The Crypto AG Scandal And The Question Of Swiss Neutrality

On the 11 February 2020, the Washington Post published an extensive article revealing the Crypto AG Scandal. The article damningly exposes the way in which the Swiss encryption company Crypto AG was co-opted by the CIA for decades. The spy agency coerced the company’s founder into working for them in the 1950s, and later bought out Crypto AG in a secret partnership with the German spy agency the BND. Throughout this time, faulty encryption machines were sold to governments around the world to improve American espionage capabilities. This “audacious” project lasted well into the 21st century, presumably until the company’s liquidation in 2018. According to the Washington Post article, “CIA and BND documents indicate that Swiss officials must have known for decades about Crypto’s ties to the U.S. and German spy services, but intervened only after learning that news organizations were about to expose the arrangement.” It is this revelation which has led various news agencies (including the BBC) to declare that Swiss neutrality has been “shattered”.

The Swiss have long cultivated a policy of neutrality. This concept is ubiquitous in popular culture, from the end of The Sound of Music, to the English phrase “being Switzerland” which is synonymous with neutrality. What impact, (if any), will the implications of Swiss partiality toward the U.S. in the scandal have upon their aura of neutrality?

Frankly, it is difficult to imagine that this scandal will have a major impact on the Swiss role in international relations, including their status as a neutral state. Perhaps the greatest argument in favour of this, is the lack of publicity this scandal has garnered. The whole project sounds as if it were taken out of a John le Carré spy novel and would presumably make a great news story, yet there are few articles in major international newspapers and on popular news sites, such as CNET and Buzzfeed. If there is a general lack of awareness of the scandal, it will hardly be influential enough to detract from decades of foreign policy and public opinion.

Another reason to doubt the scandal’s potential to “shatter” Swiss neutrality, is that for many foreign governments, this is barely a scandal. Although the extent of Operation Thesaurus and Operation Rubicon (the two code-names for the project) was previously unknown, American influence of Crypto AG was long suspected. The U.S.S.R. and China never bought Crypto AG equipment due to “well-founded suspicions of the company’s ties to the West,” according to the Washington Post article. Ronald Reagan almost completely foiled the operation by referring to concrete evidence of Libyan involvement in a Berlin nightclub bombing which would only have been possible through American monitoring of encrypted communication channels. Furthermore, in 1996, Iran detained a Crypto AG salesman due to suspicion of espionage. If these nations were so suspicious of a Swiss company, they would surely have suspected the culpability of the Swiss government in the project. Yet Switzerland was still able to play the role of neutral mediator between the U.S.A. and the U.S.S.R. by holding the Geneva Summit in 1985, to take just one example. There is little indication that these suspicions have had any impact upon Swiss neutrality, so why should their formalisation be any different?

Swiss neutrality has been bolstered by their power in the international sphere. This power is mostly economic, maintained by the famous Swiss banks, but also takes the form of international organisations being stationed in Geneva. Simply put, the world relies too much on Switzerland to question their neutrality. If sending Jewish people back to Germany during World War II was not enough for world powers to condemn Switzerland and hold reservations as to their neutrality, (and the power garnered by such a policy), why should their knowledge in a long-running but obscure American spy program provoke a different response?

If we are ever to attain world peace, there needs to be a neutral ground on which states can negotiate, with an unbiased mediator to facilitate discussions. Whilst some of its actions in attaining neutrality are questionable, Switzerland undeniably plays this role. The Crypto AG scandal does provoke queries as to how neutral Switzerland is, but ultimately it is unlikely to undo decades of foreign policy objectives and frankly nor should it. Any action (or inaction) chosen by Switzerland in this situation could not be entirely neutral, so why does this specific instance prompt calls of “shattered” neutrality? As long as the Swiss are able to maintain their current power dynamics, their role in international relations is unlikely to undergo much change.

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