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RR RUEHWEB

DE RUEHSW #1910/01 2841359
ZNY CCCCC ZZH
R 111359Z OCT 06
FM AMEMBASSY BERN
TO RUEHC/SECSTATE WASHDC 3243
INFO RUEHZG/NATO EU COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0537
RUEHMO/AMEMBASSY MOSCOW 0580
RUEHUL/AMEMBASSY SEOUL 0472
RUEHKO/AMEMBASSY TOKYO 0655
RUEHBY/AMEMBASSY CANBERRA 0855
RUEHWL/AMEMBASSY WELLINGTON 0058
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0106
RUEHGV/USMISSION GENEVA 2612

C O N F I D E N T I A L BERN 001910 
 
SIPDIS 
 
SIPDIS 
 
TREASURY FOR U/S LEVEY, A/S O'BRIEN, AND OFAC 
 
E.O. 12958: DECL: 10/11/2016 
TAGS: KNNP PREL PARM SZ
SUBJECT: SWISS REACTION TO NORTH KOREAN NUCLEAR TEST 
ANNOUNCEMENT 
 
REF: A. SECSTATE 169418 
     ¶B. SECSTATE 166404 
     ¶C. BERN 1876 
 
Classified By: DCM Carol Urban, Reasons 1.4 b/d 
 
1.(C) Summary:  Switzerland condemned North Korea's announced 
nuclear test and is committed to full implementation of 
binding sanctions by the UN Security Council.  Swiss 
officials were non-commital on what measures they might take 
if UNSC sanctions are ineffectual, but underscored that Swiss 
banks were already self-limiting their engagement and the 
export control office had implemented a "no go" on technology 
exports to the DPRK.  The Swiss reiterated their strong 
recommendation that the U.S. Treasury Department revive the 
international sanctions implementation experts group that 
last met in 2001 (REF C), in order to ensure that any UNSC 
sanctions imposed would be consistently applied.  End summary. 
 
---------------------- 
Swiss Public Statement 
---------------------- 
 
2.(U) The Swiss Federal Department of Foreign Affairs (DFA) 
released a statement on October 9 condemning the nuclear test 
announced by North Korea.  The statement said the test 
"threatens the security of the region and could lead to a 
regional arms race."  Switzerland, the statement added, "is 
actively committed to non-proliferation and complete 
elimination of nuclear weapons."   The DFA expressed its 
support for the six-party talks and vowed that "Switzerland 
will cooperate with any decision by the UN Security Council 
to impose binding sanctions against North Korea." 
 
------------------------- 
Urging a Proactive Stance 
------------------------- 
 
3.(C) DCM and Poloff met with Swiss DFA Co-Deputy Political 
Director Heidi Tagliavini and Asia Director Pierre Combernous 
to encourage common action on North Korea, per REF A.  Noting 
the recent visit of Treasury Under Secretary Stuart Levey, 
the DCM urged Switzerland to identify its own ways to target 
North Korean entities engaged in proliferation, including 
through restrictions on financial transactions.  Since it was 
not at all certain that China and Russia would permit a 
decisive Chapter VII UNSC resolution to enforce binding 
sanctions on the DPRK, like-minded nations in Europe, North 
America, and the Pacific Region needed to consider options 
for joint action.  Poloff handed over the Japanese and 
Australian lists of designated DPRK entities (following 
earlier transmittal of the USG list). 
 
4.(C) Having just arrived in her position, Tagliavini 
deferred to Combernous for a substantive reply.  Combernous 
said he had recently told North Korean Ambassador Il-Chol 
that a nuclear test would worsen - not enhance - North Korean 
security.  Now, Switzerland was very anxious to see what 
would come out of the UN Security Council.  On the issue of 
sanctions beyond those mandated by the UN, Combernous told 
Emboffs that Switzerland was not in the practice of making 
their own designations.  He agreed that action by the EU on 
designating entities would encourage the Swiss to follow 
suit.  Combernous asserted there would be little practical 
difference whether the Swiss designated or not, since "Swiss 
banks had already taken steps" and exports were minimal. 
 
5.(C) Addressing the broader region, Tagliavini and 
Combernous described the situation as volatile.  Japanese 
Prime Minister Abe must have been "peeved" at the test 
occurring during his visit to Seoul.  While China was 
embarrassed by Pyongyang's provocation, Combernous imagined 
that there was some "schadenfreude" in Beijing about the 
problem facing the United States.  Tagliavini observed that 
Russia and China were playing both sides and would be mindful 
that what they agreed to now could impact future actions on 
Iran.  Combernous added that Pyongyang seemed to have used 
its only strong card, which may have been a miscalculation. 
Looking toward the upcoming Nuclear Suppliers Group meeting 
in Vienna, Combernous said that he was curious how the USG 
 
would raise its India Civil Nuclear Cooperation initiative, 
in light of North Korea's action. 
 
--------------------------------------------- ------ 
Reviving the Sanctions Implementation Experts Group 
--------------------------------------------- ------ 
 
6.(C) In parallel conversations with Swiss Secretariat of 
Economic Affairs (SECO) export control officials, Poloff also 
urged them to use Switzerland's prominence in the financial 
and high-technology sectors to help pressure Pyongyang. 
Export Control chief Othmar Wyss reiterated that SECO had the 
word out to Swiss manufacturers that technology exports to 
North Korea were a "no go."  Bilateral trade was only an 
annual $7 million in any case, much of this humanitarian 
assistance, agriculture products, and some consumer items 
(like watches).  Wyss said that the Swiss entities designated 
by the USG -- Kohas, AG, and its partial owner Jakob Steiger 
-- had informed SECO that Kohas would close down operations 
in the near term. 
 
7.(C) Wyss asked whether a new round of UNSC sanctions might 
finally prompt the Treasury Department's Office of Foreign 
Asset Control (OFAC) to schedule a meeting of technical 
experts charged with implementing sanctions.  Wyss repeated 
his frequent complaint that the Swiss had hosted the last 
such meeting in November 2001 and that OFAC had agreed to 
host the next meeting, which never happened.  Wyss' deputy 
Roland Vock underscored that coordination on implementation 
would be vital for the success of any new sanctions, since 
countries otherwise were free to fashion their own 
interpretation on what was and was not to be denied.  Poloff 
noted that this message had been conveyed recently to 
Treasury U/S Stuart Levey, Treasury A/S Patrick O'Brien, and 
State A/S Dan Fried, and that the Embassy would continue to 
follow up. 
 
------- 
Comment 
------- 
 
8.(C) Switzerland will certainly implement UN Security 
Council sanctions on North Korea, but will require steady 
prodding to enact measures that go beyond this.  Even though 
bilateral trade is minimal and Swiss firms and banks seem to 
have distanced themselves from Pyongyang, official Swiss 
endorsement of our counter-proliferation measures is 
important, particularly in conjunction with any potential EU 
action.  The Swiss proposal to revive the international 
sanctions implementation experts group seems very useful; 
Embassy encourages Treasury OFAC to consider hosting a 
meeting in the near future. 
CONEWAY