1.7.2009: SWITZERLAND SHUTTING DOWN COLENCOS BUSINESS WITH IRAN

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S E C R E T BERN 000273

DEPT FOR ISN/RA (J.ALLEN-CLOSE), NEA/IR, EUR/PRA, AND EUR/AGS (Y.SAINT-ANDRE), NSC FOR JEFF HOVENIER, DEPT OF JUSTICE BRUCE SWARTZ

E.O. 12958: DECL: 06/30/2019 TAGS: IR, MNUC, PARM, PHUM, PREL, PTER, KWAC, ECON, ETRD, EINV, SZ SUBJECT: SWITZERLAND SHUTTING DOWN COLENCOS BUSINESS WITH IRAN

REF: 08 BERN 464

Classified By: CDA L.Carter for reasons 1.4(b) and (d)

1. (S) Summary: Swiss Minister for Economics and Trade Doris Leuthard called CDA in to advise that the Swiss Federal Councilors had decided in a special session to shut down Swedish firm Colencos commercial activities in Iran. The Minister also reaffirmed the commitment of the Swiss government to accept several detainees from Guantanamo Bay for resettlement in Switzerland. Minister Leuthard made it clear that these two activities were linked to the achievement of a political settlement in the case of Swiss banking giant, UBS. The US court is scheduled to hear arguments in the civil case on July 13 and it is clear that the GOS hopes a settlement can be reached before the hearing date. End Summary.

2. (S) Minister Leuthard began the meeting by describing todays special session of the Federal Council which was focused on what steps the Swiss government could take to advance a political solution of the UBS case. The Council considered action on the Colenco case, long advocated by the USG and a major topic during the February meeting between Secretary Clinton and Foreign Minister Calmy Rey, was one proactive measure the Swiss government could take in this direction. Since action in this case falls under the purview of Minister Leuthard, she was tasked to take immediate action to shut down Colencos operations and to notify the USG. The additional information that the USG experts provided to the GOS on June 25th was pivotal in providing the Swiss with adequate actionable intelligence to make a legal finding that Colenco is violating the sanctions on Iran. Leuthard confirmed that the information we provided tracked with the findings of the Swiss intelligence services. The Swiss now consider that Colenco is not fulfilling their requirements under the dual use provisions of Swiss law. Leuthard also advised that they have notified the Swedish government of their intent to go forward with official action against Colenco.

3. (S) Colenco was not able to adequately defend their activities in Iran by a deadline set by the Swiss government. Leuthard stated that Colenco will be formally told to cease their activities in Iran on July 2. She further opined that should the government or other conditions relating to proliferation change for the better in Iran, Colenco may be able to resume their activities in the future. She emphasized that this shut-down was a "suspension". She promised to provide us with a written copy of the Colenco decision.

4. (S) Leuthard then turned the topic of discussion to Swiss willingness to accept several detainees from Guatanamo for resettlement and encouraged us to provide as much data as possible quickly so that the Swiss could move forward. CDA advised that more bio and medical data had been received today and was being delivered via a separate channel.

5. (S) At this point, Leuthard emphasized that these two actions were "elements showing that Switzerland is committed to resolving all issues between our countries." To bring home the point, she reiterated that this resolve extended especially to finding a political solution to the UBS case.

CARTER



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