Yuri Maltsev/Reuters A Russian sailor watching amphibious vehicles during a naval parade rehearsal in the far eastern port of Vladivostok in 2014.

UPDATE: On Monday, Russia said it would not be "creating" any bases on Cyprus and the Cypriot foreign minister denied a "Russia deal on bases."

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On Sunday, news outlets reported that Cyprus offered to let Russia install air and navy bases on its territory.

It was reported that Cypriot President Nicos Anastasiades announced that the country was ready to host Russian aviation and naval bases. The official agreement on military cooperation between the two nations is expected be signed on Feb. 25, according to Lenta.ru .

"There is an old [defense] agreement, which should be renewed as is," Anastasiades said according to Lenta.Ru. "At the same time, some additional services will be provided in the same way as we do with other countries, such as, for example, with France and Germany. Cyprus and Russia have traditionally had good relations, and this is not subject to change."

This announcement came after Russia in late January expressed interest in having a military base in Cyprus, according to the Global Post and Greek Reporter.

Cyprus is one of the 28 member states in the EU, which has been imposing sanctions on Russia over the past year in response to the actions in Ukraine.

And just as Greece has recently caused a stir by complicating the process of extending sanctions on Russia, Cyprus, too, just voiced some opposition to the additional sanctions on Russia, adding that many EU members shared that opinion.

"We want to avoid further deterioration of relations between Russia and the European Union," the Cypriot president reportedly said.

Military cooperation between Cyprus and Russia would be another red flag for the EU.

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Presumably, the Russian Air Force will use the air base Andreas Papandreou, along with the international airport of Paphos in the southwest of the island, about 50 kilometers from the air base of the British Royal Air Force Akrotiri. Additionally, the Russian navy will be able to permanently use the base of Limassol, according to Lenta.Ru.

"The Limassol port borders on the British air base of Akrotiri, which serves NATO operations and is also an important hub in the electronic military surveillance system of the alliance," according to the Global Post .

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Given Russia and Cyprus' shady economic relationship over the past two decades (ever since the fall of the Soviet Union), perhaps this isn't all that surprising.

Russia Today reports that "Russians have transferred over $30 billion (around $1 trillion roubles) to Cyprus over the past twenty years, according to a study published by a group of economists from Russia, Finland, and Canada."

In 2013, during the Cypriot financial crisis, analysts estimated that over a third of bank deposits in Cyprus may have had Russian origin, and reportedly, many Russian companies are registered on the island. Some r eports even went as far as saying that Cyprus had become "a major money-laundering machine for Russian criminals" back in 2013.

Even today, Russia's current economic problems are reportedly further dragging down Cyprus.

"Russia's presence in the economy has been a huge supporting factor. Its footprint is everywhere from tourism to real estate, so it is worth monitoring the impact," said Michael Florentiades , chief economist and head of investment research at XM.com, an online financial services company in Limassol.