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DE RUEHTRO #0134/01 0471631
ZNY CCCCC ZZH
O 161631Z FEB 10
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5807
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RHMFISS/CDR USAFRICOM STUTTGART GE
RUEAIIA/CIA WASHDC
RUCNDT/USMISSION USUN NEW YORK 0263
RUEHMO/AMEMBASSY MOSCOW 0120
RUEHKO/AMEMBASSY TOKYO 0011
RUEHDM/AMEMBASSY DAMASCUS 0085
RUEHTRO/AMEMBASSY TRIPOLI 6365

C O N F I D E N T I A L SECTION 01 OF 03 TRIPOLI 000134

SIPDIS

STATE FOR NEA/FO, NEA/MAG AND EUR/ERA; NSC FOR S. AGUIRRE

E.O. 12958: DECL: 2/16/2020

TAGS: PREL PHUM CVIS PINR LY

SUBJECT: LIBYA MAKES GOOD ON THREAT TO DECLARE SCHENGEN VISA WAR REF: TRIPOLI 112 TRIPOLI 00000134 001.2 OF 003 CLASSIFIED BY: Gene A. Cretz, Ambassador, U.S. Embassy Tripoli, Department of State. REASON: 1.4 (b), (d)

1.(C) Summary: The Libyan Government unexpectedly followed through February 13 with threats to suspend visa issuance to nationals of Schengen member states (ref), deporting dozens of European nationals in the first 48 hours of the ban and creating chaos at Tripoli's airport. Local media reports that the retaliation came in response to the alleged publication of a list of 188 Libyan officials and their families, including Libyan leader Muammar al-Qadhafi and son Saif al-Islam, who Switzerland barred from Schengen visa issuances. EU diplomats report that they have been unable to verify that the list was in fact published. A close aide to Saif al-Islam al-Qadhafi hinted that the Libyans had instituted the ban on Schengen travelers in frustration over the problems in the ongoing Swiss-Libyan negotiations. European diplomats have declared the situation a "political crisis," and while some have publicly blamed the Swiss for the current situation, others quietly assess the move as a vintage Libyan attempt to up the ante in Swiss-Libyan negotiations at a moment when the contretemps appeared to be near resolution. Schengen members in Tripoli are debating how to respond to the Libyan move. End Summary.

POLICY IMPLEMENTATION LEADS TO AIRPORT CHAOS

2.(C) Late on February 13, the Libyan Government announced that it was halting issuance of visas to nationals of Schengen member countries, making good on its threats to retaliate for the Swiss ban on Schengen visa issuances for Libyan officials and Qadhafi family members. (The Swiss have been vetoing Schengen visas for certain Libyans since mid-2009, as part of their effort to resolve the plight of the two Swiss businessmen detained in Libya since the summer of 2008.) The Libyans began segregating Europeans from other arriving passengers late on February 14, holding them in the airport for several hours before ultimately deporting tens of European nationals, including several with valid residency permits. Although consuls were assured that European nationals with valid Libyan visas would still be granted entry into Libya, on February 14, European nationals on flights arriving in Libya from Rome, Valletta, and Vienna encountered serious difficulties at the airport. The Consul spoke with some Maltese who had arrived in Libya on an Air Malta flight on February 14; they had been detained at the airport for five hours, without food or water, before finally being allowed entry. The Consul also observed a European diplomat having difficulty entering the country, despite his valid diplomatic visa. The Italian Consul, who was at the airport's main arrival hall, was not permitted by the Libyan authorities to enter the rest of the facility to confer with the detained Italians. The Maltese Ambassador was also prohibited from entering the airport. Several flights from Europe and elsewhere arrived throughout the day on February 15, and European diplomatic contacts reported that passengers were stacking up at the airport as the Libyan authorities decided whether to admit them.

3.(C) On February 16, the situation seemed to have improved somewhat, with only 20 Schengen nationals deported. An EU diplomat attributed the improvement to several factors. First, Lufthansa and Austrian Air had stopped boarding nationals from Schengen member states, vastly decreasing the number of arrivals in Tripoli. Second, the Italians and other EU members had issued consular travel notices warning citizens of the strong possibility of deportation upon arrival, which led to a decrease in the number of arrival and, the diplomat speculated, also led the Libyans to ease up on the deportations. The diplomat also reported that the February 16 deportations seemed to focus on arriving general managers of foreign companies, rather than short-term visitors.

SAIF'S NEWSPAPER ANNOUNCES THE BAN, GOL JUSTIFIES IT

4.(C) The controversial Libyan decision was first announced by the quasi-independent Oea online newspaper (part of Saif al-Islam al-Qadhafi's Al Ghad media group) on February 14, in a report that quoted an anonymous Libyan official announcing that "Libya has decided to suspend granting visas to all EU nationals." The newspaper asserted that the decision came "following Switzerland's decision to ban 188 Libyan figures from entering its territories. The Swiss ban includes the Libyan leader [Muammar al-Qadhafi] and his family, including Saif al-Islam."

5.(C) In a February 15 conversation with Pol/Econ Chief, a TRIPOLI 00000134 002.2 OF 003 close aide and advisor to Saif al-Islam al-Qadhafi asserted that "the Europeans should not have been surprised" by the measure, as the issue of retaliation against all Schengen states for Switzerland's veto decision had been "raised with them lots of times, and as early as a month ago." Since "none of the EU nations were choosing to pressure the Swiss," the GOL decided to take action. Saif's staff asserted that the visa issue had reached a breaking point, "especially for Saif," who had been included on Switzerland's Schengen visa veto list despite his work to facilitate political reconciliation between the Swiss and Libyans. The aide asserted that Saif's inclusion on the list was "humiliating to him." He blamed the Swiss for stalling progress in the German-mediated political talks, claiming that the Swiss had backed off from a previous agreement to investigate the 2008 arrest in Switzerland of Hannibal al-Qadhafi as part of the normalization package. According to the Russian ambassador, Saif was in Moscow on February 15 following a hunting trip in southern Russia.

6.(C) Foreign Minister-equivalent Musa Kusa met Schengen Ambassadors late in the day on February 15 to confirm that no further Libyan visas would be issued to Schengen nationals and that even those with valid visas would not be allowed entry, with no exceptions. When pressed by the ambassadors, Kusa agreed that diplomats from Schengen member nations would be permitted entry and, possibly, Schengen nationals with valid residency permits. However, he said that he would need to investigate further the residency issue.

7.(C) Kusa said that the Libyan Government had implemented the policy after the Swiss had published the list of 188 Libyan citizens on the Swiss Schengen veto list. Waving a document that he claimed was the published list, Kusa said that Libyan leader Muammar al-Qadhafi viewed the list as a personal insult that Libya could not endure. Although the GOL recognized that the decision to halt visas for Schengen nationals could cause economic loss and complications, Libya would stick to its policy. Kusa said that Libya had been isolated for years and could manage without Europe. "And if we need help, we can turn to the U.S., Japan, Russia, or Syria," he reportedly told the ambassadors.

TRYING TO FIGURE OUT THE BACK STORY

8.(C) An Italian diplomat who briefed us on the Kusa meeting said that no one had been able to verify whether the Swiss veto list had in fact been published, and the Swiss have denied doing so. A French diplomat told us that the decision had come after a February 11 meeting chaired by PM-equivalent al-Baghdadi al-Mahmoudi, the same day the GOL returned the passport of Swiss businessman Rachid Hamdani. The French diplomat believed that al-Mahmoudi chose to refer the decision to allow Hamdani to depart Libya to Muammar al-Qadhafi himself, and that the Libyan leader's response was to invoke the retaliatory ban on European nationals. The French diplomat suspected that the move was designed to up the ante in Swiss-Libyan negotiations at a moment when the contretemps appeared to be near resolution

9.(C) Swiss Charge Stefano Lazarotto said February 15 that based on readouts that he had received from Bern, the most recent, third round of German-mediated political talks had been positive, contrary to the report given by Saif al-Islam's aide. Lazarotto believes that the GOL was well aware that the Swiss were ready to end the Schengen visa freeze and to begin issuing visas immediately after the two Swiss businessmen had been allowed to leave Libya. He defensively said that the idea of an arbitration council had been off the table since the September 18, 2009, "kidnapping" of the two Swiss businessmen by Libyan officials. After their release, Swiss negotiators agreed to establish an arbitration tribunal to investigate the Hannibal case only if the Libyans agreed to set up a similar tribunal to investigate the circumstances involved in the "kidnapping" of Rachid Hamdani and Max Goeldi; a stipulation the Libyans refused.

10.(C) Until February 13, Lazarotto was positive that Hamdani was on track to receive an exit visa and permission to depart the country -- he had already been cleared of all charges and received his passport back from the GOL on Thursday evening, February 11. Also on February 11, the immigration court commuted Max Goeldi's sentence to four, from sixteen, months, and he had agreed to pay the fine sentenced to him by the tax court. Goeldi's lawyer was in the process of requesting a TRIPOLI 00000134 003.2 OF 003 suspension of the prison sentence, pending Libyan-Swiss political reconciliation. However, the "visa war" against Schengen states that Libya had declared moved the goal posts once again, and according to Lazarotto, was a typical pressure tactic that Libya was using to obtain something more from Switzerland, although he did not venture to guess what that might be. He did not know how Bern would respond to the latest Libyan pressure, but he dejectedly assessed that the only solution left was "to cut diplomatic relations, for the benefit of all." He believed that Bern was also coming to that conclusion.

11.(C) The Libyan Government's move unleashed a barrage of attacks and infighting within the Schengen community. The Austrian Ambassador told the Swiss Charge that the visa halt had become a "political crisis." In an interview with Italian media on February 16, the Italian Foreign Minister blamed the Swiss for the current situation, saying that Switzerland's unilateral ban on visas to Libyan officials had effectively held "other countries in the Schengen area hostage." The Ambassador witnessed a spirited debate at a reception on the evening of February 15, with the Dutch ambassador arguing that according to the Schengen Treaty, other countries were entitled to unilaterally act in defiance of the Swiss "hold." Other Europeans believed that was not the case but asserted that Switzerland could choose to release other states of their obligations to prevent issuance of Shengen visas. Interestingly, several of the ambassadors believed they heard Musa Kusa say that that was not a solution; Libya, he reportedly said, would accept no Schengen solution that did not include Switzerland's returning to the status quo ante with regard to complete Schengen issuances by all countries in the treaty. A Schengen Committee meeting is scheduled for February 18 in Brussels, and EU foreign ministers are expected to meet on February 22, to discuss the EU response to the Libyan action.

COMMENT

12.(C) Libya's escalation of its bilateral dispute with Switzerland came at an unexpected time. The Swiss and Libyans had been moving forward with the political reconciliation process and were near resolution, indicating that the Libyan leader, or his son Saif al-Islam, may want something more than the Swiss are willing to give. While Libya's pressure on European nations seems to be achieving its goal of dividing the European block through isolation of Switzerland, the full ramifications of the Libyan visa ban remain to be seen in the EU's response to the Libyans. The situation, if it is not resolved quickly, could evolve into a high-profile crisis over the coming days, with major implications for the ability of foreign companies to operate in Libya, as well as for EU-Libyan relations. CRETZ