US embassy cable - 03ZAGREB2186

C O N F I D E N T I A L ZAGREB 002186 
 
SIPDIS 
 
 
DEPARTMENT FOR NEA/PDAS (LAROCCO); EUR/SCE (NARDI/KABUMOTO); 
EUR/RPM (WASER); NP/RA (JSMITH); EUR/PRA (CORDOVA); IO/PHO 
(CARLSON); AND INR/SPM (ZARZECKI) 
 
E.O. 12958: DECL: 10/09/2013 
TAGS: PARM, MNUC, KNNP, LY, HR 
SUBJECT: GOC TO WATCH POTENTIAL LIBYA CONTRACTS CLOSELY 
 
REF: STATE 282619 
 
CLASSIFIED BY: POLOFF JUSTIN FRIEDMAN, REASONS 1.5 (B) & (D) 

1. (C) SUMMARY: DCM DELIVERED REFTEL POINTS PRESIDENTIAL 
FOREIGN AFFAIRS AVISOR IVICA MASTRUKO ON OCTOBER 6 AND TO MFA 
ASSTANT MINISTER FOR NON-EUROPEAN AFFAIRS DRAZEN MARGETA ON 
OCTOBER 7.  THE GOC INTERLOCUTORS SAID THAT WHILE CROATIA HAD 
A SIGNIFICANT INTEREST IN SECURING PURELY CIVILIAN WORK IN 
LIBYA, THE GOC SHARED OUR CONCERNS AND WOULD IMPLEMENT A 
STRICT POLICY TO ENSURE THAT ANY CONTRACTS WOULD NOT BE TO 
THE BENEFIT THE LIBYAN MILITARY.  END SUMMARY. 
 
2. (C) DCM DELIVERED REFTEL POINTS PRESIDENTIAL FOREIGN 
AFFAIRS AVISOR IVICA MASTRUKO ON OCTOBER 6 AND TO MFA ASSTANT 
MINISTER FOR NON-EUROPEAN AFFAIRS DRAZEN MARGETA ON OCTOBER 
7.  NOTING CROATIA'S LONG HISTORY OF BUSINESS RELATIONS WITH 
LIBYA, DCM STRESSED THAT U.S. SANCTIONS WERE STILL IN PLACE, 
AND CAUTIONED THAT POSSIBLE INVESTMENT BY THE CROATIAN ENERGY 
FIRM INA IN LIBYA COULD RAISE ILSA CONCERNS.  DCM WARNED THAT 
LIBYA HAD TRIED IN THE PAST TO SECURE OVERHAUL SERVICES FOR 
MILITARY SHIPS BY ATTEMPTING TO HIDE THEIR MILITARY NATURE, 
AND URGED THE GOC TO BE VIGILANT IN ITS MONITORING OF 
APPROACHES BY LIBYA TO CROATIAN SHIPYARDS. 
 
3. (C) REFERRING TO PRESIDENT MESIC,S VISIT TO LIBYA IN 
AUGUST, PRESIDENTIAL ADVISOR MASTRUKO INSISTED THAT CROATIA 
WAS INTERESTED ONLY IN CONSTRUCTION OF ROADS, RAILROADS, A 
DIABETES CENTER AND A WATER PIPELINE IN LIBYA.  HE ASSERTED 
THAT ITALY AND MONTENEGRO HAD SECURED MAJOR CONTRACTS TO 
OVERHAUL LIBYAN SHIPS, IMPLYING THAT SOME MAY BE MILITARY. 
MASTRUKO SAID THAT CROATIA WOULD LIKE TO SECURE OVERHAUL 
CONTRACTS, ESPECIALLY FOR SHIPS, ENGINES, BUT INSISTED THAT 
NO MILITARY VESSELS WOULD BE INVOLVED.  HE CITED A SMALL 
    SHIPYARD NEAR ZADAR AS A POSSIBLE CONTRACTOR.   MASTRUKO ALSO 
NOTED THAT THE CROATIAN STATE PETROLEUM COMPANY INA WAS 
INTERESTED IN INVESTING IN OIL REFINERY WORK IN LIBYA. 
 
4. (C) ASSISTANT MINSTER MARGETA NOTED THAT PRESIDENT MESIC 
HAD BROUGHT ALONG A HUGE DELEGATION ON HIS TRIP TO LIBYA. 
RESPONDING TO THE DCM'S CAUTION ON POSSIBLE ILSA IMPLICATIONS 
OF ANY INA INVESTMENT IN LIBYA, MARGETA SAID THE DOUBTED THAT 
ANY INA INVESTMENT WOULD REACH THE $20 MILLION THRESHOLD OF 
ILSA.  HE BELIEVED INA WAS MOST INTERESTED IN SECURING 
CONTRACTS FOR ITS CROSCO FIELD SERVICES SUBSIDIARY, NOTING 
THAT CROSCO USUALLY WORKED AS A SUBCONTRACTOR TO OTHER MAJOR 
OIL SERVICES FIRMS. 
 
5. (C) ON SHIPBUILDING, MARGETA SAID THAT LIBYA HAD TRIED TO 
SEND SOME SHIPS TO CROATIA FOR OVERHAULS CLAIMING THEY WERE 
CIVILIAN.  HOWEVER, THE GOC HAD LEARNED THAT THE SHIPS WERE 
ACTUALLY IN THE REGISTER OF THE LIBYAN NAVY AND HAD REFUSED 
TO ALLOW ANY WORK TO BE DONE.  DCM URGED THAT THE GOC BE 
VIGILANT FOR SIMILAR ATTEMPTS TO BYPASS GOC CONTROLS, 
PARTICULARLY INVOLVING MARINE ENGINE OVERHAULS. 
 
6. (C) MARGETA STATED THAT THE GOC SHARED U.S. CONCERNS ON 
POSSIBLE WMD DEVELOPMENT IN LIBYA.  MARGETA NOTED THAT SOME 
CROATIAN FIRMS HAD MAINTAINED OFFICES IN LIBYA FOR THE LAST 
DECADE, AND MANY FIRMS REGARD LIBYA AS PART OF CROATIA'S 
TRADITIONAL MARKET.  HE SAID THAT THE GOC WOULD IMPLEMENT A 
STRICT POLICY TO ENSURE THAT ANY WORK BY CROATIAN FIRMS IS 
PURELY CIVILIAN IN NATURE. 
FRANK 
 

 
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