CRYPTO LEAKS AND THE GEOPOLITICAL IMPLICATIONS ON SWITZERLAND’S NEUTRALITY DOCTRINE AND INTERNATIONAL SECURITY- MATTEO MOSELI

Image: Philipp Katzenberger (Unsplash)

In 2015, the security and intelligence community was completely shaken to its core with the publishing of The Spy Cables, which were a series of top-secret intelligence documents from various state security and intelligence agencies. These revelations exposed sensitive government secrets and compromised their national security outputs. The recent intelligence leaks in Switzerland have further shaken global intelligence and security networks.

Crypto AG, headquartered in Zug, Switzerland was one world’s leading manufacturers of encryption and cypher devices until its dissolution two years ago. Even though neither the Soviet Union nor China ever purchased Crypto machines, under the cover of Swiss neutrality, more than 100 countries trusted the company to keep the communications of their spies, soldiers and diplomats a secret. Its clients included Iran, South Africa’s Apartheid government, the nuclear rivals India and Pakistan and even the Vatican. Little did they know, that in 1970 the company was secretly bought by the Central Intelligence Agency (CIA) and West-German Intelligence Services (BND). From then on, the company has distributed its machines with pre-built in backdoors through which the United States (US) and its allies could decipher encrypted messages. The revelation of this operation happens in February 2020 by the Washington Post, “ the intelligence coup of the century”, which resulted in a political crisis in Switzerland and beyond. Through the so-called “Operation Rubicon” targets were not limited to the CIA and BND’s fiercest opponents during the Cold War but even included fellow NATO members Spain, Greece and Italy. Furthermore, being able to intercept communication gave the US a strategic advantage during warfare and other high-level political negotiations with other states. Among other achievements, this intelligence surplus allowed the US and its allies to have valuable information during the Iranian 1981 hostage crisis, as well as the 1989 US led invasion of Panama. The ramifications of this intelligence and security compromise have had a significant impact on Swiss foreign policy, raised the question of morality and has spawned further debates about cybersecurity.


There are only a few countries if any in the world that have made neutrality it’s key foreign policy of which, Switzerland is arguably the most famous. These recent developments, however, cast a shadow upon the doctrine of Swiss neutrality, especially in periods such as the Cold War and its status as an internationally recognised neutral diplomatic actor. A key pillar of Swiss foreign relations is its “good office” policy which allows it to “build bridges” where others are prevented from doing so. This is because it does not belong to any political bloc or does not pursue a “hidden agenda”. It can thus, support conflicting parties to negotiate a solution, either through acting as a mediator or by directly supporting negotiations. Specifically, through its embassies from 1961 to 2015, Switzerland represented the US interests in Cuba and since the 1980’s it represents US interests in Iran. Currently, it remains unclear to what extent the Swiss government knew about these CIA and BND foreign intelligence operations. The Swiss government has ordered a parliamentary investigation into these allegations and the report is currently pending. Nevertheless, security and intelligence experts consider that some part of the Swiss government were complicit in these CIA and BND activities and knew about these built-in back doors and could have benefited from this intelligence.

In the aftermath of these allegations, the diplomatic backlash on Switzerland seems to be limited. It remains to be seen how this will impact the country’s neutrality doctrine credibility in the long-term. This is especially the case for opponents of the US, such as Iran or North Korea which in the future might lean on other diplomatic actors for their negotiations and with the US, being Switzerland’s second most important trading partner it will become increasingly difficult to weigh its economic interests against diplomatic ones.

A further point that has to be raised is the question of morality. By actively monitoring communications of foreign governments, the intelligence services were informed about serious human rights violations including assassination plots, ethnic cleansing campaigns and other abuses. Specifically, it has been revealed that the CIA knew about the “Operation Condor” where South American dictatorships established a secret communication network by using Crypto machines on a continent-wide operation against perceived threats to their rules. For example, during the military dictatorship in Argentina, an estimated 30 000 dissidents were captured and brutally killed by being thrown out of military planes alive. This raises the ethical dilemma of whether there exists an obligation to expose these human rights breaches obtained via espionage even if doing so compromises the operation. Critics, therefore, argue that knowledge is a form of participation. It also reinforces the widespread opinion in Latin America that the US did little to prevent human rights abuses. The US does not have a good humanitarian and neutrality reputation as Switzerland does and so, these revelations underpin its controversial historical role in Latin America. Moreover, it very much resembles the non-interventionist stance that China employs today which often overlooks human rights abuses in favour of its diplomatic and economic interests.

In the recent decade, Crypto AG’s demise slowly started, as it missed the transformation from digital to analogue encryption technologies. Nevertheless, the large amount of data on “Operation Rubicon” that has been released, undoubtedly is of significant historic importance for research in the security and intelligence communities. It will still take time for the full story to be revealed. As the National Security Agency (NSA) revelations by Edward Snowden have shown, the US continues to secretly collect intelligence, even on its closest allies. Furthermore, there now exists a de-facto telecommunications duopoly held by Chinese and the US companies, which allegedly use their national corporations in its foreign policy strategy to gain intelligence. This poses larger challenges for governments and whom they can trust to transmit their sensitive information. The quest for information supremacy will continue into the 4th Industrial Revolution where attacks on hostile governments are increasingly taking place in cyberspace rather than on the battlefields.

By Matteo Moseli

Matteo Moesli holds a BSc from Zurich University and MA International Political Economy from the University of Warwick. He currently works as a Research Associate at Zurich University and previously gained experience as a trainee at the Swiss Federal Department of Foreign Affairs. His research interests focus on topics of geopolitics, international trade and economic development.

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