Identifier
Created
Classification
Origin
02ROME642
2002-02-08 16:26:00
UNCLASSIFIED
Embassy Rome
Cable title:  

JOINT STATE/COMMERCE REQUEST: INVESTIGATION OF POTENTIAL

Tags:  BEXP ECON EFIN ETRD AMGT IT 
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UNCLAS SECTION 01 OF 02 ROME 000642

SIPDIS

STATE FOR EB/ESP
USDOC FOR U/S LARSON AND U/S ALDONAS
INFO 3133/USCS/OIO/ESLETTEN/PBUCHER
4220/ITA/EUR/SED/DDEFALCO

E.O. 12958: N/A
TAGS: BEXP ECON EFIN ETRD AMGT ECON EFIN ETRD AMGT IT IT BEXP
SUBJECT: JOINT STATE/COMMERCE REQUEST: INVESTIGATION OF POTENTIAL
TRADE PROMOTION AND FINANCE BEST PRACTICES

REF: SECSTATE 210982

FOLLOWING ARE U.S. MISSION TO ITALY RESPONSES TO QUESTIONS POSED IN
REFTEL PARAGRAPH 12 ("ITALY").

UNCLASSIFIED

PAGE 02 ROME 00642 01 OF 02 081650Z
A) THE ISTITUTO NAZIONALE PER IL COMMERCIO ESTERO, OR ICE (ITALIAN
TRADE COMMISSION) WEBSITE PERMITS ONLINE USERS TO REGISTER AT NO COST
FOR THEIR NEW EXPORT CLUB SERVICE. ONCE REGISTERED, MEMBERS ARE ABLE
TO CONSULT, ONLINE GRATIS, PRELIMINARY INFORMATION ON TRADE LEADS,
INTERNATIONAL TENDERS, INTERNATIONAL FINANCING OPPORTUNITIES, AND
OTHER SUBJECTS OF INTEREST, BUT MUST PAY 1.5 EUROS OR 3 CREDITS OFF
THEIR SERVICE CARDS (DISCUSSED IN PART D) TO VIEW COMPLETE CONTACT
INFORMATION. INFORMATION ON THE SITE IS UPDATED CONSTANTLY AS NEW
LEADS ARRIVE. MEMBERS MAY ALSO REQUEST REGULAR NOTIFICATION OF
TENDERS, INTERNATIONAL FINANCING, AND PREVIEWS OF MAJOR PROJECTS IN
SPECIFIC AREAS OF THE WORLD, IN PARTICULAR, INDUSTRY SECTORS TO BE
SENT TO THEIR E-MAIL ADDRESS AS THEY BECOME KNOWN OR AS AN ANNUAL
SUBSCRIPTION. THE FEE SCHEDULE IS AS FOLLOWS: UP TO 10
COUNTRIES/INDUSTRY SECTORS, 50 EUROS (USD 45); FROM 10 TO 30
COUNTRIES/INDUSTRY SECTORS, 100 EUROS (USD 90); AND OVER 30
COMPANIES/INDUSTRY

SECTORS, 155 EUROS (USD 138). IT SHOULD BE NOTED THAT ICE'S FOCUS IS
ON SMALL- AND MEDIUM-SIZED ENTERPRISES (SMES). THUS, IT MAY DEAL WIT
MAJOR PROJECTS ONLY AS THEY RELATE TO SUBCONTRACTING.

PRIOR TO OCTOBER 2001, COMPLETE INFORMATION WAS AVAILABLE TO ANYONE
WHO CONSULTED THE WEBSITE. BECAUSE THE SERVICE IS NOW ORGANIZED IN A
DIFFERENT MANNER, IT IS NOT YET CLEAR HOW SUCCESSFUL THE INITIATIVE

IS. ICE IS ABLE TO TRACK THE NUMBER OF VISITS TO THE SITE, HOWEVER,
AS WELL AS THE NUMBER OF COMPANIES THAT REGISTER FOR EACH LEAD OR
TENDER. RESULTS WILL PROBABLY BE MADE PUBLIC IN THE FUTURE.

UNCLASSIFIED

PAGE 03 ROME 00642 01 OF 02 081650Z
B) THE SOCIETA ITALIANA PER LE IMPRESE ALL'ESTERO, OR SIMEST (ITALIAN
SOCIETY FOR OVERSEAS FIRMS),A SEPARATE ENTITY FROM ICE, IS THE
ITALIAN FINANCIAL INSTITUTION FOR THE DEVELOPMENT AND PROMOTION OF
ITALIAN BUSINESS ABROAD, IS A LIMITED LIABILITY COMPANY CONTROLLED BY
THE MINISTRY FOR FOREIGN TRADE. ITS SHAREHOLDERS INCLUDE BANKS,
BUSINESSES AND TRADE ASSOCIATIONS.

UNDER A MARKET PENETRATION PROGRAM, SIMEST ASSISTS ITALIAN COMPANIES
IN ESTABLISHING A PERMANENT PRESENCE AND PROMOTES MARKETING ACTIVITIE
IN NON-EU MARKETS. FINANCING IS AVAILABLE FOR PERMANENT FACILITIES
SUCH AS REPRESENTATIVE OFFICES, SALES OUTLETS AND NETWORKS, CUSTOMER
ASSISTANCE CENTERS, WAREHOUSES, DEPOSITS, AND SHOWROOMS. PROGRAMS FO
THE STRENGTHENING OF EXISTING STRUCTURES ARE ALSO ELIGIBLE. PROJECT
MUST BE IMPLEMENTED WITHIN TWO YEARS.

TYPES OF EXPENSES THAT MAY BE COVERED INCLUDE SETTING UP AND
MAINTAINING REPRESENTATIVE OFFICES, CONDUCTING MARKET RESEARCH,
PROMOTIONS, ADVERTISING AND DEMONSTRATIONS, AND CUSTOMER SERVICE
ACTIVITIES. IN CASES WHERE FINANCING IS REQUESTED TO IMPROVE OR
ENLARGE EXISTING FACILITIES, THE PROJECT IS ELIGIBLE WHERE THERE IS A
SUBSTANTIAL INCREASE IN COST FOR PERMANENT STRUCTURES AND/OR NEW
STAFF.

FINANCING COVERS UP TO 85 PERCENT OF THE COMPANY'S PROJECT EXPENSES,
MILLION EUROS (ABOUT USD 1.8 MILLION),OR 3 MILLION EUROS IN THE CASE
OF A CONSORTIUM OF SMES THAT IS IMPLEMENTING THE PROJECT DIRECTLY.
THE REPAYMENT PERIOD MUST NOT EXCEED SEVEN YEARS FROM THE DATE THE
LOAN CONTRACT IS SIGNED. COMPANIES THAT HAVE BEEN APPROVED FOR
FINANCING HAVE 2 YEARS TO MEET THEIR PROPOSAL TARGET AND PAY ONLY
INTEREST DURING THAT TIME.

UNCLASSIFIED

PAGE 04 ROME 00642 01 OF 02 081650Z
FINANCING IS AVAILABLE ONLY FOR COUNTRIES NOT BELONGING TO THE
EUROPEAN UNION. GENERALLY, A PROJECT IS PROPOSED FOR ONE ECONOMIC
REGION AND LIMITED TO 2 COUNTRIES IN THAT REGION. A COMPANY MAY
RECEIVE FINANCING FOR ONLY ONE PROJECT AT A TIME.

THE INTEREST RATE IS FIXED FOR THE DURATION OF FINANCING AND IS EQUAL
TO 40 PERCENT OF THE REFERENCE RATE (FOR EXPORT CREDIT TRANSACTIONS
WITH FUNDS RAISED DOMESTICALLY AT VARIABLE RATES) IN FORCE AT THE TIM
THE CONTRACT IS SIGNED.

AT THE TIME OF APPLICATION, THE REQUESTING FIRM MUST SUPPLY FINANCIAL
STATEMENTS AND RELATIVE DOCUMENTATION FOR THE LAST THREE YEARS ALONG
WITH THEIR APPLICATION AND SUMMARY DESCRIPTION OF THE FIRM. IN
ADDITION, THE COMPANY MUST SUBMIT A PROJECT REPORT DESCRIBING ITS
BUSINESS PLAN, OBJECTIVES, MANNER OF IMPLEMENTATION, TOGETHER WITH
BUDGET INFORMATION DESCRIBING ALL FORESEEN EXPENDITURES.

SIMEST ALSO EXPLORES PARTNERSHIP AND INVESTMENT OPPORTUNITIES FOR
ITALIAN COMPANIES. UNDER THE BUSINESS SCOUTING PROGRAM, SIMEST
REGULARLY MONITORS LOCAL INVESTMENT OPPORTUNITIES AS WELL AS POTENTIA

UNCLASSIFIED

UNCLASSIFIED PTQ1495

PAGE 01 ROME 00642 02 OF 02 081650Z
ACTION SSO-00

INFO LOG-00 ANHR-00 EB-00 E-00 TEDE-00 SS-00 TEST-00
SAS-00 /000W
-------------- 6431AD 081650Z /38
R 081626Z FEB 02
FM AMEMBASSY ROME
TO SECSTATE WASHDC 2046
INFO USDOC WASHDC
AMCONSUL MILAN
USEU BRUSSELS 2544

UNCLAS SECTION 02 OF 02 ROME 000642

SIPDIS

STATE FOR EB/ESP
USDOC FOR U/S LARSON AND U/S ALDONAS
INFO 3133/USCS/OIO/ESLETTEN/PBUCHER
4220/ITA/EUR/SED/DDEFALCO

E.O. 12958: N/A
TAGS: BEXP ECON EFIN ETRD AMGT ECON EFIN ETRD AMGT IT IT BEXP
SUBJECT: JOINT STATE/COMMERCE REQUEST: INVESTIGATION OF POTENTIAL
TRADE PROMOTION AND FINANCE BEST PRACTICES

ACQUISITIONS IN SEVERAL COUNTRIES. SIMEST ALSO UNDERTAKES SPECIAL
CUSTOMIZED SEARCHES FOR POTENTIAL PARTNERS OR PROJECTS ON BEHALF OF
ITALIAN COMPANIES.

C) ORIGINALLY, THERE WAS AN ICE SUBSCRIPTION SERVICE FOR 400.000
UNCLASSIFIED

PAGE 02 ROME 00642 02 OF 02 081650Z
ITALIAN LIRE (ABOUT USD 200) THAT ENTITLED SUBSCRIBERS TO A 30 PERCEN
DISCOUNT ON ALL SERVICES. THERE WAS NO CHARGE FOR REPORTS, STUDIES
AND STATISTICS, ONLY FOR ASSISTED SERVICES.

THE ARE TWO TYPES OF ASSISTED SERVICES: SPECIALIZED AND PERSONALIZED
ALTHOUGH THESE NAMES ARE CONSIDERED AMBIGUOUS AND WILL PROBABLY CHANG
IN THE FUTURE. SPECIALIZED SERVICES ARE DOCUMENTS, STUDIES, AND
CONSULTATIONS THAT ARE SOLD AT FIXED PRICES. PERSONALIZED SERVICE
PRICES ARE ESTIMATED BASED ON PERSONNEL-HOURS AND COUNTRY.

ICE HAS DEVELOPED A LIST OF CITIES WHERE IT HAS OFFICES, DEFINING
THESE CITIES AS BEING IN DEVELOPING, NEWLY INDUSTRIALIZED, AND
INDUSTRIALIZED COUNTRIES. WHEN ICE WAS QUESTIONED ON HOW THE CRITERI
FOR THESE CATEGORIES WERE DETERMINED, IT INDICATED THAT THERE WAS NO
HARD AND FAST RULE. SOME OF THESE ARE FAIRLY OBVIOUS, BUT OTHERS SEE
RATHER ARBITRARY. MONTREAL AND AMSTERDAM ARE ON THE "NEWLY
INDUSTRIALIZED LIST," FOR EXAMPLE. IT SEEMS THAT, BECAUSE THE LISTS
ARE USED TO CALCULATE COSTS, COST OF LIVING IS THE BOTTOM LINE. COST
PER PERSON/DAY FOR ICE SERVICES IS AS FOLLOWS: IN DEVELOPING
COUNTRIES, 260 EUROS (ABOUT 260 USD); IN NEWLY INDUSTRIALIZED
COUNTRIES, 300 EUROS (ABOUT 300 USD); AND IN INDUSTRIALIZED COUNTRIES
360 EUROS (ABOUT USD). SERVICES IN COUNTRIES NOT ON THE LIST HAVE TH
SAME COST AS THEIR SO-CALLED COUNTRY OF JURISDICTION.

THE DOWNSIDE OF CHARGING FOR PRODUCTS THAT ONCE WERE FREE OF CHARGE,
ICE OFFICIALS SAY, IS THE DECREASE IN DEMAND FOR THESE PRODUCTS.
HOWEVER, THESE PRODUCTS ARE VIEWED AS A NEW SOURCE OF REVENUE, WHICH,
IT IS HOPED, WILL INCREASE OVER TIME. BECAUSE THE PROGRAM IS STILL
QUITE NEW, IT IS DIFFICULT TO GAUGE SUCCESS AT THIS TIME.

ICE IS NOT ENGAGED IN SERIOUS COST-RECOVERY (ALTHOUGH IT HAS TAKEN
UNCLASSIFIED

PAGE 03 ROME 00642 02 OF 02 081650Z
LIMITED STEPS TO CHARGE FEES IN PROPORTION TO COST). COST-RECOVERY I
NOT THE MAJOR CONCERN TO THE GOI THAT IT IS TO THE USG IN SUCH AREAS.
IT IS DIFFICULT FOR ICE TO DO A ROBUST COST/BENEFIT ANALYSIS OF ITS
SERVICES, FOR LAST YEAR'S PRIVACY LAW ALLOWS IT ACCESS ONLY TO
AGGREGATE DATA RATHER THAN TO INFORMATION REGARDING PARTICULAR
TRANSACTIONS THAT MIGHT FLOW FROM, FOR EXAMPLE, AN ICE TRADE SHOW.

D) THE ICE PRE-PAID "SERVICE CARD" IS AVAILABLE IN THREE CATEGORIES
AND IS VALID FOR ONE YEAR FROM THE DATE OF ISSUE. EACH LEVEL IS WORT
A CERTAIN NUMBER OF POINTS THAT CAN BE USED TO PURCHASE ON-LINE
SERVICES (TRADE LEADS, INFORMATION ON TENDERS, PURCHASE OF STUDIES,
DOCUMENTS, AND STATISTICS) AND OFFERS DISCOUNTS ON PERSONALIZED
SERVICES AT ANY OF THE ICE OFFICES THROUGHOUT THE WORLD. THE BASIC
LEVEL IS WORTH 250 POINTS, OFFERS A 10 PERCENT DISCOUNT, AND COSTS 13
EUROS (ABOUT USD 125). SUPER IS WORTH 500 POINTS, OFFERS A 15 PERCEN
DISCOUNT, AND COSTS 230 EUROS (ABOUT USD 220). GLOBAL IS WORTH 1000
POINTS, OFFERS A 25 PERCENT DISCOUNT, AND COSTS 400 EUROS (ABOUT USD
380).

CARDS CAN BE OBTAINED ONLINE USING A CREDIT CARD OR BY MAILING OR
FAXING THE REQUEST FORM TO ICE'S OFFICE. CUSTOMERS CAN PURCHASE
DOCUMENTS AND REPORTS ONLINE OR MAY REQUEST BOUND COPIES OF THESE
MATERIALS FROM ICE FOR A HIGHER PRICE. THE PROGRAM IS STILL NEW
(INITIATED IN OCTOBER 2001),BUT IT SEEMS THAT FORMER SUBSCRIPTION
HOLDERS ARE BUYING THE CARDS. ICE WILL HAVE A BETTER IDEA IN THE
FUTURE AS TO WHETHER THE NEW PROGRAM HAS DRAWN NEW CUSTOMERS.

(ORIGIN: FCS ROME/ECOLOMBO/BMCCLEARY)
SEMBLER

UNCLASSIFIED

PAGE 04 ROME 00642 02 OF 02 081650Z

UNCLASSIFIED

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2002ROME00642 - Classification: UNCLASSIFIED