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