BLUE LANTERN: DISCUSSIONS WITH EMBASSY AND SWISS

UNCLAS STATE 029999

SENSITIVE
SIPDIS
BERN FOR RICHARD RORVIG
POL/E

E.O. 12958: N/A
TAGS: ETTC KOMC OTRA PARM PREL SZ
SUBJECT: BLUE LANTERN: DISCUSSIONS WITH EMBASSY AND SWISS
OFFICIALS FEBRUARY 23-24


1. (SBU) SUMMARY: Senior Compliance Specialist Judd Stitziel
from the Department's Office of Defense Trade Controls
Compliance (PM/DTCC) met February 23-24 in Bern with Embassy
and Swiss officials to discuss implementation of the Blue
Lantern end-use monitoring program and related U.S. export
control issues in Switzerland. End-use monitoring in
Switzerland presents some unique challenges, as Swiss
authorities do not allow USG officials to make inquiries
directly with private companies. Instead, Embassy officials
must submit requests for information to the State Secretariat
for Economic Affairs (SECO),which conducts the checks and
responds back to the Embassy. Despite some concern about the
Department's consequent ability to obtain comprehensive and
unvarnished information about private Swiss entities, Swiss
authorities generally are expeditious, cooperative, and
reliable. During the visit, Swiss officials demonstrated a
good deal of interest and desire to cooperate through the
program. The visit appears to have met the objectives of
improving understanding of the Blue Lantern end-use
monitoring program and USG defense trade laws and
regulations. END SUMMARY.


2. (U) Administered by PM/DTCC, Blue Lantern is a global
program designed to verify the end-use, end-users, and
disposition of commercially exported defense articles,
technology, and services. This visit to Switzerland was part
of PM/DTCC's ongoing efforts to improve the program's
effectiveness through outreach visits with posts, host
governments, and industry.

EMBASSY EXPORT CONTROL TEAM:
SWISS COOPERATIVE BUT NOT ALWAYS OPEN


3. (U) Stitziel met with Embassy export control team members
and Charge d'Affaires a.i. Leigh G. Carter to brief the Blue
Lantern program and to discuss issues specific to
Switzerland. Participants included Richard Rorvig, Counselor
for Political and Economic Affairs and Blue Lantern POC; COL
Dorothea Cyper-Erickson, Defense and Army Attache; Michael
McCool, Immigration and Customs Enforcement Attache; John
Walker, Assistant Legal Attache; Donald Businger, Commercial
Counselor; Christopher Buck, POL/E Officer; and Sylvie
Wanzenried, POL/E FSN. Stitziel also met with Col. Godfred
Demandante, Jr., Air Attache, and Ruth Millard, Security
Assistance Coordinator, in Stuttgart, Germany, on February 25.


4. (SBU) Stitziel briefed the mission, objectives, and
results of Blue Lantern, both globally and in Switzerland.
Since 2004, PM/DDTC has received 2,063 applications for
commercial defense exports to Switzerland worth $956 million
dollars; during that time, PM/DDTC has approved over 1,706
licenses worth $803 million and 273 agreements worth $861
million. Since 2004, a dozen Blue Lantern checks have been
conducted, evenly split between pre-license checks and
post-shipment verifications, on applications and licenses
that listed end-users in Switzerland. Of these 12 cases,
only one was closed "unfavorable," meaning that the facts
determined by the check were not consistent with the
information listed on the application or license.
Switzerland's "unfavorable" rate of eight percent is
significantly lower than the global average during the last
several years, which has ranged between 16 and 23 percent.
Embassy Bern's average response times of 48 days for
pre-license checks and 59 days for post-shipment checks are
within the normal range globally. While the POL/E section is
responsible for coordinating Blue Lantern checks in
Switzerland, Stitziel encouraged post to draw on the full
range of country team resources, including ICE, DAO, LEGATT,
and Foreign Commercial Service (FCS),when appropriate.


5. (SBU) Discussion focused on the Government of
Switzerland's prohibition against USG officials directly
contacting private Swiss companies and individuals concerning
end-use checks, as the GOS would consider such
"investigations" a violation of Swiss law. The United
Kingdom is the only other country that imposes similar
restrictions on Blue Lantern checks. According to the
standard procedure in Switzerland, Embassy Bern conveys all
Blue Lantern requests to the State Secretariat for Economic
Affairs (SECO),which in turn conducts its own inquiries and
responds back to the Embassy. Export control team members
commented on the conflicts of interest and ambiguity inherent
in this arrangement. The GOS takes an essentially defensive
posture toward end-use checks. It is genuinely interested in
preventing illicit arms trafficking in Switzerland, but also
wishes to avoid embarrassing public disclosures about the
involvement of Swiss entities in undesirable or illegal
activities abroad. SECO generally is very cooperative and
responsive and provides prompt, detailed answers to explicit
questions. However, emboffs noted that Swiss officials are
not always completely open and candid and have a tendency to
provide legalistic and technically correct, but occasionally
incomplete, responses. One cannot assume the same level of
due diligence that would be exercised by emboffs, as Swiss
authorities are unlikely to self-report or to go out of their
way to discover and divulge derogatory information on Swiss
entities, unless the GOS sees a potential for potentially
adverse or embarrassing future consequences. Additional
complications and opaqueness are caused by Switzerland's
extremely federalist structure: federal authorities like
SECO usually rely on local authorities in the cantons to
conduct and report the results of end-use checks on private
Swiss entities.

SWISS OFFICIALS SUPPORT BLUE LANTERN, EAGER TO COLLABORATE,
BUT SWISS LAW PROHIBITS DIRECT USG CONTACT WITH PRIVATE SWISS
ENTITIES


6. (U) Thanks to the modest size of Switzerland's federal
government, during his visit, Stitziel was able to meet with
all of the senior Swiss officials involved in defense trade
and export control issues. At SECO, the Swiss agency most
important to the functioning of the Blue Lantern program in
Switzerland, Stitziel met with Erwin Bollinger, Head of
Bilateral Economic Relations, Export Control Policy; Rolf
Stalder, Head of Export Control Policy; Simon Pluess, Head of
Export Controls for War Materiel; Juergen Boehler, Head of
Export Controls for Industrial Products and Special Military
Goods; and two export control action officers. Already
familiar with many aspects of U.S. export control laws, the
SECO officials were very interested in the Blue Lantern
program and posed several detailed and informed questions
about U.S. laws and regulations. They seemed astonished to
learn that Switzerland was one of only two countries
worldwide that do not allow USG officials to directly contact
local private companies concerning Blue Lantern inquiries.
Despite Stitziel's explanation that Blue Lantern is not a law
enforcement investigation but rather a confidence-building
exercise, the officials reiterated the GOS's long-standing
position that such checks would violate Swiss law (which
prohibits investigations on Swiss territory by foreign
agents) and infringe on Swiss sovereignty. At the same time,
the SECO officials were quick to express their eagerness to
continue to strengthen our bilateral defense trade by
conducting Blue Lantern checks on behalf of the USG. The
officials also provided an overview of Switzerland's export
control regulations and bureaucracy. Consisting of 15
employees, SECO's export control division issued
approximately 500 licenses worth 720 million Swiss francs
last year.


7. (U) Stitziel next met with officials from the Federal
Department of Foreign Affairs' Center for International
Security Policy, including Andreas Friedrich, Head, and
Bernhard Gasser, Desk Officer. SECO staffs export license
application to this MFA office, which has veto power over
applications and pays special attention to proposed exports
to "critical countries" where human rights and regional
stability are of concern.


8. (SBU) Turning to intelligence and law enforcement aspects
of export controls, Stitziel met with officials from the
Federal Department of Defense's Service for Analysis and
Prevention (DAP),Switzerland's domestic intelligence agency
for counter-proliferation, counter-terrorism, and
counter-intelligence. Participants included Marks
Kellenberger, Head of Counter-Proliferation; Elvis Cikotic,
Chief, War Materiel Division; Patrick Fournier, Chief,
Special Military Goods Division; and Claudine Waespe, Liaison
Officer. SECO staffs Blue Lantern inquiries that it receives
from Embassy Bern to DAP, which maintains a database of
intelligence on Swiss firms and provides input on all
non-papers. DAP officials were eager to learn about Blue
Lantern and to cooperate and collaborate with Embassy Bern
and PM/DTCC. While DAP knows large Swiss companies very
well, it is not as familiar with smaller firms and can only
contact them through local canton authorities. DAP is also
responsible for end-use monitoring of sensitive exports.
However, it currently conducts only post-shipment checks,
which are initiated in Bern by a sole action officer who
tasks relevant Swiss embassies to obtain end-users'
signatures confirming order and delivery.


9. (U) Stitziel's final meeting was at Armasuisse, the MOD's
procurement agency and a respondent to several past Blue
Lantern inquiries. Participants included Christian Meier,
Head, Transportation and Customs; Serge Guignard, Head,
International Relations; Peter Emch, Head, Legal &
International Affairs; and Alexander Hubler, Attorney, Legal
& International Affairs. While the Armasuisse officials were
not familiar with the name "Blue Lantern" and the program's
global mission, they personally had responded to past
requests for end-use/end-user confirmation and demonstrated
significant knowledge of U.S. defense trade control laws and
regulations. The officials expressed gratitude for the
briefing and direct contact with PM/DTCC, which will allow
them to more quickly and efficiently resolve future license
application issues.


10. (U) PM/DTCC would like to express its gratitude to
Embassy Bern and especially to Richard Rorvig and Diane
O'Guerin for their exemplary work in helping to arrange and
execute this visit.
CLINTON