ITALY DISCUSSING TIGHTENING OF VENEZUELA ARMS SALES

C O N F I D E N T I A L ROME 002873

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/21/2016
TAGS: MARR MASS PARM VE PREL OTRA IT
SUBJECT: ITALY DISCUSSING TIGHTENING OF VENEZUELA ARMS SALES

REF: A. STATE 155336


B. ROME 2032

Classified By: Acting Political Minister Counselor Jonathan R. Cohen fo
r reasons 1.4 (b) and (d).


1. (C) Summary. Poloff met with Francesco Talo, MFA South
America Office Director, and Paolo Campanini, South America
Office, September 21 to inform Italy of the U.S. arms
transfer policy to Venezuela, per Ref A, urging Italy to
adopt similar measures. Talo noted that arms sales to
Venezuela were the subject of internal GOI discussions, that
Italy was in close consultation with the United States on
this subject, and that the already-restrictive Italian arms
transfer policy would be tightened further. Finmeccanica
effectively represented one hundred percent of the Italian
industrial audience with regard to these measures, according
to Talo. Laura Aghilarre from the MFA's Non-Proliferation
Office echoed Talo's comments and said the GOI may use the
legal basis that blocks transfers to North Korea to
accomplish the same with Venezuela. End Summary.


2. (C) Arms sales to Venezuela had been a subject of intense
internal discussion in Italy, according to Talo. He noted
that the GOI was taking a closer look at small arms because
of their potential to destabilize the balance of power, the
possibility they could be diverted to Colombia, and their
role in facilitating criminal activity. While a large
increase in the number of small arms could present a serious
problem, Talo reported that the Italian Ambassador in
Caracas, in consultation with EU and G8 countries, had gotten
the sense there was no real danger of a serious weapons
imbalance in the region. However, Talo noted, the current
trend was disturbing.


3. (C) The GOI had also held confidential discussions with
industry representatives, most importantly with Finmeccanica,
according to Talo. Finmeccanica, he said, effectively
amounted to one hundred percent of the current and future
audience on this issue. Talo reported that Finmeccanica had
told the MFA confidentially they had revised their internal
code of conduct to an even higher standard than the GOI's.
For Finmeccanica, the issue came down to economics, Talo
said, with lucrative aircraft deals with the United
States--which the Italian company did not want to
jeopardize--hanging in the balance. (Note: Finmeccanica
recently decided against selling naval guns to Venezuela for
patrol vessels after consulting with the Embassy, as reported
in Ref B. End note.)


4. (C) Although Italian companies had not been feeling a lot
of pressure from Venezuela, Talo speculated that Caracas
might become more demanding, especially in cases where a deal
had already been concluded. While Talo was not aware of any
recent Italian arms activity with Venezuela, he stressed that
the GOI was studying the situation with a lot of concern, and
would consider the points in Ref A.


5. (C) On September 27, Poloff delivered Ref A demarche to
Laura Aghilarre, MFA Non-Proliferation Office. She
underscored that Italy would not authorize the sale of
US-origin parts to Venezuela as a matter of course and that
bilateral business with Venezuela is already extremely
limited. Aghilarre said that the GOI would nevertheless take
a harder look at ways to block future military transactions
with Venezuela. She speculated that the GOI could borrow
legal language from the ban on military transfers to North
Korea to stop similar transactions with Venezuela. She
requested (and Poloff subsequently furnished) more
information on the legal authority for US sanctions on
Venezuela.
SPOGLI