depending on how the previous month went, government spokesman Stefanos Stefanou said.

“And as the finance minister said, we are on track regarding the obligations we have and our financing needs for April,” Stefanou added.

Speaking on state radio earlier yesterday, Finance Minister Vassos Shiarly said the state will need €2.8 billion in the next three months – one billion being maturing debt that it hopes to roll over.

“All this can be done without additional borrowing,” the minister said.

Cyprus’ request for a full bailout has apparently been caught in limbo due to disagreements between EU members. But the island has also had to contend with a discussion on how far Moscow should be involved in a bailout.

In an interview with the Associated Press yesterday, the finance minister said leaders from the other 16 EU countries that use the euro are in “high level” talks with Moscow about a contribution to the bailout and that a deal was “probable.”

“I think it's only a question of time,” Shiarly told the AP.

And last night the Kremlin said Russian President Vladimir Putin had a telephone conversation with his Cyprus counterpart Demetris Christofias, but gave no details.

According to a laconic statement posted on the Kremlin’s website, the two presidents discussed current issues of bilateral cooperation, including cooperation in the economy and finance.

Government sources said last night that the call was made by Putin to Christofias, who is currently on an official visit to Serbia. 

Although the source could not give details, they said that obviously the two discussed the possibility of extending Russia’s €2.5 billion loan to Cyprus and Russia’s possible involvement in an international bailout of Cyprus. 

Christofias is expected to make an announcement today from Serbia regarding the phone discussion between the two leaders. 

On Monday, Russian Prime Minister Dmitry Medvedev signalled his country’s willingness to help under certain conditions. The help could come in the form of an extension to a five-year €2.5 billion loan Moscow granted Nicosia in 2011.

Cyprus said earlier this month it had formally requested a five-year extension to repay that debt, a step that could take the immediate heat out of Nicosia's financial woes and that, according to a German government document, eurozone finance ministers support.

"We think the main burden to solve these problems should be taken on by Cyprus and the EU states," Medvedev told the German business daily Handelsblatt in an interview held on the sidelines of the World Economic Forum in Davos.

"But we are not refusing to help under certain conditions. The conditions must be agreed first. Before that, there can be no money from us," he added.

Christofias is expected to announce details of the Kremlin call today

Budget cut means Nicosia will have to tighten belt

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Author: 
Poly Pantelides

NICOSIA municipality will get €400,000 less from the government than expected in 2013, which may overthrow plans for a balanced budget, Nicosia mayor Constantinos Yiorkadjis said yesterday.

The state and parliament had already reduced Nicosia municipality’s budget by €4.0 million, but the budget was further reduced by €400,000 for 2013, Yiorkadjis said during a news conference.

As it stands, the budget allows for a surplus of €2,360, the difference between the (originally) expected income of €32,159,981 and the anticipated expenses of €32,157,621. Last year closed with an estimated deficit of €3.3 million.

“The budget serves the need to render the municipality viable at a time when the government is unable to support local government,” Yiorkadjis said. 

Ongoing and necessary works have priority, including the renovation of Eleftheria square that is expected to be completed in early 2015. The European regional development fund is funding 85 per cent of the project. The budget has grown from €20 million – some €13 million for the square and €7.0 million for underground parking – to over €25 million, Yiorkadjis said. He blamed the VAT hike for the increase as well as delays caused by the antiquities department that resulted in a sloppy plan with ill thought out aspects.

Other streamlined works to regenerate the areas of Kaimakli and Tachtakala within the city walls, the old town and Paphos Gate will either continue or else start this year, Yiorkadjis said. 

He added that the municipality has obtained permission from town planning to undertake the regeneration of declining Makarios avenue, Stasikratous street and Onasagorou street by creating commercial centres.

It is not just the crisis and the expensive rents that has caused a decline in Makarios avenue, he said. “If you create three commercial nuclei you will break up the clientele. It’s natural,” Yiorkadjis said.

The municipality will also try to secure EU funding to build anti-flood infrastructure including in the Sopaz area, he said. Floods in the Sopaz area last year swept away cars, some parked but others with people in them who had to be rescued.

Meanwhile, some 50 people are expected to retire this year as part of a scheme to reduce staff numbers that resulted in the voluntary retirement of 35 employees last year, and will bring staff numbers down to 450 by the end of the year, Yiorkadjis said. 

Rubbish fees will go up by €19 per household to keep up with expenses. The government plans to set up two new waste processing plants in Nicosia and Limassol to avoid EU fines from failing to clean up its landfill sites. Yiorkadjis said this would at least double rubbish collection fees, bringing them up to €250 - €300 a year unless they obtained a budget to update their system so they could charge people on the weight of their rubbish. 

This year, as with last, the priority remains ensuring Nicosia “functions smoothly,” Yiorkadjis said.

Grand plans: Zaha Hadid's vision for Eleftheria Square

Body in suitcase man ‘killed because he wouldn’t get up’

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Author: 
George Psyllides

A 29-year-old Bangladeshi man stabbed his roommate to death because he refused to get out of bed to replace him at the hotel reception where they worked, the Nicosia district court heard yesterday.

The suspect, along with a second Bangladeshi man, 33, were yesterday remanded in custody for eight days in connection with the killing of a compatriot, 25, who was found stuffed in a suitcase in the boot of a car on Monday.

The 29-year-old told the court his only mistake was that he moved the body because he was scared, but investigators said he had given a statement admitting to killing his roommate in the early morning hours of Friday.

He “fatally wounded the victim with a knife in their room, because he refused to get out of bed to replace him at the hotel reception where their worked, something that happened often,” the police investigator told the court.

The 25-year-old’s body was found inside a suitcase that had been wrapped in a plastic bag.

The victim had bled to death as a result of three wounds to the throat, the court heard. 

He also had defensive wounds on his right hand.

Police said they have not yet found the murder weapon.

The 29-year-old had claimed initially that he had found his roommate dead in his bed and decided to move his body because he was scared.

He also told officers he had cleaned the blood from the wall.

The suitcase had been placed in the boot of a car belonging to the victim. It was found in an open parking lot on Eschylou Street in the old town of Nicosia.

The 29-year-old had driven the car to where it was found from a nearby parking facility in the moat surrounding the old town’s walls.

Police said the second suspect had helped the alleged perpetrator carry the suitcase to the car.

However, it was not immediately clear whether the second suspect knew what was in the suitcase.

He denied any involvement, telling officers that last Saturday he received a phone call from the first suspect who asked him to meet so that he can return €90 he owed and help him move some things.

In the early hours of Sunday, according to the second suspect, he helped the 29-year-old move two green plastic bags containing clothes as well as the suitcase, which he was told, also contained clothes.

Police said their movements were recorded by security cameras.

Footage showed two individuals who look like the suspects, carrying a case resembling the one the body was found in, police told the court.

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