VZCZCXYZ0020
RR RUEHWEB

DE RUEHSW #0898/01 1251515
ZNR UUUUU ZZH
R 051515Z MAY 06
FM AMEMBASSY BERN
TO RUEHC/SECSTATE WASHDC 2217
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEABND/DRUG ENFORCEMENT ADMIN HQ WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHGV/USMISSION GENEVA 2519
RUEKJCS/SECDEF WASHINGTON DC
RHMFIUU/FBI WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS BERN 000898 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
STATE ALSO FOR USTR 
 
E.O. 12958: N/A 
TAGS: PREL ETRD SZ VE
SUBJECT: SWITZERLAND & LIECHTENSTEIN: ASSESSING OUR 
BILATERAL RELATIONSHIPS 
 
FROM AMBASSADOR PAMELA P. WILLEFORD 
 
1.(U) Introduction:  As I prepare to leave Embassy Bern 
after two and a half years, I would like to share some 
observations and insights I gained during my tenure here.  I 
hope these thoughts will be helpful to those dealing with 
Switzerland and Liechtenstein, and Europe in general. 
 
----------- 
Big Picture 
----------- 
 
2.(SBU) Switzerland and Liechtenstein are niche players in 
the world and we must be creative in how we challenge them 
to contribute to our shared goals.  Our three new agreements 
with Switzerland -- covering political cooperation, trade 
and investment, and counterterrorism cooperation -- are 
modest achievements in and of themselves, but must be filled 
with good content to be truly useful.  We should not be 
afraid to ask our partners for assistance, mindful that 
there are constraints on how active these traditionally 
neutral countries can be.  In anything we do, personal 
relationships will be key.  We should not be fooled that the 
engineer-like Swiss are impervious to relationships - this 
is how we get things done.  We encourage Washington to 
cultivate and use these relationships, just as we have done 
in Bern. 
 
3.(SBU) A word on Davos.  The World Economic Forum's Annual 
Meeting is the premier event of its kind.  The USG can use 
this platform to spread our message.  Indeed, if we are 
early enough with our ideas, we can work with WEF organizers 
to fashion sessions and programs important to us.  A high- 
level USG presence is noticed by the global community.  We 
encourage Washington to begin thinking now about this coming 
January's meeting. 
 
------------------------- 
State of the Partnerships 
------------------------- 
 
4.(SBU) Switzerland and Liechtenstein can be valuable 
partners for the United States, provided we are creative in 
identifying areas of cooperation that take into account 
their own limitations.  Though neither is a member of the EU 
or NATO, each play a role larger than their size would 
suggest.  Switzerland and Liechtenstein, as international 
financial centers, are important to the struggle against 
terrorist finance, money laundering, and narcotics assets. 
Economically, Switzerland is the world's 16th largest 
economy, 12th largest aid donor, 6th largest direct investor 
in the United States, and "manager" of 40 percent of the 
world's privately held savings.  Switzerland is a 
participant in all relevant export control and non- 
proliferation regimes.  In political affairs, Switzerland 
plays above its size in the United Nations.  It has used its 
neutral status to our benefit along the Korean DMZ and as 
our protecting power in Iran and Cuba.  As depository of the 
Geneva Conventions, Switzerland has recently played a key 
role in hosting a diplomatic conference passing the Third 
Additional Protocol to the Third Geneva Convention. 
Switzerland's tentative steps toward peacekeeping in the 
Balkans, engagement in NATO's Partnership for Peace, and 
even tiny presence with ISAF in Afghanistan, reflects a 
country reconsidering its role in global security - though 
with trepidation. 
 
5.(SBU) Our greatest challenge has been prying more 
cooperation out of the often provincial and isolationist 
sectors of the societies.  Bank secrecy laws entail that 
host country financial institutions are substantially self- 
policing - not an entirely comforting situation. 
Agricultural protectionism shattered Swiss efforts to pursue 
a free trade agreement with the United States.  Both the 
federal structure of Switzerland and acute concerns about 
sovereignty mean that information sharing on terrorism, 
proliferation, and other crimes is less than optimal.  The 
 
Swiss military is barred from participation in peace 
enforcement (as opposed to peacekeeping) activities.  Media 
has been critical of the war in Iraq and the broader war on 
terrorism - particularly with respect to Guantanamo, 
renditions, and travel/visa restrictions.  Bad feelings 
derived from the Holocaust Assets scandal still redounds 
against us. 
 
6.(SBU) Facing these challenges, Embassy Bern has worked 
with sympathetic counterparts within the host governments to 
fashion ways of improving coordination and avoiding 
friction.  Among the measures we have taken are several 
agreements designed to ease cooperation on political 
affairs, trade, and law enforcement.  The Federal Council 
approved three this week, and should address the customs 
agreement this summer: 
 
-- Framework for Intensified Cooperation, to ease 
collaboration on multilateral democracy and security 
building.  Thus far, this has reaped Swiss membership in, 
and million dollar donation to, the Foundation for the 
Future, as well as Swiss financial support for disarmament 
in Ukraine, election monitoring in Afghanistan, and the 
NATO/EAPC trust fund in Iraq. 
 
-- Trade and Investment Cooperation Forum (the Forum) for 
discussion and resolution of minor trade and investment 
disputes and discussion of common efforts to, for example, 
strengthen intellectual property rights.  The Forum will 
complement other non-trade related economic discussions 
under the auspices of the Joint Economic Commission 
established in 2002. 
 
-- Operative Working Arrangement (OWA) to enable information 
sharing and possible joint investigations in terrorism 
cases. 
 
-- Customs Mutual Assistance Agreement (CMAA), addressing 
offenses against customs laws that are prejudicial to the 
economic, fiscal, and commercial interests of both 
countries, due for finalization this summer. 
 
7.(U) In addition to these agreements, the Embassy worked 
successfully with OBO and local Swiss officials to finalize 
a lease on a new chancery, which we should occupy in 2008. 
 
----------------------------------- 
Regional Stability, Democracy & Aid 
----------------------------------- 
 
8.(SBU) Switzerland's traditional neutrality has, in the 
past, severely restricted its involvement in world affairs 
outside of the humanitarian and economic spheres.  We have 
worked hard to bring the Swiss around toward fostering 
regional stability and democracy.  In May 2005, the Federal 
Council (cabinet) voted to enhance our bilateral 
relationship.  As a first gesture, they contributed $250 
thousand to the NATO/PfP trust fund for Iraq, $350 thousand 
to dismantling conventional weapons in Ukraine, $300 
thousand for election observation in Afghanistan (among the 
largest OSCE donations), and added short-term training 
courses for Iraqi and Afghan security officials.  The Swiss 
also made a significant commitment to fostering democracy in 
the broader Middle East and North Africa by joining the 
Forum for the Future and pledging $1 million to the 
Foundation for the Future. 
 
9.(U) Progress on the diplomatic front was also impressive, 
as the Swiss fulfilled their obligation as depository state 
for the Geneva Conventions by hosting a diplomatic 
conference to approve the Third Additional Protocol, which 
in turn will allow the Red Cross/Red Crescent Movement to 
recognize the Israeli Star-of-David emblem.  Embassy (with 
Mission Geneva) invested a great deal of effort in steeling 
the spines of our Swiss counterparts, efforts crucial to 
ensuring a successful diplomatic conference. 
 
10.(SBU) For the future, we want the Swiss to maintain their 
220-strong peacekeeping force deployed to Kosovo and Bosnia, 
to expand their small presence in Afghanistan, and to 
broaden their NATO-partnership activities outside of Europe. 
We want Swiss Army reform currently underway to succeed in 
transforming the Swiss military into a lighter, deployment- 
oriented force available for peace support operations.  We 
also wish to maintain our defense procurement relationship 
with the Swiss military.  We also hope to see the Swiss 
enlarge their broader security assistance to include police 
and border security assistance.  Likewise, in the aftermath 
of the Kashmir earthquake and Indian Ocean Tsunami, we might 
encourage the Swiss to explore a potential PfP coordinating 
role for the use of military assets in humanitarian relief - 
an area that might appeal to the pacifist as well as 
internationalist sectors of the populace. 
 
-------------------- 
Trade & Investment 
------------------ 
 
11.(U) A major outcome of the May 2005 Federal Council 
decision was the Swiss proposal to explore a free trade 
agreement with the United States.  Unfortunately, needed 
agricultural tariff reforms were too large a pill for many 
Swiss to swallow.  USTR's fallback position was to initiate 
a bilateral Trade and Investment Cooperation Forum, mandated 
to address small, yet sensitive issues such as strengthening 
intellectual property rights cooperation, removing Non- 
Tariff Barriers to trade and investment, and beef and wine 
exports. 
 
12.(U) Another potentially useful tool for the Mission is 
the U.S.-Swiss Joint Economic Commission (JEC), whose 
meetings in Washington, Bern, and at the World Economic 
Forum in Davos have served as fora for discussion and 
resolution of bilateral misunderstandings.  Through the JEC, 
the Swiss-American Chamber of Commerce, and intensive 
outreach efforts with Swiss and Liechtenstein media, the 
Mission has alleviated business concern about U.S. post-9/11 
security measures such as passenger name recognition laws, 
food security, aviation cargo regulations, and the financial 
provisions of the Patriot Act.  Working proactively, we 
averted a potential crisis on Zurich Airport's FAA 
certification.  FCS's intervention also turned back Swiss 
Health Office attempts to disadvantage U.S. pharmaceuticals. 
 
-------------------- 
World Economic Forum 
-------------------- 
 
13.(U) The WEF Annual Meeting in January is the premier 
international event of its kind.  Our Embassy's presence 
supports senior cabinet and congressional participation (six 
cabinet members and seven legislators last year; presidents 
and vice presidents in recent years).  Our consultations 
with WEF organizers ensure that USG officials have a 
platform to our present policies.  This year, for the first 
time, the Mission established a "Shared Logistics Platform" 
that provided airport and security liaison assistance, as 
well as logistical support in the run-up to and during the 
WEF on a cost-sharing basis.  Washington remains an 
important partner for the Mission in WEF support, as we seek 
to regularize this practice and improve support for high- 
level USG WEF attendees. 
 
---------------------------------- 
Counterterrorism & Law Enforcement 
---------------------------------- 
 
14.(U) The FBI, Homeland Security, and the Drug Enforcement 
Administration are all represented at post, while other law 
enforcement agencies are represented by regional offices. 
We are working with Washington and the Swiss Government to 
grant the RSO law enforcement status as well. 
 
15.(SBU) Cooperation with Swiss law enforcement agencies has 
 
improved "glacially" over recent years.  We are hoping some 
changes will speed this process along.  We have recently 
agreed on new language for an updated bilateral Operative 
Working Agreement (OWA) allowing joint investigations under 
certain narrow circumstances.  Swiss Justice Minister 
Blocher will now present to Parliament.  Direct cooperation 
with cantonal and municipal police is severely restricted. 
We are also hopeful that a new OWA will lead to greater 
information sharing between the Swiss and Embassy law 
enforcement representatives, including at the cantonal 
level. 
 
16.(SBU) Given the absence of direct attacks in their 
territory, public complacency is a big problem.  The level 
of risk is impossible to establish, absent the ability to 
investigate leads.  High-profile terrorist suspects arrested 
here - primarily support-personnel for the Madrid and Riyadh 
bombings - have been provisionally freed for lack of hard 
evidence.  One Salafist terrorist was deported to Spain, 
though only after a leak to the Spanish media revealed his 
presence in the country. 
 
17.(SBU) On terrorist finance, the Swiss continue to freeze 
over $25 million in al Qaeda/Taliban assets.  Switzerland 
holds about $130 million in Iraqi assets, whose turnover has 
been delayed by UN bureaucracy.  Liechtenstein, for its 
part, is cooperating on the U.N. lists and is looking for 
ways to be helpful in USG efforts against North Korean 
assets.  We will continue to press both countries to ensure 
that financial institutions exercise due diligence with 
their clients and for authorities vigorously to investigate 
suspicious transaction reports. 
 
18.(SBU) Liechtenstein was a model of cooperation for the 
mission's law enforcement agencies, offering legal 
assistance on important investigations of money laundering 
and child pornography.  The principality continues to be in 
full compliance with the Financial Action Task Force 
requirements.  It recently returned a high-profile Iraqi 
asset, Saddam's former executive jet, to the new government 
there.  Post ensured that media was aware of all these 
successes. 
 
19.(SBU) One area where we have been effective in 
encouraging better coordination is in combating trafficking 
in persons (TIP).  USG pressure, especially the downgrading 
of Switzerland in 2004 to "tier two," has spurred the Swiss 
Federal Government to communicate better with cantons on 
ways to protect trafficking victims and to identify areas of 
prosecution.  As the Swiss move to introduce new legislation 
and enlarge data collection, we will look for ways to 
encourage and support them. 
 
--------------------------------------------- --------- 
Non-proliferation of Weapons of Mass Destruction 
--------------------------------------------- --- 
 
20.(SBU) The Swiss are members of all relevant non- 
proliferation agreements and regimes and reliably report 
requests for controlled items.  Traditionally, in the gray 
area of dual-use items, the Swiss have been less diligent. 
However, we have recently witnessed a greater openness on 
the part of export control officials to share information, 
due in large measure to Embassy outreach and Washington's 
agreement to supply leads on investigations.  Given the 
growing threat from Iran and North Korea, this is very 
important.  Swiss officials have taken part in PSI exercises 
and are on-board for using existing law robustly against 
proliferators.  The Mission hopes that a broadened OWA will 
also foster joint investigations in the area of non- 
proliferation connected with terrorism. 
 
21.(SBU) The Swiss co-hosted with the USG two major 
conferences on WMD - one a workshop for 80 representatives 
of Eurasian countries on the bio-terrorism threat and 
another with 60 participants on supporting a US Department 
of Energy effort to eliminate plutonium-producing plants in 
 
Russia.  Pledges on the latter project have been 
forthcoming.  Follow-on conferences on both themes are 
expected in the coming 12 months.  In addition, under 
Partnership for Peace, the Swiss sponsor annual 
international conferences on critical infrastructure 
protection - an effort for which we hope to recruit USG 
experts. 
 
-------- 
Consular 
-------- 
 
22.(U) This year, our Consular Section has taken on 
additional burdens in assisting neighboring consular 
districts in Italy and France, where governments have failed 
to adopt machine-readable passports by the USG's deadline. 
These efforts are in addition to the usual portfolio, which 
also includes close coordination with the Swiss Protecting 
Power in Tehran.  Notwithstanding these challenges, Consular 
has achieved remarkable success in reducing visa applicant 
waiting times and improving customer service.  Washington 
was helpful in providing us with a needed fourth consular 
officer. 
 
23.(U) The Embassy also increased public outreach to clarify 
visa and passport regulations and procedures and provide a 
human face to the application process.  Our Homeland 
Security, Foreign Commercial Service, Consular, and Public 
Affairs sections initiated and implemented a program of 
travel trade promotions and outreach to the press and the 
Swiss travel industry that has contributed to a significant 
improvement in the Swiss public perception of travel to the 
U.S.  Other factors contributing to the improved perception 
are the implementation of a Swiss pilot program for 
biometric passports and a growing public appreciation for 
security measures.  Positive public perception combined with 
favorable economic factors made the U.S. the leading long- 
haul destination for Swiss travelers.  The annual number of 
Swiss travelers to the U.S. increased from 235 thousand in 
2003 to 270 thousand in 2005, with an annual 300 thousand 
expected by 2007. 
 
24.(U) Swiss students studying in the U.S. contribute 
approximately USD 60 million to the U.S. economy on an 
annual basis.  To promote graduate studies in the U.S., the 
Commercial, Public Affairs and Consular sections joined 
forces to support the annual MBA Fair in Zurich.  In 2005, a 
total of 4,656 students enrolled in U.S. higher education 
programs, a 13 percent boost from the previous year. 
 
------------------ 
Public Diplomacy 
---------------- 
 
25.(U) On all the above substantive goals, official Swiss 
reluctance to engage more deeply with the United States 
stems largely from public suspicion of USG actions. 
Generally, the Swiss public is not energized about the 
terrorist threat; those who are tend to believe that 
association with America might only increase Switzerland's 
exposure.  Some Swiss do "get it," however.  Mission's task 
is to work with these partners to spread the message that 
terrorism threatens us all and that spreading freedom and 
prosperity to the region is a long-term means to tackle the 
threat.  The large majority who opposed the war in Iraq must 
be reminded that we share a common interest in a successful 
new Iraq.  Those media outlets that have exaggerated USG 
faults have had their over-reaching exposed.  We will seek 
ways to help those sympathetic to our goals get the word 
out. 
 
------------- 
Post Security 
------------- 
 
26.(SBU) As noted in the law enforcement section, it has 
been an uphill struggle to convince many Swiss authorities 
 
of the gravity of the current threat.  For many years, the 
Canton of Bern refused our requests to operate a 
surveillance detection (SD) team.  We have succeeded in 
reversing their decision and we should have an SD program in 
place shortly.  As noted, we are working to have our 
diplomatic security agents recognized as law enforcement 
under our bilateral agreements.  The coming years will offer 
a particular challenge as we relocate the Embassy to a new 
chancery. 
 
---------------------------------------- 
Management: Relocation to a New Chancery 
---------------------------------------- 
 
27.(U) Among the most satisfying accomplishments of the past 
years has been the identification and securing of a new 
chancery.  In 2005, we signed a lease for a more secure and 
centrally located Chancery building and executed a contract 
to sell the existing building.  We are completing the permit 
process.  Renovation on the new site should begin mid-2006, 
and we should be prepared to relocate in early FY 2008. 
Until that time, tremendous efforts will still be necessary 
to overcome challenges, both expected and unexpected. 
Washington's continued support will be key. 
 
---------- 
Final note 
---------- 
 
28.(U) I would like to thank everyone in Washington and Bern 
for their wonderful support during my time here.  I have had 
the privilege of working with tremendously talented people 
who are dedicated to serving their country.  Representing my 
country as U.S. Ambassador to Switzerland and Liechtenstein 
has been one of the highlights of my life. 
WILLEFORD