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### Viewing cable 07STATE135395, EEB ASSISTANT SECRETARY SULLIVAN RAISES GAS DEAL \

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07STATE135395 | 2007-09-25 23:01 | 2011-03-14 06:00 | CONFIDENTIAL | Secretary of State
Appears in these articles: http://www.letemps.ch/swiss_papers

`

    VZCZCXRO7572
    PP RUEHAG RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHPT RUEHROV
    DE RUEHC #5395/01 2682315
    ZNY CCCCC ZZH
    P R 252301Z SEP 07
    FM SECSTATE WASHDC
    TO RUEHSW/AMEMBASSY BERN PRIORITY 2612
    INFO CIS COLLECTIVE
    EU MEMBER STATES COLLECTIVE
    IRAN COLLECTIVE
    RUEHAK/AMEMBASSY ANKARA 1491
    RUEHBK/AMEMBASSY BANGKOK 7667
    RUEHBR/AMEMBASSY BRASILIA 5721
    RUEHBY/AMEMBASSY CANBERRA 9024
    RUEHIL/AMEMBASSY ISLAMABAD 9123
    RUEHKL/AMEMBASSY KUALA LUMPUR 7137
    RUEHMO/AMEMBASSY MOSCOW 4459
    RUEHNE/AMEMBASSY NEW DELHI 3326
    RUEHNY/AMEMBASSY OSLO 4589
    RUEHOT/AMEMBASSY OTTAWA 7862
    RUEHTI/AMEMBASSY TIRANA 0098
    RUEHKO/AMEMBASSY TOKYO 0707
    RUEHYE/AMEMBASSY YEREVAN 4307
    RUEHIT/AMCONSUL ISTANBUL 1265
    RUEHPT/AMCONSUL PERTH 0525
    RUEHRI/AMCONSUL RIO DE JANEIRO 7877

` `

    2007-09-25 23:01:00	07STATE135395	Secretary of State	CONFIDENTIAL	07BERN881|07BERN924|07STATE126979	VZCZCXRO7572\
    PP RUEHAG RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHPT RUEHROV\
    DE RUEHC #5395/01 2682315\
    ZNY CCCCC ZZH\
    P R 252301Z SEP 07\
    FM SECSTATE WASHDC\
    TO RUEHSW/AMEMBASSY BERN PRIORITY 2612\
    INFO CIS COLLECTIVE\
    EU MEMBER STATES COLLECTIVE\
    IRAN COLLECTIVE\
    RUEHAK/AMEMBASSY ANKARA 1491\
    RUEHBK/AMEMBASSY BANGKOK 7667\
    RUEHBR/AMEMBASSY BRASILIA 5721\
    RUEHBY/AMEMBASSY CANBERRA 9024\
    RUEHIL/AMEMBASSY ISLAMABAD 9123\
    RUEHKL/AMEMBASSY KUALA LUMPUR 7137\
    RUEHMO/AMEMBASSY MOSCOW 4459\
    RUEHNE/AMEMBASSY NEW DELHI 3326\
    RUEHNY/AMEMBASSY OSLO 4589\
    RUEHOT/AMEMBASSY OTTAWA 7862\
    RUEHTI/AMEMBASSY TIRANA 0098\
    RUEHKO/AMEMBASSY TOKYO 0707\
    RUEHYE/AMEMBASSY YEREVAN 4307\
    RUEHIT/AMCONSUL ISTANBUL 1265\
    RUEHPT/AMCONSUL PERTH 0525\
    RUEHRI/AMCONSUL RIO DE JANEIRO 7877	C O N F I D E N T I A L SECTION 01 OF 02 STATE 135395 \
     \
    SIPDIS \
     \
    SIPDIS \
     \
    E.O. 12958: DECL: 09/19/2017 \
    TAGS: ETTC PREL ENRG EPET IR SZ TU GR IT
    SUBJECT: EEB ASSISTANT SECRETARY SULLIVAN RAISES GAS DEAL \
    CONCERNS WITH SWISS AMBASSADOR. \
     \
    REF: (A) STATE 126979 (B) BERN 881 (C) BERN 924 \
     \
    Classified By: EEB A/S Daniel Sullivan; Reason: 1.4 (d) \
     \
    ¶1. (C) Summary.  EEB A/S Sullivan met with Swiss ambassador \
    Ziswiler to underscore our concerns about the EGL \
    gas/pipeline deal with Iran (reftels), particularly its \
    negative impact on efforts to pressure Iran to comply with \
    UNSC resolutions on its nuclear activities.  Ziswiler \
    defended the deal, asserting that it did not contravene UN \
    sanctions resolutions and suggesting that it was needed to \
    enhance energy security.  Sullivan stressed the serious \
    negative consequences of this first agreement to bring \
    Iranian gas to Europe, and, noting clear indications of GOS \
    involvement and support, rebutted claims that it was simply a \
    private transaction.  Ziswiler said he would take our points \
    back to Bern.  End Summary. \
     \
    ¶2. (C) EEB Assistant Secretary Daniel Sullivan met with Swiss \
    Ambassador Ziswiler September 19 to reinforce strong USG \
    concerns about the EGL deal to purchase gas from Iran and \
    construct new pipeline infrastructure to bring it to Europe \
    (Reftels).  A/S Sullivan stressed the invidious effect of \
    agreements of this kind, which directly undermine \
    international efforts to pressure Iran to comply with UNSC \
    resolutions concerning its nuclear activities.  The outcome \
    of those efforts is critically important, and it was deeply \
    disappointing to see Switzerland involved in actions that \
    impair the prospects for their success. \
     \
    ¶3. (C) A/S Sullivan noted that Iran takes every opportunity \
    to play up commercial agreements, especially in the oil and \
    gas sector, to suggest that UN efforts to apply economic \
    pressure are failing and that Iran,s resources give it \
    international leverage.  Switzerland could be handing Iran a \
    major diplomatic and commercial victory, while it continues \
    to defy the international community.  With efforts underway \
    to craft a third sanctions resolution, the timing of the EGL \
    deal was particularly bad.  While we appreciate the \
    conscientious way in which Switzerland has carried out its \
    responsibilities as protecting power for the USG and official \
    interlocutor with Iran, that role amplifies the negative \
    impact of the EGL deal. \
     \
    ¶4. (C) Sullivan pointed out that the Swiss position stands in \
    sharp contrast to that of the French.  France has advised \
    Total not to finalize its pending LNG deal with Iran at this \
    time, and Foreign Minister Kouchner has said publicly that \
    French companies are being encouraged not to bid on new \
    contracts.  That is the kind of stance we would like to see \
    others take.  Sullivan stressed that we are conveying the \
    same message, discouraging energy deals with Iran, to others \
    with similar plans, and noted that he had met with the CEO of \
    Total and senior Shell representatives on this issue. \
     \
    ¶5. (C) Responding, Ambassador Ziswiler said Switzerland takes \
    its international obligations with utmost seriousness.  He \
    pointed out that two Swiss banks, UBS and Credit Suisse, had \
    been among the first to pull back from Iranian business; many \
    banks elsewhere had not taken that step.  He emphasized the \
    importance of energy security as a concern of every \
    government, suggesting that the EGL deal was necessary and \
    desirable in that context.  Switzerland, he said, depends on \
    Russia for more than 50 percent of its gas imports, and \
    needed to diversify its sources.  Firms from other countries, \
    such as Austria and Italy, were active in Iran,s oil and gas \
    sector.  Switzerland would be left behind its competitors if \
    it did not take action.  He stressed that the deal was not \
    forbidden by UNSC resolutions, to which Switzerland \
     \
    STATE 00135395  002 OF 002 \
     \
     \
    scrupulously adhered, and the GOS had also concluded that it \
    was not an &investment8 subject to the Iran Sanctions Act \
    (ISA, formerly ILSA).  In any event, it was a private \
    commercial transaction, in which the government was not \
    directly involved. \
     \
    ¶6. (C) A/S Sullivan again stressed the deleterious effect of \
    the deal, which would inevitably weaken the pressure on Iran \
    and encourage Iranian obduracy.  Going through with the deal \
    would impair the effectiveness of UN action on a critically \
    important issue )- an astounding position for a country as \
    committed as Switzerland to international solutions for \
    political problems.  With respect to the activities of other \
    countries in Iran,s oil and gas sector, there was much more \
    talk than action, and Iran has had great difficulty in \
    finalizing commitments by foreign companies.  The idea that \
    this was a purely private transaction was difficult to \
    accept.  It seems clear from our discussions in Bern, as well \
    as the Ambassador,s own references to energy security as a \
    national concern, that the GOS has strongly supported and \
    facilitated this arrangement.  It was telling that the \
    President herself met with the visiting Iranian Acting Oil \
    Minister, amid wide publicity, for a discussion of the gas \
    deal.  Concluding, A/S Sullivan emphasized that this \
    transaction would have immense significance.  It would be the \
    first agreement to put Iranian gas into the heart of Europe. \
    The negative consequences of that arrangement would be \
    lasting.  He hoped that the GOS and the company would fully \
    consider those consequences before going forward.  The \
    Ambassador said he would fully report our further expressions \
    of concern to Bern. \
     \
    ¶7. (C) Department appreciates Embassy efforts and the \
    analysis provided in Ref. C.  Welcome further reporting, as \
    appropriate, as we continue to consider this matter. \
    RICE \

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