The sun rises in the East

Thanks to a half-century of redoubled efforts, the indication of Swiss origin for watches has acquired renown and prestige without equal in industrial products. Swiss made is on a par in the quality stakes with the most famous wines or cheeses. On a globalised and therefore highly competitive market, Swiss made undoubtedly adds cachet to the product, a kind of virtual added value which some astute market observers do not hesitate to rate at 30%, all things being equal. In other words, a watch worth 100 francs rises automatically in value to 130 francs if the two little words «Swiss made» appear on the dial. And this simple calculation sums up the problem nicely. To put it bluntly, the illegal use of Swiss made can be a real money-spinner.

 

In July, the FH was asked by the Swiss embassy in Beijing to lend assistance to the AIC (Administration for Industry and Commerce), roughly the Chinese equivalent of the fraud squad. Following several complaints from Chinese consumers casting doubt on the Swiss origin of a number of watch brands, the AIC expedited an investigation in Penglai City, in the province of Shandong. With more than 90 million inhabitants, it is the country's most heavily populated province after neighbouring Henan. Although situated to the south of Beijing, Shandong is considered to be part of Northern China. On the basis of information supplied by customers, inspectors visited two shopping centres and purchased six watches from the Lukcom Tangin, Seget, Vankor, Rosht and Expool brands which are associated with the Swiss made indication or a derivative.

In August, to check their conformity with rules outlined in the Swiss made ordinance, the samples were sent to the FH through diplomatic channels. The Anticounterfeiting Department then carried out standard examinations, at the end of which there was no option but to face the facts: the claim of Swiss origin was false on all six counts. The use of the name Swiss on these watches is therefore of a nature to mislead the customer as to the product's real origin. In addition, such usage constitutes unfair trading. This unambiguous conclusion was reported by our embassy to the Chinese authorities.

Much to everyone's surprise, the verdict was not long in coming. The AIC enacted a series of restrictive measures which exceeded our hopes: the first shopping centre was ordered to pay a fine of around 80,000 francs and had its stock of litigious watches confiscated, i.e. 284 models; of lesser importance, the second shopping centre was ordered to pay around 30,000 francs. Watches held in stock, in this case 141 items, were also seized.

Considering the way in which the Chinese administration is organised, the decision taken in Penglai is now likely to find application in all provinces of China. The FH Centre in Hong Kong is of course monitoring the situation very closely and will not hesitate systematically to invoke «Penglai case law». For Swiss made, a bright new day is dawning in China. Or so we hope.