GOI PUSHES BACK ON AIR TRAFFIC CONTROL SALE TO IRAN

S E C R E T ROME 000092 SIPDIS SIPDIS NOFORN E.O. 12958: DECL: 12/29/2021 TAGS: ETTC PARM PREL IR IT SUBJECT: GOI PUSHES BACK ON AIR TRAFFIC CONTROL SALE TO IRAN REF: A. STATE 194199 ¶B. ROME 3295 ¶C. 2004 ROME 2829 ¶D. 2004 ROME 1591 Classified By: Ecmin Thomas L. Delare for reasons 1.4 (b) and (d) ¶1. (S) Summary. Econ Counselor recently discussed with the MFA's Arms Material Authorization Unit the canceled sale by a Finmeccanica subsidiary of air traffic control (ATC) radar to Iran (ref A) in an effort to enhance GOI understanding of U.S. export control views of dual-use exports to Iran. Our contact was adamant in asserting that the civilian radar in question is "not covered by dual-use lists," and that the export of ATC radar to Iran would have been legal under Italian law had Finmeccanica chosen to go forward with the sale. End Summary. ¶2. (S) Econ Counselor met December 13 with Carlo Tripepi, Director of the MFA's Arms Material Authorization Unit, responsible for licensing Italian munitions exports, and former Director of the MFA office responsible for Italy's participation in the Wassenaar Arrangement. Tripepi compared the proposed ATC export to the USG export license granted to General Electric for the export of engine parts to be installed on aircraft engines used by Iran Air, Tripepi said both exports would have a positive impact on the safety of civil aviation in Iran. "People can die as a result of inadequate air traffic control, just as they can die from engine malfunctions." Tripepi recalled that in 1985, the USG objected to a proposed contract between Selenia (another Finmeccanica subsidiary) and the then-Soviet government for the maintenance of radar systems used at Moscow's Sheremetyevo Airport. According to Tripepi, USG was concerned the radar units could be linked together to provide "military grade" radar coverage. Tripepi recalled that after much debate, the contract was allowed to go forward, and made clear his "personal opinion" that the proposed ATC export to Iran should also be allowed to proceed. In any event, Tripepi said, Finmeccanica will not go forward with the export because of its interest in sales to the USG. ¶3. (S) In response to Tripepi's assertion that the ATC radar in question are not covered by the Wassenaar Arrangement and that their export to Iran is legal under Italian law, Econ Counselor asked if there is any flexibility in Italian export control regulations to allow the GOI to act otside the various multilateral export control regimes. Tripepi replied by citing the GOI's "success" in 2005 in stopping the export of fast boats to Iran as evidence of the flexibility of Italian export control laws. In the case of the fast boats, Tripepi said, the GOI was able to invoke "national security" to "stop the boats' export." He further noted that "we can't do this all the time," but argued that in extreme circumstances, the GOI has the ability to block the export of goods not specifically included in the multilateral regimes. In a subsequent meeting with Enrico Padula, one of Tripepi's subordinates, Econoff learned that Italian regulations give the GOI wide discretion to block exports for nonproliferation reasons. Padula added that the catch-all is interpreted narrowly by the GOI, possibly to avoid litigation due to denied export licenses. ¶4. (S) Comment. We recall the fast boats episode quite differently than Tripepi does. Specifically, as reported ref D, while the GOI agreed to stop the export of the very last of twelve fast boats intended for Iran, it did so only after exhaustive USG efforts and months of GOI foot-dragging, during which the initial eleven boats were shipped. Furthermore, it is clear to us that whatever progress was made on the fast boats issue was made possible by the cooperation of officials at the then-Ministry of Productive Activities (now the Ministry of Foreign Trade) who have since been reassigned. Italian exports of fast boats, marine diesel engines (ref B),and ATC systems to Iran all illustrate a growing disconnect between the USG and GOI on the important issue of dual-use export controls and highlight the need to restart bilateral export control consultations, last held in 2004 (ref C). End comment. SPOGLI