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Originally published Wednesday, January 16, 2013 at 6:24 AM

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Cyprus off Russia's investment 'black list'

Russia has removed Cyprus from a so-called black list of countries which Moscow discourages investment in, the Cypriot finance ministry said Wednesday, in a development it hopes will help in bailout negotiations with international creditors.

The Associated Press

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NICOSIA, Cyprus —

Russia has removed Cyprus from a so-called black list of countries which Moscow discourages investment in, the Cypriot finance ministry said Wednesday, in a development it hopes will help in bailout negotiations with international creditors.

The ministry said the decision will help the country attract investment from Russia and burnish its reputation as an international business center.

Cyprus, one of the 17 European Union countries that use the euro, has recently come under fire as a money laundering hub for Russian oligarchs, especially in Germany where some lawmakers have voiced opposition to a near (EURO)10 billion ($13.3 billion) rescue of Cyprus' banks, which took massive losses on Greek debt.

Cypriot officials have strongly rejected the allegations.

The island nation has enough cash to pay public sector salaries until March and wants a deal with its euro partners and the International Monetary Fund as soon as possible. It has already enacted numerous salary rollbacks and tax increases as part of a draft version of the bailout plan.

Cyprus also said a beefed-up version of its treaty with Russia against the double taxation of expatriate citizens and companies is now fully in force.

Economic analyst Stelios Platis said the announcement is part of Cyprus' attempts to counter the money laundering allegations and that it's possible Cyprus may have pressed Russia to expedite its removal from the `black list.' However, he noted that talks between the two countries had been going on for at least a year before the allegations surfaced.

"It's the Russians who would worry more about money laundering because it costs them lost revenue through a kind of tax evasion," said Platis.

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