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Swissness Act enters into force in January 2017

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Products and services offered by Swiss companies enjoy a very good reputation on global level, due tot positive references on quality, authenticity and precision regarding products “made in Switzerland”. Switzerland is also known for luxury products, as many foreign companies establish company branches and subsidiaries in this country. Most common authenticity markers are de red and white cross and references including the label “made in Switzerland”.

In order to protect this reputation, the Swissness legislation will come into force starting with January 2017. This means that all manufacturers and service providers will not use these authenticity markers, even if they are established and/or operate in Switzerland.

The Swissness legislation was passed by the parliament on June 2013, and despite protests from Swiss businesses claiming that the new legislation would hurt the competitiveness of their products.

The Swissness legislation sets out some clear rules regarding the conditions under which businesses are able to claim that their services are made in Switzerland. The bill amends regulations in the Trade Mark Protection Act, concerning the geographical origin of goods, ingredients and services, targeting several categories of goods.

Provisions regarding goods and ingredients

Agricultural produce, regardless if or animal or plant origin must be 100% domestic in order to be able to use the label “Made in Switzerland”. This includes milk and milk products. As for food products, 80% of the raw material used must be of Swiss origin. However, the legislation does allow some exceptions in certain cases, if the raw materials come from border areas, such as Haute Savoie or Pays de Gex. Other border areas are taken into consideration only if they are managed by Swiss farmers since January 2014.

One of the most important ingredients in manufacturing foods is water. However, the government did not want to enable a scenario in which certain companies would simply add water to an already prepared recipe and claim that the final product is Swiss made. On the other hand, for certain goods water is absolutely necessary, otherwise it wouldn’t be possible to manufacture them. For example, without using water, there wouldn’t be possible to produce “Swiss beer”. Therefore, Swiss water would count as an ingredient used in a Swiss made product, only if this ingredient is important to certain characteristics of the product and if it’s not used for dilution purposes.

For products that need raw ingredients that are not available in Switzerland, such as dark chocolate or coffee, special provisions were also included in the Act. Companies using such ingredients have the right to claim the Swiss origin only if the said raw ingredients are completely processed in Switzerland. Milk chocolate can claim the “Made in Switzerland” label if milk of Swiss origin is used in the manufacturing process.

Industrial goods

Industrial goods can also use the label “Made in Switzerland”, as long as 60% of the production costs are realized in Switzerland. All production costs may be taken into account, as well as costs for research and development, certification and quality assurance. In addition to these provisions, at least one manufacturing process must take place in Switzerland. There will also be the possibility to register geographical indicators of source for non – agricultural products, in a new register, for example “Valais” for mineral water or “Geneve” for watches.

Services provided by Swiss companies

Companies that qualify under the conditions of the new Act must have their headquarters and administrative centers in Switzerland. Swiss services are allowed to use the Swiss cross (red and white), but after the Act comes into force, this marker can also be used for Swiss goods.

Other provisions

For certain categories of goods, with a considerable reputation in Switzerland, such as watches or cosmetics, further additional rules may apply.

The Federation of the Swiss Watch Industry has submitted a proposal to the Swiss cabinet regarding the use of the word “Swiss” by watch brands. The watch industry doesn’t want that only 60% of the production costs are realized in the country, but they also demand that technical development and the watch movement must be made in Switzerland.

In conclusion, any type of Swiss business, regardless if it handles manufacturing or it provides certain services, should consider these new regulations regarding the “Made in Switzerland” label. Swiss businesses are not obliged to use this label, but those who decide to use it, must meet the conditions set by the new legislation.

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