From the Editor: How Swiss is Your 'Swiss Made' Watch? Explaining What 'Swiss Made' Really Entails and What it will Mean as of January 1, 2017.

The label 'Swiss Made' is perceived as one of the top deciding factors for one looking to buy a reputable reliable timepiece —unless you are fan of A. Lange & Söhne and 'Made in Germany' is the deciding factor. Since 1971, the designation ‘Swiss Made’ has protected and promoted the Swiss watchmaking industry and has been a synonym for certain level of perceived quality and reliability in the watch industry worldwide. Unfortunately, the designation 'Swiss Made' is somewhat subjective and the ordinance has so many loopholes that nowadays who knows how much 'Swiss' you are in reality getting in a 'Swiss Made' timepiece.

As watch companies strive to cut down costs and maximize profits, a very important part of the components in a watch movement are made elsewhere. Now, in order to prevent any misconceptions, let's explain what the 'Swissness' law ordinance regulating the use of the name 'Swiss' for watches, stipulates. That way, you all can come up to your own conclusions and see what the implications will be starting 2017.

What Defines a 'Swiss Made' Wristwatch?

According to the 'Swissness' law Ordinance 232.119 from December 23, 1971 by the Swiss Federal Council regarding the utilization of the label 'Swiss' on watches, the law defines a 'Swiss Made' wristwatch, as a time measuring device where its movement does not exceed 50 mm in width, length or diameter and its movement is not thicker than 12 mm including the main plate and bridges. Additionally, a 'Swiss Made' wristwatch has to have a 'Swiss' movement, has to be cased up in Switzerland and the final quality control inspection by the manufacturer has to take place also in Switzerland.

What Defines a 'Swiss' Movement?

The Swiss law states that a 'Swiss' movement, is a movement that has been assembled in Switzerland, that has been controlled by the manufacturer in Switzerland and that at least 50% of the 'value' of all its components/parts were made in Switzerland—without taking into consideration, the cost of labor for its assembly. Here the key word to keep in mind is 'value', and that's how some watch companies are able to get around the law. Therefore, what this means, is that a large number of entry-level and mid-level timepieces that bear the designation 'Swiss Made' are in fact mostly manufactured in Asia — cases, dials and bracelets— and fitted with a designated 'Swiss movement' that in reality is made up of components also manufactured outside of Switzerland. Therefore, is very important to decide who you buy from.

How is the Value of the Components Calculated?

The value of components can account for the cost of the dial and hands, if they have been installed in Switzerland, regardless of their origin. Additionally, the cost to assemble the watch, can be taken into consideration only when an international certification guarantees that due to an industrial strategic partnership, there is equivalence in quality between the foreign components and the 'Swiss' components.

As you can see, is fairly easy to get up to that 50% 'Swiss' manufactured that the law stipulates and some companies —especially the micro-brands— are getting away with it by designating their watches as 'Swiss Made' when in reality they are more Asian than anything else. Because the 50% relates to value and not to the number of components, it is not surprising to find some watches out there where probably no more than 20% to 25% of their components were indeed made in Switzerland. This is one of the things that differentiates a true in-house Swiss Manufacture —that makes their own components at the manufacture— from others.

When is a Watch Case Deemed 'Swiss'?

Per the Swiss ordinance, a watch case is considered 'Swiss' when the case undergoes at least one essential manufacturing operation —such as polishing, turning or stamping— in Switzerland, if it has been assembled and tested in Switzerland and if at least 50 percent of the cost of manufacture —excluding the value of the material— is accounted for by operations carried out in Switzerland. However, this is a huge loophole as the actual case could be coming straight from Asia in an unfinished state and as long as the finishing touches and testing isdone in Switzerland, the case can be considered a 'Swiss' component. Another big loophole of the ordinance and one that allows for some companies to get away with Asian made cases being sold in 'Swiss Made' watches.

What Will Happen to the 'Swissness' Ordinance as of January 1, 2017?

Luckily for all of us watch collectors, on January 1st 2017, a revision to the 'Swissness' ordinance will make the criteria for the ‘Swiss Made’ designation much more strict and with less loopholes; in other words, the revised law stipulates the point at which a product can legitimately claim to be of 'Swiss' origin.

This new ordinance, stipulates that at least 60% of the production of a watch —in terms of the total cost and not just for the movement— must take place in Switzerland. This new 'Swissness' ordinance might also require that all engineering and prototyping of watches takes place in Switzerland.

As far as mechanical watches are concerned, this revision to the ordinance might not have a huge impact on how much of the watch is indeed in reality 'Swiss Made'; however, it might deter some companies from continuing to maximize profits by virtue of getting most of their significant components made in Asia opposed to Switzerland. Nevertheless, the ones that will have a harder time with this ordinance revision, are the companies manufacturing 'Swiss Made' quartz watches as they will now struggle to meet the criteria of having 60% of the production cost of the watch take place in Switzerland. Since some of their major components —case, dials, and bracelets— will have to be made in Switzerland in order comply with the 60% production cost, ironically we might be getting better quality and more 'Swissness' in these watches. While at the end of the day, this change in the ordinance is still relatively small, we expect for some of the smaller companies to improve the quality of components in their watches without the need to increase prices. At the end, this should guarantee longer lasting better made timepieces.

For more info on the current and new 'Swissness' ordinance click here.

Posted on July 13, 2016 and filed under News.