Wed, Feb 8th 2023
Switzerland makes a tidy profit off of its arms industry. Unsurprisingly, those weapons often end up in unintended hands.
Switzerland has never been closer to breaking with centuries of historic neutrality. The straw to break the camel’s back? A change in its War Materials Act, which has so far, prevented the country from allowing the re-exportation of Swiss-made arms to be sent onto Ukraine. But how did neutral Switzerland come to be such an important arms manufacturer?
War has long been a money-making business for Switzerland, dating as far back as medieval times when Swiss mercenaries fought in all significant European military conflicts. Sometimes, the Swiss even fought on both sides of a battle, such as in Louis XII’s Italian War of 1499. And while Switzerland has not sent mercenaries to battle in more than 500 years, Swiss weapons are still available in most conflicts worldwide.
Switzerland has accepted at least 70,000 Ukrainian refugees in the last year.
Switzerland’s permanent neutrality principle is a fundamental foreign and security policy pillar. As such, the alpine country cannot get entangled in a conflict between two other nations and can’t provide military support to any party in a war.
Switzerland accepts billions of euros for hosting international and humanitarian organizations such as the United Nations High Commissioner for Refugees (UNHCR), United Nations International Children’s Emergency Fund (UNICEF), and the Red Cross. But, despite Switzerland’s deep-rooted pledge towards military neutrality, the country is a major arms exporter. The alpine country ranked second in arms exports per capita in 2015, according to the Stockholm International Peace Research Institute.
While the Swiss government has attempted to prohibit arms exports to countries at war, Bern has inconsistently relaxed the protocols, primarily out of monetary incentives to support Switzerland’s defense industry. For instance, Switzerland signed off on selling arms to Saudi Arabia and other Middle Eastern nations, which were at war with the Houthi militia in Yemen. Furthermore, Bern permitted Riyadh to accept ammunition for air defense systems previously delivered to safeguard civil infrastructure and employed for military self-defense.
Recently, the Swiss-manufactured Mowag Piranha tanks were deployed by Saudi Arabia to curtail Bahrain’s uprising. And Swiss-made sniper rifles were wielded against Ukrainian citizens. Other customers include the Pakistani leader of the 1999 coup, Pervez Musharraf, the ousted Egyptian despot Hosni Mubarak, and several U.S. presidents who have been at war in Iraq, Libya, Syria, and Afghanistan since the turn of the century.
Swiss arms exports have become an increasingly sensitive and contentious topic within civil society because weapons often end up in the unintended hands. For instance, Qatar sold Swiss-made munitions to Libyan insurgents in 2013. And in 2003, Swiss hand grenades sold to the United Arab Emirates were being used in the Syrian civil war.
As a result, this led to a freeze on Swiss arms exports in 2015. But the moratorium did not last long, as the Swiss government adopted a more relaxed approach to permit arms exports in the following years up until 2019. In any case, access to arms and repressive security policies can contribute to an escalating cycle of violence. Moreover, Switzerland has exported weapons to countries that violate human rights under the United Nation’s definition.
Germany is sending Gepard tanks to Ukraine, but Switzerland won’t allow the Swiss-made ammo that goes in the tanks to be sent, as well.
The global weapons industry is a lucrative business, and Switzerland is a heavy hitter with its arms industry and soaring export volumes.
Swiss defense companies exported weapons worth 727.9 million Swiss francs to 71 countries in 2019, up from 510 million francs in 2018. The figure grew to CHF 901.2 million in 2020, a 24% increase from the previous year. And in 2021, Switzerland’s arms industry generated a total of CHF 742.8 million (down 18% from 2020). The largest buyers include Germany (CHF 123.4 million), Denmark (CHF 96 million), the United States (CHF 90 million), Romania (CHF 87 million), Botswana (CHF 63.5 million), and Saudi Arabia (CHF 51.4 million).
Furthermore, according to an independent research company Profundo, Swiss banks have provided loans and hold shares worth approximately $11 billion in companies such as Northrop Grumman, Lockheed Martin, and General Dynamics. The banks with the most considerable exposure are UBS, Credit Suisse, and the Swiss National Bank (SNB). In 2016, the SNB extended $800 million in loans to nuclear weapons producers, while Swiss pension funds invested $4 to $12 billion in weapons companies.
Former Swiss President Ignazio Cassis met with Ukrainian President Volodymyr Zelenskyy last fall (Credit: Ignazio Cassis’ official Twitter account).
Switzerland’s position towards Ukraine
Politically, Bern has taken a somewhat ambiguous position in response to Russia’s invasion of Ukraine. On one hand, Switzerland has aligned itself with EU sanctions imposed against Russia for 11 months and counting. Switzerland has repeatedly voted against Russia in the UN General Assembly. As a result, Moscow has asserted that it no longer regards Switzerland as neutral.
On the other hand, Switzerland has continually blocked weapons exports to Ukraine. And it has refused to allow other NATO countries, such as Spain and Germany, to re-export Swiss-made munitions and armored vehicles to Ukraine. Germany has already pledged to provide Kyiv with seven Gepard anti-aircraft gun tanks by spring 2023, but securing a supply of the ammunition has proven challenging as Switzerland, which has a stockpile of Gepard ammo, prohibits the sale of it under its War Materials Act.
Less than two weeks ago, Switzerland’s upper house of Parliament voted to revoke a part of its War Materials Act and allow shipments of arms to other countries who intend to send them onto warring nations, only if the conflict in question has been denounced as violating international law by a two-thirds majority of the UN. The motion now goes to the lower house to approve the recommendation. The Swiss Secretariat for Economic Affairs (SECO) and seven-member governing body of Switzerland must also sign off on the decision.
The decision still hinges on the UN Security Council voting with a two-thirds majority that Russia violated international law. The Security Council counts Russia as a veto-wielding permanent member, so it would seem impossible for the council to make such a vote stick. Then again, the group passed a measure in November calling for Russia to be held accountable for violating international law in Ukraine.
The future of the war, and of Switzerland’s long-held neutrality, could change very quickly in the days to come.
“I fear the world is not sleepwalking into a wider war,” said UN Secretary-General António Guterres recently. He added “It is doing so with its eyes wide open.”
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