Swiss War Materiel and Arms Exports

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Encryption devices blocked after the Crypto affair

Goods category: Encryption devices and modules in the Goods Control Act licensing procedure; the specific technical list positions are not published in the decisions.

In connection with the Crypto affair, SECO suspended general export licences for encryption devices in December 2019. In February 2020, it filed a criminal complaint over possible violations of export-control law. On 19 June 2020, the Federal Council suspended decisions on individual export applications until the criminal investigation was complete. At Crypto International, 13 applications from January to May 2020 for a total of 552 encryption devices were affected. For TCG Legacy in liquidation, formerly Crypto Group, the items included 30 encryption modules and two positions of three devices each from January and February 2020. On 2 December 2020, the Federal Administrative Court declined to hear the appeals against the suspensions ordered by the Federal Council. It did, however, overturn the suspension of another TCG application dated 23 June 2020 because it had been submitted after the Federal Council’s decision. On 21 December 2020, the Office of the Attorney General of Switzerland announced that it had definitively discontinued the criminal proceedings. No indications of deliberate, non-legitimised violations of export-control law had emerged. The discontinuation did not determine whether the pending export applications could be approved. The background concerned devices of the former Crypto AG whose vulnerabilities enabled foreign intelligence services to decrypt their customers’ communications.

Effect of the proposed War Materiel Act revision

Under the new Article 22b, the Federal Council could depart from all the licensing criteria in Article 22a under vaguely defined ‘exceptional circumstances’. The public would not have to be informed. Depending on the recipient state to which the case is assigned today, Article 22a paragraph 2bis would make approval the rule for Annex 2 states; the Federal Council could add further states to Annex 2 by amending the ordinance. Article 18 paragraph 1 would make non-re-export declarations by government end recipients a requirement dependent on the situation and could thus facilitate onward transfers. The recipient states in this entry are not individually named, so no reliable country-specific SIPRI example is possible.

Countries

Companies

Time period

2019–2020

Sources