Journalicious Dots from Switzerland

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.

——————  Historical Context  ——————

(U) The quintessential element of Switzerland’s foreign  policy is its centuries-old tradition of neutrality. In  Liechtenstein’s case, neutrality was adopted after World War

¶I. This, alongside the country’s unique system of direct  democracy, is considered by the Swiss to be one of the two  main factors in the country’s 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 country’s 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 Switzerland’s economic integration with the EU (by  liberalizing movements of capital, goods, and labor), but  preserve the country’s 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 People’s 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 Kosovo’s  independence to the ICJ.

———————  U.S.- Swiss Relations  ———————

(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 Europe’s  history, the Swiss foreign policy establishment is at heart  convinced that Switzerland’s 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, Switzerland’s recent ‘offer’ to represent  Russia’s 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 Switzerland’s status as neutral  and pose a counterpoint to its representation of U.S.  interests in Tehran and Havana. (It also represents Iran’s  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 Iran’s trust. While Switzerland has supported UN  sanctions against states of proliferation, including Iran, in  Iran’s 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).

————-  Liechtenstein  ————-

(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 country’s GDP. Like  Switzerland, Liechtenstein has adopted neutrality as its  foreign policy strategy and often follows Bern’s 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 Liechtenstein’s 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  Liechtenstein’s 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.  Liechtenstein’s 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.

————–  Private Sector  ————–

(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 public’s positive  perception of the U.S. and our policies.

—————-  Political Issues  —————-

(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  People’s 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 Iran’s 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-Rey’s  ministry has undercut these efforts at several turns by  offering an alternative “Swiss Plan” for resolving the  dispute. The Swiss Plan and Calmy-Rey’s 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 Couchepin’s 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 Ministry’s 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.

—————  Economic Issues  —————

(U) Switzerland’s 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 Nestle, Novartis, Roche, Credit  Suisse and UBS gave the Swiss Stock Exchange a market  capitalization equal to roughly 2/3 that of Germany’s.

(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 nation’s  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, Switzerland’s 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.

——————–  World Economic Forum  ——————–

(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  WEF’s 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 Forum’s annual  meeting in Davos. Klaus Schwab has made Davos media-friendly.  One of his primary goals each year is to expand the media’s  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 America’s missions and values.

————————–  Foreign Commercial Service  ————————–

(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 Department’s 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.

———-  Management  ———-

(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.

————-  Post Security  ————-

(C) The Mission’s 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.

———————-  Defense Attach Office  ———————-

State of the Partnerships

(U) Switzerland’s continued presence in the Balkans, level  of engagement in NATO’s 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 military’s involvement in PSOs and  other military engagements is participation under a  multilateral umbrella, equally avoiding bilateral  involvement’s 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.

—————  Law Enforcement  —————

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 Women’s 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 Section’s  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.   Deputy Chief of Mission, Leigh Carter  Political/Economic section: Richard Rorvig, Chris Buck,  Leslie Freriksen, Meg Goldfaden, and Diane O,Guerin  Foreign Commercial Service: Donald Businger  Management: Jonathan Schools  Regional Security Office: Brian Murphy  Defense Attach Office: Colonel Dorothea Cypher-Erickson  Department of Homeland Security: Michael McCool  Drug Enforcement Administration: E. Joe Kipp  Federal Bureau of Investigation: Danny Boyd  Public Diplomacy: Lisbeth Keefe  Consular: Ed Birsner   Thank you for this opportunity to serve my country.   Ambassador Peter R. Coneway

CONEWAY