SALE OF FAST BOATS TO IRAN

S E C R E T ROME 005717 SIPDIS NOFORN STATE FOR EUR/WE, EUR/PRA, NP/ECNP, INR/SPM, NEA/NGA, PM/RSAT E.O. 12958: DECL: 12/24/2013 TAGS: PARM ETTC PREL EIND IR IT EXPORT CONTROLS SUBJECT: SALE OF FAST BOATS TO IRAN REF: A. ROME 5680 ¶B. ROME 5552 ¶C. STATE 338477 ¶D. ROME 5202 AND PREVIOUS CLASSIFIED BY: ACTING ECONOMIC MINISTER KATHLEEN REDDY FOR REASONS 1.5 (A) (B) AND 1.6X6. ¶1. (S) FURTHER TO REF A, GABRIELE CHECCHIA, DIPLOMATIC ADVISOR TO PRODUCTIVE ACTIVITIES (INDUSTRY) MINISTER ANTONIO MARZANO, CALLED A/ECMIN TO REPORT THAT MINISTER MARZANO HAD SPOKEN WITH FOREIGN MINISTER FRATTINI ON THE MARGINS OF THE DECEMBER 23 COUNCIL OF MINISTERS' MEETING REGARDING THE EXPORT FROM ITALY OF FB DESIGN FAST BOATS TO IRAN. ¶2. (S) CHECCHIA REPORTED WHAT EMBASSY ALREADY KNEW FROM OTHER CHANNELS, THAT TWO BOATS HAD DEPARTED ITALY "A FEW WEEKS AGO." HE SAID THE GOI WAS TRYING TO HALT THE VENICE DEPARTURE OF A THIRD BOAT, BUT THAT ONLY FM FRATININI COULD DO THIS. A/ECMIN THEN CALLED GIANCARLO CURCIO, CHIEF OF STAFF TO MFA DIRECTOR GENERAL FOR ECONOMIC AFFAIRS MAGLIANO, TO FOLLOW UP. CURCIO SAID THE FM IN FACT DID NOT CURRENTLY HAVE AUTHORITY TO STOP FURTHER SHIPMENTS, AND THAT HE WOULD CALL CHECCHIA TO CLARIFY THAT POINT. ¶3. (S) CHECCHIA LATER CALLED A/ECMIN TO SAY THAT THE FM WILL TRANSMIT A LETTER TO THE FINANCE MINISTRY "IN THE NEXT DAYS" TO SEE IF THE GOI CAN BUY THE BOATS THAT HAVE NOT YET LEFT ITALY. (NOTE: WE UNDERSTAND IRAN HAD ORDERED FOUR FB DESIGN FAST BOATS.) CHECCHIA CONCEDED, HOWEVER, THAT THIS MAY NOT STOP THE VENICE SHIPMENT OF THE THIRD BOAT. HE REITERATED THAT THE GOI COULD NOT SEIZE THE BOATS BECAUSE THE FIRM MIGHT TAKE LEGAL ACTION AGAINST THE GOVERNMENT SINCE IT HAD NO LEGAL AUTHORITY TO SEIZE THEM. ¶4. (S) CHECCHIA ALSO SAID PRODUCTIVE ACTIVITIES MINISTER MARZANO WILL CALL A MEETING BY YEAR-END TO DISCUSS THE LEGAL OPTIONS AVAILABLE TO THE GOI. CHECCHIA DID NOT THINK, HOWEVER, THAT ALL MINISTRIES WOULD SUPPORT A DECREE LAW, BECAUSE FORBIDDING EXPORT OF THESE BOATS HAS ECONOMIC IMPLICATIONS FOR THE FIRM(S) INVOLVED AND FOR PERSONS EMPLOYED BY THOSE FIRMS. CHECCHIA SAID HE WOULD LIKE TO DISCUSS WITH US HOW TO ADDRESS THE ECONOMIC ASPECTS OF DENYING EXPORT RIGHTS TO THESE FIRMS. ¶5. (S) COMMENT. WE INTERPRET CHECCHIA'S LAST POINT THAT THE GOI WANTED TO DISCUSS WITH US "THE ECONOMIC ASPECTS OF DENYING EXPORT RIGHTS TO THESE FIRMS" AS A SUGGESTION THAT THE USG BUY THE BOATS OURSELVES TO PREVENT THEM GOING TO IRAN. THIS SUGGESTION AND THE GOI'S INTER-AGENCY CONFUSION REFLECT THE DISARRAY IN WHICH THE GOI FINDS ITSELF AS IT SEARCHES FOR A MEANS TO BLOCK SHIPMENTS WHICH ARE NOT BARRED BY ANY ITALIAN LAW. WE ARE NOT CONFIDENT THAT THE GOI WILL BE ABLE TO DRAFT, APPROVE, AND IMPLEMENT A NEW DECREE LAW IN TIME TO STOP THE SHIPMENT OF THE THIRD FB BOAT. NEVERTHELESS, WE BELIEVE WE SHOULD CONTINUE PUSHING THE GOI IN THAT DIRECTION, IF ONLY TO SET A PRECEDENT AND CREATE A LEGAL MECHANISM WHICH CAN BE EMPLOYED IN THE FUTURE. END COMMENT. SEMBLER NNNN 2003ROME05717 - Classification: SECRET