Does Switzerland earn good money with the Good Offices?

Schweizer Bundespräsident Ignazio Cassis in der Schweizer Botschaft in Iran
Swiss President Ignazio Cassis (center) reveals the inner workings of the Swiss Embassy in Iran via Twitter.

Switzerland is rightly praised for its international Good Offices. But for those at home, it looks like they’re footing the bill. Is that true?

The “Neue Zürcher Zeitung” recently reported that Switzerland is being paid around two million Swiss francs a year for its ‘Good Offices’ in the Islamic Republic of Iran on behalf of the United States.

This almost sounded as if Switzerland was making money with its diplomatic mediation efforts.

Several sources then asked the “Alte Tante”, as the newspaper is sometimes called, where the figure in the article actually came from. According to the authors, it came from two sources.

On the one hand, the figure was reported in an older publication by the Center for Security Studies (CSS) at the Swiss Federal Institute of Technology ETH Zurich.

In addition, the order of magnitude is mentioned in the diplomatic work by Paul Widmer “Diplomacy, a Handbook”. So everything should be about right.

Tax money for services

Official Switzerland often steps into the breach if two countries break off their relations completely or partially. Switzerland helps to maintain minimal relations between the parties involved in such a dispute. This assistance, known as Good Offices, has existed since the 19th century.

But in the end who pays for this service, that the Swiss Confederation mediates between states? Does the tax money of the Swiss people go to pay for it? asked the Federal Department of Foreign Affairs (FDFA) about the costs of Switzerland’s Good Offices, and what the two million Swiss francs per year for Switzerland’s most important protecting power mandate, that of the U.S.A. in Iran, is all about.

Many transitory items

A FDFA media spokesman explained that Switzerland invoices its expenses incurred for the protecting power mandate for the U.S. in Iran and that the U.S. pays for them. However, the FDFA could not comment on the specific figures, he added.

In general, protecting power mandates consist of consular and/or diplomatic activities. Switzerland invoices the states concerned for the costs incurred for consular activities, the FDFA said.

These expenses fluctuate from year to year and therefore vary considerably.

States with their own staff

In terms of personnel, only the safeguarding of interests for the United States in Iran is carried out by Swiss and local embassy staff at the Swiss Embassy in Tehran, according to a 2016 Federal Council response to the Béglé postulate.

In all other cases the represented states have largely independent interest sections staffed by their own personnel, which are nominally affiliated with the Swiss Embassy, it said.

Help for U.S. citizens

Switzerland has represented U.S. interests in Iran since 1980, and the so-called Swiss interest section in Tehran (see photo from Twitter) handles all U.S. consular matters in Iran. This includes passport applications, civil status changes or consular protection of U.S. citizens.

The protective power mandate dates back to the 1980 hostage crisis. The U.S. severed relations with Iran after Iran proclaimed the Islamic Republic, students occupied the U.S. Embassy in Tehran, and held embassy employees hostage.

No hourly wage

However, as further research by revealed, Switzerland does not charge for its time and effort spent on diplomatic activities in protecting power mandates.

Those costs are probably also difficult to record, as the top diplomats are unlikely to write down the exact hours for the respective activities.

Wide range of services

In addition to protecting power mandates, Switzerland’s Good Offices include many other things. For example, supporting conflicting parties in their search for a negotiated solution.

Switzerland is also available for mediation or supports negotiations. Prisoner exchanges, for example, are organized with Switzerland’s help.

An important pillar of Switzerland’s host state policy is also the organization of peace conferences and peace negotiations. This could be under its own auspices, as well as under those of the UN.

Money stays in the country

As host of such peace processes, for example in Geneva, Lausanne, Zurich or in Bern, Switzerland organizes everything that involves logistics, security and protocol.

As a rule, it covers the accommodation costs of the delegations and makes the meeting rooms available, as the Federal Council’s report on the Béglé postulate further states.

This means that Swiss taxpayers’ money will be used for this purpose. However, the money remains in the country, so to speak, and supports the local economy.

Multiplier effects

Indirectly, however, all this benefits Switzerland’s good reputation and contributes to its international importance. All this is part of Swiss foreign policy and the people must therefore also bear the costs.

Ultimately, Switzerland’s good reputation as an international hub for diplomats, governments and their entourage – be it in luxury hotels or gourmet restaurants – also brings foreign money back into Swiss coffers.

So on the one hand, Switzerland is not left sitting on consular expenses. And through the expenditures of the Good Offices, which diplomacy provides and which are borne by Switzerland, new money also flows back into the country.


Does Switzerland earn good money with the Good Offices?

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