VZCZCXYZ0007
OO RUEHWEB

DE RUEHSW #0965/01 2711312
ZNY CCCCC ZZH
O 281312Z SEP 07
FM AMEMBASSY BERN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4547
INFO RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 2770
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0035
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0150

C O N F I D E N T I A L BERN 000965 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR ISN/RA (R.NEPHEW), IO/T (H.VONBEHREN), T, P, INR, 
EUR/AGS (Y.SAINT-ANDRE), AND NEA/IR (S.GROEN) 
 
E.O. 12958: DECL: 09/27/2017 
TAGS: ETTC KNNP IAEA PARM UN IR SZ
SUBJECT: SWISS PLAN TO NOTIFY UN IRAN SANCTIONS COMMITTEE 
OF DUAL-USE EXPORT 
 
REF: A. BUCK-NEPHEW E-MAILS (26/27SEP07) 
     ¶B. BERN 913 
 
Classified By: CDA Leigh G. Carter; reasons 1.4(b) and (d). 
 
¶1. (C) Summary:  Swiss Department for Economic Affairs (SECO) 
State Secretary Gerber reported that Switzerland plans to 
notify the UN Iran Sanctions Committee of a dual-use export 
(grinding machine) to the Mapna Turbine Engineering and 
Manufacturing Company (aka "Tuga") (ref A).  SECO Export 
Controls and Sanctions Division Chief Wyss said that the 
export involved is a "grinding machine" that is captured by 
the Nuclear Suppliers Group (NSG) Part II (dual-use) list 
and, therefore, according to UNSCR 1737, the export needs to 
be notified to the UN Iran Sanctions Committee.  Wyss said 
that SECO has "no legal basis to deny the export."  In 
presenting the case of the grinding machine, Gerber went to 
some length to argue that Switzerland strictly controls 
exports to Iran.  He said that the GOS is notifying the UN 
Iran Sanctions Committee of this export, as required by UNSCR 
1737, and asserted that the GOS is "fulfilling 100%" of its 
obligations under UNSCRs 1737/1747.  This and another case 
(reftel B) appear to indicate, however, that the approach 
taken by Switzerland involves a relatively narrow reading of 
export control and UNSCR texts.  Swiss officials claim that 
Swiss law and policy ("neutrality") leave them no other 
options.  Post will continue to urge Swiss officials to take 
the broadest possible approach to restricting the export of 
dual-use items to Iran, and would welcome Washington guidance 
on how best to tailor that message.  End summary. 
 
¶2. (U) StS Gerber was accompanied in the meeting by SECO 
Assistant Secretary Monika Ruehl and SECO Export Controls and 
Sanctions Division Chief Othmar Wyss.  Emboffs accompanied 
the Ambassador. 
 
--------------------------------------------- -- 
SECO Claims "No Legal Basis to Deny the Export" 
--------------------------------------------- -- 
 
¶3. (C) Swiss Department for Economic Affairs (SECO) State 
Secretary Gerber used a previously scheduled September 26 
 
SIPDIS 
meeting on another topic with the Ambassador to inform us 
that Switzerland plans to notify the UN Iran Sanctions 
Committee of a dual-use export (grinding machine) to the 
Mapna Turbine Engineering and Manufacturing Company (aka 
"Tuga") (ref A).  Gerber said that he expected that the 
notification would occur at the latest by October 1.  He 
emphasized that he was informing us in advance of the 
notification in the interest of transparency, and added that 
he thought that this would be the first such notification by 
any country to the UN Iran Sanctions Committee. 
 
¶4. (C) SECO Export Controls and Sanctions Division Chief Wyss 
said that the export involved is a "grinding machine" that is 
to be used in the manufacture of electrical equipment 
unrelated to the nuclear sector.  He stated that the grinding 
machine is captured by the Nuclear Suppliers Group (NSG) Part 
II (dual-use) list and, therefore, according to Article 5(c) 
of UNSCR 1737, the export of the machine to an entity in Iran 
needs to be notified to the UN Iran Sanctions Committee. 
Wyss said that SECO has no reason to believe that the 
grinding machine will be used in the nuclear sector in Iran, 
and therefore has "no legal basis to deny the export."  He 
said that a license to export the grinding machine to Tuga 
was approved by SECO six months before UNSCR 1737 came into 
force, and the machine itself had been exported to Tuga in 
Iran within the past week.  Wyss said that the GOS is not 
able to provide the name of the Swiss exporting firm, due to 
commercial privacy restrictions.  He commented that the 
export license for the grinding machine includes an end-user 
statement that provides for end-use checks.  (Note:  SECO 
officials subsequently indicated to poloff that they expect 
to do an end-use check on the grinding machine after it is 
reported installed at Tuga.  They claimed that Tuga is an 
established gas turbine manufacturer that has 
technical/commercial cooperation with companies in other 
European countries.  End note) 
 
--------------------------------------------- -- 
SECO Pitches Swiss Export Denial Record on Iran 
--------------------------------------------- -- 
 
¶5. (C) Gerber said that Switzerland has always taken great 
care to ensure that Switzerland is not used to circumvent 
 
high-tech export controls or sanctions.  He added, however, 
that Switzerland could not enforce U.S. or EU export 
restrictions that go further than UN sanctions, since "that 
would go beyond (Switzerland's) neutrality policy." 
 
¶6. (C) In presenting the case of the grinding machine, Gerber 
went to some length to argue that Switzerland strictly 
controls exports to Iran.  He said that the GOS is notifying 
the UN Iran Sanctions Committee of this export, as required 
by UNSCR 1737, and asserted that the GOS is "fulfilling 100%" 
of its obligations under UNSCRs 1737.  Noting that 
Switzerland apparently will be the first to make such a 
notification, he wondered aloud whether some other states 
perhaps are not meeting their obligation to notify the 
committee of dual-use exports to Iran.  In that context, he 
provided a chart that he said indicates that Switzerland has 
the third highest number of export regime denial 
notifications on Iran, implying that the GOS is stricter than 
some other governments in controlling  such exports. 
According to the chart, Switzerland had a total 67 export 
denial notifications (NSG, MTCR, AG) as of September 24, 
placing it behind Germany (179 denial notifications) and the 
UK (113).  (Comment:  It is difficult to assess how 
meaningful this data is, absent adjustment for relative trade 
volumes, but SECO officials argue it is a telling statistic. 
End Comment) 
 
------------------------ 
Comment/Guidance Request 
------------------------ 
 
¶7. (C) Swiss officials assert that Switzerland strictly 
enforces export controls on Iran, according to the 
requirements of the multilateral export control regimes and 
UNSCRs 1737/1747.  This and another case (reftel B) appear to 
indicate, however, that the approach taken by Switzerland 
involves a relatively narrow reading of export control and 
UNSCR texts.  Swiss officials claim that Swiss law and policy 
("neutrality") leave them no other options.  SECO contacts 
emphasize the value they place on close bilateral export 
control cooperation and information sharing with the USG. 
Post will continue to urge Swiss officials to take the 
broadest possible approach to restricting the export of 
dual-use items to Iran, and would welcome Washington guidance 
on how best to tailor that message. 
CARTER