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 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