ITALIAN SURVEILLANCE SHOWS NO EVIDENCE OF EXPORTS

S E C R E T ROME 000989

SIPDIS

STATE FOR ISN/MTR JOHN PAUL HERRMAN
STATE FOR EUR/PRA

E.O. 12958: DECL: 08/20/2034
TAGS: ETTC IR IT JA KSCA MNUC MTCRE PARM PREL
SUBJECT: ITALIAN SURVEILLANCE SHOWS NO EVIDENCE OF EXPORTS
TO IRAN OF JAPANESE-ORIGIN ITEMS

REF: A. STATE 75985

B. ROME 472

C. STATE 34798

Classified By: Economic Counselor William R. Meara
for reasons 1.4 (b) and (d).


1. (S) Summary: In response to Post's inquiry about the
GOI's investigation of the suspected export of restricted
Japanese-origin items by an Italian firm to Iran, the GOI
advised that it had put the suspected Italian firm under
surveillance for the 3 months ending on July 28. The
surveillance uncovered no/no evidence of attempts to export
prohibited items. GOI officials indicated that if the USG
wished the GOI to extend its surveillance of the company, the
USG should so request it formally through the Italian MFA.
They also requested more detailed information on the items of
concern. End Summary.


2. (S) Per Ref A, Post requested that Italian officials
provide an up-date on the case of attempts by Iran's Farazeh
Equipment Distributor (FEDCO) to acquire Japanese-origin
servo actuators from Italian firm Alpi Aviation through an
intermediary, the Iranian-based Samnov Company. Post had
already demarched the GOI on this case back in April (Ref B).
On August 5, Ministry of Economic Development export license
official Giovanni Zampa told us that after our April
demarche, the Ministry of Foreign Affairs's (MFA) export
controls office asked Italian Customs to place Alpi Aviation
exports under surveillance. Italian Customs complied to this
request, but due to internal procedures could only put Alpi
Aviation exports under surveillance for a period of three
months from about April 20 to July 28. Zampa said that
during this period of surveillance Italian Customs had not
seen evidence of suspicious exports, or the servo actuators
of concern, by Alpi Aviation to Iran. Zampa added that now
that the three months surveillance period has ended, and that
there was no evidence of exports of the servo actuators by
Alpi Aviation to Iran, that Italian Customs is asking the MFA
for guidance on what to do next. Zampa advised that if we
believe the risk remains that Alpi Aviation may export the
servo actuators to Iran, then we should ask the MFA for an
additional period of surveillance by Italian Customs.


3. (S) Zampa also requested more specific information on the
servo actuator products because, in his opinion, the model
names alone that we had earlier provided were not enough for
Italian Customs to undertake thorough controls. Besides the
model names of the products, Zampa recommended that we
provide their pertinent harmonized trade system numbers,
whether they are designated as arms or dual use products, and
whether they are specifically prohibited by international
export control arrangements.


4. (S) On August 17 we met with the MFA's export control
official Pierfrancesco De Cerchio to discuss Zampa's up-date,
and to inquire on the possibility of continued surveillance
by Italian Customs over Alpi Aviation exports to Iran. De
Cerchio said he was familiar with the case but was not up to
date on its details. He promised to investigate. We told him
that based on our previous concerns over the possibility of
Alpi Aviation export to Iran of the servo actuators, that
continued surveillance by Italian Customs would be
appropriate. De Cerchio asked, however, that we confirm with
Washington if another period of surveillance is necessary and
to come back with a formal request. He said this would be
helpful in case Alpi Aviation learns of the Italian Customs
surveillance and challenges it in Italian courts.


5. (S) Guidance Request: Post requests Department provide us
with more specific information on the servo actuators
products of concern, and instructions on whether we should
formally ask the MFA for continued surveillance by Italian
Customs of Alpi Aviation exports to Iran.
DIBBLE