ITALY REQUESTS INFORMATION ON 1267 TERROR FINANCE

C O N F I D E N T I A L SECTION 01 OF 04 ROME 002515

SIPDIS

SIPDIS

STATE FOR L, EEB/TFS LAMBERT, IO/PSC FOR CROWE
TREASURY FOR EDDY, LURIE

E.O. 12958: DECL: 12/27/2017
TAGS: EFIN KFIN ECON IT
SUBJECT: ITALY REQUESTS INFORMATION ON 1267 TERROR FINANCE
DELISTING CASES

REF: A. HUTCHINGS-LAMBERT/CROWE EMAIL DEC 21

B. ROME 2143

C. STATE 139684

D. STATE 145622

E. ROME 2477

Classified By: Econ Counselor William R. Meara
for Reasons 1.4 (b) and (d).


1. (U) This is an action request, please see para 11.


2. (C) Summary: On December 21, Stefania Fancello at the
MFA's Office of International Cooperation Against
Terrorism conveyed to Econoff a request for more information
on the 1267 (al-Qaida/Taliban Sanctions) delisting cases of
Nasreddin, Nada and Himmat. While noting concern over the
delisting of Italian national Nasreddin, Fancello asked the
USG provide to the GOI an explanation of why we supported
delisting Nasreddin. Turning to the case of Nada, an Italian
national whose request for delisting via the Focal Point
process was denied, Fancello said Nada is now appealing to
the Italian national authorities for redress. Fancello
relayed a GOI request that the USG provide a public statement
by January 10, 2008, explaining the USG decision to oppose
Nada's delisting. Finally, concerning the pending delisting
petition via the Focal Point process of Himmat, the GOI
requests that we share information on Himmat and coordinate
our position with the GOI before informing the Focal Point
office of our position. Econoff agreed to pass these
requests to Washington, but noted that some of them may be
difficult to fulfill within the requested time period. Post
will discuss the Nasreddin case with senior Ministry of
Finance officials. End summary.

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Background on Focal Point Process
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3. (C) Ahmed Nasreddin (an Eritrean-born Italian citizen)
applied on April 13, 2007 to the UN Focal Point system for
the delisting of himself and 12 entities associated with him.
Nasreddin had been jointly listed by G7 nations under
provisions of UNSCR 1267 (al Qaida Taliban Sanctions) on
April 22, 2002. The Focal Point office within the UN
Secretariat was established by the Secretary General to allow

SIPDIS
listed individuals/entities to petition directly for
delisting. Once the Focal Point office receives a delisting
request, it forwards the request to the designating
government(s) and to the government(s) of citizenship and
residence. These governments have three months to review the
petition and decide to oppose or support delisting, or to
request additional time to review the petition. Member
States reviewing the Focal Point delisting request may also
opt to not take a position for or against the request. In
any event, the decision taken by reviewing States to support
or deny Focal Point delisting requests are shared via the
Focal Point with Members of the 1267 Committee. If any of
the reviewing states support delisting, a decision to delist
is circulated to members of the 1267 Committee under a 5-day
no objection deadline (NOD).


4. (C) UN representatives agreed in July 2007 to request
additional time to review Nasreddin's delisting petition, and
to reconvene prior to the extension deadline (October 12) to
consult on final positions to support/deny Nasreddin's
petition. Nasreddin's delisting petition was reviewed by
listing countries (G7),Kingdom of Morocco (country of
residency),and relevant governments of incorporation of
Nasreddin-linked entities. In September, the Italians
indicated to the USG through Embassy Rome that they would
likely support the decision to delist Nasreddin, or, at
minimum, remain silent (Ref B). Both MFA and Ministry of
Finance officials requested that the USG position be shared
with the GOI because it would factor into GOI decisions. In
late September the USG informed the Italians that we would
support delisting (see Ref C).

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Background on Italian Position Switch
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5. (C) When the delisting request was received, Italy's
Financial Security Committee (FSC) tasked a magistrate
(analogous to a US prosecutor) in Milan to investigate and
review the evidence on Nasreddin in order for the GOI to
develop a position on Nasreddin. The magistrate was unable
to charge Nasreddin under Italian law, because the laws
prohibiting his activities came into effect after the
terrorist financing activities occurred. However, the
magistrate wrote a statement in which he said Nasreddin was
guilty of terrorist activities. Ministry of Finance official
Maria Paula Suppa told Econoff on October 11 that the FSC was
surprised by the magistrate's conclusion. (Giuseppe Maresca,
the Ministry of Finance representative on the FSC explained
to Econoff in December that the Italian Justice official on
the FSC had been adamant that Nasreddin was a terrorist and
he should remain on the 1267 list.) Rather than attempting
to formally change the GOI position in favor of delisting,
the FSC tasked Italy's mission at the UN with sharing the
Magistrate's decision with the Focal Point Committee. (It
appears that the FSC hoped that this in information would
cause other Focal Point members to decide to oppose the
delisting.) However, when the information was passed to the
Italian mission at the UN, MFA officials learned that in
order to transmit information to the Focal Point Committee,
the Italian government would have to make a statement on how
this information affected delisting. Roberto Ciciani of the
Ministry of Finance told econoff that the MFA, therefore,
made a last minute political decision to characterize the
information as negative when sharing it with the G7; the GOI
encouraged other countries to object to the delisting at the
next Focal Point Committee meeting. Stefania Fancello passed
the same message to Post, but also indicated that the
Italians would likely remain silent over the delisting. Post
conveyed to Washington the Italians, objection and asked
that this case be reviewed. The USG reviewed the information
and concluded we would still support the delisting. Post
conveyed our position to Italian authorities on October 18
(reftel D). Meanwhile, Ciciani told Econoff privately that he
thought the delisting should continue. He said and it was a
lack of understanding of the process which resulted in the
Italian requests to lobby the USG and G7 countries to oppose
delisting.


6. (C) The USG filed its papers supporting the decision to
delist Nasreddin at the Focal Point secretariat in early
November 2007. The GOI decided to remain silent in the focal
point system on Nasreddin, but continued to lobby the USG and
other G7 countries to oppose delisting. Fancello explained
to Econoff in late October that, while the Italians did not
want to contradict their own magistrate's opinion, the GOI
was also reluctant to publicly name an Italian national as a
terrorist. On November 5 ,when the Focal Point committee met
and discussed the case, no country objected; Nasreddin was
delisted after the five day NOD on November 10, 2007.


7. (C) During Treasury Under Secretary Levey's visit in late
November (reftel E),Ministry of Finance Director General
Grilli made clear his unhappiness over the fact that
Nasreddin was delisted. Econoff replied to Grilli that we
reviewed the information on Nasreddin, and found no new
information that could change the USG position to support
delisting. Econoff also noted that it was difficult for the
USG to oppose a delisting when Italy remained silent and did
not object to the delisting at the Focal Point Committee
meeting. Grilli responded that because Nasreddin was their
own national, the Italians could not take a public position
on his activities.

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Nasreddin Appealing For Compensation
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8. (C) On December 21, Stefania Fancello informed Econoff
that Nasreddin has appealed to the Italian legal system for
compensation. Fancello said Italian ministries are
coordinating their position, and request from the USG an
explanation of the reasoning behind the decision to support
delisting. Noting that the USG sponsored the proposal to
sanction Nasreddin, Fancello questioned why the USG changed

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its views and eventually supported his removal from the list.
(Note: All G-7 members --including Italy-- cosponsored
Nasreddin's listing.) Fancello reminded Econoff that the
Italians had shared the magistrate's decision on Nasreddin
with the USG and other Member States reviewing Nasreddin,s
delisting petition. She pointed to the Judge's view that
Nasreddin had connections to terrorist financing activities,
even though the courts could not formally charge him. In
light of the new information the Italians provided, and their
request for the USG to change position, the GOI would like an
explanation of the USG decision to support delisting.
Econoff replied that she would convey the request to
Washington, but noted that the magistrate's decision did not
contain any additional evidence on Nasreddin and reminded
Fancello that Italy's approach to ask other countries oppose
delisting, when they themselves would not oppose delisting,
complicated the situation.


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Nada Asks Judge for GOI to Appeal to Focal Point
-------------- ---


9. (C) Turning to the delisting petition submitted (and
denied) via the Focal Point by Italian citizen Youseff
Moustaffa Nada, Fancello said Nada has petitioned a judge to
urge the competent Italian authority to appeal his case via
the UN 1267 Committee. Italy's Financial Security Committee
normally makes the decision on whether to appeal or not. (Our
GOI contacts seem genuinely concerned that a judge may order
them to appeal Nada's case to the 1267 committee.) Fancello
said the USG (that had proposed the 1267 listing) had
objected to Nada,s delisting in September and that the
Italians agreed. Noting that the USG made a public statement
when Nada was sanctioned domestically and at the 1267
Committee, Fancello said that the GOI is requesting that the
USG provide the GOI with a public statement on why the USG
believes Nada should remain on the 1267 list. Fancello
advised that an updated statement on our earlier position
(available on the OFAC website) on Nada would suffice.
Fancello said that the GOI deadline for responding to Mr.
Nada is in January and explained that the FSC is set to meet
on January 16 to decide the GOI response. They request that
a USG statement be made available to the Italians by January

10. Econoff replied that, in the best of circumstances, it
is difficult to obtain a fully cleared statement from the USG
in two weeks. Fancello emphasized that this information is
necessary for their internal process and noted that the GOI
is required by law to render a decision on Nada. (Note: We
believe any USG public statement that we provide to the
Italians would likely be used by the GOI in their legal case
involving Nada,s appeal.)

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GOI Asks for Information Sharing on Himmat
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10. (C) Regarding the pending delisting petition via the
Focal Point process for removal from the 1267 Consolidated
List of Himmat (an associate of Nada and Nasreddin),Fancello
passed the judge's ruling on Himmat and asked us to take his
decision into account. The judge's decision on the case was
similar to that in the Nasreddin case: while Himmat could not
be tried under Italian law, the judge still believed Nada had
participated in terrorist financing activities. The Focal
Point deadline on this case is March 12. (Econoff emailed a
copy of the decision to the desk and EEB officers.) Fancello
also requested that the USG inform the GOI of our position
once it is taken and asked that the USG communicate any
information we have on Himmat so the GOI can take a better
informed position.

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Action Request
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11. (C) Post requests Washington provide a response to the
request regarding Nada by January 10. Post also requests
Washington provide us with an explanation by February that we
can pass to the GOI (in a nonpaper) on the reasoning behind

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the Nasreddin decision, along with any information on the USG
position on Himmat.

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Comment
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12. (C) Comment: The Nasreddin case is an example of Italian
interagency confusion about the Focal Point process and the
purpose of the listing/delisting system. To be fair, this
case is the first of its kind. But nevertheless we've been
disappointed by the GOI's willingness to blame us for their
confusion. The GOI genuinely believed that the magistrate
would uphold their earlier position to delist Nasreddin and
had described the process as a formality to post, (Ref B).
But, when the magistrate, who likely was unaware of how and
why an individual could be delisted, wrote that Nasreddin had
in fact financed terrorist activities, the GOI was put in an
awkward position.


13. (C) In an effort to maintain Italian cooperation on
terror finance/WMD finance matters, Post intends to quietly
go back to the GOI on the Nasreddin case at a high level
early in the new year. We will lay out for the GOI the
sequence of events on this case (as described here) and make
clear that no one on the US side made any missteps on this
delisting.


14. (C) It seems that the Italians, once again, want us to be
the ones to block the delisting of Himmat. Any information
the US can provide on the Himmat case would allow for a
meaningful dialogue on the case before the decision is made.
End Comment.
BORG