VZCZCXRO7963
OO RUEHTRO
DE RUEHTRO #0994/01 3661426
ZNY CCCCC ZZH
O P 311426Z DEC 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4284
INFO RUEHSW/AMEMBASSY BERN PRIORITY 0026
RUEHEG/AMEMBASSY CAIRO 1365
RUEHTU/AMEMBASSY TUNIS 0722
RUEHAS/AMEMBASSY ALGIERS 0860
RUEHRB/AMEMBASSY RABAT 0803
RHEHAAA/NSC WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 4807

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000994 
 
SIPDIS 
 
DEPT FOR NEA/MAG 
 
E.O. 12958: DECL:  12/30/2018 
TAGS: PREL EAIR ECON SZ LY
SUBJECT: THINGS FALL APART: LIBYA TELLS SWISS COMPANIES TO CEASE 
OPERATIONS 
 
REF: A) TRIPOLI 592, B) TRIPOLI 851, C) TRIPOLI 926  CLASSIFIED BY: John T. Godfrey, A/DCM. REASON: 1.4 (b), (d) 

¶1. (C) Summary: The diplomatic row between Switzerland and Libya prompted by the mid-July arrest of Hannibal al-Qadhafi has worsened again.  The GOL recently notified Swiss companies active in Libya that they must cease their operations and liquidate their locally-held assets by January 31.  Employees of Swiss companies have been threatened with incarceration unless they leave Libya immediately.  The last remaining Swiss Air flight between Zurich and Tripoli was cancelled by the GOL for "technical reasons", and Swiss diplomats believe their entire mission may be declared personae non grata soon.  The GOL's latest actions appear to have been motivated by Switzerland's refusal to agree to Libya's request that the police officers who arrested Hannibal be punished (Switzerland's position is that the arrest was lawful and properly executed).  In addition, the decision by Swiss members of a bilateral commision of inquiry to make public parts of a draft report under review gave Libya an opening to justify more aggressive measures against Swiss interests in Libya.  The latest developments are further evidence that business is politics in Libya, and that the al-Qadhafi regime is prepared to risk a complete rupture of at least some bilateral relationships to save face.  End Summary.  

¶2. (C) The diplomatic fallout stemming from the July 15 arrest of Hannibal al-Qadhafi in Geneva (ref A) continues to worsen. The Government of Libya (GOL) has ordered Swiss companies to cease operations in Libya and liquidate their assets by January 31 and the Swiss Embassy here has ceased all non-essential services.  Third-country nationals employed by Swiss firms in Libya have been threatened with incarceration unless they depart the country immediately.  The GOL cancelled the last remaining Zurich-Tripoli Swiss Air flight shortly before Christmas, and Libya's state-owned Afriqiya Airlines has ceased its flights to Switzerland. (Note: Swiss Air operated three weekly flights from Zurich to Tripoli until Hannibal's arrest, after which two of the three were cancelled by the GOL, ostensibly for "technical reasons".  End note.)  Swiss DCM Francois Schmidt told Poloff on December 29 that he "wake[s] up every day not knowing if they will allow us to leave the country or not".  The situation has become so tenuous that one of two Swiss nationals who had taken refuge at the Swiss Embassy decided last week to leave the compound and go it alone.  Schmidt did not know what would happen to the final "hostage" remaining at the Swiss Embassy in the event Swiss diplomats were declared personae non grata by the GOL, a possibility he viewed as increasingly likely.  

¶3. (C) Swiss diplomats continue to be frustrated by the ever-changing demands from the Libyan side.  The two countries signed a memorandum of understanding on August 31 agreeing to: 1) drop the charges against Hannibal; 2) establish a joint commission of inquiry to investigate the incident; and 3) issue a formal public apology (ref B).  Schmidt complained that the Libyans decided to use the joint commission, with Libyan and Swiss co-presidents, as a vehicle to exact further demands after the Swiss dropped the charges and apologized for the incident. The Swiss had hoped that a visit by Swiss Foreign Minister Micheline Calmy-Rey on December 5 would help the co-presidents agree on final language for the commission's report (ref C); however, the visit was canceled a few hours before Calmy-Rey was due to arrive.  

¶4. (C) Through mid-December, the Libyans insisted that the report describe the behavior of the arresting officers in Geneva as inappropriate. The GOL has insisted that any resolution of the crisis must involve punishment of the police officers and law enforcement officials involved.  While Swiss Ambassador Daniel von Muralt acknowledged the police acted on the more aggressive side of the spectrum of possible actions - a line consistent with recent Swiss Foreign Ministry statements reported in the media - he said there was no question that they acted within the scope of Swiss law.  Despite an agreement to keep the commission's work confidential, the Swiss co-president reportedly allowed language from a working draft that highlighted the impasse over legal culpability to be passed to the Libyan press, giving the GOL an opening to condemn the commission's work.  The day after the press reports, employees of Swiss corporations received letters directing them to cease their operations and liquidate their assets in Libya by January 31.  Spanish CDA Rafael Reig told Poloff that one Spanish national employed by an unnamed Swiss company was told to leave the country "immediately," despite the fact that Libyan authorities were processing his travel documents for an extended work permit and he would be forced to travel without his passport.   TRIPOLI 00000994  002 OF 002   

¶5. (C) Comment: Swiss diplomats are clearly exasperated by Libya's efforts to pressure Switzerland into punishing its police officers for what they believe to have been a lawful, properly executed arrest.  Swiss diplomats here have lost confidence that the new year will bring a resolution to the bilateral impasse.  Swiss DCM Schmidt has complained that Bern has contributed to the problem by acceding too easily to Libya's demands.  Libya's latest measures to ratchet up the pressure on the Swiss suggest that al-Qadhafi's regime is willing to risk a complete rupture in the bilateral relationship to save face (from the GOL's perspective) over what amounts to a matter of egregious behavior by Hannibal.  While some diplomats in Tripoli partly blame the Swiss for the public manner in which they chose to detain Hannibal, virtually all agree that the incident serves as a cautionary tale for countries and companies seeking to do business in the Jamahiriya.  The Canadian Ambassador captured the consensus view, reminding us that business is politics here, and that U.S. commercial interests would suffer if U.S.-Libya ties were to experience turbulence.  End comment. CRETZ