U.S. Terror Victims Accuse Italy of Siding with

UNCLAS ROME 004182

SIPDIS

DEPT FOR EUR/WE, EUR/ERA, EB/IFB/OMA
DEPT PLEASE PASS TO CEA
PARIS PLEASE PASS TO USOECD
TREAS PLEASE PASS TO HULL
USDOC 4212/ITA/MAC/OEURA/CPD/DDEFALCO

SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: ECON EFIN PGOV IR IT KPRP ANTITERRORISM FORCE PROTECTION
SUBJECT: U.S. Terror Victims Accuse Italy of Siding with
Iran


1. Lawyers of the families of three U.S. victims of Hamas
terrorist attacks in Israel in 1995 and 1996, to whom a U.S.
Court in 2003 awarded USD 523 million in damages against
Iran, have accused Italy of siding with Iran in the legal
battle to collect damages from Iran's assets here. The
lawyers, targeting Iran because of its alleged support of
Palestinian militant groups, have asked the Rome Court to
freeze a Banca Nazionale del Lavoro (BNL) account in Rome,
held by the Iranian Embassy. The Court has agreed.


2. Following the Iranian Embassy's formal protest November
10, the MFA reminded the Court that the Vienna Convention
protects embassies from such action, and that the Court must
uphold international agreements. However, in a December 9
statement, the MFA said the letter was "only procedural,"
and that Foreign Minister Fini hoped "justice will take its
course and families are compensated in accordance with
international law." On December 13, Iran threatened that
should the asset freeze continue, Iran would release
"evidence of Italian support to Saddam Hussein's regime."


3. At a December 20 Court hearing, lawyers for Italy and
Iran raised procedural objections to freezing the accounts
and maintained that sovereign nation assets enjoy immunity
from national laws. Lawyers of the U.S. victim families now
reportedly accuse Italy of siding with Iran. The Rome Court
is expected to rule on the objections in January.


4. Comment: The Rome Court's decision could set a precedent
to open similar suits in other countries, who are also
Vienna Convention signatories. Italy has traditionally had
good relations with Tehran, is Iran's biggest trading
partner in Europe, and has large investments in Iran's gas
market through the Italian oil and gas giant ENI. That
said, the Italian government strongly condemned Iranian
President Ahmadinejad's recent rhetoric, calling for
Israel's destruction and describing the Nazi Holocaust as a
"myth." Italy has cooperated closely with us on all
measures to stop terrorism financing. End comment.

SPOGLI