ITALY/IRISL: GOI TO CONSIDER SUPPORTING BRITISH

C O N F I D E N T I A L SECTION 01 OF 02 ROME 001228

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E.O. 12958: DECL: 11/02/2019
TAGS: EFIN ETTC KNNP IR IT
SUBJECT: ITALY/IRISL: GOI TO CONSIDER SUPPORTING BRITISH
BAN ON PROTECTION AND INDEMNITY COVERAGE

REF: SECSTATE 108151

Classified By: Acting Deputy Chief of Mission Frank Ledahawsky
for reasons 1.4 (b) and (d)


1. (SBU) SUMMARY: A senior official from the Italian
Ministry of Economics and Finance (MEF) responded favorably
to our request that the GOI support the British ban on
providing insurance coverage to IRISL vessels, saying that at
an upcoming interagency meeting he would support issuing a
warning to Italian commercial insurers. A senior official
from the Ministry of Foreign Affairs (MFA) also supported
consideration of the USG request at the meeting, but stated
that it might be difficult for the GOI to take decisive
action in the absence of EU guidance. END SUMMARY


2. (SBU) On October 22, A/ECMIN met with Giuseppe Maresca,
Director General, Financial Crimes Division, Ministry of
Economics and Finance to solicit GOI support for the recent
British ban on providing Protection and Indemnity (P&I)
services to IRISL vessels (reftel). Maresca noted that
Italian insurers had already been warned against offering P&I
services to the Iranian shipping firm following a request
conveyed some time ago by US Treasury U/S Levey. Post asked
Maresca to consider issuing a new warning to commercial
insurers, making specific mention of the British action and
advising public entities of the possibility that IRISL might
now seek support from Italian institutions. Maresca seemed
quite willing to issue this new warning.


3. (SBU) Maresca stated that he will ensure that our request
is on the agenda at an upcoming GOI Interagency Financial
Security committee and indicated he would encourage support
for the British ban by warning Italian firms to refrain from
offering P&I services to IRISL.


4. (C) A/ECMIN then attempted to engage Maresca in a
discussion about Fratelli Cosulich and, specifically, about
IRITAL the Cosulich joint venture with IRISL. While Maresca
was aware of the joint venture, he tried to avoid this
discussion by claiming that this was a matter for the
Ministry of Foreign Affairs (MFA). However, A/ECMIN was able
to give Maresca the following background information on the
Cosulich/IRITAL situation.


5. (C) Background: In the Fall of 2008, after the USG
designated IRISL and 18 of its subsidiaries under Executive
Order (E.O.) 13382, the GOI became concerned that Italian
firms shipping with IRISL would be subject to sanctions.
Claudio Spinedi, Deputy Director General for Multilateral
Economic and Financial Cooperation, Ministry of Foreign
Affairs, told the EMBASSY at that time that Italy would not
go beyond the EU common position on sanctions against IRITAL
and expressed his disapproval of the USG position. However,
based on the designation of IRISL, we suggested to the MFA
that Cosulich should divest its interest in IRITAL and, in
January 2009, the MFA reported to us that Cosulich would
sever ties with the Iranians within one month, due to GOI
"moral suasion." At the same time, the MFA asked post not/not
to talk directly with Cosulich but to leave all direct
communication with the shipping firm to the Italian
government. On October 8, we learned that Cosulich continues
to maintain an ongoing relationship with IRITAL and has no/no
intention of divesting their interest.


6. (C) In concluding the meeting, Maresca seemed to
understand our concern and agreed to raise this issue at the
Interagency Financial Security committee meeting.


7. (SBU) On October 27, A/ECMIN met with MFA Dep DG Spinedi
to solicit additional support for the British P&I ban. (note:
Spinedi will also attend the Interagency Financial Security
committee meeting and, he too, will raise the issue). Spinedi
stated that the committee will decide whether or not to warn
Italian companies against offering P&I services to Iranian
vessels but that it will be difficult for the GOI to take any
decisive action absent legal direction from the EU. He also
expressed doubt that there are any Italian firms who could
step into the gap created by the British ban.


7. (C) A/ECMIN asked Spinedi why Fratelli Cosulich continued
to maintain a joint venture with IRISL and was told that "tax
issues" with Italian Customs had prevented the shipping firm
from divesting its interest in IRITAL. Spinedi was not
prepared to elaborate and it appears that for all the MFA's
claims of "moral suasion" Cosulich will not divest until

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forced to do so.


8. (SBU) The British EMBASSY in Rome has expressed its
gratitude for our efforts in support of the British P&I ban.
The British were not aware of the Cosulich connection with
IRISL and stated that they didn't know whether the P&I ban
applied to subsidiaries of IRISL.
THORNE