Marine Pollution from ships

Report ID: 21

Cyprus has over the years developed into a major maritime centre and today has the 6th largest 

merchant fleet in the world in tonnage terms. During the last few years it has taken steps to develop

its  infrastructure and improve its maritime administration in an effort to raise the standards of Cyprus 

registered ships and enhance the image of the Cyprus flag. It has signed and ratified all relevant 

international conventions and agreements and has voted national laws and regulations to enable their implementation . At the centre of this effort is the improvement of safety on board Cyprus registered ships and the protection of the marine environment.

Pollution Prevention through ship surveys

Flag State Control plays a major part in the prevention of pollution to the environment. Through the

regular inspection of the ships it is ensured that the requirements of the MARPOL Convention are

properly adhered to. The Department of Merchant Shipping has made significant improvement in this

respect during the last few  years and it has increased the number of inspections both by the

Department surveyors and the appointed surveyors overseas. Further improvement is expected as

more surveyors will be employed both in Cyprus and overseas during the next couple of years.

Control will also be enhanced as a result of the computerisation of the Department, currently under

way, which will enable the targeting of high risk ships for inspection.

The criteria for registration of ships under the Cyprus flag have been revised as from 1.1.2000 with more effective control being exercised on overage ships. An important development regarding the safe operation of the ships, which is also beneficial from the point of view of the protection of the environment, is the implementation of the International Safety Management (ISM) Code as from 1998. Cyprus has implemented the Code for most ships (tankers, bulk carriers, passenger ships)

in 1998 and will implement it for all the fleet in July 2002. On the negative side it must be noted that all ship inspections by the Department surveyors have been suspended since February 2001 due to industrial action . Even though most of the gap is filled by the overseas inspectors the government must take all the necessary measures to resolve the dispute as soon as possible.

Port State Control of foreign visiting ships by the DMS is at an acceptable level and meets the requirements of the Mediterranean Memorandum of Understanding which states that at least 15% of the ships are inspected. By comparison however inspection rates by the maritime authorities in advanced  countries (U.S. Coast Guard, Paris MoU and Tokyo MoU) are much higher.

Inspections of Cyprus registered ships by foreign Authorities show a steady improvement and detention rates have decreased for the last three years. This is a direct result of the steps taken to upgrade Flag State Control. However, the Cyprus flag is still on the target list of the U.S. Coast Guard  and the Paris MoU with detention rates  marginally above average. The downward trend though leaves some optimism that the Cyprus flag will be taken off the target lists soon.

EUROSAI Audit on Climate Change

Report ID: 22

The aim of the audit was to assess the actions taken in the States of the Cooperating SAIs to implement the provisions of the United Nations Framework Convention on Climate Change, the Kyoto Protocol to this Convention, Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community and the requirements of the national legislation, in the scope of:

• the performance of observations on climate change and its effects,
• actions taken to mitigate climate change,
• forecasts and assessments of the actual anthropogenic greenhouse gas emission and absorption levels,
• reporting on the scope of the actions taken and planned to be taken in order to mitigate climate change and the achieved effects of these actions.

The audit demonstrated that in the period 2006 – 2008 in all the States of the Cooperating SAIs climate change observations were performed, covering climate variables and including analysis and interpretation of the research results. The scope and frequency of the research carried out in the individual States was different, but in all of them the basic climate variables were tested. The observation results were published in the reports of government agencies and statistical reports and they were also placed on the websites of the competent government institutions or meteorological services. All the States were involved in international cooperation in the scope of research and an exchange of observation data, e.g. through their participation in international networks and research projects, their work at the technical commissions of the World Meteorological Organisation and training courses. Climate change observations were funded with financial resources from the state budget, national, other than budget resources and international funds.

In all the States of the Cooperating SAIs, measures were taken to mitigate climate change through the limitation of their greenhouse gas emissions and the enhancement of the capacity of the sinks and reservoirs of these gases. Bodies responsible for taking measures to mitigate climate change were established. In 8 States, national and sectoral strategies, programmes or action plans necessary to stabilise and limit greenhouse gas emissions were prepared and in 2 States their preparation began. In 7 States the greenhouse gas emissions were reduced by 30% - 53% with respect to the base year (under the Kyoto Protocol: 1988, 1990, 1995 or 2000, depending on the State) and in 1 State the emissions grew by 85.3%. The per capita levels of anthropogenic greenhouse gas emissions varied between 5.1 – 16.4 Mg CO2e.

In the EU Member States, the provisions of the Emissions Trading Scheme Directive were implemented. National emission allowance allocation plans were developed, an emission allowance trading scheme was established and the required registries were kept. Among the 6 States of the Cooperating SAIs which were not EU Member States, emission allowances were traded pursuant to the Kyoto Protocol only in 1 country.

6 States of the Cooperating SAIs – Azerbaijan, Cyprus, Denmark, Israel, the former Yugoslav Republic of Macedonia and Switzerland – were involved in the implementation of Clean Development Mechanism (CDM) projects, whereas 5 of them – Denmark, Estonia, Poland, Russia and Ukraine – participated in Joint Implementation (JI) projects. The international cooperation in the field of the mitigation of climate change effects also included the implementation of educational projects, support for legislative activities and participation in the working groups of international agencies. The activities within the framework of international cooperation were funded with national resources and those from international financial institutions, such as the World Bank and UNDP.

In all the States of the Cooperating SAIs, the measures to mitigate climate change were monitored.

The required reports were prepared and submitted to the UNFCCC Secretariat and the European Commission. Certain reports were submitted with a delay.

Value Added Tax and Exercise Taxes

Report ID: 24

The present document provides information on the execution and results of parallel audits conducted by the Supreme Audit Office of the Czech Republic and the Supreme Audit Office of the Slovak Republic, which were both focused on the area of administration of value-added tax and excise taxes.

The cooperation between the two supreme audit institutions of the two countries is based on the Agreement on Audit Cooperation, signed in February 2004.

The topic of the parallel audits was chosen with a view to the fact that indirect taxes constitute very substantial revenue of the state budgets of both countries. The value-added tax structure, which allows for a refund of an excessive tax deduction, provides room for tax frauds and tax evasion. High excise tax rates, particularly those applying to tobacco and tobacco products, spirits and mineral oils, bring high profits to those who can dodge them by selling the commodities listed above illegally.

The Czech and Slovak Supreme Audit Office’s have established, inter alia, the following facts:

• Business transactions were not declared in the same way in both countries, which made corresponding exports and imports difficult to identify in the Czech and Slovak Customs Databases,
• Data entry errors in the above-mentioned customs databases made it impossible to identify some import and export transactions,
• Some exports from the Czech Republic failed to find and verify appropriate matching imports in the Slovak Repub1ic. Insofar as these cases are concerned, there exists a justified suspicion of fictitious exports for the purpose of illegally claiming a value-added tax return.
• Taxpaying entities failed to comply with certain Iegal obligations pertaining to reporting of exports and imports in value-added tax retum forms,
• Shortfalls and deficiencies were identified in the administration of value-added tax and excise taxes by Tax Offices and in their coordination with customs offices.

Value Added Tax Administration

Report ID: 25

This material provides information on the course and results of parallel audit performed by the Supreme Audit Office, Czech Republic and the Supreme Audit Office of the Slovak Republic which was concerned with the area of administration of value added tax and use of the VIES (Value Added Tax Information Exchange System).

In May 2004, the Czech Republic and the Slovak Republic acceded to the European Union and, consequently, income from the value added tax affects not only the State budgets of the two countries, but also the budget of the European Union as a whole. The parallel audit was concerned particularly with the procedure of tax administrators in relation to a review of the value added tax paid within commercial transactions between the individual member countries of the European Union.

Introduction of the VIES system enabled electronic exchange of information on registration of VAT payers in the individual member countries of the European Union and on commercial transactions performed by the VAT payers. Variance between information in the VIES and information stated in a value added tax return submitted by a taxpayer should alert the tax administrator to any suspicious cases and facilitate detection of tax evasions or frauds.

Excise Duty Administration

Report ID: 27

The joint report presents information about the course and result of international cooperation in parallel audits performed by the Supreme Audit Office, the Czech Republic, and the Supreme Audit Office of the Slovak Republic, focused on excise duty administration after the accession of both countries into the European Union.

The cooperation was performed pursuant to the Agreement on Audit Cooperation signed in February 2006.

Parallel audits were chosen with respect to radical changes in the excise duty collection system as a result of the accession of the Czech and Slovak Republic into the EU internal market as of 1 May 2004. The functioning of the EU internal market requires free movement of goods, including excisable goods. The basic principle is to enable circulation of tax-free goods up to the date of their presentation for end use. The new legislation adopted in both countries enables movement of goods under tax supervision under the duty suspension arrangement in accordance with the aforementioned principle. The system imposes high requirements on tax authorities and anticipates mutual cooperation of particular administrative authorities of the Member States in the fight against tax fraud.

The cooperation between the SAO, CR and the SAO SR enabled comparison of legislation governing the field of excise duties in both countries, procedures of the Czech and Slovak Customs Authorities at the start and end of the movement of goods under the duty-suspension arrangement between both countries, registration of movements and also comparison of information exchanged between Customs Authorities under international cooperation.