ZURICH – The sale of ski lift equipment worth approximately 7 million Swiss francs (around $7.5 million), intended for use at a major ski-resort construction project in North Korea, has been blocked by Switzerland’s Federal Council.
North Korean officials contacted the office of Swiss ski equipment manufacturer Bartholet Maschinenbau AG Flums (BMF) this spring with an interest in purchasing a combined chair lift and cable railway system, reports in the Swiss press said on Sunday. A deal was subsequently sealed at the beginning of June, with BMF agreeing to deliver the system in separate parts to a Chinese partner who would have taken on responsibility for subsequent assembly in North Korea.
BMF contacted Switzerland’s State Secretariat for Economic Affairs (SECO) on June 05 to find out if UN sanctions prohibiting the sale of luxury goods to North Korea would have posed problems for any potential ski lift equipment sale to the client in the DPRK.
On June 10 SECO informed BMF by telephone that the cable car deal would be allowed to go ahead, but strongly advised against it due to the political situation in North Korea and potential for reputational damage. But the BMF cable car ignored the warning and took steps to push ahead with the deal.
Chairman of BMF’s Board of Directors Roland Bartholet said that “the export would have been no problem. Both the civilian population as well as the regime could have used the facility.” Also, he argued that the construction of sports facilities would generate North Korean jobs in a long, value-added chain.
But on July 3 the Swiss Federal Council – which comprises seven members and acts as the Federal Government’s executive – completely pulled the plug on the deal after a new directive expanded an embargoed goods list for North Korea to include a new term that banned, “installations for infrastructure and equipment for sports facilities with a luxury character.”
SECO spokesperson Marie Avet denied that the list was adapted especially to prohibit BMF’s s cable car deal, but nonetheless sharply criticized those Swiss companies considering selling products to be used in North Korea’s luxury ski resort project.
“It is clearly a prestige and propaganda project of the regime”, she said. Considering the political and economic background of North Korea, she also argued that it was unimaginable that the facility would ever be used by the general public.
Roland Bartholet of BMF says he is disappointed with this decision. BMF wanted to deliver at the end of July and now hopes to export the assembled parts elsewhere.
While the North Korean embassy in Bern would not comment on the incident, SECO said that they had been informed about the decision. The SonntagsZeitung however said that the North Korean ambassador became upset when hearing of the news during a meeting with SECO director Marie-Gabrielle Ineichen-Fleisch.
Some foreign observers support the decision of the Federal Council to prohibit the sale of ski equipment to North Korea. At the beginning of July the Japanese human rights activist Ken Kato contacted cable car companies in Europe and America to discourage their participation in the Masik-ryong ski resort project. He considers the project a waste of money and accuses BMF of being naive in participating.
Soldiers of the Korean People’s Army are currently building the luxury ski resort in the east of the country. It is set to include 110 km of pistes, cable cars, hotels, and a helicopter pad.
The deal with BMF would have multiplied Switzerland’s total volume of exports to North Korea. Last year Switzerland exported goods of just under 2.5 million Swiss francs and in the past few years the export volume has stayed in the single-digit million range.
But Swiss products are not alien to many North Koreans. According to Katharina Zellweger, who until 2011 was the director of the Development Cooperation Office in Pyongyang, there are thousands of old Swiss rotary-dial telephones to be found throughout the country. Also, a few Swiss goods such as Swiss army knives, Tissot watches, Lindt chocolate bars as well as Raclette cheese are available.
This article is a variation of one written by Simon Widmer, first published in Sonntags Zeitung on August 18, 2013
Photo: Flickr Creative Commons by Cassi G
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