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The Iranian-Swiss Energy Deal: Frequently Asked Questions

Posted: April 10, 2008

The Swiss government's high-profile efforts in March 2008 to consummate a $30 billion energy deal with Iran, including a visit to Tehran by Swiss Foreign Minister Micheline Calmy-Ray, was questioned by the United States and criticized by Israel because of its timing and notoriety. 

In response, on April 8, 2008 ADL placed ads in major international newspapers and in leading Swiss dailies to raise awareness of the consequences of dealing with a nation that continues to pursue the acquisition of a nuclear weapons capability in violation of its obligations under international law, sponsors terrorism, and whose leaders frequently call for the destruction of Israel.

The following are answers to some of the most frequently asked questions surrounding ADL's campaign and its position on the Iranian-Swiss energy deal.

Q: Why did ADL launch this campaign?

A: The campaign is intended to send a message that this is not the time for business as usual with Iran.  The European Union has offered – with the explicit support of the United States – to increase economic cooperation with Iran if it gives up its nuclear program, and to increase economic sanctions if Iran continues its nuclear program.  That offer has been on the table for a long time, and the Iranians continue to refuse it.

The Swiss deal undermines European efforts by encouraging the Iranians to hold out against the will of the international community.  It also buys time for Iran to drive forward their nuclear weapons program.  Just recently, Iran announced the installation of an additional 6,000 centrifuges at their uranium enrichment facility in Natanz.

The high-profile meeting with Iranian President Mahmoud Ahmadinejad, with whom Swiss Foreign Minister Micheline Calmy-Rey smiled and laughed as they were photographed, also weakens Ahmadinejad's political opponents in Iran.  Ahmadinejad had been criticized by some in Iran as pursuing a foreign policy and a nuclear policy that were too aggressive and which were isolating Iran.  The huge contract and the jovial meeting with Ms. Calmy-Rey provide him with a very public counterargument.

Q: A spokesman for the Swiss Foreign Ministry has stated that ADL's claims in the ad are not supported by the facts.  Is he right?

A: No, the facts are indisputable:

• EGL, a government-owned company, contracted to buy natural gas from Iran.
• The Swiss Foreign Ministry has said that the contract was worth between 18 billion euros and 27 billion euros ($28 billion to $42 billion) over a 25-year period.
• Switzerland is pursuing "its narrow economic interests," because the contract is a commercial deal by a government-owned company, and is not about Swiss energy security.
• Iran is pursuing nuclear weapons.
• Iran finances Hezbollah, Hamas, and terrorist groups around the world.
• Iran severely violates the human rights of its citizens.

The Swiss government's vague complaint is a weak attempt to defend the indefensible.

Q: The Swiss Foreign Ministry's spokesman also questioned why a non-governmental organization like ADL was criticizing Switzerland "for following its own long-term strategic rationale, which is in line with international considerations?" 

A: Non-governmental organizations (NGOs) play an important role in monitoring the actions of governments, and ADL has played an active role in the U.S. and internationally on the question of the Iranian nuclear program.  When Switzerland is not the object of their criticism, the Swiss government generally supports the important work of NGOs.

Q: Other countries buy oil from Iran and have even higher trade volumes.  Why did ADL single out Switzerland?  Besides, aren't such contracts perfectly legal, because they are not prohibited by U.N. sanctions or other restrictions? 

A: The Swiss deal is different and more problematic for two main reasons: first, the timing, right after the adoption of the third UN Security Council sanctions resolution on Iran; and second, the political aspect.  Foreign Minister Calmy-Rey accepted an invitation to Tehran to attend the signing of the deal, while President Nicolas Sarkozy, Chancellor Angela Merkel, Prime Minister Gordon Brown and other European leaders are calling for increased economic pressure if the Iranians do not meet their international obligations to stop enriching uranium and pursuing other work applicable to nuclear weapons.  Ms. Calmy-Rey's decision to go to Iran was irresponsible.  She should have known she was being manipulated by the Iranians to show that they are not isolated.

Although the gas contract is not covered by UN sanctions, it undercuts the policy of the French, German, British and U.S. governments, which is to discourage new business with Iran's energy sector.  Just because it isn't illegal doesn't mean it isn't a morally wrong policy that deserves to be condemned.

Q: Does Switzerland have legitimate reasons for the contract?

A:  No.  Switzerland's claim that the Iran purchase is designed to reduce dependence on Russian gas is not credible because only 12 percent of its gas (about 15 billion cubic feet (bcf) per year) is imported from Russia.  The Swiss company, EGL, contracted to buy 198 bcf per year (also reported as 5.5 billion cubic meters), which is 150% of Switzerland's total gas consumption.  EGL itself admitted that most of the gas will be used in other countries.  This is a commercial deal to buy cheap Iranian gas and sell it for a profit elsewhere in Europe.

Q: It was a Swiss company, not the Swiss government that signed the deal.  So why are you attacking the government and not the company?

A: EGL is a government-owned company, as part of AXPO Holdings which is in turn 100 percent owned by several Swiss cantons (states). And the federal government is responsible for foreign relations on behalf of the cantons.

Foreign Minister Calmy-Rey made clear the Swiss government's approval by her presence at the signing, and she called the deal "a Swiss diplomatic and economic success."  The Swiss government bears direct responsibility for its endorsement of the deal.

Q: Isn't Switzerland "neutral"?

A: Switzerland is a Western democracy and should not undermine the efforts of other Western democracies to prevent Iran from acquiring nuclear weapons.

Iran is not only the leading state sponsor of terrorism, it is an ideological leader of the radical Islamic movement.  And that movement does not recognize anyone as neutral. 
Q: Swiss Foreign Minister Calmy-Rey said she used the visit as an opportunity to discuss human rights with Iran and to say that it cannot threaten Israel.  Doesn't that make the visit a success?

A: The contract and her presence in Tehran have serious political and economic implications and allow the Iranians to show that they are not isolated.  Although Ms. Calmy-Rey says that Switzerland has had a human rights dialogue with Iran since 2003, she has nothing to show for it.  Her dialogue has not prevented Iran from imposing the death penalty on children, from amputating the hands and feet as punishment, from oppressing ethnic, religious and other minorities.  Iran's atrocious human rights record certainly must be addressed, but through concerted action, not dialogue.  The Iranian regime's behavior will not be changed by making a good argument.  When asked on April 5 about President Ahmadinejad's threat to destroy Israel, Ms. Calmy-Rey responded, "The voice of Switzerland is a voice of dialogue."  When it comes to Iran, dialogue alone can have deadly consequences.

Q: Is the campaign similar to the Holocaust-era Swiss bank accounts controversy of the 1990s?

A: Only in the sense that once again the Swiss government has much to be embarrassed about, and is being called upon to take responsibility for its actions.  Switzerland should be embarrassed about what Iran could use the money for: its nuclear weapons program, buying missiles for Hamas and Hezbollah, and financing Europe-based terrorist groups. 

Q: The Swiss Jewish community has distanced itself from the ADL campaign, calling it "interference" in their national affairs.  Did the ADL inform Swiss Jewish organizations in advance about plans for the ads?
A: Yes, we informed the president of the Jewish community of Switzerland we would be running ads, but it is ADL's campaign, not that of the Jewish community of Switzerland. The Jewish community is entitled to take any position they want, and we respect their position. But we see this as a global issue that impacts not only Switzerland, but also Europe, the United States, Israel, and the global community.

The issue is larger than Switzerland, and our message is to the entire world: now is not the time to break the consensus of responsible countries that Iran needs to be pressured to end its nuclear weapons program.

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