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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 14:39 | 2011-03-14 06:00 | 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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