COLENCO WILL NOT CHALLENGE SWISS GOVERNMENT

S E C R E T BERN 000370

SIPDIS

DEPT FOR ISN/RA (J.ALLEN-CLOSE),NEA/IR, EUR/PRA, AND
EUR/AGS (Y.SAINT-ANDRE),NSC FOR JEFF HOVENIER

E.O. 12958: DECL: 09/02/2024
TAGS: PARM MNUC ETTC KNNP PREL ETRD IR SZ
SUBJECT: COLENCO WILL NOT CHALLENGE SWISS GOVERNMENT
DECISION

REF: BERN 273

Classified By: DCM Leigh G. Carter; reasons 1.4(b) and (d).


1. (S) Swiss State Secretary for Economics and Trade Affairs
Jean-Daniel Gerber informed Ambassador Beyer on September 3
that the Swedish-owned, Switzerland-based firm Colenco will
not challenge the Swiss government's decision to shut down
its commercial activities in Iran. According to Gerber,
Colenco confirmed to the Swiss State Secretariat for Economic
Affairs (SECO) that it will not opt to make a legal challenge
despite the fact the deadline for such action is not until
September 10.


2. (S) Gerber explained that he was the primary interlocutor
with Colenco in SECO's efforts to convince Colenco to cease
business with Iran. He said that he believed that Colenco
was a "good company" and would have taken the decision to
halt its Iranian contract based solely on moral suasion from
SECO, but needed the cover of the Swiss government's decision
to halt Colenco's involvement with the Iranian lightwater
nuclear reactor program, in case the Iranians pursue damages
for the breached contract. If the Iranians seek monetary
damages for breach of contract, the Swiss government could be
liable to pay damages under force majeure.


3. (S) Given the Swiss government's exposure to these
potential monetary damages, Gerber asked for assistance from
the USG for any further information that could be used to
explain SECO's decision. He also said that he would
appreciate the opportunity to speak with senior Department
interlocutor(s) on the Colenco issue, either in Washington or
in Bern, as feasible. Gerber is tentatively scheduled to be
in Washington the week of October 19.
BEYER