USING SOME OF IRAQ'S FROZEN ASSETS IN ITALY

C O N F I D E N T I A L ROME 002728 SIPDIS E.O. 12958: DECL: 06/17/2013 TAGS: PREL ECON EFIN IZ IT IRAQI FREEDOM SUBJECT: USING SOME OF IRAQ'S FROZEN ASSETS IN ITALY REF: A. ROME 1344 ¶B. SECSTATE 126507 ¶C. HQCOALITION 6101344 CLASSIFIED BY: ACTING POL MC JOHN BASS FOR REASONS 1.5 (B) AND (D) ¶1. (C) ON JUNE 12, LUIGI MACCOTTA, THE MFA'S OFFICE DIRECTOR FOR IRAQ, ASKED TO MEET WITH POL NEA WATCHER TO DISCUSS THE COST OF MAINTAINING THE TWO "IRAQI" WARSHIPS KEPT IN THE ITALIAN PORT OF LA SPEZIA. (NOTE: IN THE MID-1980S, FINCANTIERI, A GOI-CONTROLLED SHIPYARD COMPANY, BUILT FOUR LUPO FRIGATES (SMALL WARSHIPS) FOR THE SADDAM GOVERNMENT. THESE FRIGATES WERE NEVER DELIVERED BECAUSE OF THE IRAQ/IRAN WAR AND THEN THE UN EMBARGO (REF A). TWO OF THESE FRIGATES, PARTIALLY PAID FOR BY THE IRAQIS, REMAIN AT LA SPEZIA. POST HAS NO INFORMATION ON THE WHEREABOUTS OF THE OTHER TWO SHIPS. END NOTE). THE COST OF MAINTAINING THESE TWO SHIPS, ACCORDING TO MACCOTTA, IS $2 MILLION/YEAR, WHICH THE GOI HAS BEEN PAYING SO FAR. ¶2. (C) SINCE THE GOI DOES NOT WISH TO CONTINUE TO PAY FOR THE MAINTENANCE OF THESE IRAQI SHIPS, SAID MACCOTTA, THE MFA SUBMITTED A PROPOSAL FOR POLITICAL APPROVAL BY WHICH ITALY WOULD USE FROZEN IRAQI ASSETS TO PAY FOR THE MAINTENANCE OF THE FRIGATES, AS WELL AS THE EXPENSES OF THE IRAQI INTEREST SECTION IN ROME, IN ACCORDANCE WITH UN RESOLUTION 1483, PARAGRAPH 23, SECTION B. MACCOTTA EXPECTED THIS PROPOSAL TO BE APPROVED AT THE POLITICAL LEVEL SOON. ¶3. (C) ON THE TOPIC OF IRAQI CHIEFS OF MISSION RETURNING TO THE MFA IN BAGHDAD (REF B),MACCOTTA SAID THAT THE IRAQI CHARGE D'AFFAIRES IN ITALY, FARIS ALI AL SHOKER, HAS NOT BEEN ASKED TO RETURN TO THE IRAQI MFA (CONFIRMED BY REF C) SINCE HE IS ONLY A FIRST SECRETARY AND IS NOT A CHIEF OF MISSION. MACCOTTA SAID THAT AL SHOKER IS NOT "ONE OF THE BAD GUYS." THE PLAN, SAID MACCOTTA, WOULD BE FOR THE GOI TO RELEASE FUNDS FROM THE IRAQI FROZEN ASSETS TO AL SHOKER, WHO WOULD IN TURN PAY FOR MAINTENANCE OF THE SHIPS AND THE EXPENSES OF THE IRAQI INTEREST SECTION IN ROME. SEMBLER NNNN 2003ROME02728 - Classification: CONFIDENTIAL