2.12.2008: BILATERAL RELATIONSHIPS WITH SWITZERLAND AND THE PRINCIPALITY OF LIECHTENSTEIN

Les saken:



Embassy Bern CONFIDENTIAL R 021439Z DEC 08

FM AMEMBASSY BERN

TO SECSTATE WASHDC 5485

INFO EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L BERN 000612

EUR/FO FOR A/S FRIED, DAS GARBER, EUR/CE, CA FO, EUR/PPD,

EUR/EX

E.O. 12958: DECL: 12/05/2028

TAGS: PREL, ECON, ETRD, PHUM, EFIN, SZ

SUBJECT: BILATERAL RELATIONSHIPS WITH SWITZERLAND AND THE

PRINCIPALITY OF LIECHTENSTEIN

Classified By: AMB. P. CONEWAY FOR REASON 1.4 (b) and (d)

(U) As I approach the end of my two and one-half year tenure

in Bern, I would like to share a few thoughts regarding our

relationship with Switzerland and Liechtenstein. I hope that

these observations will be helpful to my successor and others

concerned to better understand the opportunities and

challenges we face in dealing with these very successful, but

frequently frustrating alpine democracies.

(U) Special thanks to our dedicated staff of career

professionals at Embassy Bern and at the EUR/CE Switzerland

desk in Washington for their contributions to this document

and their important role in the bilateral relationship.

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Historical Context

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(U) The quintessential element of Switzerlands foreign

policy is its centuries-old tradition of neutrality. In

Liechtensteins case, neutrality was adopted after World War

I. This, alongside the countrys unique system of direct

democracy, is considered by the Swiss to be one of the two

main factors in the countrys remarkable historical success.

During the last century, when the rest of Europe suffered

horrific human and material losses in wars and revolutions,

Switzerland remained an island of democratic stability. In a

turbulent Europe, the Swiss were at peace. No Swiss

factories were bombed, the infrastructure was slowly

perfected, and the countrys banks (and even its real estate

agents) thrived on its proven track record as a safe haven.

Gradually over decades, such circumstances and traditional

Swiss industriousness transformed a resource-poor alpine

republic into one of the most prosperous societies on earth.

(U) Even now, in the 21st century, with its growing global

political, economic, and environmental challenges, neutrality

remains the cornerstone of Swiss foreign policy, a view

supported by all major Swiss political parties. Switzerland

is neither a member of NATO nor the European Union, and the

Swiss public does not aspire to join either, according to

public opinion polls. In a 2001 referendum, the Swiss voted

to reject full EU membership. Instead, the Swiss opted for a

series of so-called bilateral treaties with Brussels to

increase Switzerlands economic integration with the EU (by

liberalizing movements of capital, goods, and labor), but

preserve the countrys ultimate sovereignty.

(C) In a 2002 referendum, 55% of the Swiss voted to join the

United Nations. Proponents argued that UN membership would

allow Switzerland to make its discrete views better heard on

global issues. The decision was heavily opposed by the

conservative nationalist Swiss Peoples Party (SVP) run by

Christoph Blocher, which argued it would weaken the country.

UN membership has forced Switzerland to take positions on a

range of issues on which it could have previously remained

silent. However, when faced with a particularly

controversial issue, the Swiss often abstain, such as in the

recent vote on whether to refer the question of Kosovos

independence to the ICJ.

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U.S.- Swiss Relations

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(C) U.S.-Swiss relations are correct and cordial, but they

lack the natural intimacy and trust that stems from a shared

struggle against Fascism or Communism, a common language, or

linked history. U.S. and Swiss soldiers never fought

side-by-side in a war, no Swiss town felt an emotional bond

to the U.S. for a past liberation or economic assistance

program, and no flood of Swiss political dissidents or

economic migrants had to seek shelter on U.S. shores.

(C) Despite paying lip service to the useful democratizing

and stabilizing role the U.S. has played in modern Europes

history, the Swiss foreign policy establishment is at heart

convinced that Switzerlands well-being and success is of its

own making, and the country owes a debt to no one. As a

result, the fabric of emotional and historical ties between

Switzerland and the United States is thinner than with many

other countries, and there is no store of historical goodwill

or accumulated political capital upon which to draw.

(C) This does not mean that the U.S. and Switzerland cannot

cooperate effectively in many areas. However, the ways in

which the Swiss choose to work with us (such as on global

economic, environmental or humanitarian issues) are those

where they believe our rational self-interest coincides and

which do not require Switzerland to abandon its strict

neutrality on international armed conflicts.

(C) Internal debates over Swiss foreign policy tend to focus

more on the style and body language of its neutrality

rather than its substance. Swiss Federal Councilor for

Foreign Affairs Micheline Calmy-Rey is resented in some Swiss

circles for her high-profile attempts to offer Switzerland as

an intermediary in various disputes, which runs counter to

Switzerland,s tradition of discrete, low-profile diplomacy.

Thus, for example, Switzerlands recent offer to represent

Russias interests in Tbilisi came almost as soon as the hot

phase of the conflict ended. However, the Swiss Department

of Foreign Affairs (EDA) strategists believe the move was an

effective way to underline Switzerlands status as neutral

and pose a counterpoint to its representation of U.S.

interests in Tehran and Havana. (It also represents Irans

interests in Washington).

(C) One of the most recent points of tension between the

United States and Switzerland was the decision of the Swiss

gas company EGL to enter into a long-term contract to buy

natural gas from Tehran. Swiss Foreign Affairs Councilor

Calmy-Rey has cited it as one of the achievements of her

activist style of diplomacy, which has allowed Switzerland to

win Irans trust. While Switzerland has supported UN

sanctions against states of proliferation, including Iran, in

Irans case, the Foreign Ministry has pursued its own "Swiss

Plan," which has on several occasions sent the wrong message

to Iran given the Swiss protecting power mandate for the U.S.

(see Political Issues for important expanded history on the

Iran Dossier).

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Liechtenstein

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(U) The United States enjoys excellent relations with the

Principality of Liechtenstein and its hereditary ruling royal

family. Despite having only 33,000 inhabitants, the

Principality is an important banking center, providing

offshore financial services to thousands of foreign

clients. The numerous banks and holding companies located in

the Principality manage more than $150 billion of client

assets and generate roughly 30% of the countrys GDP. Like

Switzerland, Liechtenstein has adopted neutrality as its

foreign policy strategy and often follows Berns lead on

international issues. In many countries, Liechtenstein

relies on the Swiss Embassy to represent its interests. For

these reasons, the U.S. Embassy in Bern devotes only a

fraction of its time to managing bilateral relations with

Liechtenstein. Our most substantive interactions have

involved seeking ways to improve our cooperation in the fight

against money laundering and terrorist financing and on how

to prevent Liechtensteins bank secrecy laws from being used

by U.S. taxpayers to evade taxes.

Terrorist Financing

(U) Liechtenstein and the United States signed a mutual legal

assistance treaty in 2002 focused on jointly combating money

laundering and other illegal banking activities. Close

relations with our Liechtenstein counterparts, such as

Liechtensteins Financial Intelligence Unit (FIU), have

helped the embassy resolve issues before they become

problematic. For example, in April 2007, Liechtenstein

halted the transfer of Boeing MD-80 aircraft from Germany to

Iran via Liechtenstein. Since September 11, Liechtenstein

has also frozen approximately $150,000 in terrorist assets.

Liechtenstein is a party to the UN Convention on Terrorist

Financing and in March 2008, Liechtenstein hosted the working

meeting of the Egmont Group ) the worldwide association of

national Financial Intelligence Units.

Tax Evasion

(C) Like Switzerland, Liechtenstein draws a fine line between

banking privacy and secrecy and exempts individuals for tax

evasion, but not tax fraud, from criminal prosecution. These

technical differences have hindered efforts to obtain banking

information on U.S. citizens suspected of tax evasion.

Liechtensteins largest bank, LGT, which is operated by the

royal family, is under scrutiny (and pressure from the U.S.

Senate) for allegedly encouraging U.S. citizens to commit tax

evasion and tax fraud. As a result, the U.S. and

Liechtenstein are currently negotiating a Tax Information

Exchange Agreement, which should provide more open access to

information and additional avenues for legal cooperation

where tax fraud is concerned.

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Private Sector

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(U) Leaders in the private sector (CEOs, CFOs, public affairs

officers, etc.) and NGO arenas can wield considerable

influence in political matters when they choose to get

engaged.

(U) Typically, they are less involved in Switzerland than our

experience in the U.S., but it is a good investment for the

COM, DCM, Pol/Econ, Public Affairs, and Commercial officers

to develop relationships in these sectors. From programs and

panels at the WEF, Swiss-American Chamber events, programs,

and issues, and underwriting of exchange programs like the

U.S.Fulbright-Swiss Scholarship Program, to general support

of our Embassy and mission, the private sector and NGOs can

positively influence our success.

(U) The private sector can also enhance the publics positive

perception of the U.S. and our policies.

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Political Issues

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(C) The decentralized nature of political power in

Switzerland is unique in Europe. Far from having a unitary

Executive, the Swiss government is led by a seven-member

cabinet -- the Federal Council. The Swiss presidency is

largely ceremonial and rotates annually between different

members of the Federal Council. Even for those accustomed to

dealing with the complex political geometries of European

coalition governments, the Swiss form of decision making can

be disorienting. With the exception of the rightist Swiss

Peoples Party that opted for an opposition role last year,

all the major political parties are represented on the

Federal Council, spanning a broad spectrum from left to

right. Each Federal Councilor (Minister) serves at his or

her own pleasure and enjoys an ill-defined but generally high

degree of autonomy. While key policy decisions are taken by

the entire Council -- sometimes via vote -) its

deliberations are strictly secret, and the Swiss have a

long-standing tradition whereby Federal Councilors avoid

publicly criticizing each other. The end result is a

seemingly amorphous policy-making process in which decisions

are implemented with considerable freedom of interpretation

by senior representatives of political parties having often

diverging interests.

(C) An additional "x factor" in Swiss decision making is the

ability of the Swiss people to initiate or to strike down

legislation via an expansive and oft-used referendum

mechanism. It only takes 50,000 certified Swiss signatures

to force a public vote. The threat of a referendum is a fact

of Swiss political life that no politician here can ignore,

and something that Swiss officials frequently flag for us )

particularly when we ask them to do something difficult.

(C) Dealing with these unique elements of the Swiss

political system demands patience and flexibility but can pay

important dividends. Given its international reputation for

mediation and diplomatic competence, Switzerland,s influence

on the international stage is significantly greater than one

would otherwise assume for a country of its size. Standing

outside of the EU and NATO, Switzerland sees its comparative

advantage as working the seams via diverse and variable

coalitions of convenience. With enough effort and

coordination, the Swiss advantage in this respect can

sometimes become our own, as was the case with the strong

supportive roles the Swiss have played on Kosovar

independence, on obtaining the release of American citizens

wrongfully detained in Iran, on addressing interoperability

concerns with the Oslo Accord on cluster-munitions, on the

establishment of the Forum for the Future, and with the

resolution of the Magen David Adom dispute. But getting

successful outcomes requires strategic patience on our part

and a willingness to take the time to cultivate relationships

with each of the Federal Councilors, as well as with industry

leaders. In doing so, I have come to appreciate that the

extensive horse-trading endemic to the Swiss tradition of

political compromise sometimes gives unlikely actors

influence on issues of interest to us.

(C) As noted above, the Swiss penchant for equidistance

sometimes works to our advantage. However, on one key issue

of the past two years ) the Iran nuclear problem )

Switzerland,s instinct "not to take sides" has harmed

international efforts. While many Swiss clearly understand

and take seriously the threat that Irans dangerous nuclear

program represents to our mutual interests, FM Calmy-Rey has

apparently seen in this dispute an opportunity to raise her

own profile. While we and the members of the P5 1 group, the

EU, and other like-minded states have made considerable

progress in increasing the pressure on Iran, Calmy-Reys

ministry has undercut these efforts at several turns by

offering an alternative "Swiss Plan" for resolving the

dispute. The Swiss Plan and Calmy-Reys infamous trip to

Tehran in March to secure a major new gas deal with Iran for

Swiss firm EGL, have surely given Iran some reason to believe

that it can continue to resist pressure to meet its

international obligations.

(C) Swiss behavior regarding Iran is of particular concern

because Switzerland has been our Protecting Power in Iran

since 1980, and since Switzerland was re-elected to the IAEA

Board of Governors last fall. It has required much effort on

our part to contain Swiss activism on Iran, culminating with

a public endorsement in July of the P5 1 proposal by

President Couchepin, along with assurances that Switzerland

would no longer promote its own initiatives for resolving the

Iran nuclear dispute. At the same time, the Swiss have taken

increasingly firm and constructive stances regarding Iran at

the IAEA, thanks in no small part, I believe, to our lobbying.

(C) However, President Couchepins recent declaration, which

received broad press coverage (see July NZZ Sonntag article),

"For several weeks the Swiss position in the Iran-Nuclear

dispute is completely clear. There is no special initiative

any more. We do not look for a special mediation/way.

Instead we support the position of the P5 plus 1 countries,

and we hope that Iran will give in," has effectively muzzled

the Foreign Ministrys determination to pursue its own "Swiss

Plan."

(C) If and when this or the new administration wishes to

explore a diplomatic dialogue on the Iranian nuclear

proliferation issue, perhaps we could engage the Swiss at the

outset to truly represent us, with the understanding at that

point, that they would only deliver our message, and not

something diluted by independent Swiss thinking. If and when

such a dialogue is in our best interests, I believe the Swiss

and their Foreign Ministry would jump at the chance to truly

represent us without prejudice and with strict guidelines.

This idea is worth exploring if an appropriate opportunity

presents itself.

(SBU) To reinforce our ability to identify and pursue goals

of mutual interest, in 2006 we signed a MoU with the EDA

initiating a so-called "Political Framework for Intensified

Cooperation." Though such instruments are always at risk of

becoming merely talk-shops, the EDA places high importance on

the Framework, making it a potentially useful tool for us to

define and achieve USG goals, including in such areas as

promoting civil society in the Broader Middle East and North

Africa, human rights, peace support operations in the Balkans

and Africa, and counterterrorism.

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Economic Issues

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(U) Switzerlands highly advanced and diversified economy

has so far proven comparatively resilient in the global

financial crisis. The Swiss government estimates that GDP

growth will fall from roughly 1.9% in 2008 to a maximum 1.0%

in 2009. Switzerland,s GDP in 2007 totaled 512 billion CHF

($450 billion), resulting in a per capita GDP of about

$60,000, according to the IMF. Only three percent of Swiss

wage-earners take home less that 3,000 CHF per month, and one

out of five Swiss pensioners has a net worth of more than

1,000,000 CHF. Unemployment is 2.3%. Switzerland is home to

a disproportionate number of large European multinationals,

and global companies such as Nestl, Novartis, Roche, Credit

Suisse and UBS gave the Swiss Stock Exchange a market

capitalization equal to roughly 2/3 that of Germanys.

(U) U.S.-Swiss economic ties are robust and long-standing,

and they contribute most positively to our political

relationship with Switzerland. The economic sphere is an

area where both sides perceive a clear win/win situation.

Swiss firms have collectively invested over $140 billion in

the United States and employ nearly 500,000 U.S. workers,

ranking Switzerland seventh among all foreign investors in

the U.S. On the other side, more than 600 U.S. enterprises

have together invested more than $90 billion in Switzerland,

providing jobs for 70,000 people (or about 2% of the nations

entire labor force.) Switzerland is a preferred location for

the European headquarters of a number of top U.S.

multinationals (Caterpillar, GM, Dow Chemical, DuPont,

Colgate-Palmolive, etc.), while U.S. citizens head up some of

Switzerland,s bluest of blue chip companies. These include

Brady Dougan at Credit Suisse, Michael Mack at Syngenta, and

James Schiro at Zurich Financial Services. The Swiss bank

UBS actually has more employees in the United States (32,000)

than it does in Switzerland (27,000).

(U) Despite the lack of a free trade agreement, U.S. trade

with Switzerland is largely free outside of agriculture, and

Switzerland is a strong supporter of global services and

manufacturing trade liberalization. In 2007, U.S.

merchandise exports to Switzerland rose 18.5 percent to $17.0

billion (making the alpine country our 17th largest export

market). At the same time, merchandise imports from

Switzerland rose 3.7 percent to $14.8 billion. Key U.S.

exports to Switzerland included precious stones and metals,

pharmaceutical products, art and antiques, optical and

medical instruments, and aircraft, while top U.S. imports

from Switzerland included pharmaceutical products, clocks and

watches, machinery, optical and medical instruments, and

chemicals. Although most trade and business activity takes

place entirely in the private sector, the Mission must still

occasionally intervene with Swiss authorities to defend U.S.

commercial interests.

(U) In 2005, Switzerlands Federal Council decided to

propose exploration of a free trade agreement with the United

States. The attempt foundered on opposition from

Switzerland,s highly-protected farm sector. Instead, the

U.S. and Swiss governments agreed to establish a bilateral

Trade and Investment Cooperation Forum to address small yet

sensitive trade issues. Under its auspices, in October 2008

the two governments signed an E-Commerce Declaration, which

provides a framework for cooperation to improve trade

conditions for these services. In addition, a Safe Harbor

Agreement to allow free flow and effective protection of

personal data is in the final states of negotiations and is

likely to be concluded before the end of 2008.

(U) Also this year, the U.S. and Switzerland concluded an

expanded Open Skies Agreement, and are exchanging

discussion drafts on a Multilateral Convention on

International Investment in Airlines. The U.S.,

Switzerland, and several other countries are also engaged in

negotiating the Anti-Counterfeiting Trade Agreement,

(ACTA), which held its last negotiating round in Tokyo in

October 2008 and is intended to increase international

cooperation and strengthen the framework of practices that

contribute to effective IPR protection.

(U) Another tool utilized by the Mission to promote trade is

the U.S.-Swiss Joint Economic Commission (JEC). The JEC meets

once a year to discuss and resolve bilateral

misunderstandings. The JEC also holds a panel at the World

Economic Forum at Davos, the premier international event of

its kind, as documented in the World Economic Forum section

below.

(U) The JEC panel, which is organized by the Mission in

cooperation with the Swiss Department of Foreign Affairs, the

Swiss-American Chamber of Commerce, and EconomieSuisse,

allows the mission to publicize USG messages to an

influential global audience, such as supporting the Doha

Round at the 2008 panel and addressing the impact on trade of

the global financial crisis, the topic of the upcoming 2009

panel.

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World Economic Forum

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(U) The World Economic Forum (WEF) annual meeting in Davos,

Switzerland, is unlike any other event of its kind. Over a

five-day span at the end of January each year, 2,000 world

leaders, Fortune 500 chief executive officers, international

media moguls and nongovernmental organization (NGO) leaders

gather in the small alpine village of Davos to participate on

panels, in industry meetings and in "off the record"

sessions. The WEF meetings in Davos have been a ripe target

for public diplomacy efforts over the past 38 years, and the

WEFs founder, Dr. Klaus Schwab, has preserved the original

intent of the forum in maintaining its focus as a place for

informal dialogue and debate on major social and economic

problems.

(U) Davos 2008 was an important milestone for the United

States. During the final year of the Bush presidency, the

administration dispatched five cabinet secretaries, three

deputy secretaries, and numerous undersecretaries to Davos.

Secretary of State Condoleezza Rice, Secretary of Homeland

Security Michael Chertoff, Secretary of Energy Samuel Bodman,

Secretary of Education Margaret Spellings, U.S. Trade

Representative Susan Schwab, and Deputy Secretary of the

Treasury Robert Kimmitt, participated in five days of panels

and discussions that covered topics ranging from Middle East

peace, climate change, and educational reform to immigration,

financial market stability, and trade liberalization.

(U) Embassy Bern has worked closely with Klaus Schwab and his

WEF team to include U.S. delegations that not only speak with

strength and conviction on the global issues of our time, but

are also internationally recognized experts on the pressing

issues of the day.

During the last three years, our Mission has helped shape six

panels for Klaus and his team. The environment, challenges in

the global financial arenas, energy security, global

prosperity, and Muslim outreach are among the topics on which

we have collaborated with Dr. Schwab. No other nation works

so closely with the WEF on topics and participants, and no

other nation has our record of success in organizing panels

for key officials.

(U) Engaging a skeptical world is not an easy task. Public

diplomacy is vital if the United States is to correct skewed

impressions. Communication and public diplomacy are major

reasons for the success of the World Economic Forums annual

meeting in Davos. Klaus Schwab has made Davos media-friendly.

One of his primary goals each year is to expand the medias

reach. As a result, world leaders travel to the Swiss Alps to

deliver addresses aimed at their constituents around the

world. It has been an effective platform for the United

States Government and private sector leaders to support and

advance Americas missions and values.

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Foreign Commercial Service

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(U) The U.S. Foreign Commercial Service (FCS) has the lead on

providing promotional support and advocacy for U.S. exporters

and on attracting Swiss business investment to the United

States. Thus, it intervened with Swiss authorities in the

telecom sector to obtain regulatory approvals and in the

pharmaceutical sector to expand insurance reimbursements. In

aerospace, FCS and Mission management facilitated export

licenses leading to millions of dollars in U.S. exports. Over

the past year, FCS developed programs with multiple U.S.

universities to attract Swiss students to the U.S.A. In

October 2008, it mounted a USDOC-certified U.S.A. Pavilion at

WorldDidac (an educational fair in Basel). These activities

took place at the same time as we were consolidating the

operations of our FCS Zurich office into the new Embassy in

Bern.

(U) Our strong relationship with the Swiss-American Chamber

of Commerce is a vital asset in our efforts to promote U.S.

business. The 41-person board of directors of the Chamber is

a Who,s Who of the Swiss business community led by Executive

Director Martin Naville who is one of our biggest friends and

assets in-country. Virtually every board member is a CEO or

senior officer of a major corporation in his/her own right.

There is probably no better high-level, pro-U.S. audience in

Switzerland with which to promote investment in the U.S. In

June 2008, I rolled out the Commerce Departments Invest in

America Initiative in a speech to nearly 400 Swiss AmCham

members and guests. In November 2008, the Chamber and FCS

will co-host an Invest in U.S.A. Seminar with speakers from

Commerce, Treasury, State, and Homeland Security. Finally, in

June 2008 FCS consummated its "Transformational Commercial

Diplomacy" initiative for Switzerland by integrating its

Zurich office with the Embassy in Bern.

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Management

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(U) In June 2008, the Mission completed the sale of the

government-owned chancery complex and moved to a

newly-renovated, short-term lease property. It represents a

substantial upgrade in embassy habitability, and the new

building occupies a geographically central location in Bern

that minimizes transportation movements in our daily

business. The USG-owned Chief of Mission Residence (CMR) is

located next to the new chancery.

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Post Security

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(C) The Missions overall security posture significantly

improved with the relocation of the Embassy. The physical

security of the building is excellent; it is outfitted with

modern hardline doors, windows and barriers, and we achieved

significantly more "setback" from the street. Moreover, we

now control all vehicles entering and exiting the compound,

which was not the case in the previous location. Technical

security also improved with better-constructed and

well-defined CAAs.

(C) The Regional Security Officer (RSO) faces a challenging

audience when dealing with Swiss authorities on Post

security. Many Swiss authorities do not consider the United

States Embassy in Bern as a high-value target for terrorists;

this fallacy and its resulting challenges require frequent

intervention and lobbying by the RSO. Recurring conversations

and education resulted in positive instances of excellent

security support. We succeeded in persuading Swiss

authorities not to cut the number of posts currently manned

by either Swiss law enforcement or military. In addition, we

have requested and received security support for dozens of

high-level U.S. officials either visiting or transiting

Switzerland. The response of Swiss authorities to security

incidents has been commendable. They sent a well-trained

professional team to the Embassy to deal with a "white

powder" incident, and on several occasions have controlled

and mitigated suspicious individuals or vehicles in the area

of the Embassy. They sent appropriate support for

demonstrations directed at the Embassy and for special events

such as the July 4th celebration. On occasion, the RSO has

requested and received close protection for me at large

public events.

(C) The most disappointing security issue was the rejection

by the Swiss government of our request to deploy a

surveillance detection team. The decision was made at the

highest levels (the Federal Council) and was conveyed to us

by the Foreign Ministry. The chances of reversing that

decision are poor considering the high level of political

attention it received. The RSO will continue to work with his

resources and coordinate with Swiss authorities to provide

appropriate levels of security support.

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Defense Attach Office

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State of the Partnerships

(U) Switzerlands continued presence in the Balkans, level

of engagement in NATOs Partnership for Peace, and its recent

decision to withdraw the two military officers assigned to

ISAF reflect a military willing and at least superficially

able to contribute to regional security but severely

constrained politically. As Switzerland tries to find its

niche on the geo-strategic security stage, it has begun to

focus limited efforts towards Africa. Given the current

turmoil within the Defense Ministry and the recent abrupt

resignation of the current Defense Minister Samuel Schmid,

Swiss engagement abroad will increasingly be under the

auspices of the Foreign Ministry.

Greatest Challenges

(U) The Swiss military is limited by law to participating

only in peace support operations (PSOs) -- as opposed to

peacekeeping or peace enforcement -- and only under the

auspices of either a UN or an OSCE mandate. Furthermore, the

standing posture of the militarys involvement in PSOs and

other military engagements is participation under a

multilateral umbrella, equally avoiding bilateral

involvements with either NATO or the EU.

Contribution to Regional Stability, Democracy, and Foreign

Assistance

(U) On September 20, 2007, the Swiss parliament voted to

double the number of peace support operations troops from 250

to 500. While the actual realization of this effort will

most likely occur beyond the 2010 timeline originally

attached to the bill, it nevertheless provides insight into

the Swiss desire to be seen as contributing to regional

security and stability. Currently, Switzerland is

coordinating though DAO Bern to donate medical equipment to

the Afghan National Army. And, as mentioned previously,

Switzerland is increasingly focused on disarmament,

democratization, and reintegration efforts on the African

continent.

(U) Our engagement initiatives with the Swiss military will

continue to emphasize U.S. desires for them to maintain their

250-strong peacekeeping contingents deployed in Kosovo and

Bosnia and broaden their NATO-partnership activities beyond

Europe, and we will continue to explore cooperative ventures

for improved regional security and stability in Africa.

Towards that end, we will work in concert with both U.S.

European Command (USEUCOM) and African Command (USAFRICOM).

We will continue to maintain a robust defense procurement

relationship with the Swiss military, even as Swiss budgetary

constraints manifest themselves in less outlay for

acquisition. We will also continue to encourage the Swiss

military to further utilize military assets -- particularly

excess defense articles -- in humanitarian relief/aid efforts.

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Law Enforcement

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Counterterrorism and Law Enforcement Efforts

(U) The Federal Bureau of Investigation (FBI), Department of

Homeland Security (DHS), and Drug Enforcement Administration

(DEA) are the law enforcement entities represented at post.

Other law enforcement offices are represented through

regional offices. Ongoing efforts continue with the

government of Switzerland to grant the Regional Security

Office (RSO) law enforcement status.

(U) Switzerland strictly forbids investigative activity

within its territory by U.S. law enforcement. Thus, a high

reliance exists on the Swiss authorities to conduct

investigations on behalf of the U.S. in Switzerland.

Obstacles that have continued to hinder full cooperative

efforts and the free exchange of information in this regard

include an unfavorable Mutual Legal Assistance Treaty (MLAT)

that requires Swiss notification to the subject and

disclosure, and Switzerland,s strict personal privacy

statutes.

(U) This has reinforced the importance of the development of

liaison and rapport with Swiss law enforcement authorities by

U.S. law enforcement agencies at a working level, as well as

efforts at the ministerial level to invigorate information

sharing, particularly as it relates to counterterrorism and

money laundering.

(U) As a result of these efforts, we have seen a measured

improvement in overall Swiss cooperation with U.S. law

enforcement authorities at the federal, cantonal, and local

level. In addition, we remain optimistic concerning a new

version of the Operative Working Arrangement (OWA) recently

ratified by the Swiss parliament, which allows the formation

of joint U.S.-Swiss investigative teams to address criminal

and counterterrorism investigations with a U.S.-Swiss nexus.

(U) Our current challenge exists in continuing to enhance law

enforcement cooperation, intelligence sharing, and efforts to

apply the OWA in joint cases.

(U) Liechtenstein continues to be a model of cooperation for

U.S. law enforcement, having offered legal assistance on

important money laundering investigations and the arrest of

significant U.S. fugitives. The principality continues to be

in full compliance with the Financial Action Task Force

requirements.

----------------

Public Diplomacy

----------------

(U) The Public Affairs Section (PAS) is lean, with one

officer and three staff members. The budget supports limited

programming, two IVLPs, and one to one-and-one-half I-Bucks

speakers. Public Diplomacy outreach focuses on enhancing

public support for the United States and its goals and on

improving counterterrorism cooperation. Mutual understanding

is advanced through intensive use of the Fulbright and IV

Programs and alumni; actively engaging media in

Switzerland,s three major languages; increasing educational

advising and university relationships; presenting

multi-culturalism in the United States through Iftar, Black-

and Womens History Month speakers; and programming American

terrorism experts in all language regions.

(U) The last published media survey addressing Swiss

anti-Americanism was Q1 2007. It ranked Switzerland as

having the most anti-American levels in Western Europe.

Moreover, a September 2008 interview with Swiss Ambassador to

the United States Urs Ziswiler said he was concerned by the

anti-American attitude of the Swiss. PAS believes

anti-Americanism remains high: Inaccurate and/or negative

stories about the United States or the Embassy continue in

tabloids, free commuter papers and in the Geneva dailies.

However, the investment in ramped-up outreach has yielded

results, including dramatic increases in the number and

diversity of Fulbright applicants; the number of universities

hosting Embassy programming; the number of media inquiries

and accurate stories; and alumni group participation and

activity.

--------

Consular

--------

(U) In 2008, the Consular Section led an interagency effort

to convince the Swiss government to begin negotiations on the

Terrorist and Criminal Information-Sharing Agreement. To

date, the Swiss have shown little interest in this proposal,

arguing that such an agreement would be incompatible with

Swiss privacy laws. The Consular Section is now attempting

to get Swiss authorities to suggest their own version of such

an agreement that would be consistent with Swiss privacy laws

and still fulfill the intent of the U.S. proposal. We hope

to lay the groundwork for a Swiss negotiating team to visit

Washington in early 2009.

(U) The January 12, 2009, deadline for mandatory use of the

Electronic System for Travel Authorization (ESTA, a DHS

program for advance registration of travel to the U.S. so far

aimed at Visa Waiver Program (VWP) travelers) is fast

approaching. The Bern Consular Section has been active in

getting the word out to airlines, tourist agencies, leading

business groups, and the Swiss traveling public at large that

ESTA is out there and that its use will be required for all

Visa Waiver travel as of January 12. These outreach efforts

have been assisted by FCS and PAS.

(U) The early arrival (August 2008) of the new Consular

Section chief, permitting a 3-month overlap with the

departing Section Chief, temporarily brought the Sections

officer complement to the full staffing of four officers.

This enabled Post to greatly reduce its large backlog of NIV

appointments, which had occurred due to staffing gaps.

Currently, the waiting period for an appointment is one week.

As of early November, the Consular Section has found itself

again short one officer, and only the seasonal drop in NIV

applications has prevented the backlog from again approaching

high levels. The next entry level officer is due to arrive

in March 2009. Post is seeking TDY/WAE support in the

meantime to keep the situation from assuming the unacceptable

Spring-Summer 2008 proportions.

-----------

Conclusion

-----------

I would like to thank the following dedicated and talented

career officers at Embassy Bern who have worked with me in

advancing our mission in Switzerland and Liechtenstein. They

contributed significantly to this memorandum and remain

committed to working under the leadership of Deputy Chief of

Mission and Charg, Leigh Carter, until the next ambassador

arrives.

[TEXT REMOVED BY AFTENPOSTEN]

Thank you for this opportunity to serve my country.

Ambassador Peter R. Coneway

CONEWAY



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