Counterfeiting in Cyprus 1981–1992
| Date | 01 January 1994 |
| Pages | 347-363 |
| Published date | 01 January 1994 |
| DOI | https://doi.org/10.1108/eb025633 |
| Author | Andreas Nicolaides |
| Subject Matter | Accounting & finance |
Counterfeiting
in
Cyprus 1981-1992*
Andreas Nicolaides
Andreas Nicolaides
is
a
police inspector working
in
the Forensic
Laboratory, Police Headquarters, Nicosia,
Cyprus, born
in
the ancient port
of
Paphos
in
south-west Cyprus, he joined
the Cyprus Police Force
in
1971 when,
following completion
of
basic training,
he
became
a
member
of
the Presidential
Guard.
Since 1975 he has worked in
the
Forensic Science Laboratory,
specialising
in
counterfeiting, and
he is
currently in charge
of
the unit. He has
visited the USA and Greece and
has
forged close personal and professional
links with the American Secret Service,
the Greek Police Force and Interpol.
Those interested
in
obtaining copies
of
his dissertation should contact him
on
fax number: 010 357
2
426802.
ABSTRACT
This paper analyses previously unpublished
and uncollated statistical data relating
to the
incidence
of
counterfeit currency
in
Cyprus
from January
1981 to
September
1992.
Among other factors,
it
examines compara-
tive values
by
currency type; seizures,
investigations, prosecutions; cases
by
dis-
trict, location and month; and
the
nationality
of offenders.
It was
found that,
as in
other
*Material
in
this paper
is
taken from a
disser-
tation
submitted to the
University
of Exeter
as
part of the author's work for the Diploma in
Comparative
Policing.
countries,
the
most counterfeited note
is the
US$100
bill.
There
is no
apparent link
between tourism
and the
passing
of
counterfeit currency
and
Lebanese
and
other Middle Eastern nationalities
are
those
most frequently prosecuted. Despite
the
relatively small scale
of the
problem
of
counterfeit currency, there
is an
upward
trend
and
convictions appear
to be
difficult
to obtain.
INTRODUCTION
'The exchange of goods and services,
transacted through the use of genuine
currency, is the foundation of any
organised country as a political state.'1
Citizens have the right to expect their
currency to be stable and to have suffi-
cient value to facilitate their day-to-day
personal and business transactions. A
country should have a credible currency,
both to establish and improve its pur-
chasing power internationally.
Ever since currency became a method
of facilitating such exchanges, the threat
of counterfeit coins and banknotes has
existed. Counterfeit money threatens the
economies of countries and diminishes
the confidence of their citizens. If
counterfeiting were to be permitted,
currency would have no value. Owing to
this no country allows the circulation of
counterfeit currency in conducting
financial transactions.
347
THE JOURNAL OF ASSET PROTECTION AND FINANCIAL CRIME VOLUME ONE NUMBER FOUR
NICOLAIDES
It seems reasonable to assume that the
Turkish invasion of Cyprus in 1974, the
aftermath of which led to the uprooting
of 200,000 people, and the continued
occupation of the northern part of the
country would have increased the prob-
lem of counterfeit currency in Cyprus
very considerably. It would only have
been natural, it might be thought, for
both the refugees, who had lost every-
thing overnight, as well as the invaders,
to take advantage of the anomalous situ-
ation at the time and, driven by different
motives, proceed to the counterfeiting of
either the local currency or any other
foreign currency, particularly US dollars.
None of these events occurred. The
number of recorded cases during the
first few years following the invasion
substantiate this claim. There was no
large-scale counterfeiting of any cur-
rency. More specifically, in the years
1975 to 1980 only 25 Cyprus pounds,
18,400 US dollars, 100 German marks,
51,000 French francs and 50,000 Italian
lira were confiscated in Cyprus. It is per-
haps worthwhile mentioning that
during the pre-war years there was a
very low incidence of forged currency:
in 1972 just one $100 note was confi-
scated; in 1973, five $20 notes were
detected; and in 1974 there was just one
incident of one 50 cent coin.2
This study concentrates upon the
years 1981 to 1992. The year 1981 is
significant because it marks the begin-
ning of Cyprus's economic recovery after
the direct and residual effects of the
1973 Turkish invasion. From 1974 to
the end of 1980, the Cypriot economy
was in serious decline, but by 1980 there
were clear indicators of an economic
recovery. Undoubtedly the main reason
for this was the Government policy to
move from an agrarian-based economy
to one that focused upon the service
industries — foremost of which were
banking, tourism, property develop-
ment, insurance, shipping and off-shore
companies. Numerous constitutional
laws were enacted which facilitated the
establishment and rapid development of
these service industries; for example,
laws on tax
relief,
property concessions,
and employment of foreign labour by
the off-shore companies. The cumula-
tive result of all these changes was that,
according to the Financial Times, Cyprus
had by 1992 become the 26th richest
country in the world. There are cur-
rently over
8,000
registered off-shore
companies in Cyprus, together with 26
trading banks and vast property devel-
opment schemes, especially hotels.
As Cyprus moves towards becoming a
member of the European Community,
borders will be removed, and free move-
ments of trade will be allowed. Crime
will inevitably increase, including coun-
terfeiting. The Cyprus police should
thus be pro-active rather than re-active,
being prepared to cope with the prob-
lem before it becomes uncontrollable.
METHODOLOGY
In researching the extent of counterfeit-
ing in Cyprus from 1981 to 1992, the
author has relied heavily on primary
source material which as yet remains
unpublished. Various data had to be
collected from a variety of sources
including interviews with people whose
experience was relevant to the study. As
no textbooks on this topic were
available, secondary data were collected
mostly through documents, brochures
and pamphlets.
This paper examines counterfeiting in
Cyprus, in particular:
- variations in the amount of counterfeit
US dollars found or passed
348
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