SWISS ADOPT RESTRICTIONS ON DISPOSAL OF EXCESS

C O N F I D E N T I A L SECTION 01 OF 02 BERN 000593

SIPDIS

SIPDIS

STATE FOR NEA/I, EUR/RPM, EUR/AGS
BAGHDAD FOR POL/MIL, MNSTC-I, MNF-I

E.O. 12958: DECL: 03/20/2016
TAGS: MASS MOPS PREL IZ SZ
SUBJECT: SWISS ADOPT RESTRICTIONS ON DISPOSAL OF EXCESS
ARMAMENTS; M-113 APC'S TO IRAQ STILL TOO CONTROVERSIAL

REF: A. BERN 255

B. BAGHDAD 223

BERN 00000593 001.2 OF 002


Classified By: Poloff Eric Lundberg, Reasons 1.4 b/d

1.(C) Summary: The Swiss Federal Council on March 10 adopted
a restrictive policy governing which countries can receive
excess Swiss armaments. Under the new regulations, the first
preference would be to return war materials to the country of
origin; second preference would be to sell or donate to
countries observing international export regimes (primarily
developed countries); the final alternative would be to scrap
the items. The Federal Council retains the right of refusal
for all transactions. The new policy was formulated in
response to last year's controversial proposal to provide
M-113 armored personnel carriers to Iraq, via the United Arab
Emirates, as well as the UAE's provision of previously Swiss
M-109 howitzers to Morocco, without an export license. While
the new policy theoretically would permit the USG to buy back
excess armaments for provision to other countries, the Swiss
Defense Department recommends that the USG hold off on
acquiring such items as the M-113s for Iraq until the
political atmosphere improves. End summary.

Restricting the sale of excess war materials
--------------

2.(C) As reported in Ref A, the Embassy has been in
conversation with the Swiss Defense Department's deputy
policy director Christian Catrina (protect) over the possible
provision of excess Swiss M-113 armored personnel carriers to
Iraq. Swiss Defense Minister Samuel Schmid last year had
proposed selling about 85 M-113s to the UAE, on behalf of
Iraq. However, a political firestorm over the UAE's export
(or loan) of previously Swiss M-109 howitzers to Morocco and
the inaccurate press description of the M-113s as tanks,
prompted the Swiss government to suspend the sale of all
armaments to the UAE. The Swiss Parliament's renewed allergy
to military sales also undermined Swiss DoD plans to provide
M-113s to Pakistani peacekeeping forces. (Note: Switzerland
has 340 excess M-113s, 180 of which are available for
immediate disposition).

3.(C) Catrina was tasked to draft regulations that would meet
the Federal Council's new, restrictive attitude towards the
sale of armaments and munitions (non-lethal items are not
restricted). Recognizing that the Swiss military would be
unable to provide excess material to any nation in conflict,
Catrina told DATT and Poloff on March 16 that he did his best
to ensure that at least Switzerland's "western" partners --
particularly the United States -- were not excluded. This
calculation resulted in the following three alternatives for
the disposition of armaments:

-- First option, return (sale or gift) to the country of
original manufacture, in which event no further licensing
obligation would be required.

-- Second option, sale to countries belonging to all export
control agreements, with the provision that the items
provided would not be exported or loaned out. These
countries include in alphabetical order: Argentina,
Australia, Austria, Belgium, Canada, Czech Republic, Denmark,
Finland, France, Germany, Greece, Great Britain, Hungary,
Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand,
Norway, Poland, Portugal, Spain, Sweden, and the United
States.

-- Final option, store or scrap the materials.

Federal Council splits 4-3
--------------

4.(C) In Catrina's view, the inclusion of option one was
crucial, because it would allow such countries as the United
States, France, and Germany to re-acquire items previously
sold to Switzerland for provision to developing countries
like Afghanistan and peacekeeping contributors like Pakistan.

BERN 00000593 002.2 OF 002


Catrina said that it was a near-run thing getting option one
included. Three out of the seven Federal Council (cabinet)
members wanted this option removed; in Catrina's view because
they worried that the United States might try to acquire
armaments for Iraq. The three opposing members were the two
Socialists, Foreign Minister Calmy-Rey and
Transport/Energy/Communications Minister Leuenberger, as well
as Christian Democrat and Economic Affairs Minister Deiss.
Catrina said that the center-right cabinet members (Schmid,
Blocher, Merz, and Couchepin) were able to prevail because,
under the scheme, the Federal Council retained the right of
approval for all military sales.

"Hold off on Iraq"
--------------

5.(C) Asked how the USG should proceed with a possible
provision of the M-113s to Iraq (Ref B),Catrina (again,
protect) recommended that there be no approach in the near
future. Iraq remained too controversial, he stressed. While
the new regulations ensured that countries of origin would
not be required to seek approval for further export of the
excess Swiss armaments, all initial transactions would still
be subject to Federal Council review. If the USG asked for
the M-113s now, he said, it would be obvious that they were
bound for Iraq, and the Federal Council would almost
certainly deny the transaction, if only to avoid another
press/parliamentary onslaught.

6.(C) Catrina envisioned two possible routes toward laying
the groundwork for future provisions of excess Swiss war
material of U.S.-origin:

-- First request the material for a more acceptable
destination country, such as Afghanistan or a UN peacekeeping
provider. Then, once the precedent is set, ask on behalf of
Iraq.

-- Alternatively, request return of the excess war material
with no third destination country. (Comment: Presumably, this
would allow the possibility of re-export after a decent
interval.)

Comment
--------------

7.(C) In drafting the new regulations, the Swiss Defense
Department has salvaged some maneuver room out of the
zero-tolerance mood that descended upon the Swiss body
politic in 2005. Any war materials destined for developing
countries will require the middle man of the country of
origin (namely France, Germany, the United States),since
Switzerland will not provide these directly. Embassy will
defer to Washington and Baghdad as to whether the eventual
acquisition or donations of 180 M-113s is worth the wait and
hassle. If so, some preliminary investigation of the
condition of the M-113s could be undertaken prior to an
official request. End comment.
Willeford