US embassy cable - 05ROME695

S E C R E T ROME 000695 
 
SIPDIS 
 
 
NOFORN 
 
STATE FOR NP/CBM, EUR/PRA, EUR/WE, EAP/CM, PM/DTC (GANZER) 
 
E.O. 12958: DECL: 03/01/2015 
TAGS: ETTC, PARM, PREL, IT, CH, MTCR, EXPORT CONTROLS 
SUBJECT: (S) MTAG: ADDITIONAL GOI REACTION TO POTENTIAL 
ITALIAN COMPANY ACTIVITY IN CHINA 
 
REF: A. FEBRUARY 18 GANZER-FINKBEINER EMAIL MESSAGE 
B. ROME 117 
C. 04 STATE 275541 
 
Classified By: Economic Minister Counselor Scott Kilner for reasons 1.4 
(b), (d) and (h) 
 
1. (S) Ref B reports on the delivery of our January 13 
demarche (ref C) to the MFA's Non-Proliferation Coordinator 
Carlo Tripepi, in which we informed the GOI that several 
Chinese firms intended to engage in proliferation-related 
activity with several Italian firms, including Galileo 
Avionica, Sicam, Alenia, Marconi Selenia, and FLT. Our 
demarche noted in particular our concern regarding China's 
efforts to develop unmanned aerial vehicle (UAV) technology. 
 
2. (S) Alfredo Cuzzoni, Director of the Office for Armaments, 
Military Sales, and the Aerospace Defense Industry in the 
Ministry of Productive Activities (MPA), followed up on the 
demarche in a letter faxed directly to the Office of Defense 
Trade Controls in the State Department,s Bureau of Political 
Military Affairs on February 17 (ref A). Cuzzoni noted in his 
letter that the MPA had reminded Italian industry of the need 
to respect both national and multilateral controls on the 
transfer of armaments and dual-use technology and materials. 
Cuzzoni requested a meeting with econoff on February 22 to 
further explain his letter, and to give us a hard copy of the 
letter (which we will forward to PM/DTC). 
 
3. (S) While continuing to encourage increased commercial 
ties between Italy and China, Cuzzoni told us that the GOI is 
also maintaining its vigilance regarding the potential 
transfer of high technology aerospace material. Cuzzoni, 
whose office promotes the Italian aerospace industry, told 
econoff that, since becoming aware of our January 13 
demarche, he had contacted several Italian firms, including 
Alenia Aeronautica, Galileo Avionica, and Marconi Selenia, to 
reiterate their need to comply fully with export license 
requirements.  Notwithstanding recent high profile engagement 
with the Chinese government to promote commercial ties (such 
as Italian President Ciampi,s December 2004 state visit to 
China), Cuzzoni said the GOI continued to view the 
maintenance of strong commercial relations with the United 
States on aerospace as of paramount importance. He mentioned 
specifically the Italian hopes for enhanced cooperation in 
the area of communications satellites.  Cuzzoni expressed 
concern that some GOI officials  (he specifically mentioned 
MPA Under Secretary Valducci) were overly optimistic 
regarding the attractiveness of the Chinese market, at least 
with regard to high technology goods that require export 
licenses and that, depending on the technology, would not in 
all cases be approved. 
 
4. (S) Comment: Cuzzoni expressed familiar GOI concerns 
during our meeting regarding the dilemma faced by a 
struggling Italian aerospace industry -- the attractiveness 
of the Chinese market, but the risk that such cooperation 
could impede current and future business with U.S. partners. 
Cuzzoni stressed his ties to Italian industry and his 
willingness, even eagerness, to work with the Embassy to 
avoid misunderstandings. Econoff explained that the Embassy 
had to deliver such sensitive messages to the MFA 
Non-Proliferation Coordinator, given his role overseeing 
Italy's Inter Ministerial Consultative Committee on Dual-Use 
Export Controls. We agreed, however, that further direct 
contact with Cuzzoni on similar issues could be helpful in 
making our concerns more broadly known within the GOI. End 
comment. 
 
SEMBLER 
 
 
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	2005ROME00695 - Classification: SECRET