ITALY: UPDATE ON TRANSFER OF IRAQI ASSETS

UNCLAS ROME 000227 SIPDIS SENSITIVE DEPT FOR EB - SALOOM TREASURY FOR ZARATE AND MURDEN E.O. 12958: N/A TAGS: ETTC IZ IT IRAQI FREEDOM SUBJECT: ITALY: UPDATE ON TRANSFER OF IRAQI ASSETS REF: A. 03 SECSTATE 346682 ¶B. 03 ROME 5559 ¶C. 03 ROME 5542 ¶1. (U) THIS IS AN ACTION REQUEST. SEE PARAGRAPH FOUR. ¶2. (SBU) FINANCE MINISTRY OFFICIALS CONFIRMED THAT APPROXIMATELY ONE MILLION DOLLARS WERE UNFROZEN AND TRANSFERRED TO THE DEVELOPMENT FUND FOR IRAQ (DFI) ON DECEMBER 18. ACCORDING TO ROBERTO CICIANI, DIRECTOR OF THE OFFICE OF MONEY-LAUNDERING AND FINANCIAL CRIMES (WHICH HAS JURISDICTION OVER IRAQI ASSETS FOR THE FINANCE MINISTRY), UNICREDITO BANK MADE TWO TRANSFERS, ONE IN DOLLAR AMOUNT OF 971,514; THE SECOND IN EURO AMOUNT OF 2,234. THE TOTAL AMOUNT OF IRAQI ASSETS IN ITALY UNFROZEN AND TRANSFERRED TO THE DFI SO FAR IS USD 2,194,929 AND EURO 2,234, ACCORDING TO FINANCE MINISTRY RECORDS. CICIANI ACKNOWLEDGED THAT THE UNFREEZING AND TRANSFER OF ASSETS REMAINS SLOW, BUT THE GOI - THE FINANCE MINISTRY AND UFFICIO ITALIANO DEI CAMBI (UIC) IN PARTICULAR - CONTINUE TO DISCUSS WAYS TO PROMPT BANKS TO COMPLY FASTER. HE EXPRESSED APPRECIATION FOR THE INFORMATION CONTAINED IN REF A, WHICH WAS GIVEN TO HIM ON JANUARY 7TH, AND SAID THAT THE UIC IS DOING A SIDE-BY-SIDE COMPARISON WITH ITS LISTS OF IRAQI ASSETS IN ITALY. ¶3. (SBU) FOLLOWING UP ON DISCUSSIONS BETWEEN THE DEPUTY CHIEF OF MISSION AND THE UIC'S SECRETARY GENERAL CARLO SANTINI (REF B),EMBASSY ECONOMIC MINISTER COUNSELOR SENT A LETTER TO SANTINI ON JANUARY 20, URGING GREATER GOVERNMENT ACTION TO ENCOURAGE BANK COMPLIANCE WITH UNSCR OBLIGATIONS. WE ALSO SHARED DIRECTLY WITH THE SECRETARY GENERAL THE LIST CONTAINED IN REF A. THE FINANCE MINISTRY HAD EARLIER TRANSMITTED THIS LIST TO LOWER-LEVEL UIC OFFICIALS. ¶4. (SBU) COMMENT AND ACTION REQUEST: POST IS CONCERNED THAT THE GOI IS FOCUSING ONLY ON BANKS THAT HAD DELAYED TRANSFERRING FUNDS UNTIL PASSAGE OF A SECONDARY EU DIRECTIVE. THE GOI APPEARS LESS VIGOROUS IN PRESSING BANKS THAT SEEK REPAYMENT OF CREDIT TO THE FORMER IRAQI REGIME, WHICH AMOUNT TO APPROXIMATELY USD 50 MILLION. THIS IS DESPITE THE GOI'S STATED POSITION, CONSISTENT WITH U.S. POLICY, THAT CLAIMS MUST HAVE RECEIVED A FORMAL LEGAL JUDGMENT PRIOR TO MAY 2003 TO BE CONSIDERED VALID. EMBASSY WOULD APPRECIATE ADDITIONAL TALKING POINTS THE DEPARTMENT COULD PROVIDE ON UNSCR OBLIGATIONS REGARDING THE HANDLING OF PRIOR CLAIMS. END COMMENT AND ACTION REQUEST. SEMBLER NNNN 2004ROME00227 - Classification: UNCLASSIFIED