ITALY ON LIBYA: RABTA GATHERS STEAM

S E C R E T ROME 003067

SIPDIS

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

E.O. 12958: DECL: X1, X5
TAGS: PREL ETRD ETTC PARM ITALY'>IT SECRET PAGE ROME
SUBJECT: ITALY ON LIBYA: RABTA GATHERS STEAM

REF: (A) ROME 1748 (B) STATE 57323

CLASSIFIED BY: A/DCM MARGARET DEAN; REASONS 1.5 B/D, X1, X5


1. (S) SUMMARY. HAVING VETTED THE MATTER THROUGH
INTELLIGENCE CHANNELS TO ITS SATISFACTION, THE GOI HAS
RESUMED CONSIDERATION OF THE APPLICATION OF AN ITALIAN
PHARMACEUTICAL COMPANY TO CONTRACT WITH THE GOVERNMENT OF
LIBYA TO REFURBISH CHEMICAL FACILITIES AT RABTA TO ALLOW FOR
THE PRODUCTION OF MEDICINES, MFA'S NONPROLIFERATION
COORDINATOR SAID ON JUNE 14. A DRAFT ITALY-LIBYA MEMORANDUM
OF UNDERSTANDING WILL BE INTRODUCED TO AN INTERMINISTERIAL
DUAL USE EXPORTS COMMITTEE CHAIRED BY MFA ON JUNE 21 AND,
THEREAFTER, ANY CHANGES TO THE RABTA CONTRACT NECESSARY TO
COMPORT WITH THE MOU WILL BE MADE. MFA EXPECTS THE
APPLICATION TO BE READY FOR APPROVAL AT THE JULY MEETING OF
THE COMMITTEE. A BRITISH COMPANY CONTINUES TO COMPETE FOR
THE CONTRACT AS WELL. MFA RECENTLY HAD THE ITALIAN
AMBASSADOR TO WASHINGTON VISIT THE DEPARTMENT IN ORDER TO
REACTIVATE A DIRECT COMMUNICATION CHANNEL ON RABTA. END
SUMMARY.


2. (S) AN ITALIAN PHARMACEUTICAL COMPANY, PHARMACHIM OF
MILAN, CONTINUES TO PUSH THE GOI FOR LEAVE TO CONTRACT WITH
THE GOVERNMENT OF LIBYA TO REFURBISH CHEMICAL PRODUCTION
FACILITIES AT RABTA, MFA'S NONPROLIFERATION ISSUES
COORDINATOR UGO DE MOHR TOLD ECONOFF ON JUNE 14. DE MOHR
SAID ITALIAN INTELLIGENCE SERVICES HAVE COMPLETED REVIEW OF
THE CASE AND RETURNED THE FILE TO THE INTERMINISTERIAL DUAL
SECRET

PAGE 03 ROME 03067 211833Z
USE EXPORT CONTROLS COMMITTEE HE CHAIRS. THE APPLICATION IS
ON THE COMMITTEE'S AGENDA FOR ITS JUNE 21 MEETING. DE MOHR
SAID HE WILL PRESENT AT THE MEETING A DRAFT GOI-GOL
MEMORANDUM OF UNDERSTANDING REGARDING TERMS AND CONDITIONS
FOR THE VENTURE -- TO INCLUDE REGULAR GOI INSPECTION OF
FACILITIES AND VERIFIABLE DESTRUCTION OF "NONRELEVANT" RABTA
FACILITIES.


3. (S) DE MOHR EXPECTS THE MOU, WHEN FINALIZED WITH THE
LIBYANS, WILL NECESSITATE CONFORMING CHANGES IN THE
PHARMACHIM-GOL CONTRACT. HE BELIEVES THAT, BARRING
UNFORESEEN DELAYS, THE MOU/CONTRACT PACKAGE SHOULD BE READY
FOR A COMMITTEE VOTE AT ITS JULY MEETING (DATE NOT YET SET).


4. (S) DE MOHR SAID THE BRITISH COMPANY GLAXOSMITH CONTINUES
TO PURSUE THE LIBYAN CONTRACT. HE DECLINED TO REITERATE THE
CONFIDENCE HE EXPRESSED REF A THAT PHARMACHIM HAD BEEN GIVEN
THE INSIDE TRACK BY THE LIBYANS. HE MENTIONED THAT AN
UNNAMED COMPANY FROM THE BALKANS HAS ALSO RECENTLY ENTERED
THE RABTA COMPETITION. HE ADDED THAT ITALIAN INTELLIGENCE
OFFICIALS HAD RECEIVED ASSURANCES FROM THEIR BRITISH
COUNTERPARTS THAT ANY UK BLESSING OF A GOL AWARD TO
GLAXOSMITH WOULD BE CONDITIONED ON A GOVERNMENT-TO-GOVERNMENT
MOU SIMILAR TO THE ONE BEING DRAFTED BY THE GOI.


5. (S) FINALLY, DE MOHR SAID THE GOI HAD RECENTLY INSTRUCTED
ITALIAN AMBASSADOR TO THE U.S. FERDINAND SALLEO TO VISIT THE
DEPARTMENT TO DISCUSS RABTA. DE MOHR'S CHARACTERIZED
SALLEO'S VISIT AS A REACTIVATION OF A DIRECT COMMUNICATION
CHANNEL ON THE CASE FOLLOWING ITS REVIEW BY ITALIAN
INTELLIGENCE.
SECRET

PAGE 04 ROME 03067 211833Z
SEMBLER

SECRET

>
2002ROME03067 - Classification: SECRET