“Potential for further U.S. investment and opportunity for Cyprus in a dynamic economic and geopolitical landscape.”
Tuesday, October 25
Thank you very much for giving me the opportunity to be with you here today at EY’s Cyprus Attractiveness Forum.
Since I arrived on the island three-plus years ago, including through the challenges of Covid-19, the United States and the Republic of Cyprus have made great strides together. Most attention is paid to our growing security partnership, but our economic ties are growing smartly as well. Ensuring our trading partners are prosperous, stable, and secure remains a priority for the United States.
So, when we talk about economic ties, what does this mean? Even before the energy crisis in Europe was heightened by Russian President Putin’s unprovoked and unjustified war in Ukraine, the interest of major U.S. energy companies in Cyprus stood out. Their focus on exploration and development of their licensed blocks in the Republic of Cyprus Exclusive Economic Zone (EEZ) remains solid. We have also seen increasing interest from U.S. companies in the Information, Communication, and Technology (ICT) sector – where U.S. companies are leading the island’s digital transformation efforts – in the tourism infrastructure projects, education sector, the healthcare sector and the banking and financial sectors.
Perhaps the most significant indicator of the growing U.S.-Republic of Cyprus economic partnership is the United States’ selection as the partner of choice for the Republic of Cyprus’ first Integrated Strategy Action Plan. Our goal: to create a framework to take our bilateral economic relationship to the next level. Tackling a market the size of the United States, and building economic bridges, requires perseverance and an organized and collaborative approach. The Action Plan helps lay some of that groundwork. The stakeholders in the Plan include the business community as well as government entities, and we envision all of us working together to contribute to its implementation.
So, what would it take to attract further U.S. investment? The answer isn’t a mystery. Investors from the United States, as elsewhere, look for predictable, stable environments, with assurances that agreements and contracts will be honored, and with efficient dispute resolution systems – whether through the courts, mediation, or arbitration – when the sometimes unavoidable disagreement arises.
It has long been a tenet of American economic diplomacy that our companies can compete with the best in any market if there is fair competition. And the most insidious factor in undermining fair competition is corruption. As President Biden’s National Security Strategy released earlier this month notes, corruption poses a fundamental threat to rule of law. The Republic of Cyprus has come a long way in dealing with anti-corruption and AML issues, making important strides in restoring the Republic of Cyprus’ reputation. Though if I’m being honest, doubts linger in many corners. As businessmen, you understand once trust is broken, it’s difficult to restore.
Importantly, the Republic of Cyprus is taking steps to address the risks of corruption. These steps will build the confidence of foreign investors and stand behind the optimism shown in the survey results. The Republic of Cyprus has started offering public access to a registry of Ultimate Beneficial Owners (UBOs) of companies registered in Cyprus and it will be accessible online soon. The registry promotes transparency – a key tool in the fight against corruption and asst is countering tax evasion, anti-money laundering as well as other forms of illicit crime. Another milestone is the establishment of the Anti-Corruption Authority a few months ago. We are looking forward to the quick passage of its implementing regulations so it may begin identifying areas for further investigation and reform. But speaking in context of attracting foreign investment, perhaps the most important change over the past few months was the passage of judicial reform bills in July, aimed at reducing the time it takes to resolve cases in civil court. I think you all agree how key this is. And it showed up clearly in the survey results.
While we’re focused today on attracting foreign investment, we should not forget that not all foreign investment is desirable. National security concerns may arise depending on the origin of the investment, and/or the sector involved. The United States welcomed the decision of the Council of Ministers this past September to establish an Investment Screening mechanism, as recommended by the European Commission. We believe this step will strengthen the confidence of U.S. investors in Cyprus. And we look forward to sharing lessons learned from our experience with investment screening, as Cyprus launches its new mechanism.
I’d be remiss if I didn’t mention the Republic of Cyprus’s strong, principled stance on sanctions compliance, along with the rest of the European Union. This has sent and continues to send an important message against Russia’s illegal invasion of Ukraine. These actions speak far louder than words as to the new course the Republic of Cyprus is on.
October in the United States is Cybersecurity Month. In our increasingly interconnected, online world, the persistent increase of cyber and ransomware attacks on companies makes it imperative the Republic of Cyprus is well equipped to deal with this growing challenge. The effectiveness of the Digital Security Authority, the national Computer Security Incident Response Team (CSIRT), and cyber security regulations, will contribute to a more secure business environment in which U.S. companies can operate. We all have to remain vigilant – governments and private sector companies alike.
I’d like to take a moment here to reflect on the importance of 5G. 5G has vast implications for cybersecurity and everything from artificial intelligence to manufacturing to public services. If a 5G network is compromised, not just your toaster but your bank, your hospital, your electrical grid, and other critical services could fail. The vendors who build and maintain access to 5G have a tremendous responsibility to protect national security, and human rights, and privacy in addition to their own (and Cyprus’) economic and commercial interests. For these reasons, the United States continues to advocate for Cyprus to carefully weigh its options for creating its 5G infrastructure – including acquiring services from trusted providers – in order to ensure the security of the entire network.
Innovation. A healthy, growing economy also needs to foster innovation and support the ideas and visions of tomorrow. Emerging technologies like data science, autonomous technologies, nanotechnology, advanced computing, and artificial intelligence, will be critical to future economic growth and security. The United States aims to nurture a healthy innovation economy that collaborates with allies and partners. We see Cyprus as one of those partners. The island is a seemingly natural center for innovation, with access to EU, Eastern Mediterranean, and Middle Eastern markets, with excellent universities and English language skills, and a strong and vibrant diaspora in most of the world’s major business centers.
It’s exciting to see what is happening in Cyprus today – you just feel you are at the beginning of something transformational. We are supporting the Republic of Cyprus as it moves forward with its ambitious plans to grow its innovation ecosystem and digital economy and become a tech hub.
So in closing, the public sector can do a lot to foster economic health and security. But in the end, we cannot create it. Only a thriving and robust private sector can do that. If economic security is national security – and I believe everyone here would agree it is – that makes all of us partners in these efforts. American national security, Cypriot national security, and the security and stability of the Eastern Mediterranean region are all inseparably connected.
As my time on the island nears its end, I am confident that the Republic of Cyprus is going in the right direction, as is the U.S. – Republic of Cyprus bilateral relationship. We are stronger together. Thank you again for inviting me and I wish you every success in your conference.