SMEs, for instance, that export to Saudi Arabia, the USA or South Korea face a problem. The customs and excise rules in these countries oblige them to indicate the origin of the goods, while for Swiss SMEs such a label could represent a breach of Swissness legislation.
The difference between origin and provenance
The rules of origin under customs and excise law determine whether a product qualifies for preferential tariffs, when crossing a border. The calculation of origin is based on rules which differ from those for the calculation of provenance within the meaning of Swissness legislation.
The Swissness rules fall within the scope of trademark law (declaration of provenance) and indicate that an article or a service comes from a certain geographical area. Declarations of provenance allow the voluntary labeling of goods and services “for advertising purposes”, but must be accurate. They are intended to protect consumers against fraud.
Due to the different objectives and calculation criteria for origin and provenance, it is therefore possible that a product may not be advertised with the words “Made in Switzerland”, although it meets Switzerland’s origin criteria under customs and excise law.
The declaration of origin as a rule for exports under customs and excise law
What should an SME do when exporting a product that, under Swissness legislation, is not allowed to be labeled with the words “Made in Switzerland”, but where it is necessary to state the origin of the goods under customs and excise law, on the label or on the packaging, in order to comply with import regulations in the buyer country?
Swiss exporters have to comply with the rules of the export country. Saudi Arabia, the USA and South Korea, for instance, require imported products to be labeled with the “country of origin under customs and excise law” regardless of whether the product also meets the provenance rules under Swissness legislation. The Swiss Federal Institute of Intellectual Property recommends the following:
“As long as the necessary ‘declaration of origin’, according to the relevant foreign customs and excise law, is arranged or attached in such a way that it is not understood as advertising the product with the label ‘Switzerland’ (under labeling or trademark law), it is entirely unobjectionable from the point of view of ‘Swissness’. (…) The same applies when the declaration of origin under customs and excise law on the certificate of origin is not sufficient for the importing country and a declaration on the packaging or on a label is a mandatory requirement.”
Checklist for exporting SMEs
SMEs should ensure that:
the reference to Switzerland is not integrated into a label (trademark).
the Swiss cross is not used
the label is positioned in such a way that it cannot be understood as advertising the Swiss provenance of the goods
the label does not stand out from the rest of the product information due to the font size, the color scheme or a contrasting presentation.
Whether an SME fulfills these conditions depends on the circumstances of the individual case (effect of the label in the context of the general presentation of the goods) and can only be ultimately established by a judge.