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.
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