Libya increases pressure on Switzerland

Tamoil has one refinery in Switzerland at Collombey in Valais Keystone

Libya's reported withdrawal of oil and assets from Switzerland is the latest round in a prestige fight between the two countries, says security expert Kurt Spillmann.

According to the Libyan state news agency, Jana, the foreign ministry there said the move was retaliation for “abuse of Libyan diplomats and business people by the Geneva police”.

Diplomatic tensions between the two countries started in July following the arrest in Geneva of one of Libyan leader Moammar Gaddafi’s sons.

Media reports quoted Issam Zanati, director of the Libyan Tamoil company, saying the decision to halt the oil supplies to Switzerland had come from the Libyan government, not the company. He could not say when deliveries would resume.

Farhat Qadara, head of Libya’s central bank, told The Associated Press that “Libya has withdrawn all its deposits from Swiss banks and transferred them to other European banks”.

Libyan reports say the sum amounts to SFr8 billion ($7.1 billion).

The Swiss foreign ministry said it had received no official information from Libya.

President Pascal Couchepin told public television on Friday that he did not know whether the reports amounted to words or actions, but on the whole, the moves probably would have no effect.

“We always regret it when a country takes measures against Switzerland, but in this case we can accept it with ease,” he said.

Efforts are continuing to solve the problems between Switzerland and Libya, according to the foreign ministry.

“Switzerland is a state based on the rule of law. The constitution has to be honoured,” a statement said.

Prestige fight

Spillmann, the former director of the Center for Security Studies and Conflict Research at the Zurich Federal Institute of Technology, said that Libya’s move was “another round in a prestige fight between Gaddafi and Switzerland”.

“Gaddafi still feels humiliated and wants to use his effective tools against Switzerland to probably reach what was not known officially but what was known through various media channels, namely an official apology from Switzerland,” Spillmann told swissinfo.

Spillmann did not see any particular reason for Gaddafi to take this action now, three months after his son “Hannibal” and his wife were arrested in a Geneva luxury hotel.

Servants of the two had accused them of serious mistreatment.

Libya took a number of measures against Switzerland at the time, including recalling some of its diplomats in Switzerland and detaining two Swiss nationals who were later released on bail but ordered to stay in Libya. It also threatened to halt oil supplies. Switzerland receives around 20 per cent of its oil from Libya.

Although the charges against the couple were dropped after the servants withdrew their complaint, Libya has demanded that Switzerland apologise over the incident.

“Official deliberations are still underway and are in no way concluded. Maybe Gaddafi got dissatisfied with the state of affairs that Switzerland would not move in a direction of an apology,” explained Spillmann.

Clash of cultures

Spillmann believes that a clash of culture lies behind the tensions and that Switzerland will have to take into account the Islamic and Arab context of personal and family honour.

But by apologising Switzerland could place itself in a difficult situation because it has reacted according to its constitution and laws, he said.

“Although it would be wise for Switzerland just to excuse itself officially, it has to find a way of doing so that’s acceptable for Gaddafi and of doing it in such a way as not to abandon its fundamental beliefs and values,” he commented.

For now, Spillmann cannot see an end to the tensions. It is not known how much Gaddafi wants to escalate the situation, he added.

Spillmann and other experts do not believe that Libya’s decision over oil and assets will have a strong effect on Switzerland.

Rolf Hartl, managing director of the Swiss Oil Association, told the Swiss news agency that by the time any shortfall came to be felt, importers would have been able to compensate from other suppliers.

Libya owns one of Switzerland’s two oil refineries and 320 filling stations.

swissinfo, Isobel Leybold-Johnson with agencies

Libya-Swiss relations

Libya is an important economic partner of Switzerland and its main supplier of crude oil.

Political contacts between the two countries also returned to normal after the UN-imposed sanctions were lifted in 2003.

Libya is one of Switzerland’s five key export markets on the African continent.

In 1997 Tripoli banned Swiss citizens from entering Libya to protest against Switzerland’s refusal to grant a student visa to a son of Colonel Gaddafi. In return the Swiss authorities tightened entry regulations for Libyan citizens. The conflict was solved in April 1998.

There are about 40 Swiss citizens in Libya, most of whom have dual nationality.