Swiss fired up over arrival of mercenary firm

Aegis was awarded one of the biggest US security contracts in Iraq valued at more than $430 million Keystone

The move to Basel of a British security firm that provides soldiers for war zones has met with widespread criticism, with observers saying it affects Swiss neutrality.

Aegis Defence Services, one of the world’s largest private security contractors, has set up a Swiss holding company for its different operations, effectively moving its headquarters from London to Basel.

It employs an estimated 20,000 soldiers, mostly in Iraq and Afghanistan. Many of them are on contract to the United States defence department.

While Swiss arms exports are strictly controlled so as not to breach neutrality policies, the presence of Aegis raises questions over the place of a private security firm within Switzerland.

To date, Switzerland does not have any national laws for regulating such firms or the export of mercenary services and military logistics outside its borders. But under Swiss export law, companies cannot export arms into active armed conflict zones.

Aegis says “no business activities will be conducted in or from Switzerland”.

“That’s rubbish,” Albert Stahel, a professor of strategic studies at Zurich University’s Institute for Political Science, told swissinfo.ch.

“It’s nonsense to say something like that. The firm is of course a holding company which is connected to other operations which follow from Britain.”

“These kinds of firms are implicated in conflicts that are outside Switzerland, like Iran, Iraq, Afghanistan. It’s against our policy of neutrality. There are implications.”

He says, for example, a Swiss citizen going to Afghanistan might not usually encounter any problems, but that could change if it becomes known that a Swiss-based firm is fighting for one side of a conflict.

He urges changing the law “very quickly”. “It is not difficult to introduce into our law something that would give the government the possibility to control these kinds of companies.”

Lack of foresight

Another critic Peter Malama, a Basel-based Radical party politician, is also planning to raise the issue with the parliamentary defence commission – on which he sits – in parliament’s autumn session, with a view to creating a law that regulates a license and control system for private military and security firms.

Back in 2008, the Swiss cabinet concluded that there was no need to legislate against such companies, due to the small number of Swiss firms that might potentially export security resources. It decided that there was a “negligible risk” of incidents arising that were likely to impact on “Swiss foreign policy or on its neutrality”.

Malama told Le Temps newspaper the cabinet had lacked foresight in this case. “From an ethical and political point of view, I am very worried about the arrival in Switzerland of this type of firm whose aim is to finance and administer military resources in at-risk regions. It poses a danger to the humanitarian image of Switzerland and also to our neutrality policy.”

Urgent legislation

A statement sent by a public relations company acting on behalf of Aegis said the decision to set up a holding company in Basel was partly taken because of Switzerland’s “geographic location, accounting transparency and stable system of taxation”, as well as the presence of international organisations such as the International Committee of the Red Cross, which has worked to regulate the private security industry.

Basel City cantonal government was not informed of the move as it involves a holding company. Any company that just holds shares of other companies can settle in any Swiss canton and be registered under the Swiss Registry of Commerce.

The canton has taken pains to distance itself from the affair. Christoph Brutschin, head of Basel’s department of economic, social and environmental affairs, said the authorities wanted to point out that Aegis’s arrival “was in no way part of our economic development efforts”.

“We completely understand people’s criticism about this firm’s arrival,” he told swissinfo.ch.

The canton is planning to submit a request for urgent federal legislation to be passed to inhibit the company’s movements, as the rules for where and under what circumstances companies can settle in Switzerland are regulated on a federal level.

“We think it is necessary that new federal rules regarding an approval-system for such companies be adopted as soon as possible,” Brutschin added.

Jessica Dacey, swissinfo.ch

Aegis Defence Services

Aegis Defence Services is a security and risk management company with overseas offices in Afghanistan, Bahrain, Iraq and the US.

On its website it says it has a worldwide client-base, including governments, international agencies and the international corporate sector. It is also a registered and active UN contractor and a major security provider to the US government.

Aegis Defence Services, led by former British army officer Timothy Spicer, is now wholly owned by Aegis Group Holding.

Founded in 2004, Aegis was awarded one of the biggest US security contracts in Iraq valued at more than $430 million (SFr447 million).

In 2005 controversy involving the firm erupted after some Aegis employees posted videos on the internet showing company guards firing automatic weapons at civilians from the back of a moving security vehicle.

Aegis claimed the shootings were legal and within rules established by the now-defunct Coalition Provisional Authority. US Army auditors, in their own investigation, agreed with Aegis.