Swiss-Swedish Diplomatic Row Over Crypto AG

Previously I have written about the Swedish-owned Swiss-based cryptographic hardware company: Crypto AG. It was a CIA-owned Cold War operation for decades. Today it is called Crypto International, still based in Switzerland but owned by a Swedish company.

It’s back in the news:

Late last week, Swedish Foreign Minister Ann Linde said she had canceled a meeting with her Swiss counterpart Ignazio Cassis slated for this month after Switzerland placed an export ban on Crypto International, a Swiss-based and Swedish-owned cybersecurity company.

The ban was imposed while Swiss authorities examine long-running and explosive claims that a previous incarnation of Crypto International, Crypto AG, was little more than a front for U.S. intelligence-gathering during the Cold War.

Linde said the Swiss ban was stopping “goods”—which experts suggest could include cybersecurity upgrades or other IT support needed by Swedish state agencies—from reaching Sweden.

She told public broadcaster SVT that the meeting with Cassis was “not appropriate right now until we have fully understood the Swiss actions.”

EDITED TO ADD (10/13): Lots of information on Crypto AG.

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Posted on October 6, 2020 at 6:11 AM • 13 Comments

Comments

Ulf • October 6, 2020 6:31 AM

According to Wikipedia, the Swiss dismissed the allegations after they became public in 1994. But in 2015 declassified US documents confirmed those allegations. Only now, after renewed press coverage, are the Swiss waking up to this? They must have strange priorities.

Curious • October 6, 2020 7:53 AM

Btw, the Swedish SVT article has nothing about Crypto AG in their main article, but just below, and sort of hidden, there is a brief section that can be expanded, which mentions the cold war and the controversy of Crypto AG, about how USA spied on other countries having bought Crypto AG equipment.

The brief section has this which I thought was intriguing (translated):
“But the company [presumably Crypto International] still ended up in the searchlight of the authorities in Switzerland, had their equipment confiscated by the prosecutor and struck with an export ban”.

“Men bolaget har ändå hamnat i myndigheternas strålkastarljus i Schweiz, fått utrustning beslagtagen av åklagare och belagts med ett exportförbud.”

Clive Robinson • October 6, 2020 7:55 AM

Why long long after the horse has fled the barn, and died of extream old age are the Swiss shutting thr stable door?

I suspect that it is political reasons involving the US and it’s current behaviours.

Look at it this way as various sayings have it such as “leopards do not change their spots” things have a habit of bot changing even if the name does.

It’s thus reasonable to assume that “Crypto International” is “Crypto AG” with the same behaviours, and that the “Five Eyes” or “Extended Five Eyes” of which Sweden is a member are still doing the “same old same old”.

So the Swiss authorities effectively want rid of “NSA tampered equipment” out of their jurisdiction, as it does not fit in with their “Switzerland is Neutral” image they want to give the world impression of[1] as it’s good not just for tourism but more importantly business.

In theory as the company is Swedish owned, Switzerland can do a couple of things. Firstly use “eminent domain” under the cover of “National Security” to take the company over in it’s entirety. Force it to be closed again under “National Security” by the excuse of “Owned and or operated by agents of a hostile nation” or similar.

Thus I suspect that what will happen will be a compromise, and the Swiss will get to appoint a director or similar who has access to all areas thus secrets.

Because the Swiss are not particularly daft, and they can see that amoungst other things such as right wing nationalism, pushes from Russia, pushes from the US, economic issues in the South and East, refugees from the Middle East and following along like the little boy with the bucket to pickup the horse dung after the parade Brexit, Europe is in trouble… A whole lot of trouble, and it’s on the Swiss door step which ever way you turn. Thus they need as much intelligence as they can get whilst still appearing to remain neutral.

[1] The fact that there is more than enough evidence to show that Switzerland has been less than neutral in all European and other conflicts in the past century and a half is besides the point. It’s the bells on cows, chocolate, Swiss maids, and cockoo clock image they want people to think of.

Sebastien • October 6, 2020 8:21 AM

Ulf, that’s basically the same thing that happened with ECHELON. Publically known since 1972, and confirmed by government and ex-government people around 2000 (after which time Europe decided they should investigate whether it exists), people nevertheless acted all surprised when Snowden “revealed” that they’d been systematically spied on.

The wannabe tech guy • October 6, 2020 11:31 AM

@sebastien
Is it likely most “average” people didn’t know about it &/or care?

Sebastien • October 6, 2020 4:50 PM

Is it likely most “average” people didn’t know about it &/or care?

I don’t recall ECHELON having the level of news coverage Snowden got. Cypherpunks were well aware, and often considered paranoid for it. Research has shown that people do actually care about privacy, even when some people view their actions (or surveillance-jokes) as suggesting otherwise.

Keep in mind that “regular people” were not using email in those days, and the intelligence agencies wouldn’t have had the ability to store or automatically analyze all telephone calls (as they did to the Bahamas with their “full-take” system).

xcv • October 6, 2020 8:36 PM

@Curious

myndigheternas

That is a strange word, literally “the authorities” in Swedish, but only in the sense of a “yes/no” type of authority, consent or permit for something requested or applied for. It’s a rubber-stamp government commissariat or board of commissioners enforcing the mob rule of the district by parochial interpretations of statutory law.

Clive Robinson • October 7, 2020 3:37 AM

@ Sebastian, The wannabe tech guy,

I don’t recall ECHELON having the level of news coverage Snowden got.

I’m old enough to remember it, and in the UK at the time “The Troubles” in Northern Ireland were quite noticeably spilling over into the UK mainland.

ECHELON was described as a voice recognition system that triggered on certain key words like “gun” or “bomb”. Thus in many peoples eyes in the UK it would have been seen as a good thing.

Likewise the aircraft hijackings of the 60’s and 70’s –we now know were “Super Power” fascilitated as part of their proxie wars– were starting to be replaced with atrocities on the ground. With the likes of the “Red Army Faction” and others taking hosteges with no real intention other than to make news and then kill them or be killed themselves.

Thus I suspect others in Europe would have likewise thought ECHELON was a good thing.

Thus I suspect, that in effect they got away with the leaking of their surveillance by it being seen as an anti-terrorist measure, set the stage for all their surveillance as being a “Good Guys doing bad things to stop bad things” we later saw after 9/11 and 7/7.

What the Ed Snowden trove did was to show that it was not about terrorism it was about Western Nations behaving like the East German Stasi and similar state surveillance organisations forced on East European Nations by Russian occupiers after WWII.

Ergo Sun • October 7, 2020 8:29 AM

@Clive Robinson…

What the Ed Snowden trove did was to show that it was not about terrorism it was about Western Nations behaving like the East German Stasi and similar state surveillance organisations forced on East European Nations by Russian occupiers after WWII.

That’s not a fair comparison, the Western Nations do have great surveillance capabilities, but do not have “Gulag”.

Oh wait, there’s Guantanamo Bay, Extraordinary rendition, CIA Black Sites, etc.

Never mind…

Tm • October 8, 2020 8:51 AM

This is a relatively harsh measure – they had planned to celebrate the 100 year anniversary of diplomatic relations. A bit surprisingly I find very little mention of this in the Swiss media. The whole story is highly embarassing and the Swiss don’t much like to be reminded, is my impression.

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