www.fhs.swiss Annual Report 2017 1 FH Annual Report 2017 2 ISSN 1421-7384 The annual report is also available in French and German in paper or electronic format, upon request. © Fédération de l’industrie horlogère suisse FH, 2018 3 Table of contents The word of the President 4 Highlights of 2017 6 Swiss made – Entry into force of the revised ordinance 8 Commitment on every front – To secure favourable background conditions 9 ISO/TC 114 Congress - Watch industry – Biennial meeting 12 Swiss made – Ongoing fight against infringements 14 Panorama of the 2017 activities 16 Improvement of framework conditions 18 Information and public relations 24 The fight against counterfeiting 28 Standardisation 35 Legal, economic and commercial services 36 Relations with the authorities and economic circles 37 FH centres abroad 39 The Swiss watch industry in 2017 40 Watch industry statistics 42 Structure of the FH in 2017 46 The FH in 2017 48 The General Meeting 49 The Board 50 The Bureau and Commissions 51 The Departments and the Services 52 The network of partners 53 The word of 5 the President At the end of 2016, we The fi nancial year under review also saw the ISO Congress in announced that our exports early September in Hong Kong. ISO norms play a welcome role would probably stabilise in of predictability and standardization. Firstly, they make compa- 2017. That scenario has nies’ work easier by establishing a recognised basis. Secondly, materialized faster and they contribute to the harmonisation of technical rules at global even more strongly than level, so facilitating free trade. predicted. Growth is back at a rate of 2.7% with the Supervision of legislation and improvement of the framework value of watch industry conditions worldwide, including the free trade agreements, exports representing CHF remain priorities for the FH. In addition, new rules appear at 19.9 billion. Admittedly, very regular intervals and must be analysed to measure their not everybody has benefi - potential impact on our branch. 2017 lived up to this tradition: ted from this trend as yet, marking of precious metals in Russia, new certifi cation in South especially sub-contractors Korea, disposal of electrical waste in the United Arab Emirates, and situations may differ introduction of the GST in India, attestations required in Egypt. widely from one Swiss company to another. However, these developments did give us grounds for cautious optimism at Perusal of this annual report for 2017 will enable you to discover the start of 2018 and we expect this positive trend to continue. all this information and much more besides. Our report refl ects the extensive activity pursued by the FH for the benefi t of its 2017 saw the implementation of the revised “Swiss made” members and for the whole industry. Our aim remains that of label. On the whole, the adaptation went ahead relatively smoo- promoting the development of our branch in Switzerland and thly. However, this review is still coming in for criticism: some all over the world to enable the Swiss horological industry to companies believe it is too stringent and others not stringent maintain its leadership. enough. The margin for manoeuvre between divergent opinions within the branch, the WTO rules and free trade agreements was in any case narrow. It was not possible to do more and doing less would have lacked credibility. Work also focused on Jean-Daniel Pasche interpretation of the text showing how the 60% rate is to be calculated and on the publication of the list of materials that are not available in suffi cient quantities in Switzerland. The FH is already taking very active measures to prevent unlawful use of the “Swiss Made” designation. However, it intends to strengthen its inspection mission further, especially when the transitional measure expires at the end of 2018. As part of the fi ght against counterfeiting, the FH has arranged for nearly two million copies of Swiss watches to be impounded all over the world; that number of products making unauthorized use of “Swiss made” have been taken out of circulation. Highlights 7 of 2017 The start of the year 2017 saw the successful conclusion of an important matter on which the FH had been working for more than ten years, namely the entry into force of the new Swiss made ordinance. This revised text now guarantees con- sumers a minimum of 60% Swiss added value for the watch head. The new Swiss made defi nition is synonymous with a stronger fi ght against counterfeiting and support given to the different agencies, authorities and States that are combating this threat. In 2017 the FH redoubled its efforts in this area on many fronts. In parallel, Switzerland and China opened discussions leading up to a review of the free trade agreement signed in 2014. The FH took part in this work which prioritizes the renegotiation of customs duties. Last but not least, the biennial ISO/TC 114 Congress was also held in 2017. This meeting of seven national delegations brought signifi cant progress on several projects concerning standardization in the watch industry. 8 Swiss made Entry into force of the revised ordinance A famous German adage has it that “all good things take time”. This is particularly true of the Swissness legislation whose origins date back to 2006. That was the year in which the Swiss Parliament adopted the two Fetz and Hutter Postulates which instructed the Federal Council to examine legislative measures that might be taken to strengthen and better pro- tect the “Swiss” indication of origin. On 2 September 2015, after lengthy discussion in several committees of the two Chambers and tough political debates, the Federal Coun- cil fi nally adopted the legislative package and decided that it would enter into force on 1 January 2017. In parallel, it opened the consultation procedure on the draft Swiss made ordinance for watches. Following the rejection of a motion by the National Council and the withdrawal of another by its own author, the new Swissness legislation, including the Swiss made ordinance for timepieces, came into force in early 2017 and is no longer under any further political threat from 1 January 2019, technical development and prototyping or contestation at present. of the timepiece and of its movement will also have to be performed in Switzerland. These new criteria supplement Swissness takes account of the fact that most Swiss products those already stipulated in the previous law, namely casing enjoy an excellent reputation all over the world and therefore up of the movement in Switzerland and fi nal inspection of command higher prices than comparable products manufac- the watch on Swiss soil. tured abroad or of unknown origin. Scientifi c studies show that this Swiss added value may represent on average 20% In order to support the FH members and other stakeholders in and up to 50% for luxury products (consumers in some the Swiss watch industry with the application and interpreta- countries are even willing to pay a 100% supplement for a tion of the new rules, the FH has published a Swissness guide. genuine Swiss watch!). Swissness has also brought essential This guide permits a better understanding of the details of the clarity in respect of the legal requirements by stipulating, in new rules used to calculate the cost price which were intro- the case of industrial products, a minimum unifi ed rate of duced with the new legislation. Moreover, the FH has been 60% of the cost price which must be generated in Switzer- urged by its members and the parties involved in the watch- land. This fi gure is made up of research and development making world, to provide information about Swissness. Its legal costs, expenditure on materials and manufacturing costs, i.e. experts have answered hundreds of e-mails and organised all of the expenditure incurred directly in the manufacture of several dozen meetings to assist the industry with implemen- a product, but excluding natural products and raw materials tation of the rules. In parallel, the FH has also begun to draw that are not available in Switzerland. Costs that are not directly up opinions on matters of interpretation which were left open related to the manufacture of a product, such as marketing in the legal texts. These questions concern such matters as and distribution expenses, are also excluded. the defi nition of the Swiss watch case or the possibility of excluding materials that are not available in Switzerland but From the point of view of the watch industry, the strength- are essential to the product design. These materials are now ening is palpable considering that the former Swiss made centralised in a branch list drawn up by the FH and available ordinance for watches dating back to 1971 and revised in for consultation by everyone on its website. Proactive man- 1995 laid down no value criterion for the fi nished product. agement of this list gives businesses a clear insight into the In this regard, it simply required the use of a movement possibility of excluding the cost of certain materials. in which Swiss manufacture accounted for not less than 50% of the value of all the component parts excluding the In 2017, the FH used its best endeavours to ensure a smooth assembly cost. No account was taken at that time of the transition to the new rules and to support the Swiss watch exterior parts. By requiring a 60% rate of the cost price of industry with their correct application. The ultimate objective the entire watch head, the revised ordinance now guaran- is still to preserve the excellence of the Swiss made label for tees a clear Swiss added value for the consumer.