As a positive example of enhanced cooperation, Switzerland and France have agreed to broaden the scope of their bilateral agreement on precious metals. The agreement now includes multi-metal goods.
Trading of high-value materials may attract criminal behaviours and calls for regulatory framework promoting the fight against fraud, corruption, money laundering and the protection of human rights based on multiple international and bilateral agreements and conventions. In particular, the trade in raw materials and derived goods is strictly controlled.
Switzerland and France are major business partners. They are each other’s third most important trading partner in terms of value1, and almost CHF 30 billion of goods in total are traded between them each year. In 2020, Swiss companies exported goods worth CHF 15,430 billion to France and of these 17% (CHF 2,616 billion) were in the jewellery, watchmaking and precision instruments sectors. The new agreement, signed on 19 June 2018, came into force on 1 September 2021. It replaces the convention signed in 1987, which covered only precious metal articles, i.e. articles made of gold, silver or platinum. It provides for a mutual recognition of the official marks applied to precious metal and multi-metal articles. Multi-metal articles are defined as those made of either several different precious metals or of both precious and base metals (e.g. steel, titanium, copper etc.). Switzerland had a particular interest in adding multi-metal articles to the agreement, to cover for example the fashionable Swiss-made bi-colour watches made of gold and steel or gold and silver.
The new Swiss-French agreement summarised
French exporters of items made of precious metals and multi-metals articles do not need to obtain any additional mark in Switzerland, provided that the items bear the official guarantee mark (attesting to their content of precious metal), as well as the manufacturer’s mark. Reciprocally, Swiss exporters of these items do not need to obtain any additional mark in France, provided that they bear the appropriate guarantee and manufacturer’s mark.
After importation, items must be presented to an official control office to ensure that the Swiss or French official marks are duly applied (art. 2). Manufacturers who have an official manufacturer’s mark and have already registered their brands at their respective national control office no longer need to register their brands in the other country (art. 3). The authorities can ask for analytical tests of content (to attest the content of precious metal in the article); however, these should not unnecessarily delay the importation and sale of the articles (art. 4). Test procedures have been modernised to match the ISO standards (art.5).
Benefits of the new agreement
This new agreement will lend further support to bilateral trade in some of high-value economic sectors in the two countries, from the jewellery and watchmaking to the automotive, electronics and medical technology sectors. Swiss exports to France will function more smoothly, saving time along the overall supply chain. French exporters will benefit from cost reductions as they will no longer bear the cost of obtaining additional Swiss marks and compliance checks, which previously cost between CHF 1.25 and CHF 7.20 per item. Cost of registration of the manufacturer’s mark in Switzerland will also no longer be incurred (these costs did not exist in France for Swiss exporters)2.
International trade in raw materials is highly regulated and taxed, for example by mineral oils tax, the EU conflict mineral regulation, precious metal control, the Kimberly Process for rough diamonds etc. However, the only existing international instrument at a global level that relates to precious metals guarantees is the Hallmarking Convention (also known as the Precious Metals Convention) to which Switzerland, but not France, is a member. This is why the original bilateral agreement was made.
Switzerland has concluded similar bilateral agreements with other countries that do not adhere to the Hallmarking Convention: The Russian Federation, Italy (although Italy ratified the Hallmarking Convention in 2018 it has not yet been enforced), Austria and Spain. However, the scope of these bilateral agreements is limited to precious metal articles3.
This new agreement between Switzerland and France is a major development in the trading of precious and base metal articles. It sets a beneficial legal framework for traders on both sides of the border.
1 Switzerland is France’s third business partner outside of E.U.
2 Source: note from the French Ministry of Europe and Foreign Affairs, page 4
3 More information can be found on the webpage of the Swiss Federal Customs Administration
A sound Trade Compliance framework is particularly desirable in the field of precious and base metal trading. It enables companies to understand and manage the risks relating to applicable regulations, such as the EU conflict mineral regulation. The level of visibility and control granted by Trade Compliance frameworks allows companies to benefit from trade facilitation opportunities like this one, thereby saving costs and time while avoiding irregularities.
Is your company exporting precious and multi-metal articles to France? Check the eligibility of your products and benefit from this new agreement (ref 0.941.334.91, available on the Fedlex webpage).
Deloitte will be happy to discuss with you the design and operational effectiveness of your company’s trade compliance management framework. Please reach out to our key contacts below, if you would like to discuss this topic further.