Definition of a Swiss Watch

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A watch is considered Swiss, according to the Swiss law if:

* its movement is Swiss and,
* its movement is cased up in Switzerland and;
* the manufacturer carries out the final inspection in Switzerland

Swiss watch movement

A watch movement is considered Swiss if:

* the movement has been assembled in Switzerland and,
* the movement has been inspected by the manufacturer in Switzerland and;
* the components of Swiss manufacture account for at least 50 percent of the total value, without taking into account the cost of assembly.

If a watch movement is intended for export and will not be cased-up in Switzerland, but it otherwise meets the criteria to be considered a Swiss movement, the watch may say "Swiss Movement" but it may not say Swiss Made on the watch case or dial.

The 50% Rule for Swiss Made Watches

Use of the Swiss Made label for watches is covered by an ordinance of the Federal Council dated 29 December 1971. The Swiss standard is often pejoratively referred to as the 50% Rule. However, it has its basis in real life economics. Again, the law merely sets forth a minimum standard. The famous or infamous Swiss Made Ordinance has, for a number of years, been subject to many criticisms, particularly inside the industry, because it is considered too lax, but also in legal circles, where the view is that it no longer fully meets the legal mandate specified in the companion law on trademarks (SR 232.11).

“It is not generally known that quite a few Swiss companies have watches assembled in China for export to North America, Asia and even Europe, where the brand name is more important that the “Swiss made” label. Such watches may consist of a Chinese case and a Chinese crystal, a Taiwan-made dial and metal bracelet and Japanese hands. If the movement is to be considered Swiss, 51% of its value must be Swiss and at least the last wheel must be added in Switzerland. Swiss watch brands without the “Swiss made” label are usually equipped with a Japanese movement. The “Swiss parts” label means that the movement is assembled in Asia using kits consisting at least partially of Swiss made components.”

Trueb Lucien, F. The World of Watches, Ebnar Publishing, 2005, at page 362, accord The Year of Living Dangerously (linked below).

From time to time namely in 2003 and more particularly in 2007, there are efforts made to strengthen the definition of "Swiss made." These efforts are normally spearheaded by the Fédération de l'industrie horlogère suisse (FHS) a trade organization.

A 1995 Amendment to the law

The Swiss federal Council modified the ordinance regulating the use of the "Swiss" name for watches in May 1995. The was said to bring the requirements of Swiss watchmaking industry a rubric like those of the European Union. In essence, the revision made it possible to affix indications of "Swiss made" on foreign watchcases and dials intended to equip Swiss watches. A watch is considered Swiss whose movement is Swiss, whose movement is encased in Switzerland and whose final control by the manufacturer takes place in Switzerland. Conversely, the Swiss manufacturers of parts destin for foreign watches from then on were authorized to visibly indicate that their products come from Switzerland. These innovations were intended to improve the transparency as regards the source of products. Consumers were expected to clearly recognize from what countries the various constituent parts of the watches came. However, the revisions were not intended to reduce the protection the name "Swiss made". Indeed, the high requirements which are imposed with a Swiss watch were said to remain unchanged. [2],[3]

A Strengthening Effort

In 2007, the FHS seeked political action on a proposal which introduced a new aspect to the definition of Swiss made, in the form of a value criterion.

Accordingly, any mechanical watch in which at least 80% of the production cost is attributable to operations carried out in Switzerland would be considered as a mechanical Swiss watch. For other watches, particularly electronic watches, this rate would be 60%. Technical construction and prototype development would moreover need to be carried out in Switzerland. Raw materials, precious stones and the battery would be excluded from the production cost. The Swiss movement in the existing ordinance already has a value criterion, namely the rate of 50%. Considering that here, too, the definition needs reinforcing, the draft amends these value criteria. For mechanical movements therefore, the rate would be at least 80% of the value of all constituent parts. For other movements, particularly electronic movements, this rate would be 60%. Technical construction and prototype development in Switzerland would also be a requirement in this case. The draft also stipulates other provisions concerning the definition of Swiss constituent parts and assembly in Switzerland.

Real Life Economics
The minimum rate of 60% was not chosen at random: it corresponds to the rate used in the free-trade agreement between Switzerland and the European Union. In addition, with a rate of 80%, the FH proposes to lay particular emphasis on the mechanical watch. With these proposals, objectives in terms of protecting the Swiss Made label should be attained. The proposed criteria also take into account the place of manufacture and the origin of components, thereby complying with the law on trademarks which serves as the legal basis of the Swiss Made Ordinance. However, it will be up to the FH General Meeting to reach a final decision on the matter.

The FHS effort to strengthen Swiss Made is supported by Compagnie Financière Richemont SA, Montres Rolex, and the Swatch Group, among others.


Now you know.