PROMPTING BANKS TO COMPLY WITH UN RESOLUTION ON

UNCLAS ROME 005559

SIPDIS


DEPT FOR EB - SALOOM
TREASURY FOR ZARATE AND MURDEN

E.O. 12958: N/A
TAGS: ETTC IZ IT UNSC
SUBJECT: PROMPTING BANKS TO COMPLY WITH UN RESOLUTION ON
FROZEN IRAQI ASSETS

REF: ROME 05542


1. (SBU) AS FINANCE MINISTRY OFFICIALS INDICATED IN RESPONSE
TO OUR APPROACHES ON FROZEN IRAQI ASSETS, THE FINANCIAL
SECURITY COMMITTEE (FSC) DISCUSSED THIS ISSUE AT ITS DECEMBER
11 MEETING (REF A). IT WAS AGREED THAT SENIOR FINANCE AND
CENTRAL BANK OFFICIALS WILL CONTACT ITALIAN BANKS DIRECTLY TO
TRANSFER FROZEN IRAQI ASSETS TO THE DEVELOPMENT FUND FOR IRAQ
(DFI). ROBERTO CICIANI, SENIOR DIRECTOR, FINANCE MINISTRY,
TOLD ECONOFF ON DECEMBER 12 THAT THE CENTRAL BANK'S UFFICIO
ITALIANO DEI CAMBI HAS SENT OUT LETTERS TO BANKS REGARDING
THE OBLIGATION TO TRANSFER FUNDS TO THE DFI AS INDICATED IN
ANNEX THREE OF THE EU RESOLUTION PASSED LAST WEEK. THE FSC IS
CONFIDENT THAT THE BANKS WILL BE FORTHCOMING AND TRANSFER
FUNDS BY THE END OF THE MONTH.


2. (SBU) FINANCE SECRETARY GENERAL DOMENICO SINISCALCO WILL
ALSO SEND OUT LETTERS TO BANKS THAT SEEK REPAYMENT OF
OUTSTANDING CREDIT. THE LETTER WILL INSTRUCT BANKS TO COMPLY
- IMMEDIATELY -- WITH THE UN AND EU DIRECTIVES. BANKS THAT
CONTINUE TO SEEK ANY EXCEPTION MUST PRESENT THEIR CASE - WITH
ANY SUPPORTING LEGAL JUSTIFICATION - TO THE FINANCIAL
SECURITY COMMITTEE. CICIANI SAID THE FSC IS DECIDING WHAT
DEADLINE SHOULD BE ESTABLISHED FOR BANKS THAT SEEK A RULING
FROM THE FSC, BUT COMMENTED THAT THE DEADLINE WILL BE TIGHT.
THE FSC IS AWARE THAT UNDER UNSCR 1483, EXCEPTIONS ARE NARROW
IN SCOPE, AND WILL MAKE ITS RULING IN STRICT ACCORDANCE WITH
UNSCR 1483.


3. (SBU) THE FSC DID NOT IDENTIFY POSSIBLE PUNITIVE ACTIONS,
SHOULD THE BANKS NOT COMPLY, CICIANI STATED. COMMITTEE
MEMBERS WANTED TO SEE THE RESPONSE OF BANKS BEFORE DECIDING
UPON SUCH MEASURES.

SEMBLER


NNNN
2003ROME05559 - Classification: UNCLASSIFIED