VZCZCXRO0545
PP RUEHTRO
DE RUEHTRO #0949/01 3111631
ZNY CCCCC ZZH
P 071631Z NOV 07
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 2815
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHRO/AMEMBASSY ROME PRIORITY 0326
RUEHLO/AMEMBASSY LONDON PRIORITY 0656
RUEHFR/AMEMBASSY PARIS PRIORITY 0353
RUEHBS/USEU BRUSSELS PRIORITY 0150
RUEHEG/AMEMBASSY CAIRO PRIORITY 0901
RUEHAS/AMEMBASSY ALGIERS PRIORITY 0552
RUEHRB/AMEMBASSY RABAT PRIORITY 0504
RUEHTU/AMEMBASSY TUNIS PRIORITY 0342
RUEHTRO/AMEMBASSY TRIPOLI 3236

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000949 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR NEA/MAG 
 
E.O. 12958: DECL:  11/7/2017 
TAGS: PREL PGOV ECON EINV ETRD LY IT
SUBJECT: SLOW PROGRESS ON ITALY-LIBYA COLONIAL COMPENSATION TREATY A 
SIGN OF GOL'S "CORSAIR MENTALITY" REF: A) TRIPOLI 912; B) Tripoli 641 CLASSIFIED BY: Chris Stevens, DCM, Embassy Tripoli, State. REASON: 1.4 (b), (d)

1.(C) Summary: Recent media reports suggest that Rome may be close to finalizing an agreement to compensate Libya for damages incurred during Italy's colonization of the country; however, Italy's ambassador to Tripoli expressed doubt that such would occur soon. Pointing to the GOL's demands for compensation and its reluctance to consider Italy's requests for revised commercial/travel policies and resolution of sanctions-era debts to Italian companies, he criticized Libya for failing to adopt policies that would encourage the greater trade ties and foreign investment it claims to seek. In his view, Qadhafi and the GOL's senior leadership lack real strategic vision and instead do themselves a disservice by insisting on tactical linkages between "concessions" and "compensation". End summary.

2.(C) Open-source media reported October 29 remarks by Italian Foreign Minister Massimo D'Alema to the effect that Italy and Libya may be close to signing an agreement designed to settle the longstanding question of compensation for damages sustained by Libya during Italy's colonization of the country. Tripoli's rumor mill has been rife with speculation that movement towards an agreement, which has been under discussion for some time, was a Libyan pre-condition for granting Italy's Eni an ostensibly lucrative oil/gas exploration and production sharing agreement. (Note: Ref A reports on the deal, trumpeted by Eni as a success, and explains that drawbacks in details of the arrangement may have serious repercussions for other foreign oil and gas concession holders operating in Libya. End note.)

3.(C) In a conversation with P/E Chief November 4, Italy's Ambassador to Tripoli, Francesco Trupiano, dismissed the idea of a linkage between Eni's deal and the recent resurgence of interest in a colonial compensation agreement. Noting that Italian commercial interests were pressuring Rome to accommodate Libya's desire for symbolic remuneration, he offered that the agreement was further fueling what he described as the GOL's "inherently corsair mentality". In return for signing an agreement designed to bring the contentious issue of colonial-era abuses to a close, Libya has insisted that it is "owed" a highway that former Italian prime minister Silvio Berlusconi pledged to finance during a 2004 visit to Tripoli. The 1,900 kilometer highway, to be built to European standards, is to span Libya's coastline from the Tunisia-Libya border in the west to the Libya-Egypt border in the east.

4.(C) Trupiano said that some in the Italian government hope that Eni's deal will lend impetus to efforts to conclude a colonial compensation treaty to help facilitate trade, but cautioned that the GOL has balked at agreeing to Italy's three conditions. The first is facilitating easier registration of Italian companies by removing the requirement that the Libyan Prime Minister provide "political" approval to Italian entities seeking to do business in Libya in addition to the commercial approval that must be obtained from the Minister for Economy and Trade. Companies from other countries only have to obtain approval from the Minister of Economy; the requirement for political approval applies only to Italian firms. The second condition is revoking Libyan legislation that prohibits Italian "Fourth Shore" immigrants who resided in Cyrenaica and Tripolitania, and who were expelled in the early 1970's, from visiting Libya. Trupiano noted that some of those individuals had family ties that stretched back three generations or more by the time they were expelled from Libya and said the Italian government has received "numerous" requests for assistance in recent years from elderly Fourth Shore immigrants who were born in Libya and hope to visit again before they pass away. Italy's final stipulation for a colonial compensation treaty is resolving the issue of some 647 million Euros worth of payment for products and services owed to Italian companies by the GOL performed in the late 1980's and early 1990's in the early sanctions period.

5.(C) Noting that the GOL and even the affected Italian companies were willing to demonstrate "considerable flexibility" on the issue of unpaid bills, Trupiano complained that the GOL TRIPOLI 00000949 002 OF 002 has balked at lifting the political approval requirement for Italian companies and, more annoyingly, facilitating travel for "Fourth Shore" immigrants. On the latter, the GOL has proposed reviewing cases on a case-by-case basis, an arrangement Trupiano likened to an outright refusal in light of Libya's notoriously difficult visa practices. Trupiano attributed the GOL's "haughtiness" to soaring oil prices, its successful candidacy for a UNSC non-permanent seat and recent successes such as the slew of French-Libyan commercial agreements brokered during President Sarkozy's visit in connection with efforts to secure the release of Bulgarian medics accused of deliberately infecting Benghazi children with the AIDS virus (ref B and previous). The GOL complains that more European companies have not rushed to enter the Libyan market, he said, but consistently fails to take decisions that would facilitate greater commercial interest, let alone strike a grace note such as facilitating travel for Fourth Shore immigrants. He expressed pessimism about the possibility that an Italian-Libyan colonial compensation treaty would be finalized soon.

6.(C) Comment: Trupiano's frustration with the GOL's unwillingness to adopt policies that would invite the greater commercial interest and foreign investment it claims to seek is consistent with Post's observations. The GOL consistently expresses disappointment that more U.S. companies are not participating in Libya's current development efforts, but has been either unwilling or unable to make practical decisions on visa issuances or contract language that would help encourage greater U.S. commercial interest. Trupiano's summary judgment is that Qadhafi and senior GOL leadership lack real strategic vision on how to reestablish meaningful ties with the outside world in the wake of the lifting of sanctions, but instead approach issues from an inherently tactical perspective, directly linking each Libyan "concession" to "compensation". End comment. MILAM 0 11/07/2007 6695 PREL,PGOV,ECON,EINV,ETRD,LY,IT SLOW PROGRESS ON ITALY-LIBYA COLONIAL COMPENSATION TREATY A SIGN OF GOL'S "CORSAIR MENTALITY" Recent media reports suggest that Rome may be close to finalizing an agreement to compensate Libya for damages incurred during Italy's colonization of the country; however, Italy's ambassador to Tripoli expressed doubt that such would occur soon. Pointing to the GOL's demands for compensation and its reluctance to consider Italy's requests for revised commercial/travel policies and resolution of sanctions-era debts to Italian companies, he criticized Libya for failing to adopt policies that would encourage the greater trade ties and foreign investment it claims to seek. In his view, Qadhafi and the GOL's senior leadership lack real strategic vision and instead do themselves a disservice by insisting on tactical linkages between "concessions" and "compensation".