Cyprus is speaking to other European Union member states to shore up support for the shipping industry hit by sanctions on Russia, its shipping minister said.

Cyprus has the third-largest shipping fleet in the EU after Malta and Greece. It has seen defections, or itself deflagged, about a fifth of its oil tanker fleet in recent months, connected one way or another to sanctions on Russia.

The island’s proposals include automatic extensions of so-called tonnage tax systems – which come under EU state aid rules – as well as tonnage tax discounts for fleets with European and Ukrainian seafarers, and better terms for EU operators in third jurisdictions, shipping minister Vassilios Demetriades told Reuters.

Tonnage tax is a system where ship owners or operators can opt to pay an annual tax calculated on the basis of the carrying capacity of a ship rather than a profit. It is subject to reviews by Brussels.

Cyprus Shipping Pivots From Russia To Asia

Brussels undertook to consider supportive measures for the industry by February, to counterbalance the impact of a oil price cap on Russian crude shipments.

“We have not received a negative answer, but an answer that shows that the commission is not ready, at this stage, to take measures,” Demetriades told Reuters.

“We don’t pretend to know everything, but if a sector is challenged you expect to dedicate resources and think what measures should be brought to counterbalance negative consequences,” the Cypriot official said.

Demetriades, who is expected to leave office at the end of this month following a general election, said he would advise his successor to deal with the matter as a priority.

But he was careful not to criticise Brussels. “I believe we are also responsible to better communicate this need, and that’s why we have turned to other member states to share our concerns and make our voice stronger,” he said.

Source: Reuters