MOSCOW, March 21 - RAPSI. With Cyprus caught in a financial crisis, Prime Minister Dmitry Medvedev has proposed creating an offshore zone in Russia's Far East.

"The entire world is now talking about Cyprus. Offshore zone or not, they will sort it out sooner or later and the solution will be reasonable and forward-looking. But since there is so much turmoil going on maybe we should think about creating a zone of some kind in the Far East. There are many suitable areas. Sakhalin, the Kuril Islands. We could transfer the money that is currently deposited in Cyprus and other areas that have not been mentioned for obvious reasons, such as BVI, the Bahamas and so on," Medvedev said at a Government meeting.

He stressed that there are certain risks implied as "everyone would be registering in this country" but it is a matter of legislation. At any rate, the prime minister expects new development mechanisms to appear for Russia's Far East.

"I expect all government members to give it a thought," Medvedev said.

The financial system in Cyprus, one of the world's largest offshore financial destinations, has remained at risk since Tuesday when the country's parliament voted against a one-time levy on bank deposits that would secure financial aid from the European Union. Cypriot officials have been negotiating with Russia and the EU for two days to prevent a national default.