Identifier
Created
Classification
Origin
02ROME1748
2002-04-08 16:38:00
SECRET
Embassy Rome
Cable title:  

ITALY MAY LET PHARMACEUTICAL COMPANY ENTER LIBYA

Tags:  ETRD ETTC IT PARM PREL 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T SECTION 01 OF 02 ROME 001748 

SIPDIS

NP/CBM FOR ROE
TREASURY FOR OFAC
PASS DOC FOR BXA/CBC/SEEVARATNAM AND BROWN

E.O. 12958: DECL: XI, X5
TAGS: ETRD ETTC IT PARM ETTC IT PARM PREL PRELETRD
SUBJECT: ITALY MAY LET PHARMACEUTICAL COMPANY ENTER LIBYA
SECRET


PAGE 02 ROME 01748 01 OF 02 081729Z

REF: (A) STATE 57323 (B) 01 ROME 6495

CLASSIFIED BY: ECMIN MARGARET DEAN; REASONS 1.5 B/D,X5.

S E C R E T SECTION 01 OF 02 ROME 001748

SIPDIS

NP/CBM FOR ROE
TREASURY FOR OFAC
PASS DOC FOR BXA/CBC/SEEVARATNAM AND BROWN

E.O. 12958: DECL: XI, X5
TAGS: ETRD ETTC IT PARM ETTC IT PARM PREL PRELETRD
SUBJECT: ITALY MAY LET PHARMACEUTICAL COMPANY ENTER LIBYA
SECRET


PAGE 02 ROME 01748 01 OF 02 081729Z

REF: (A) STATE 57323 (B) 01 ROME 6495

CLASSIFIED BY: ECMIN MARGARET DEAN; REASONS 1.5 B/D,X5.


1. (S) SUMMARY. THE ITALIAN OFFICIAL CHAIRING AN
INTERMINISTERIAL LICENSING COMMITTEE IS "INCLINED TO SUPPORT"
THE APPLICATION OF AN ITALIAN PHARMACEUTICAL COMPANY FOR A
LICENSE TO CONTRACT WITH THE GOVERNMENT OF LIBYA TO REFURBISH
FACILITIES AT RABTA, LIBYA IN ORDER TO ALLOW THEIR PRODUCTION
OF MEDICINES. THE APPLICATION, FIRST SUBMITTED IN FEBRUARY
2002, WILL NEXT BE CONSIDERED AT THE COMMITTEE'S 16 APRIL
MEETING AND MAY BE READY FOR DISPOSITION IN MAY. PER REF A,
POST CONVEYED THE USG'S EXTREME CONCERN THAT LIBYA REMAINS
DETERMINED TO DEVELOP CHEMICAL AND BIOLOGICAL WEAPONS USING
JUST THIS KIND OF CIVILIAN COVER. MFA OFFICIALS, HOWEVER,
SEE THE CONTRACT -- PROBABLY SUPPORTED BY A PARALLEL
GOVERNMENT-TO-GOVERNMENT EXCHANGE OF LETTERS AND LIBYAN
ACCESSION TO THE CHEMICAL WEAPONS CONVENTION -- AS A MEANS OF
ENSURING THAT LIBYA USES RABTA ONLY FOR LICIT PURPOSES.
GIVEN MFA'S INCLINATION TO APPROVE THE APPLICATION, POST
ADVISES THAT A SERIOUS EFFORT TO DERAIL THE LICENSE WOULD
DEMAND VERY HIGH-LEVEL WASHINGTON ATTENTION. END SUMMARY.


2. (S) AS FORESEEN IN DECEMBER WHEN THE GOI FIRST ASKED FOR
THE USG'S POSITION, AN ITALIAN COMPANY, PHARMACHIM OF MILAN,
HAS APPLIED FOR A GOI LICENSE TO CONTRACT WITH THE GOVERNMENT
OF LIBYA TO REFURBISH CHEMICAL PRODUCTION FACILITIES AT
RABTA, ACCORDING TO MFA'S MIDDLE EAST DEPUTY DIRCTOR GENERAL
FRANCESCO CERULLI AND NONPROLIFERATION ISSUES COORDINATOR UGO
DEMOHR. DISPLAYING GENERAL FAMILIARITY WITH THE CASE,
SECRET

PAGE 03 ROME 01748 01 OF 02 081729Z
CERULLI RESPONDED TO ECONOFF'S MARCH 29 PRESENTATION OF REF A
DEMARCHE BY URGING WASHINGTON TO APPRECIATE THAT THE COMPANY
IS NOT APPLYING MERELY TO EXPORT CHEMICALS TO LIBYA (HE
DOUBTED THE GOI WOULD APPROVE SIMPLE EXPORTS) BUT WOULD

REMAIN IN LIBYA FOR TEN YEARS TO MANAGE THE PLANT, PRESENTING
AN ONGOING OPPORTUNITY FOR ITALY TO SHAPE AND MONITOR EVENTS.
HE DEFERRED TO DE MOHR, WHO CHAIRS THE INTERMINISTERIAL
COMMITTEE CHARGED WITH RULING ON THE APPLICATION, FOR
SPECIFICS OF THE STATUS OF THE CASE.


3. (S) IN AN APRIL 4 MEETING WITH ECONOFF, DE MOHR IDENTIFIED
THE COMPANY AS PHARMACHIM OF MILAN AND SAID ITS FEBRUARY 2002
APPLICATION TO CONTRACT WITH THE LIBYAN GOVERNMENT WOULD BE
CONSIDERED AT HIS COMMITTEE'S 16 APRIL MEETING. HE SAID
ITALY IS ABOUT TO CRIMINALIZE UNLICENSED DUAL USE TECHNOLOGY
TRANSFERS, EFFECTIVELY STRENGTHENING HIS COMMITTEE.
PHARMACHIM CANNOT EXPORT CHEMICALS TO LIBYA UNDER EXISTING
LAW AND SOON, HE EXPLAINED, WOULD BE UNABLE TO EXPORT
KNOW-HOW EITHER. THE COMPANY IS EXPECTED TO SUBMIT CERTAIN
SUPPLEMENTAL INFORMATION BY THE 16 APRIL MEETING AND DE MOHR
SPECULATED THE APPLICATION COULD BE RIPE FOR A COMMITTEE
RULING BY ITS MAY MEETING. HE SAID THAT NONE OF THE
COMMITTEE MEMBERS -- WHICH INCLUDE REPRESENTATIVES FROM THE
MINISTRIES OF DEFENSE, PRODUCTIVE ACTIVITIES, ECONOMY AND
FINANCE, THE DEPUTY MINISTRY OF FOREIGN TRADE, AND THE
ITALIAN INTELLIGENCE AGENCY -- HAS TO DATE INDICATED
PARTICULAR CONCERN ABOUT THE APPLICATION.


4. (S) DE MOHR AND CERULLI EXPLAINED HOW THE APPLICATION CAME
ABOUT AND OUTLINED SOME FACTORS TO BE CONSIDERED IN ITS
DISPOSITION. DE MOHR SAID THERE WAS NO FORMAL TENDER;
SECRET

PAGE 04 ROME 01748 01 OF 02 081729Z
RATHER, LIBYAN OFFICIALS APPROACHED PHARMACHIM AND THE
BRITISH COMPANY GLAXOSMITH TO GAUGE INTEREST. HE SUGGESTED
THAT THE COMMITTEE, IF OTHERWISE DISPOSED TO GRANT THE
APPLICATION, WOULD LIKELY INSIST THAT PHARMACHIM'S LICENSE BE
CONTINGENT UPON A GOVERNMENT-TO-GOVERNMENT EXCHANGE OF
LETTERS GUARANTEEING TO THE GOI THE RIGHT TO SEND INSPECTORS
FROM THE MINISTRY OF HEALTH AND ELSEWHERE TO RABTA THROUGHOUT
THE LIFE OF THE CONTRACT.


5. (S) CERULLI SAID THE GOI IS PUSHING HARD IN TRIPOLI FOR
LIBYA TO ACCEDE TO THE CHEMICAL WEAPONS CONVENTION AND
SUGGESTED THAT LIBYAN ACCESSION SHOULD ALLAY USG FEARS ABOUT
RABTA. DE MOHR INSISTED THAT LIBYA HAD AGREED TO SIGN THE
CWC, ALTHOUGH HE PREDICTED THAT THE RATIFICATION PROCESS
WOULD BE SLOW. HE SAID THAT LIBYAN ACCESSION TO THE CWC
WOULD BE A POSITIVE DEVELOPMENT BUT ADDED THAT THE COMMITTEE
WOULD VALUE MUCH MORE THE KIND OF BILATERAL INSPECTION
GUARANTEES LIBYA ACCEPTS. "AFTERALL," HE SAID, "CWC MEMBERS
HAVE BEEN KNOWN TO CHEAT."


6. (S) ECONOFF READ OR PARAPHRASED REFTEL TALKING POINTS TO
BOTH CERULLI AND DE MOHR IN THEIR ENTIRETY, EMPHASIZING USG
SKEPTICISM ABOUT ANY FORWARD MOVEMENT, NO MATTER HOW
CHARACTERIZED, ON CHEMICAL FACILITIES IN LIBYA AND ESPECIALLY
AT RABTA. TO DE MOHR, A PRIMARY GOI REPRESENTATIVE TO THE
AUSTRALIA GROUP, ECONOFF FLAGGED IN PARTICULAR THE TALKING

SECRET

SECRET PTQ8681

PAGE 01 ROME 01748 02 OF 02 081729Z
ACTION NP-00

INFO LOG-00 AID-00 AMAD-00 ACQ-00 CEA-01 CIAE-00 CIP-00
COME-00 CTME-00 DODE-00 DOEE-00 SRPP-00 DS-00 EB-00
EUR-00 EXIM-01 E-00 VC-00 FRB-00 HHS-01 H-01
TEDE-00 INR-00 ITC-01 LAB-01 L-00 VCE-00 AC-01
NEA-00 NRRC-00 NSAE-00 NSCE-00 OES-01 OMB-01 OPIC-01
PM-00 ACE-00 P-00 SCT-00 SP-00 SSO-00 SS-00
STR-00 T-00 USIE-00 BBG-00 SSD-00 PMB-00 DSCC-00
PRM-00 DRL-02 G-00 NFAT-00 SAS-00 /012W
-------------- 80CA93 081729Z /38
O 081638Z APR 02
FM AMEMBASSY ROME
TO SECSTATE WASHDC IMMEDIATE 3158
INFO AMEMBASSY LONDON IMMEDIATE
DEPT OF TREASURY WASHDC IMMEDIATE
AMCONSUL FLORENCE
AMCONSUL MILAN
AMCONSUL NAPLES

S E C R E T SECTION 02 OF 02 ROME 001748

SIPDIS

NP/CBM FOR ROE
TREASURY FOR OFAC
PASS DOC FOR BXA/CBC/SEEVARATNAM AND BROWN

E.O. 12958: DECL: XI, X5
TAGS: ETRD ETTC IT PARM ETTC IT PARM PREL PRELETRD
SUBJECT: ITALY MAY LET PHARMACEUTICAL COMPANY ENTER LIBYA
SECRET

PAGE 02 ROME 01748 02 OF 02 081729Z

POINT SUMMARIZING AG EVIDENCE THAT LIBYA HAS ALREADY
RESTARTED ITS CHEMICAL WEAPONS PROGRAM. AGREEING FULLY THAT
RABTA WAS IN THE PAST A CW FACILITY, DE MOHR ARGUED IN REPLY
THAT A GOI LICENSE TO PHARMACHIM COMBINED WITH A
GOVERNMENT-TO-GOVERNMENT AGREEMENT COULD LESSEN THE
LIKELIHOOD OF LIBYA REALIZING ANY LINGERING CW AMBITIONS.


7. (S) DE MOHR UNDERSTANDS THE LIBYANS HAVE GIVEN THE NOD TO
PHARMACHIM OVER GLAXOSMITH BUT ALSO HEARS THAT GLAXOSMITH,
ALREADY A DOMINANT PLAYER IN THE AFRICAN MARKET, HAS NOT
GIVEN UP. HIS COMMITTEE, THEREFORE, IS NOT INCLINED TO
LINGER OVER THE APPLICATION.


8. (S) COMMENT. THE ITALIANS ARE VERY WILLING TO DISCUSS
THIS MATTER WITH US. CERULLI WAS PIQUED THAT THE FORMAL USG
MESSAGE DID NOT ACKNOWLEDGE WHAT TO HIM ARE OBVIOUS
INTELLIGENCE ADVANTAGES IN ALLOWING PHARMACHIM TO PROCEED.
HIS RESPONSE, COMBINED WITH DE MOHR'S PRELIMINARY INCLINATION
TO SUPPORT THE APPLICATION, PERSUADE US THAT THE GOI WILL
VERY LIKELY APPROVE THIS APPLICATION. TO HAVE ANY PROSPECT
OF SUCCESS, A USG EFFORT TO DERAIL THE LICENSE WOULD HAVE TO
ORIGINATE AT A VERY HIGH USG LEVEL AND, ENGAGING THE GOI AT A
SIMILAR LEVEL, AND SPECIFICALLY ADDRESS THE GOI VIEW THAT
ITALIAN PARTICIPATION WOULD BE THE BEST WAY TO PREVENT USE OF
RABTA FOR ILLICIT B/CW PRODUCTION.
SEMBLER

SECRET

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2002ROME01748 - Classification: SECRET