Jean-Daniel Pasche
At its meeting of 15 March this year, the National Council adopted the Swissness project by a very large majority and confirmed the minimum rate of Swiss value of 60% for industrial products. The project now goes before the Council of States.
On 11 November 2011, after two years of discussion, the Legal Commission of the National Council approved the draft revision of the law on trademarks and the bill to protect armorial bearings (Swissness project). In relation to industrial products, including watches, the Commission proposed that at least 60% of their cost price must be produced in Switzerland. However a minority proposal of the said commission wished to lower this rate to 50%. The FH came out firmly in favour of the majority position, knowing that this was opposed by the USAM (Union suisse des arts et métiers, the Swiss umbrella organisation representing SMEs), cantonal chambers of commerce and a minority of watchmaking firms represented by the association IGE Swiss made, under the leadership of Mondaine.
On 15 March this year, the plenary session of the National Council approved the Swissness project by 120 votes to 37 for the revision of the law on trademarks, and by 172 votes to 4 for the revision of the law on public armorial bearings. It also ruled in favour of the 60% rate for industrial products by 96 votes to 84. This decision reinforces the strong determination of the FH to introduce a minimum rate of Swiss value as a condition for use of the Swiss made label for watches. The Swiss made ordinance does not at present stipulate a minimum threshold for the required rate of Swiss added value. Enjoying the support of a very large majority of its members, the FH wishes to address this shortcoming and prevent watches that incorporate only a very low level of Swiss value from being labelled «Swiss made». Indeed, consumers who buy a watch marked Swiss made expect it to have been manufactured in Switzerland and to incorporate a high added value attributable to its Swiss origin.
In addition to ensuring its credibility among consumers around the world, strengthening of the Swiss made label for the watch industry will safeguard the existence of an industrial fabric of manufacturers and subcontractors in Switzerland and encourage the growth of production capacities in our country, in other words consolidate investment and jobs.
National Councillors took these points on board on 15 March, speaking at length and in a positive light about the watch industry to illustrate the issues surrounding Swissness. Several members of parliament made it clear that the Swiss watch industry had demonstrated its need for this project and that it was deserving of the Swiss made label. They noted that the great majority of Swiss watchmaking firms supported the project; moreover, it is these firms that create the most jobs in our country. In recent years, our industry has also increased the rate of employment in Swiss production, carrying out domestically all operations in the value creation chain, from research to distribution.
Even the author of the minority proposal for a 50% rate, relayed through other deputies, found it legitimate that the watch industry should for its part claim a rate higher than 50% for its watches.
The project now goes before the Council of States, in the first instance its Legal Affairs Commission. The FH will continue to make its voice heard in these proceedings.
It is worth noting that for the FH, the aim ultimately is to revise the Swiss made ordinance. The latter will have to respect the minimum criteria stipulated by Swissness, but will be able to go further. The FH has prepared a project, the main provisions of which concern the definition of a Swiss watch and its movement.
At present, a Swiss watch must meet three criteria: it must have a Swiss movement, and must be assembled and inspected by the manufacturer in Switzerland.
In addition to these three conditions, the FH project introduces a value criterion and the requirement that technical design and prototyping must be carried out in Switzerland. The minimum value threshold, calculated on the basis of manufacturing costs – including research and development costs – is set at 60% for electronic watches and 80% for mechanical watches. Excluded from manufacturing costs are the bracelet, the raw material, precious stones and the battery.
In the existing ordinance, the Swiss movement already has a value criterion in addition to assembly and final inspection in Switzerland, namely the rate of 50%. With a view to strengthening this definition, the project modifies this value criterion. Consequently, for the movement, the rate is increased to at least 60% of the value of all constituent parts. Technical design and prototyping in Switzerland are also stipulated as a requirement.
The project also envisages additional provisions concerning the definition of Swiss constituent parts and their assembly.
The FH submitted its project to the Federal Department of Justice and Police back in 2007, however the latter replied that it would only rule on this revision of the ordinance once the Swissness project had been adopted by the Federal Chambers.
