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At least 60 per cent of the cost price must be made in SwitzerlandStrengthening of the Swiss made label

On 11 November 2011, after more than two years of discussion, the Commission approved the draft amendment of the law on trademarks and the bill concerning the protection of coats of arms (Swissness project). In relation to industrial products, including watches, the Commission is proposing that at least 60% of their cost price must be made in Switzerland.

This decision echoes a steadfast desire on the part of the FH to introduce a minimum rate of Swiss value as a condition for use of the Swiss made label on Swiss watches, namely 60% for quartz watches and 80% for mechanical watches. These criteria will form the basis of an amendment of the 1971 ordinance regulating use of the name «Swiss» for watches (Swiss made ordinance).

At present, the Swiss made ordinance does not stipulate a minimum threshold in relation to added value accruing from the designation Swiss. With the support of a very large majority of its members, the FH wishes to remedy this shortcoming to prevent watches incorporating only a very small percentage of Swiss value from being designated as «Swiss made». Indeed consumers who buy a watch marked «Swiss made» expect it to have been manufactured in Switzerland and that it should include a high added value attributable to its source.

As well as ensuring credibility among consumers around the world, strengthening of the Swiss made label for watches will make it possible to maintain the existence of an industrial fabric of manufacturers and subcontractors in Switzerland and will encourage the growth of production capacities in our country, developing investment and securing jobs over the longer term. It is in this sense that watchmaking firms have already invested hundreds of millions of francs with the next three to five years in mind. These important developments will have a clearly positive impact on employment, as attested by several articles published recently in the press.

The National Council will probably rule on the Swissness project during the spring 2012 session. Thereafter, the project will go before the Council of States.

For the FH, the ultimate aim therefore is to revise the Swiss made ordinance. The latter will need to respect minimum criteria laid down by Swissness, but could go further. The FH has prepared a project, the main provisions of which concern the definition of the Swiss watch and its movement, also Swiss.

Currently a Swiss watch must conform to three criteria: it must be equipped with 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 construction and prototyping must be carried out on Swiss soil. The minimum value threshold, calculated according to production costs, including expenses linked to research and development, is set at 60% for electronic watches and 80% for mechanical watches. Excluded from production costs are the strap, the raw material, precious stones and the battery.

In the current ordinance, the Swiss movement already has a value criterion in addition to assembly and final inspection within the country, namely the rate of 50%. Adopting the view that here, too, there are grounds for tightening the definition, the project modifies this value criterion. Accordingly, for the movement, the rate is increased to at least 60% of the value of all constituent parts. The requirement that technical construction and prototyping must be carried out in Switzerland is also stipulated.

The project also contains additional provisions concerning the definition of a Swiss constituent part and its assembly.

The FH has submitted its project to the Federal Department of Justice and Police and discussions concerning its details have begun with the competent service, namely the Federal Institute of Intellectual Property.