ITALY'S ONGOING CONCERNS REGARDING U.S.

UNCLAS ROME 000731

SIPDIS


HHS FOR FDA - LUMPKIN, PLAISER, FRASER

E.O. 12958: N/A
TAGS: ETRD EAGR ECON IT EUN EXPORT CONTROLS
SUBJECT: ITALY'S ONGOING CONCERNS REGARDING U.S.
BIOTERRORISM ACT

REFTEL: 03 ROME 4872


1. Summary. GOI officials continue to raise concerns
about the U.S. Bioterrorism Act (BTA),in particular the
burden it places on Italian small- and medium-size
exporters, whose products make up a significant portion
of Italys food exports. Officials from three ministries
emphasized to Embassy officials in two meetings February
4 their close attention to the ongoing implementation of
BTA. In addition, Embassys DHS/Bureau of Immigration and
Customs Enforcement office has fielded numerous inquiries
s
from both exporters and shipping companies regarding the
potentially negative impact of BTA on their activity. The
GOI has requested additional seminars on BTA by
DHS/Bureau of Customs and Border Protection (DHS/BCBP)
officials in Italy to follow-up the successful seminars
held in Rome and Milan last October. End summary.


2. The Italian Agriculture Ministry called a meeting on
February 4, attended by MFA and Foreign Trade officials,
as well as Embassy Rome offices involved with outreach -
FAS and DHS/Bureau of Immigration and Customs Enforcement
(DHS/BICE). MinAg officials said that the BTA has placed
a heavy burden on SME exporters. Italys numerous small-
and medium-size food exporters are concerned about the
costs associated with contracting a U.S. agent. FAS
pointed out that the U.S. Government does not collect
fees associated with contracting for agents, and
suggested that Italian trade organizations might work out
ways to reduce such costs. The GOI also views the
application of the BTAs provisions to individuals
shipping items to relatives and friends in the U.S. as
excessively bureaucratic.


3. Italian exporters have also expressed to the GOI their
confusion regarding the timing of full implementation of
the BTA. Embassy explained that while the prior notice
provision became effective on Dec. 12, 2003, the U.S.
Food and Drug Administration had agreed to phase-in full
enforcement of the new rules by August 12, 2004.
Notwithstanding the current leniency on enforcement,
exporters should now make every effort to comply with the
rules. Repeat offenders are more likely to be subject to
penalties.


4. Officials of the MFAs Directorate General for
European Integration (which handles EU affairs) noted
that the BTAs provisions on records maintenance could be
seen as unduly interfering in an area beyond U.S.
jurisdiction, by imposing a traceability system on non-
U.S. entities. FAS suggested that governments in fact
ct
may require foreign producers to comply with certain food
safety standards in the production of foods to be
consumed by its citizens. FAS recalled the example of the
EU certified slaughter houses in the U.S., for the
production of meat to be exported to member states.


5. After answering other routine questions raised by the
GOI, FAS and DHS/BICE offered cooperation with GOI
authorities on future questions or clarification. The GOI
MinAg offered to put together a list of specific
questions that would be forwarded to FDA through US
Embassy Rome.


6. In a separate meeting February 4 with econoffs,
Ministry of Productive Activities - Foreign Trade
officials Sandro Fanella and Stefano Santacroce
underscored their ministrys continued close attention to
BTA implementation. Supporting Italian SMEs is a prime
concern of the Ministry, given these firms relatively
high importance (by EU standards) to the Italian export
sector. Such GOI support has been manifested for years
s
by its keen interest in expanding the protection of
geographic indications, also for the benefit primarily of
SME exporters.


7. DHS/BICE officials in Italy have registered a variety
of concerns about BTA from Italian exporters. Small
manufacturers have experienced difficulty because of the
language barrier (none of the instructions are available
in Italian),and are often unfamiliar with the processing


of electronic paperwork on the Internet, such as
obtaining prior notice confirmation numbers. We have
also heard complaints about U.S. law firms offering their
services as U.S. agents for exporters, often at great
expense. Some exporters are wary of disclosing business
confidential information to agents with whom they are

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largely unfamiliar. The Italian trade promotion agency
ICE (Istituto Commercio Estero) has attempted to help
Italian exporters in this regard by screening some of the
companies offering their services as agents, and by
making available to exporters a list of such agents.


8. Shipping/forwarding companies have also raised a
variety of concerns with us. Some are unsure about their
legal responsibility in case a shipment is rejected
(especially when such rejection or delay is due to
missing or incomplete information),as well as the costs
to be borne for a rejection or delay. A shipping company
could find itself responsible for the problems deriving
from a blocked shipment even if such problems are due to
another companys errors. Shippers worry they will bear
the brunt of security costs imposed on them by the BTA,
since security burdens are not equitably shared among the
various entities in the export chain. The
shipping/forwarding industry is highly competitive. With
the cost of retrieving information in Europe higher than
in many other parts of the world, European firms believe
theyre at a competitive disadvantage versus firms in
such places as Hong Kong.


9. Another major concern is the role and responsibility
y
of the U.S. agent. Many manufacturers complain that
having a single U.S. agent could discriminate against
exporters, since there are geographically distinct
distribution systems in the U.S., especially between the
east and west coasts. In addition, a manufacturer might
not want to disclose details of its sales practices to
different U.S. distributors.


10. Comment. Recent meetings have underscored the GOIs
attention, if belatedly, to the BTA and its potential
impact on Italian food exporters. Despite Embassys
outreach in the last year, the GOI until recently had not
substantively engaged the Embassy on its concerns
regarding BTA. Italian exporters, on the other hand,
have long sought information on BTA, as seen by their
heavy attendance at the two BTA seminars given by
DHS/BCBP last October. (Embassy would welcome additional
such seminars this year if possible). Given the GOIs
particular interest in protecting its small- and medium-
sized agricultural exporters (as evidenced by its strong
ng
stand on expanding protection of geographic indications),
we expect Italy would strongly support any EU-level
approaches to the U.S. on the trade implications of BTA
on European exporters. End comment.

Sembler


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2004ROME00731 - Classification: UNCLASSIFIED