On 17 June 2016, the Federal Council approved a partial revision of the Ordinance on the Use of the Name “Swiss” for Watches (the “Swiss Made” Ordinance for Watches) of 1971. This revision, which entered into force on 1 January 2017, aims at strengthening the geographical indication “Swiss” for watches and watch movements in line with the new “Swissness” legislation.
The qualified indications of source “Swiss” and “Swiss Made” on a watch embody Swiss tradition and expertise in this field and are considered a geographical indication within the meaning of Art. 22 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Various studies, in particular those carried out by the ETH Zurich and the University of St. Gallen, have shown that consumers are generally prepared to pay up to 20 per cent more for a Swiss watch, and even up to 50 per cent more for certain mechanical ones. The revision of the “Swiss Made” Ordinance seeks to reinforce the connection to Switzerland for watches labelled as “Swiss Made” in order to prevent the risk of misuse of the geographical indication “Swiss” and equally, to consolidate the good reputation of the “Made in Switzerland” brand for watches together with Switzerland as a location for production.
At least 60 per cent of the costs of manufacturing a complete watch (as an end product) must be generated in Switzerland – unlike previously, whereby this rule applied only to the watch movement itself. The movement remains important, however, as at least half of its value must consist of components made in Switzerland, and at least 60 per cent of the costs to manufacture it must be generated in Switzerland. In addition, the technical development of a “Swiss Made” watch and a “Swiss Made” movement must also take place in Switzerland. The definition of 'watch' in the “Swiss Made” Ordinance has also been extended to include smart watches in light of recent technological developments.
Watch casings and glass can be excluded from the calculation of manufacturing costs until 31 December 2018, provided that the watch casings and glass in question were already kept in stock at the time the “Swiss Made” Ordinance came into force. This ensures that producers have sufficient time to reduce all stock legitimately accumulated under the previous law and that the duration of the transitional measures is clear to suppliers.
The revised “Swiss Made” Ordinance for Watches entered into force on 1 January 2017. This is also the date on which the new "Swissness" rules entered into force.
The Federal Council also approved the report on the results of the consultation procedure on the Draft “Swiss Made” Ordinance for Watches on 17 June 2016. For further information, see also Consultation 2015.
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