ITALY: "ALREADY IMPLEMENTING UNSCR 1803"

C O N F I D E N T I A L ROME 000419 SIPDIS SIPDIS E.O. 12958: DECL: 04/04/2018 TAGS: EFIN ECON ETRD PARM PGOV PREL KNNP IR IT SUBJECT: ITALY: "ALREADY IMPLEMENTING UNSCR 1803" REF: A. STATE 29096 (UNSCR 1803 IMPLEMENTATION) ¶B. STATE 29398 (FINCEN ADVISORY) ¶C. SECSTATE 33674 (TRAVEL BAN) Classified By: Econ Counselor William R. Meara for Reasons 1.4 (b) and (d). ¶1. (C) Econ and Poloffs discussed reftels on UNSCR 1803 implementation with MFA Terrorist Financing, Iran, and Non-Proliferation desk officers on April 3. MFA officials said Italy had been pushing the EU to adopt an EU common position on UNSCR 1803 by the April 28 GAERC. On the question of Italy's hold on EU action on Bank Melli and other entities, MFA contacts said that if the pre P5 1 Quint (EU 3, US, Italy) consultations take shape before the upcoming P5 1 Shanghai Pol Directors meeting on Iran in mid-April, Italy could drop its opposition to the EU actions before the upcoming April 13/14 Italian elections and in time for action at the April 28 GAERC. They stressed that in order to satisfy Italian desire for inclusion at the political level to compensate for its "financial sacrifices," such Quint consultations could not be ad hoc or random and would also have to be somewhat binding for the participants. They acknowledged that the US and UK were inclined to meet Italy's request but they were concerned that Germany, in particular, and France, to a lesser degree, might be more difficult to convince. ¶2. (C) According to both MFA and Ministry of Finance officials, Italy is considering next steps for UNSCR 1803 implementation. MFA officials had already passed names included in the travel ban to their Consular colleagues, and they assured us that no visas would be issued even in the absence of the EU common position. MFA officials said that the Bank of Italy would decide weather to issue an additional advisory to the Italian Banking community. Stressing the BOI's independence, MFA officials said they had been in touch with BOI contacts and that at the very least the BOI planned to issue another advisory pointing to the February 28 FATF Statement which calls attention to problems in several country's anti-money laundering institutions including Iran. Econoff stressed the importance of alerting the Italian banking community to UNSCR 1803 provisions and cautioned that a combined FATF/UNSCR 1803 announcement could cloud the message. ¶3. (C) In two separate meetings with Ministry of Finance officials on reftels, Financial Crimes Office Director Robeto Ciciani told Econoff that the Bank of Italy will likely issue a warning based on the FATF statement, but that they were already exceeding the 1803 provisions calling for enhanced scrutiny of the banking sector and did not see a need to issue a separate warning to meet 1803 requirements. SPOGLI