UNSCR 1747/OECD: ITALIAN VIEWS ON COMMON LINE

C O N F I D E N T I A L ROME 000821 SIPDIS SIPDIS SENSITIVE STATE FOR EUR/WE, KATHLEEN ALLEGRONE, TREASURY FOR U/S STUART LEVEY EMBASSY PARIS FOR OECD E.O. 12958: DECL: 04/20/2017 TAGS: PREL EFIN ETRD EXIM OECD UN IR IT SUBJECT: UNSCR 1747/OECD: ITALIAN VIEWS ON COMMON LINE RESTRICTING EXPORT CREDITS TO IRAN REF: A. STATE 50834 ¶B. ROME 667 ¶C. PARIS 544 Classified By: Economic Minister Counselor Tom Delare for reasons 1.4 (b) and (d). ¶1. (C) EcMin met April 20 with Giulio Terzi, MFA Director General for Multilateral Political Affairs and Human Rights, and staff to discuss ref A points. EcMin began by explaining that we decided to approach the MFA, since previous meetings with the Ministry of Finance (MOF) and SACE (Italy's export credit agency) often ended with MOF and SACE officials referring us to the MFA on the claim that FM D'Alema would ultimately decide if there would be any change in Italian policy on export credits to Iran. ¶2. (C) Terzi responded to reftel points by emphasizing the dual public/private nature of SACE's ownership -- a private joint-stock company, with the MOF as its majority shareholder. Terzi stated that the GOI and SACE have "gone beyond" UNSCR 1747 language on restricting export credits and pointed to the Bank of Italy's swift actions against Bank Sepah Rome. Terzi also noted that SACE has reduced exposure to Iran over the past year. EcMin challenged this, pointing to the fact that, while SACE has "reduced" exposure to Iran as a percentage of its growing global portfolio, SACE has not changed its exposure to Iran in real euro terms (ref B, para 5). Terzi did not challenge this point, but rather pointed to the GOI's "strong efforts" to work with the U.S. and the UN to "contain" Iran. ¶3. (C) EcMin pointed to the French ECA COFACE's public announcement of a change in its export credit policy to Iran (ref C) as a step the U.S. would like to see the GOI and SACE take. MFA Director of the Office for Disarmament and Non-proliferation, Filippo Formica, pointed out that SACE had no history of public actions or announcements similar to COFACE, because of their different ownership structures. EcMin pressed the GOI to consider ways to do more and, then, discuss these ideas with our OECD counterparts the week of April 23. EcMin ended by stating that the U.S. not only wants to have an economic impact on Iran, but send a strong political message -- through tougher export credit policies -- to influence Iranian behavior. Spogli