CYPRUS GOVERNMENT REJECTS ALLEGATION OF SANCTIONS SCAM

Cyprus yesterday denied a report that Serbian offshore companies were using the Mediterranean island for multi-million dollar operations to evade United Nations sanctions. A UN trade embargo was clamped on Serbia and Montenegro in May for their role in a Serb minority revolt against Bosnia-Herzegovina's secession from the federation.

According to the Guardian newspaper, offshore companies controlled by Serbia and protected by Cyprus' "secretive banking laws" ship goods such as trucks and oil to countries neighbouring Serbia. The materials are then moved into the embargoed republic.