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### Viewing cable 08BERN612, BILATERAL RELATIONSHIPS WITH SWITZERLAND AND THE \

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08BERN612 | 2008-12-02 14:02 | 2011-03-14 06:06 | CONFIDENTIAL | Embassy Bern
Appears in these articles: http://www.letemps.ch/swiss_papers

`

    R 021439Z DEC 08
    FM AMEMBASSY BERN
    TO SECSTATE WASHDC 5485
    INFO EUROPEAN POLITICAL COLLECTIVE

` `

    2008-12-02 14:39:00	08BERN612	Embassy Bern	CONFIDENTIAL		R 021439Z DEC 08\
    FM AMEMBASSY BERN\
    TO SECSTATE WASHDC 5485\
    INFO EUROPEAN POLITICAL COLLECTIVE\
    	C O N F I D E N T I A L BERN 000612 \
     \
     \
    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 Nestl, 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 \

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