Why Silent Circle Moved to Switzerland

Philip Zimmermann, inventor of the world-famous Pretty Good Privacy (PGP) encryption system and co-founder of Silent Circle, spoke to the UK’s Guardian newspaper about why his business has relocated to Switzerland. Silent Circle supply the cryptographic Blackphone and recently announced a major expansion in the range of secure communications services that it offers. In a two-minute video for the Guardian, Zimmermann explained his objections to the growth of state surveillance.

The subject is very topical. Two weeks ago, Senator Rand Paul delivered a marathon 10-hour speech about NSA mass data gathering, and one of his themes was that excessive surveillance was causing American communications and technology companies to lose business. However, the Guardian has slanted its story to appear more topical than it really is. The reasons for Silent Circle’s move to Switzerland were previously discussed in a 12th May 2014 blog by Mike Janke, a former US Navy Seal and the other founder of Silent Circle. Janke stated:

Switzerland – the land of Privacy, Neutrality and now Silent Circle (not to mention great cheese, chocolate and watches). We are very much an international firm. We have employees scattered among 9 countries, data centers in Canada and Switzerland, and we count customers from over 130 countries with a heavy concentration of Global 1000 enterprise customers outside of North America. We decided to move our Headquarters from the Caribbean island of Nevis to Switzerland and move a lot of our customer service, finance, sales and operations into this new large office.

It was very important for us to remain a “Global Neutral Privacy Provider”, as well as a political and religious agnostic company. Switzerland has the world’s most robust privacy laws, fantastic business and financial resources and an incredible business-friendly atmosphere. In addition to being the world’s center for Human Rights, Global freedom of speech and an innovative technology hub, Switzerland is our perfect home.

The Guardian’s misleading narrative has encouraged others to inaccurately report that Silent Circle has more recently moved to Switzerland from the US. And cynics would argue Zimmermann is seeking publicity for his business, though the Guardian state that “before recording the message, [Zimmermann] removed his corporate lapel pin.” However, it is still worth observing that American businessmen backed by American investors prefer to have their company headquartered in Switzerland, rather than closer to home. Given the global nature of modern communications, businesses are increasingly likely to shop around for the most advantageous national privacy laws, just like they arrange their tax affairs to be as efficient as possible.

The full Guardian story on Zimmermann is available here.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.