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The transitional period permitting the casing of "Swiss Made" watches in other countries terminates on June 30, 1997.

This interim measure was introduced on 1 July 1992 when the new version of the Swiss Made Ordinance, requiring the casing and final check to be carried out in Switzerland, came into force. This particular time period was necessary for companies which, before 1992, had been legally entitled to have their watches cased outside Switzerland.

This five-year transitional period is now drawing to a close. The federal authorities have decided not to extend it despite a formal request from the European Union. It would be contrary to Switzerland’s international obligations, especially within the framework of the WTO, to grant a special extension to European companies and not to those in other regions of the world.

During the meeting of 19 November 1998, the FH council made some important decisions regarding the Swiss Made label. It rejected the creation of a European watchmaking area, but approved the idea of creating a private label of origin for certain companies’ products, while requesting the FH to carry out a parallel study on strengthening the Swiss Made law.

The Swiss Made label continues to arouse much debate within the Swiss watch industry. Buffeted by strongly divergent opinions, the Federal Council’s Swiss Made Law (OSM) continues to set minimum criteria for the use of this highly-coveted mark of origin. Contrary to popular belief, in fact, the OSM has never before been so strict. And the 1992 revision has only been in force since 1 July 1997, the date which marked the end of the transition period allowing Swiss watches, in certain conditions, to be encased abroad.

European Watchmaking Area

Faced with this situation, the Permanent Committee of the European Watch Industry (CPHE) wants to create a European watchmaking area. This would comprise a geographical zone within which encasement would be considered Swiss on the condition that it was carried out by a certified company. Besides Switzerland, the area would include traditional watchmaking regions in France, Germany, Italy and Great Britain. The certification procedure would be carried out by accredited private bodies. The aim of this project is to strengthen existing ties between Swiss and European partners.
Having submitted the project to the FH’s legal commission, the FH council and the GIP committee decided to reject it on the grounds that, by accepting encasement outside of Switzerland, it would weaken the Swiss Made label. Furthermore, it would undermine the credibility of Switzerland’s position in its multilateral negotiations within the World Trade Organization on rules of origin, in which Switzerland is defending the principle that origin for custom’s purposes is defined by where the last substantial operation was carried out (i.e. encasement). To merit the Swiss Made label of origin, this has to be carried out in Switzerland. Finally, the fight against counterfeiting would be made more difficult because legal action is often based on the Swiss Made law and would be weakened if the counterfeiter could legally encase his product in another country, like Italy for example.

Swiss Label of Origin

The FH council also studied a project on a Swiss label of origin which would be reserved for brands whose products met specific criteria in the matter of origin, criteria that are stricter than those laid down by the present Swiss Made law. The new requirements, added to those already in force (Swiss movement, encasing and final checking in Switzerland), would concentrate on Swiss finishing (case, dial, hands and even bracelet). The label would take the form of an internationally registered mark of guarantee to be used only by those companies whose products fulfilled the stipulated conditions. Registration and management would be handled by a neutral body (a legal obligation in any case). The costs involved in its creation, registration, management and marketing, as well as any legal fees in the case of fraudulent use, would be covered by the companies using it. To introduce and explain all this to the general public, the label should be launched like a new brand.
Discussions revealed divergent opinions. Some see the creation of such a label as a devaluation of Swiss Made and fear that two different Swiss labels might cause confusion; others see it as enhancing the value of products made in Switzerland and affording greater protection than the present Swiss Made, which is too weak. Some think that the FH should not be dealing with the problem at all because it would be faced with a conflict of interests: defending the Swiss Made label on the one hand and installing a new Swiss origin label on the other. As many of its members would not have access to the new label, there would be a risk of creating a two-tiered FH, which could be damaging to its activities. Supporters of the new label realize, however, that the Swiss Made label would survive in any case because some countries require a mark of origin.
At the end of lengthy deliberations and having listened to the advice of the legal committee, the economic commission and the GIP committee, the council accepted the principle of creating a new label, but decided not to entrust the matter to the FH. It is up to the companies concerned to institute such a label themselves by creating a working group for the purpose. However, the FH has been invited to put its knowledge at the disposal of this ad hoc working group and to participate in it.
The above-mentioned bodies are aware that the FH could be adversely affected by a conflict of interests. Nevertheless, they have asked the FH to conduct a new study on the possibility of strengthening the present Swiss Made label, no matter what happens with the new label project.

After five consecutive years of uninterrupted success in Shanghai, The Art of Time Exhibition was organized for the first time in Dalian between September 18 and 21.

The choice about Dalian was not fortituous at all : located in the northeastern part of China, this fast developing city is among the ten largest areas in terms of inhabitants; it is also the second busiest Chinese seaport, a reputed textile centre and a privileged holiday destination. Above all, Dalian is a "Chinese open city" and, since 1988, its whole peninsula has been granted by the Central Governement with the status of a Special Economic Zone (SEZ). For these very good reasons, Dalian is regarded as the main gateway to the northeastern provinces of China (Heilongjian, Liaoning, Jilin).

20 reputed watch brands – Alfred Dunhill, Baume & Mercier, Breguet, Breitling, Candino, Cartier, Chopard, Corum, Daniel JeanRichard, Delma, Ebel, Girard-Perregaux, Harry Winston, Patek Philippe, Piaget, Raymond Weil, Tudor, Vacheron Constantin, West End, Yves Saint Laurent – where on exhibit and took full advantage of the four-days exhibition to show their latest creations, to meet with the trade and to answer the many questions raised by a numerous captivated public. In this respect, it should be pointed out that the organizer, Promo Services Ltd., sent out a special invitation to more than 120 selected watch retailers of northern China which attended the exhibition for two days to the great satisfaction of the participating brands.

Although no comparison should be made with the attendance of The Art of Time Exhibition held previously in Shanghai, one has to stress here the very positive response from the visitors -both of the trade and the public. Beside the excellent presentation of the products itself, the exhibition particularly underlined the great reputation of Swiss fine timepieces in this part of China too. In this respect, the exhibition definitely brought a further promotional tool in the long term strategy of the participating brands to enter the Chinese market. Together with business opportunities, it also revealed the needed involvement of the Swiss watch industry in the education of Chinese consumers and watch professionals (brand and product knowledge, brand policy, positioning, philosophy, etc.). These signs remain however as many encouraging prospects for future business in China, and in this part of the country in particular.

Needless to say that The Art of Time Exhibition confirmed another valuable fact : the demand for Swiss watches not only refers to big centres such as Beijing, Shanghai or Guangzhou, but is spread over the greatest part of the country, where Dalian plays undoubtedly one of the leading roles.

The European Council recently published Regulation CE 241/1999, which amends that concerning border controls for counterfeit goods (CE 3295/94).

The Council Regulation on counterfeiting and piracy is a customs’ instrument, which only addresses commercial relations between the European Union and third countries, but offers no means of fighting against intracommunity trade. In this area, only the national laws of the Member States provide protection against counterfeiting and piracy.

Let us remember that the Regulation, which became effective on July 1st 1995, allows customs authorities, upon the request of the right holder of trademark, design right or copyright, to suspend customs operations, in particular to retain the goods, when these are suspected of being counterfeiting or pirating goods covered by an intellectual property right.

On the basis of the analysis of the system initiated more than three years ago, and of the opinions expressed by the interested parties, the European Commission has proposed certain amendments, which will take effect on July 1st 1999. The new regulation introduces three principal changes:

1) the scope of the Regulation will be extended to patents and to supplementary protection certificates (SPCs) for medicinal and plant protection products; currently, only trademarks, design models and copyrights are covered by the Regulation;

2) the customs authorities will be enabled to act against any good discovered in a free zone or warehouse;

3) the administrative side will be simplified for holders of Community trademarks; thus, the customs protection application may tend to obtain not only the intervention of the customs authorities of the Member State in which it was lodged, but also that of the customs of one or several other Member States.

These innovations deserve praise, inasmuch as they better the efficiency of a Council Regulation, of which the usefulness is recognized by industrial circles and competent authorities. The unfinished quality of this reform can however be regretted, at a time when the Commission is initiating an extensive debate on intellectual property rights infringements, through its Green Paper on counterfeiting and piracy in the internal market. Several suggestions by the relevant industries were not deemed useful by Brussels, though they covered both the causes of the phenomenon and the practical means of fighting it. Let us in particular mention the companies’ proposal to eliminate the ruling which excludes, up to a certain value, the seizure of goods contained in travellers personal luggage.

The amendment is globally positive, because these innovations bring both an extension of the scope, and an increased efficiency of the Council Regulation, which is directly applicable in any Member State.