Identifier
Created
Classification
Origin
04ROME776
2004-03-01 09:20:00
SECRET//NOFORN
Embassy Rome
Cable title:  

ITALIAN MINISTRY TRIES TO BLOCK FUTURE FAST BOAT

Tags:  ETTC EIND PARM PREL IT IR EXPORT CONTROLS 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T ROME 000776 

SIPDIS


NOFORN

STATE FOR EUR/WE, EUR/PRA, NP/ECNP, INR/SPM, NEA/NGA,
PM/RSAT, PM/DTCP

E.O. 12958: DECL: 03/01/2014
TAGS: ETTC EIND PARM PREL IT IR EXPORT CONTROLS
SUBJECT: ITALIAN MINISTRY TRIES TO BLOCK FUTURE FAST BOAT
BUSINESS WITH IRAN

REF: ROME 254 AND PREVIOUS

Classified By: Economic Minister-Counselor Scott Kilner for reasons 1.5
(a) and (b) and 1.6 x6

S E C R E T ROME 000776

SIPDIS


NOFORN

STATE FOR EUR/WE, EUR/PRA, NP/ECNP, INR/SPM, NEA/NGA,
PM/RSAT, PM/DTCP

E.O. 12958: DECL: 03/01/2014
TAGS: ETTC EIND PARM PREL IT IR EXPORT CONTROLS
SUBJECT: ITALIAN MINISTRY TRIES TO BLOCK FUTURE FAST BOAT
BUSINESS WITH IRAN

REF: ROME 254 AND PREVIOUS

Classified By: Economic Minister-Counselor Scott Kilner for reasons 1.5
(a) and (b) and 1.6 x6


1. (S) SUMMARY: With FB Design's fast-boat contract with
Iran effectively fulfilled, the Italian Ministry of
Productive Activities has sent a stern letter to the company,
warning it to do no further business with Iran without formal
ministerial review. The legal force of the letter is
unclear, but it represents the first formal action the GOI
has taken to rein in FB Design's sales to Iran. END SUMMARY.



2. (S) On February 27, Gabrielle Checchia, Diplomatic
Advisor to Minister of Productive Activities (MPA - i.e.,
Industry and Foreign Trade) Marzano, met with Ecmin to
explain the latest steps the MPA has taken to address the
long-festering problem of fast-boat sales to Iran by the
Italian company Fabio Buzzi Design.


3. (S) According to Checchia, on February 26 two MPA
Directors General (Massimo Goti, DG for Productive
Development and Competitiveness, and Amadeo Teti, DG for
Commercial Agreements-Foreign Trade) co-signed and sent to FB
Design an official letter prohibiting the company from
exporting any additional high-speed boats to Iran. The letter
reportedly covers 12 different RIB and FIB fast boat models,
and -- importantly -- also explicitly prohibits the company
from providing technical assistance and components.


4. (S) In addition, Checchia stated that the letter tells FB
Design that it must submit all/all proposed future exports to
Iran to the MPA for Ministry review. This review, he added,
would consider not only specific elements of the contract
(end-user, level of technology, etc.),but also the political
context of the sale.


5. (S) Finally, Checchia stated that the letter pointedly
notes that a copy is being sent to Italian customs
authorities, which are being instructed to report to the MPA
any FB Design exports to Iran which come to their attention.


6. (S) In response to Ecmin's question regarding the legal
force of the MPA letter, Checchia admitted that it falls
short of a formal decree-law. While a decree-law had been
considered earlier (reftels),Checchia said the Ministry had
concluded that it would take too long to push through and
might not be possible at all. Nevertheless, Checchia
insisted vigorously that the instructions in the letter fall
fully within the competence of the co-signing directors
general and that the letter carries considerable weight.
"The company would be foolish to disregard it...They know
there would be consequences," Checchia stated.

--------------
COMMENT
--------------


7. (S) Embassy has no reason to doubt that Checchia has
provided a full and accurate description of the contents of
the MPA letter. Less clear, however, is how much leverage
the document would really give the MPA to move against FB
Design, should the company continue to flout government
pressure, as it has in the past. In this connection, we note
that the letter does not appear to represent a fully
coordinated GOI approach; Checchia stated only that the MFA
had been sent a copy. Nevertheless, the MPA letter
represents the first formal action of any kind that the GOI
has taken against FB Design in the roughly two years we have
been arguing over this issue.


8. (S) It is no accident, in our view, that the MPA has
waited to take this step until FB Design's existing contract
with Iran has effectively been fulfilled; moving against the
company to disrupt that contract, in the end, proved to be an


action that was too hard politically, and too tenuous
legally, for the GOI to take. However, now that FB Design
has fulfilled its contractual obligations, it does appear
that the MPA is making a concerted attempt to draw a red line
in front of FB Design, effectively telling the company: "We
let you complete your contract with Iran so you wouldn't
suffer any losses. But that's it -- no more." We must now
watch closely to see how FB Design reacts.
SEMBLER


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2004ROME00776 - Classification: SECRET