ITALY: UPDATE ON RETURNING FROZEN IRAQI ASSETS

UNCLAS ROME 003518 SIPDIS SENSITIVE EB/ABORG/BFITZGERALD AND NEA/NGA TREASURY: WMURDEN NSC: GPETERS E.O. 12958: N/A TAGS: EFIN ETTC PREF SUBJECT: ITALY: UPDATE ON RETURNING FROZEN IRAQI ASSETS REF: SECSTATE 217437 ¶1. (SBU) ITALY HAS NOT YET TRANSFERRED ANY OF ITS ESTIMATED USD98 MILLION IN FROZEN IRAQI ASSETS TO THE DEVELOPMENT FUND FOR IRAQ, ACCORDING TO GIUSEPPE MARESCA, DIRECTOR GENERAL, FINANCE MINISTRY. WHILE ACKNOWLEDGING THE ACUTE FUNDING NEED OF THE IRAQI GOVERNMENT, MARESCA SAID THAT THE INTERNAL REVIEW OF THE TOTAL AMOUNT OF IRAQI ASSETS IN ITALY AND OF OUTSTANDING LEGAL CLAIMS AGAINST THEM IS STILL UNDERWAY. ¶2. (SBU) THE FINANCE MINISTRY HAS PRESSED THE UFFICIO ITALIANO DEI CAMBI (UIC),ITALY'S FINANCIAL INTELLIGENCE UNIT, TO LEAN ON FINANCIAL INSTITUTIONS TO ISSUE FINAL REPORTS ON AMOUNTS THEY HOLD AND ANY POSSIBLE CLAIMS AGAINST THEM. THE FINANCE MINISTRY HOPES TO HAVE INFORMATION FROM THE UIC BY THE END OF THE WEEK, BUT MARESCA ADMITTED, THE START OF THE SUMMER VACATION MIGHT DELAY BOTH THE FINANCIAL INSTITUTIONS' REPORTING AND SUBSEQUENT ACTION BY THE UIC. (NOTE: ITALY EFFECTIVELY SHUTS DOWN, STARTING FROM THIS WEEK TO AFTER FERRAGOSTO, AUGUST 15TH. END NOTE) FINANCE MINISTRY OFFICIALS CONCUR WITH THE U.S. UNDERSTANDING THAT CLAIMS AGAINST THESE FUNDS SHOULD HAVE RECEIVED A FINAL LEGAL JUDGMENT TO BE CONSIDERED STILL VALID. HOWEVER, MARESCA NOTED, PROPER DUE DILIGENCE WOULD LIKELY REQUIRE AT LEAST A REVIEW, EVEN IF CURSORY, OF THE OUTSTANDING CLAIMS BY COMPETENT AUTHORITIES. SEMBLER NNNN 2003ROME03518 - Classification: UNCLASSIFIED