US embassy cable - 02ROME2977

C O N F I D E N T I A L ROME 002977 
 
SIPDIS 
 
NP/ECS, NEA/NGA, EUR/PRA, EUR/WE 
 
E.O. 12958: DECL: 06/18/2007 
TAGS: PREL, PARM, ETTC, ETRD, IR, IT, EXPORT CONTROLS 
SUBJECT: ITALY'S NUANCED POLICY ON DUAL USE EXPORTS TO IRAN 
 
 
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REF: (A) STATE 104462 (B) ROME 2257 (C) STATE 64844 
 
CLASSIFIED BY: CLASSIFIED BY ECOUNS KAREN MILLIKEN; REASON 1.5 B/D. 
 
1. (C)  SUMMARY AND ACTION REQUEST.  ITALY INSISTS ITS POLICY 
PROHIBITING SALES OF WEAPONS AND SENSITIVE DUAL USE ITEMS 
REMAINS FULLY IN FORCE.  HOWEVER, MFA'S NONPROLIFERATION 
COORDINATOR FLAGS A POTENTIAL LEGAL VULNERABILITY IN THE 
POLICY BROUGHT ABOUT BY THE UNITED NATIONS' FAILURE TO ADOPT 
A RESOLUTION THIS YEAR CRITICAL OF IRAN'S HUMAN RIGHTS 
RECORD.  MFA ASSURES US THAT NO ITALIAN COMPANIES HAVE 
APPLIED TO EXPORT ITEMS (REF A) THAT COULD AID IRANIAN COVERT 
NUCLEAR ACTIVITIES.  AN INVESTIGATION INTO PROPOSED EXPORTS 
OF SPEED BOATS AND BOAT ENGINES (REF B) CONTINUES.  SEE 
ACTION REQUEST PARA 7.  END SUMMARY AND ACTION REQUEST. 
 
2. (C) ITALY HAS LONG EMBARGOED EXPORTS TO IRAN OF ARMS AND 
SENSITIVE DUAL USE ITEMS, MFA'S NONPROLIFERATION ISSUES 
COORDINATOR UGO DE MOHR REMINDED ECONOFF DURING A JUNE 14 
MEETING.  HE SAID, THOUGH, THAT THE POLICY COULD BE 
VULNERABLE TO LEGAL CHALLENGE IN THAT IT DERIVES FROM THE 
MANDATE OF ITALIAN PUBLIC LAW 1085 THAT SUCH ITEMS CANNOT BE 
EXPORTED TO ANY NATION TARGETED BY A UN HUMAN RIGHTS 
RESOLUTION.  THIS YEAR'S RESOLUTION HAVING FAILED TO PASS 
NOTWITHSTANDING EU SUPPORT FOR IT, DE MOHR NOTES THAT THE 
POLICY TECHNICALLY LACKS A LEGAL JUSTIFICATION. ALTHOUGH HE 
EXPECTS NO PUSH FOR A POLICY CHANGE FROM WITHIN THE GOI, HE 
POINTS OUT THAT ITALIAN COMPANIES AGGRIEVED BY DECISIONS 
DENYING LICENSES FOR EXPORTS TO IRAN COULD APPEAL TO ITALIAN 
COURTS, WHICH WOULD BE HARD-PRESSED TO UPHOLD THE DENIAL.  AS 
A PRACTICAL MATTER, HE QUICKLY ADDED, JUDICIAL APPEALS OF GOI 
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DECISIONS ON EXPORT LICENSES ARE VERY RARE; GENERALLY 
EXPORTERS DON'T LOOK TO ANTAGONIZE THE LICENSING AUTHORITY. 
 
3. (C) COMMENT.  DE MOHR HAS SAID IN THE PAST THAT HE DOES 
NOT AGREE WITH THE ASSERTION (REPEATED REF C) THAT WASSENAAR 
MEMBERS HAVE NECESSARILY COMMITTED TO REFRAIN FROM ARMS SALES 
TO IRAN.  HE BELIEVES THE WASSENAAR LANGUAGE IS INTENTIONALLY 
VAGUE ON POINT, REFLECTING A LACK OF CONSENSUS AMONG EARLY WA 
DELEGATES.  THE UN RESOLUTIONS AGAINST IRAN IN PREVIOUS YEARS 
HAVE FED INTO THE "CATCH HUMAN RIGHTS" PROVISION OF ITALIAN 
PUBLIC LAW 1085 TO GET ITALY TO THE SAME PLACE; I.E., TO 
PROHIBITING ARMAMENT EXPORTS (AS WELL AS SENSITIVE DUAL USE 
EXPORTS) TO IRAN.  ITALY THEREFORE HAS NEVER HAD TO DECIDE 
WHETHER WASSENAAR'S "COUNTRIES OF CONCERN" REFERENCE 
CONTEMPLATES IRAN AND WHETHER THE REFERENCE HAS ANY LEGAL 
EFFECT UNDER ITALIAN LAW.   END COMMENT. 
 
4. (C) ON THE IMMEDIATE ISSUE OF THE EXPORT OF ITEMS LISTED 
REF A AS POTENTIALLY DESTINED FOR IRAN'S COVERT NUCLEAR 
PROGRAM, DE MOHR SAID NO ITALIAN COMPANIES HAVE APPLIED TO 
THE GOI FOR RELEVANT LICENSES.  AS CHAIR OF THE 
INTERMINISTERIAL DUAL USE LICENSING COMMITTEE, HE IS 
CONFIDENT ANY EFFORT TO EXPORT LISTED ITEMS WOULD COME TO HIS 
ATTENTION.  HE SAID HE WOULD SHARE REF A NONPAPER WITH KEY 
COLLEAGUES ON THE COMMITTEE. 
 
5. (C) DE MOHR SAID HE HAS TALKED RECENTLY WITH THE ITALIAN 
COMPANIES LOOKING TO EXPORT BOATS AND BOAT ENGINES TO IRAN 
(FABBIO BUZZI DESIGN AND ISOTTA FRANCHINI) PER REF B.  HE 
DESCRIBED HIS IMMEDIATE ROLE AS DECIDING WHETHER THE BOATS 
INVOLVED ARE WARSHIPS.  IF HE CONCLUDES THEY ARE, HE WILL 
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PASS THE FILE TO THE MFA OFFICE THAT CONSIDERS REQUESTS FOR 
ARMAMENT EXPORTS (UAMA) WHICH, HE IS CERTAIN, WOULD NIX THE 
EXPORT NOTWITHSTANDING THE ABSENCE OF A CURRENT UN RESOLUTION 
CRITICAL OF IRAN'S HUMAN RIGHTS RECORD. 
 
6. (C) ON THE OTHER HAND, IF DE MOHR CONCLUDES THAT THE BOATS 
AND BOAT ENGINES ARE DUAL USE ITEMS, HE WILL BRING THE CASE 
TO INTERMINISTERIAL COMMITTEE TO DECIDE BASED ON AVAILABLE 
EVIDENCE AS TO END USE.  HE ASKED WHETHER THE USG CONSIDERS 
COAST PATROLLING TO BE AN INHERENTLY MILITARY FUNCTION AND 
WHETHER THE U.S. COAST GUARD AND ITALIAN GUARDIA DI FINANZIA 
ARE PURELY MILITARY ORGANIZATIONS.  ECONOFF REPLIED, PER REF 
C, THAT THE DESIGN OF THE HIGH SPEED BOATS AND THE POWER OF 
THE ENGINES UNDER CONSIDERATION ARE MORE CONSISTENT WITH 
OFFENSIVE AND SPECIAL OPERATIONS ACTIVITIES THAN WITH 
CONVENTIONAL PATROLLING. 
 
7. (C)  COMMENT AND ACTION REQUEST.  DE MOHR IS CLEARLY 
STRUGGLING WITH THE PATROL BOAT AND ENGINE CASES.  AS HE 
REVIEWS THE PROPOSED EXPORTS WITH THE INVOLVED ITALIAN 
COMPANIES, HE WILL COME UNDER PRESSURE TO SEE THESE ITEMS AS 
LEGITIMATE ASPECTS OF ITALY'S ROBUST TRADE WITH IRAN.  IF 
COMPELLING TECHNICAL ARGUMENTS ARE AVAILABLE (E.G., SPEED 
CAPACITY IS EXCESSIVE FOR CONVENTIONAL PATROL BOATS, OTHER 
BOAT DESIGNS ARE MORE APPROPRIATE TO PATROLLING, ETC.), WE 
COULD PUT THEM TO GOOD USE. 
SEMBLER 
 
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 2002ROME02977 - Classification: CONFIDENTIAL