GOI DOWNPLAYS POSSIBILITY OF OTO MELARA EXPORT TO

S E C R E T ROME 003300 SIPDIS SIPDIS NOFORN DEPARTMENT FOR EUR/PRA AND EUR/WE E.O. 12958: DECL: 12/15/2015 TAGS: PREL PARM ETTC IR VE IT SUBJECT: GOI DOWNPLAYS POSSIBILITY OF OTO MELARA EXPORT TO IRAN REF: A. STATE 196649 ¶B. ROME 1915 Classified By: Ecmin Thomas L. Delare for reasons 1.4 (b) and (d) ¶1. (U) This is an action request. Please see paragraph 6. ¶2. (S) Econ Counselor delivered ref A demarche December 13 to Carlo Tripepi, Director of the MFA's Arms Material Authorization Unit, responsible for licensing Italian munitions exports. Tripepi had not heard of Oto Melara's possible export of 76mm naval guns to Iran, but said the GOI has not issued a license for the export of munitions to Iran since 1982 or 1983. Tripepi categorically ruled out the possibility of an export to Iran by Oto Melara, saying the company would be "crazy" to export the guns in question to Iran. ¶3. (S) Econ Counselor recalled that Finmeccanica, Oto Melara's parent company, approached the Embassy in June regarding the possible export to Venezuela of similar 76mm guns. The guns were to be installed on patrol boats built by Navantia, a Spanish company (Ref B). After consulting with the USG, Finmeccanica reportedly decided not to pursue the sale. Tripepi stated that he was aware of the proposed sale to Venezuela and noted the GOI had been prepared to deny export licenses for the guns. According to Tripepi, it is GOI policy not to authorize the export of arms to Venezuela that will provide the Venezuela armed forces with "new weapons or new capabilities." However, Tripepi elaborated that the GOI would allow Italian companies to enter into contracts with the GOV for the maintenance of existing weapons systems owned by the GOV. ¶4. (S) Tripepi also told Econ Counselor the GOI had denied an export license request by Alenia Whitehead, a Finmeccanica subsidiary, for the export of eighteen torpedoes to Venezuela. According to Tripepi, the GOI gave Alenia Whitehead authorization to enter into negotiations with the Venezuelan government for the torpedoes sale three years ago. The subsequent denial of a final export license "cost the company millions." (Note: Italian law requires separate export licenses for the negotiation and fulfillment of a sales contract. The first license authorizes the negotiation of a sales contract with a foreign buyer, while the second is required for the actual export of commodities pursuant to the contract. End note.) ¶5. (S) Tripepi noted that Navantia and Oto Melara have a licensing agreement under which Navantia and Oto Melara jointly manufacture the kind of guns allegedly exported to Iran. It is Tripepi's understanding that Navantia could not have shipped one of the guns in question to Iran without Oto Melara's knowledge because Oto Melara provides key gun components which Navantia reportedly does not have the capability to manufacture independently. That said, Tripepi acknowledged that over time, Navantia may have acquired the know-how necessary to manufacture the needed components. ¶6. (S) Comment and action request. To Tripepi, it is clearly inconceivable that Oto Melara would export the 76 mm guns described in ref A to Iran. Nonetheless, he expressed interest in looking into the matter further. Post requests that Washington agencies pass to the GOI additional details regarding the export described in ref A, either through this front channel or through other appropriate channels. End comment and action requested. SPOGLI