The European Commission is demanding that Cyprus return €4 million in EU funds awarded to two winery projects, arguing the grants were awarded irregularly.
The money was allocated to two businessmen: prominent lawyer Christodoulos Vassiliades, for a winery in Omodos, and former Commissioner for Mountain Communities Development Yiannakis Papadouris, for a winery in Kalopanayiotis.
An investigation by the European Anti-Fraud Office (OLAF), launched after complaints from Cyprus’ Audit Office, found that while there was no fraud or wrongdoing by Vassiliades or Papadouris themselves, the state authorities wrongly approved their applications. According to OLAF, both companies should have been classified as “problematic enterprises” based on their financial records and therefore ineligible for EU subsidies.
The Audit Office had previously flagged these issues in reports published in 2019 and 2021, but the findings were dismissed by Cypriot ministries and the Cyprus Agricultural Payments Organization, which insisted the grants were legal and justified.
OLAF investigators visited Cyprus to collect testimony, including from public officials. Their findings supported the Audit Office’s view that state authorities mishandled the process. They also noted that parts of the Omodos project included facilities unrelated to winemaking, such as bedrooms, a spa, and a swimming pool.
Specifically, €1.77 million in EU funds went to Papadouris’ winery, while €2.2 million went to Vassiliades’.
The Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI) is now in consultations with Cypriot authorities. If no agreement is reached, Cyprus will be forced to repay the full €4 million from state funds, effectively passing the cost to taxpayers.
While OLAF ruled out fraud on the part of the two businessmen, the dispute centers on whether Cypriot authorities wrongly distributed EU subsidies to projects that should have been deemed ineligible.
