New regulation for "Swiss Made" watches

The "Swiss" bonus can account for up to 20 percent of the sales price of Swiss watches, and even up to 50 percent for certain mechanical watches. Wherever there are profits to be made, there are free riders, product counterfeiters, and certainly also strategists and profiteers. Advertising has always been linked to a product or a seal of quality - but in Switzerland the law now also regulates characteristics for a status symbol: the Swiss watch.

Actually, a regulated label never provides sufficient protection against counterfeiting organisations. It is rather a matter of a universal quality that is associated with the attribute "Swiss" - an added value essentially created in Switzerland. However, the use of inaccurate "Swiss" claims is unlawful if a busy follower does not respect Swiss trademark and quality regulations.

Significant cost differences
It is difficult to define what per se distinguishes the term "Swiss" on watches? It still seems to be a matter of judgement where the 60 percent rule should be applied. When calculating the 60 percent, the value of the components, the costs for assembly and for research and development can be taken into account.

The producer currently remains bound by the "Supplementary Agreement on Watches", according to which the movement must contain components of at least 50 percent of the value of Swiss manufacture (the costs of assembly "may" be taken into account in the calculation of this value proportion). A producer wishing to meet the watch agreement requirements might also be dependent on larger, international continents.

Consequently, a regulation has now been introduced which takes into account as many economic criteria and developments as possible with regard to the Swiss-Made label.

Really "Swiss Made"?
"Swiss" - for some an advertising phrase, for others it serves as a designation of origin and quality. Swiss law currently permits the watch designations "Suisse", "Pro-duit suisse", "Fabriqué en Suisse", "Qualité suisse" and universal terminologies such as "Swiss", "Swiss Made" or "Swiss Movement". The term is found on many timepieces, usually on the dial at the 6 o'clock position.

Cumbersome descriptions such as "Fa-briqué en Suisse", "Made in Switzerland", even "Made in Switzerland" are unseen on dials due to their character length. The quintessential question, however, is: what distinguishes a genuine Swiss watch today (especially as new technologies such as smartwatches are constantly emerging) ?

One point up front: Compared to "conventional watches, smartwatches are not favoured", it says in the new regulation (see right "To what extent is a watch 'Swiss Made'"?) regarding the new Swiss Made regulation.

The regulation becomes a crucial point at the latest at large jewellery and watch fairs such as Baselworld 2017. There is a difference between certified and inventive companies as well as a gap between renowned brands and interested parties, who usually think that the designation "Swiss" corresponds 100 percent to Swiss services.

The fact is that many brands - including luxury brands - produce many of their watch components abroad.

Official certificates
The Federation of the Swiss watch industry (FH) is constantly working to protect Swiss and other geographical indications, such as the place name Geneva. But already on Web 2.0, the FH's legal stakes are falling short, for example in constantly changing social media communities. This is also where watch suppliers from low-wage countries hide. For this reason, the designations "Swiss" and "Schweizer" have been registered as certification marks in the USA and Hong Kong by the Federation. In addition, every Swiss quality watch is registered with the manufacturer's identification mark (SIP).

The SIP code is a mandatory marking prescribed by the Ordinance on the Protection of Trademarks. Every manufacturer who wishes to produce in Switzerland must register it with the umbrella organization of the Swiss watch industry. The SIP code has been mandatory since 1.1. 1972. If, for example, a manufacturer does not register, he would still have to place a differentiation mark in the form of a small triangle on his product or on its components.

Renowned manufactories differentiate themselves even more clearly, for example by inserting a seal (see Geneva seal; French: Poinçon de Genève), a protected certificate of quality and origin for mechanical watches built and regulated in Geneva. Only a few institutions and foundations can enter a seal in addition to the C.O.S.C. certificate. Nevertheless, certificates attesting to the accuracy of a mechanical watch are voluntary. The COSC (Contrôle Officiel Suisse des Chronomètres) is an independent chronometer testing body. The COSC issues quality certificates for chronometers on the basis of a standardized measurement procedure in accordance with NIHS 95-11 / ISO 3159.

Genuine uniqueness
H. Moser & Cie, a small Schaffhausen manufacture whose own production processes are over 95 percent "Swiss", would welcome a much stricter standard in the watch industry. Edouard Meylan, CEO of H. Moser & Cie, points out that small companies in particular are confronted with higher economic requirements and regulations.

"We firmly believe in Swiss values and we defend traditional mechanical watchmaking every day. We design, develop and manufacture all our components from A to Z in our manufactory. This also applies to the hairsprings and regulating elements of our sister company Precision Engineering AG." The CEO of H. Moser & Cie. explains that the company purchases everything that it cannot manufacture in-house from Swiss suppliers.

H. Moser manufactures or processes 95 percent of its components in Switzerland. Nevertheless, the Swiss-Made label is used by brands that only "just about" meet the new requirements or "benefit from the flexibility of the label" and produce components abroad. Such manufacturers dilute a "genuine" image, the watch company stresses in company communications.

For this reason, the new "Swiss Made" regulation does not meet the criteria of the Schaffhausen manufacturer. For this reason, H. Moser & Cie. decided at the beginning of 2017 to abandon the "Swiss Made" label as well as other name or coat of arms references. As of 2017, "Swiss Made" will no longer appear on the dial of new creations from H. Moser & Cie. Edouard Meylan, CEO of H. Moser & Cie, is convinced: "An H. Moser watch, a true traditional product that demonstrates the highest watchmaking art, speaks for itself." Both traditional companies and the Federation of the Swiss watch industry (FH) agree that for many years the "Swiss Made" label has been misused and generalized. It is said that entry-level brands prefer to put "Swiss" on their watches in order to justify their existence or their price - but today, quality features are more extensive than ever.