This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ROME 000642 
 
SIPDIS 
 
STATE FOR EB/ESP 
USDOC FOR U/S LARSON AND U/S ALDONAS 
INFO 3133/USCS/OIO/ESLETTEN/PBUCHER 
4220/ITA/EUR/SED/DDEFALCO 
 
E.O. 12958: N/A 
TAGS: BEXP ECON EFIN ETRD AMGT ECON EFIN ETRD AMGT IT IT BEXP
SUBJECT:  JOINT STATE/COMMERCE REQUEST:  INVESTIGATION OF POTENTIAL 
TRADE PROMOTION AND FINANCE BEST PRACTICES 
 
REF:  SECSTATE 210982 
 
FOLLOWING ARE U.S. MISSION TO ITALY RESPONSES TO QUESTIONS POSED IN 
REFTEL PARAGRAPH 12 ("ITALY"). 
 
                       UNCLASSIFIED 
 
PAGE 02        ROME  00642  01 OF 02  081650Z 
A) THE ISTITUTO NAZIONALE PER IL COMMERCIO ESTERO, OR ICE (ITALIAN 
TRADE COMMISSION) WEBSITE PERMITS ONLINE USERS TO REGISTER AT NO COST 
FOR THEIR NEW EXPORT CLUB SERVICE.  ONCE REGISTERED, MEMBERS ARE ABLE 
TO CONSULT, ONLINE GRATIS, PRELIMINARY INFORMATION ON TRADE LEADS, 
INTERNATIONAL TENDERS, INTERNATIONAL FINANCING OPPORTUNITIES, AND 
OTHER SUBJECTS OF INTEREST, BUT MUST PAY 1.5 EUROS OR 3 CREDITS OFF 
THEIR SERVICE CARDS (DISCUSSED IN PART D) TO VIEW COMPLETE CONTACT 
INFORMATION.  INFORMATION ON THE SITE IS UPDATED CONSTANTLY AS NEW 
LEADS ARRIVE.  MEMBERS MAY ALSO REQUEST REGULAR NOTIFICATION OF 
TENDERS, INTERNATIONAL FINANCING, AND PREVIEWS OF MAJOR PROJECTS IN 
SPECIFIC AREAS OF THE WORLD, IN PARTICULAR, INDUSTRY SECTORS TO BE 
SENT TO THEIR E-MAIL ADDRESS AS THEY BECOME KNOWN OR AS AN ANNUAL 
SUBSCRIPTION. THE FEE SCHEDULE IS AS FOLLOWS:  UP TO 10 
COUNTRIES/INDUSTRY SECTORS, 50 EUROS (USD 45); FROM 10 TO 30 
COUNTRIES/INDUSTRY SECTORS, 100 EUROS (USD 90); AND OVER 30 
COMPANIES/INDUSTRY 
 
SECTORS, 155 EUROS (USD 138).  IT SHOULD BE NOTED THAT ICE'S FOCUS IS 
ON SMALL- AND MEDIUM-SIZED ENTERPRISES (SMES).  THUS, IT MAY DEAL WIT 
MAJOR PROJECTS ONLY AS THEY RELATE TO SUBCONTRACTING. 
 
PRIOR TO OCTOBER 2001, COMPLETE INFORMATION WAS AVAILABLE TO ANYONE 
WHO CONSULTED THE WEBSITE.  BECAUSE THE SERVICE IS NOW ORGANIZED IN A 
DIFFERENT MANNER, IT IS NOT YET CLEAR HOW SUCCESSFUL THE INITIATIVE 
IS.  ICE IS ABLE TO TRACK THE NUMBER OF VISITS TO THE SITE, HOWEVER, 
AS WELL AS THE NUMBER OF COMPANIES THAT REGISTER FOR EACH LEAD OR 
TENDER.  RESULTS WILL PROBABLY BE MADE PUBLIC IN THE FUTURE. 
 
                       UNCLASSIFIED 
 
PAGE 03        ROME  00642  01 OF 02  081650Z 
B) THE SOCIETA ITALIANA PER LE IMPRESE ALL'ESTERO, OR SIMEST (ITALIAN 
SOCIETY FOR OVERSEAS FIRMS), A SEPARATE ENTITY FROM ICE, IS THE 
ITALIAN FINANCIAL INSTITUTION FOR THE DEVELOPMENT AND PROMOTION OF 
ITALIAN BUSINESS ABROAD, IS A LIMITED LIABILITY COMPANY CONTROLLED BY 
THE MINISTRY FOR FOREIGN TRADE.  ITS SHAREHOLDERS INCLUDE BANKS, 
BUSINESSES AND TRADE ASSOCIATIONS. 
 
UNDER A MARKET PENETRATION PROGRAM, SIMEST ASSISTS ITALIAN COMPANIES 
IN ESTABLISHING A PERMANENT PRESENCE AND PROMOTES MARKETING ACTIVITIE 
IN NON-EU MARKETS.   FINANCING IS AVAILABLE FOR PERMANENT FACILITIES 
SUCH AS REPRESENTATIVE OFFICES, SALES OUTLETS AND NETWORKS, CUSTOMER 
ASSISTANCE CENTERS, WAREHOUSES, DEPOSITS, AND SHOWROOMS.  PROGRAMS FO 
THE STRENGTHENING OF EXISTING STRUCTURES ARE ALSO ELIGIBLE.   PROJECT 
MUST BE IMPLEMENTED WITHIN TWO YEARS. 
 
TYPES OF EXPENSES THAT MAY BE COVERED INCLUDE SETTING UP AND 
MAINTAINING REPRESENTATIVE OFFICES, CONDUCTING MARKET RESEARCH, 
PROMOTIONS, ADVERTISING AND DEMONSTRATIONS, AND CUSTOMER SERVICE 
ACTIVITIES.  IN CASES WHERE FINANCING IS REQUESTED TO IMPROVE OR 
ENLARGE EXISTING FACILITIES, THE PROJECT IS ELIGIBLE WHERE THERE IS A 
SUBSTANTIAL INCREASE IN COST FOR PERMANENT STRUCTURES AND/OR NEW 
STAFF. 
 
FINANCING COVERS UP TO 85 PERCENT OF THE COMPANY'S PROJECT EXPENSES, 
MILLION EUROS (ABOUT USD 1.8 MILLION), OR 3 MILLION EUROS IN THE CASE 
OF A CONSORTIUM OF SMES THAT IS IMPLEMENTING THE PROJECT DIRECTLY. 
THE REPAYMENT PERIOD MUST NOT EXCEED SEVEN YEARS FROM THE DATE THE 
LOAN CONTRACT IS SIGNED.  COMPANIES THAT HAVE BEEN APPROVED FOR 
FINANCING HAVE 2 YEARS TO MEET THEIR PROPOSAL TARGET AND PAY ONLY 
INTEREST DURING THAT TIME. 
 
                       UNCLASSIFIED 
 
PAGE 04        ROME  00642  01 OF 02  081650Z 
FINANCING IS AVAILABLE ONLY FOR COUNTRIES NOT BELONGING TO THE 
EUROPEAN UNION.  GENERALLY, A PROJECT IS PROPOSED FOR ONE ECONOMIC 
REGION AND LIMITED TO 2 COUNTRIES IN THAT REGION.  A COMPANY MAY 
RECEIVE FINANCING FOR ONLY ONE PROJECT AT A TIME. 
 
THE INTEREST RATE IS FIXED FOR THE DURATION OF FINANCING AND IS EQUAL 
TO 40 PERCENT OF THE REFERENCE RATE (FOR EXPORT CREDIT TRANSACTIONS 
WITH FUNDS RAISED DOMESTICALLY AT VARIABLE RATES) IN FORCE AT THE TIM 
THE CONTRACT IS SIGNED. 
 
AT THE TIME OF APPLICATION, THE REQUESTING FIRM MUST SUPPLY FINANCIAL 
STATEMENTS AND RELATIVE DOCUMENTATION FOR THE LAST THREE YEARS ALONG 
WITH THEIR APPLICATION AND SUMMARY DESCRIPTION OF THE FIRM.  IN 
ADDITION, THE COMPANY MUST SUBMIT A PROJECT REPORT DESCRIBING ITS 
BUSINESS PLAN, OBJECTIVES, MANNER OF IMPLEMENTATION, TOGETHER WITH 
BUDGET INFORMATION DESCRIBING ALL FORESEEN EXPENDITURES. 
 
SIMEST ALSO EXPLORES PARTNERSHIP AND INVESTMENT OPPORTUNITIES FOR 
ITALIAN COMPANIES.  UNDER THE BUSINESS SCOUTING PROGRAM, SIMEST 
REGULARLY MONITORS LOCAL INVESTMENT OPPORTUNITIES AS WELL AS POTENTIA 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ1495 
 
PAGE 01        ROME  00642  02 OF 02  081650Z 
ACTION SSO-00 
 
INFO  LOG-00   ANHR-00  EB-00    E-00     TEDE-00  SS-00    TEST-00 
      SAS-00     /000W 
                  ------------------6431AD  081650Z /38 
R 081626Z FEB 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 2046 
INFO USDOC WASHDC 
AMCONSUL MILAN 
USEU BRUSSELS 2544 
 
UNCLAS SECTION 02 OF 02 ROME 000642 
 
SIPDIS 
 
STATE FOR EB/ESP 
USDOC FOR U/S LARSON AND U/S ALDONAS 
INFO 3133/USCS/OIO/ESLETTEN/PBUCHER 
4220/ITA/EUR/SED/DDEFALCO 
 
E.O. 12958: N/A 
TAGS: BEXP ECON EFIN ETRD AMGT ECON EFIN ETRD AMGT IT IT BEXP
SUBJECT:  JOINT STATE/COMMERCE REQUEST:  INVESTIGATION OF POTENTIAL 
TRADE PROMOTION AND FINANCE BEST PRACTICES 
 
ACQUISITIONS IN SEVERAL COUNTRIES.  SIMEST ALSO UNDERTAKES SPECIAL 
CUSTOMIZED SEARCHES FOR POTENTIAL PARTNERS OR PROJECTS ON BEHALF OF 
ITALIAN COMPANIES. 
 
C) ORIGINALLY, THERE WAS AN ICE SUBSCRIPTION SERVICE FOR 400.000 
                       UNCLASSIFIED 
 
PAGE 02        ROME  00642  02 OF 02  081650Z 
ITALIAN LIRE (ABOUT USD 200) THAT ENTITLED SUBSCRIBERS TO A 30 PERCEN 
DISCOUNT ON ALL SERVICES.  THERE WAS NO CHARGE FOR REPORTS, STUDIES 
AND STATISTICS, ONLY FOR ASSISTED SERVICES. 
 
THE ARE TWO TYPES OF ASSISTED SERVICES:  SPECIALIZED AND PERSONALIZED 
ALTHOUGH THESE NAMES ARE CONSIDERED AMBIGUOUS AND WILL PROBABLY CHANG 
IN THE FUTURE.  SPECIALIZED SERVICES ARE DOCUMENTS, STUDIES, AND 
CONSULTATIONS THAT ARE SOLD AT FIXED PRICES.  PERSONALIZED SERVICE 
PRICES ARE ESTIMATED BASED ON PERSONNEL-HOURS AND COUNTRY. 
 
ICE HAS DEVELOPED A LIST OF CITIES WHERE IT HAS OFFICES, DEFINING 
THESE CITIES AS BEING IN DEVELOPING, NEWLY INDUSTRIALIZED, AND 
INDUSTRIALIZED COUNTRIES.  WHEN ICE WAS QUESTIONED ON HOW THE CRITERI 
FOR THESE CATEGORIES WERE DETERMINED, IT INDICATED THAT THERE WAS NO 
HARD AND FAST RULE.  SOME OF THESE ARE FAIRLY OBVIOUS, BUT OTHERS SEE 
RATHER ARBITRARY.   MONTREAL AND AMSTERDAM ARE ON THE "NEWLY 
INDUSTRIALIZED LIST," FOR EXAMPLE.  IT SEEMS THAT, BECAUSE THE LISTS 
ARE USED TO CALCULATE COSTS, COST OF LIVING IS THE BOTTOM LINE.  COST 
PER PERSON/DAY FOR ICE SERVICES IS AS FOLLOWS:  IN DEVELOPING 
COUNTRIES, 260 EUROS (ABOUT 260 USD); IN NEWLY INDUSTRIALIZED 
COUNTRIES, 300 EUROS (ABOUT 300 USD); AND IN INDUSTRIALIZED COUNTRIES 
360 EUROS (ABOUT USD).  SERVICES IN COUNTRIES NOT ON THE LIST HAVE TH 
SAME COST AS THEIR SO-CALLED COUNTRY OF JURISDICTION. 
 
THE DOWNSIDE OF CHARGING FOR PRODUCTS THAT ONCE WERE FREE OF CHARGE, 
ICE OFFICIALS SAY, IS THE DECREASE IN DEMAND FOR THESE PRODUCTS. 
HOWEVER, THESE PRODUCTS ARE VIEWED AS A NEW SOURCE OF REVENUE, WHICH, 
IT IS HOPED, WILL INCREASE OVER TIME.  BECAUSE THE PROGRAM IS STILL 
QUITE NEW, IT IS DIFFICULT TO GAUGE SUCCESS AT THIS TIME. 
 
ICE IS NOT ENGAGED IN SERIOUS COST-RECOVERY (ALTHOUGH IT HAS TAKEN 
                       UNCLASSIFIED 
 
PAGE 03        ROME  00642  02 OF 02  081650Z 
LIMITED STEPS TO CHARGE FEES IN PROPORTION TO COST).  COST-RECOVERY I 
NOT THE MAJOR CONCERN TO THE GOI THAT IT IS TO THE USG IN SUCH AREAS. 
IT IS DIFFICULT FOR ICE TO DO A ROBUST COST/BENEFIT ANALYSIS OF ITS 
SERVICES, FOR LAST YEAR'S PRIVACY LAW ALLOWS IT ACCESS ONLY TO 
AGGREGATE DATA RATHER THAN TO INFORMATION REGARDING PARTICULAR 
TRANSACTIONS THAT MIGHT FLOW FROM, FOR EXAMPLE, AN ICE TRADE SHOW. 
 
D) THE ICE PRE-PAID "SERVICE CARD" IS AVAILABLE IN THREE CATEGORIES 
AND IS VALID FOR ONE YEAR FROM THE DATE OF ISSUE.  EACH LEVEL IS WORT 
A CERTAIN NUMBER OF POINTS THAT CAN BE USED TO PURCHASE ON-LINE 
SERVICES (TRADE LEADS, INFORMATION ON TENDERS, PURCHASE OF STUDIES, 
DOCUMENTS, AND STATISTICS) AND OFFERS DISCOUNTS ON PERSONALIZED 
SERVICES AT ANY OF THE ICE OFFICES THROUGHOUT THE WORLD.  THE BASIC 
LEVEL IS WORTH 250 POINTS, OFFERS A 10 PERCENT DISCOUNT, AND COSTS 13 
EUROS (ABOUT USD 125).  SUPER IS WORTH 500 POINTS, OFFERS A 15 PERCEN 
DISCOUNT, AND COSTS 230 EUROS (ABOUT USD 220).  GLOBAL IS WORTH 1000 
POINTS, OFFERS A 25 PERCENT DISCOUNT, AND COSTS 400 EUROS (ABOUT USD 
380). 
 
CARDS CAN BE OBTAINED ONLINE USING A CREDIT CARD OR BY MAILING OR 
FAXING THE REQUEST FORM TO ICE'S OFFICE.  CUSTOMERS CAN PURCHASE 
DOCUMENTS AND REPORTS ONLINE OR MAY REQUEST BOUND COPIES OF THESE 
MATERIALS FROM ICE FOR A HIGHER PRICE.  THE PROGRAM IS STILL NEW 
(INITIATED IN OCTOBER 2001), BUT IT SEEMS THAT FORMER SUBSCRIPTION 
HOLDERS ARE BUYING THE CARDS.  ICE WILL HAVE A BETTER IDEA IN THE 
FUTURE AS TO WHETHER THE NEW PROGRAM HAS DRAWN NEW CUSTOMERS. 
 
(ORIGIN: FCS ROME/ECOLOMBO/BMCCLEARY) 
SEMBLER 
 
                       UNCLASSIFIED 
 
PAGE 04        ROME  00642  02 OF 02  081650Z 
 
                       UNCLASSIFIED 
 
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 2002ROME00642 - Classification: UNCLASSIFIED