ITALY: UPDATE ON OECD ANTI-BRIBERY CONVENTION

UNCLAS ROME 001809 SIPDIS SENSITIVE COMMERCE FOR TBARLOW; JUSTICE FOR ELEWIS, AARONOFF; TREASURY FOR PCLARK E.O. 12958: N/A TAGS: ETRD PGOV IT OECD SUBJECT: ITALY: UPDATE ON OECD ANTI-BRIBERY CONVENTION REF: SECSTATE 79413 ¶1. (U) THE FOLLOWING IS POST'S SUBMISSION FOR THE 2003 REPORT ON THE IMPLEMENTATION OF THE OECD ANTI-BRIBERY CONVENTION. -------------- ¶A. ENFORCEMENT -------------- ¶2. (SBU) TRANSPARENCY INTERNATIONAL (TI) TOLD CONSULATE MILAN THAT ITALIAN LAW ENFORCEMENT OFFICIALS ARE INVESTIGATING ITALIAN ENERGY COMPANY, ENEL, FOR PURPORTED BRIBING OF FOREIGN GOVERNMENT OFFICIALS IN THE MIDDLE EAST. ACCORDING TO MEDIA REPORTS, THOSE COUNTRIES ARE OMAN, QATAR AND THE UNITED ARAB EMIRATES. ENEL OFFICIALS CONFIRMED TO US THAT THE MILAN PROCURA (DISTRICT ATTORNEY) IS INVESTIGATING THE ENEL SUBSIDIARY, ENEL POWER, FOR ALLEGED BRIBES FOR A CONTRACT IN THE MIDDLE EAST. THE INVESTIGATION IS IN ITS PRELIMINARY PHASE AND INVOLVES PREVIOUS ENEL POWER MANAGEMENT. TI CONSIDERS THIS INVESTIGATION, THE FIRST OF ITS KIND IN ITALY, A SIGNIFICANT AND POSITIVE DEVELOPMENT. ¶3. (U) THE GOI IS STILL INVESTIGATING THE TELEKOM SERBIA CASE, WHICH DATES BACK TO 1997. ACCORDING TO PRESS REPORTS, STET (NOW TELECOM ITALIA AFTER ITS PRIVATIZATION) AND A GREEK COMPANY BOUGHT 49 PERCENT OF TELEKOM SERBIA, WITH STET'S SHARE (29 PERCENT) EQUAL TO ROUGHLY USD 500 MILLION. THE PRESS HAS ALLEGED THAT MILOSEVIC USED THESE FUNDS TO PAY SALARIES AND PENSIONS, WHEN ALL OTHER FINANCING WAS CLOSED TO HIM AND HIS REGIME, AND TO FINANCE HIS 1997 RE-ELECTION CAMPAIGN. FURTHER, ACCORDING TO THE MEDIA, PART OF THE MONEY WAS DEPOSITED INTO BANK ACCOUNTS IN THE U.K., AS A KICKBACK TO INTERMEDIARIES. THERE WERE ALSO ALLEGATIONS THAT THEN ITALIAN FOREIGN MINISTER DINI AND HIS FAMILY PROFITED PERSONALLY FROM THE DEAL. THE CASE REMAINS OPEN, BUT NO EVIDENCE OF WRONG-DOING HAS SURFACED. -------------- ¶B. DEFECTIVE IMPLEMENTING LEGISLATION -------------- ¶4. (U) ITALY DOES NOT PROVIDE FINANCIAL PENALTIES FOR PERSONS CONVICTED OF BRIBERY OFFENSES. THE ANTI-BRIBERY CONVENTION RECOMMENDS SUCH PENALTIES BUT DOES NOT REQUIRE THEM. -------------- ¶C. PROMOTING PUBLIC AWARENESS -------------- ¶5. (U) TRANSPARENCY INTERNATIONAL HAS PRAISED THE GOI'S EFFORTS IN PROMOTING PUBLIC AWARENESS ABOUT THE ANTI-BRIBERY CONVENTION AND ANTI-CORRUPTION EFFORTS IN GENERAL. GOI OFFICIALS OFTEN TAKE PART IN TI EVENTS AND SEMINARS. TI HAS SINGLED OUT LABOR MINISTER MARONI FOR HIS LEADERSHIP ON ANTI-CORRUPTION EFFORTS. THE MINISTRY OF FOREIGN AFFAIRS IS PROMOTING AWARENESS BY ISSUING INSTRUCTIONS TO ITALIAN EMBASSIES AND CONSULATES TO INFORM ITALIAN BUSINESSES OVERSEAS ABOUT THE OECD ANTI-BRIBERY CONVENTION. ¶6. (U) CONFINDUSTRIA, ITALY'S LARGEST BUSINESS ASSOCIATION, HAS BEEN A FREQUENT PARTICIPANT IN TI EVENTS AND SEMINARS. IN 2001, CONFINDUSTRIA UPDATED ITS CODE OF ETHICS, FIRST PROMULGATED IN 1991, TO REFLECT THE PRINCIPLES STATED IN THE OECD'S ANTI-BRIBERY CONVENTION. END CABLE TEXT KATHLEEN DOHERTY 04/22/2003 10:28:51 AM FROM DB/INBOX: KATHLEEN DOHERTY SEMBLER NNNN 2003ROME01809 - Classification: UNCLASSIFIED