Security and armaments policy

As a neutral country, Switzerland is bound to defend its sovereign territory should necessity require it. It can only do this if it has its own armed forces and security and defence industry. This prevents Switzerland from having to depend on foreign suppliers in a crisis situation. However, domestic demand for armaments is not sufficient to ensure the continued existence of the defence industry. It needs exports to survive.

Switzerland’s security and armaments policy plays a key role in preserving its freedom, independence and security as a nation. Swissmem campaigns in favour of maintaining a security-relevant technological and industrial base in Switzerland in order to minimize dependence on other countries and maintain our own competence in selected strategic technology fields. This base must be capable of providing essential services to the armed forces in selected strategic technology fields.

Reliance on exports

Due to its humanitarian tradition, compared with other countries Switzerland pursues very restrictive authorization practices for exports of security and defence industry goods. Having said that, the security and defence industry needs exports to survive, as the domestic market is far too small to provide a sufficient livelihood. These authorization practices therefore cannot be allowed to place Swiss companies at a disadvantage vis-à-vis competitors from comparable western states. Swissmem is campaigning to prevent any additional, domestically motivated grounds for refusal for goods exports being established. Export controls are necessary, but they must be transparent, simple and internationally coordinated.

Industrial holdings offer benefits in the case of foreign purchases

When Switzerland purchases military equipment for its armed forces from other countries, it usually requires that the purchase price be 100% offset through industrial holdings. These holdings – also called offsets – give Swiss businesses access to major, internationally active companies and open up opportunities for long-term business relationships. This also brings with it the chance to transfer/preserve technological expertise, as well as to boost Switzerland’s security-relevant technological and industrial base.

The additional costs of industrial holdings in the case of military procurement activities abroad stand at 2 to 5%. These costs must be set against returns on taxes, which reach a level of at least 4% of the annual offset volume. The additional costs of offsets are thus virtually or completely neutralized.

Swissmem is in favour of the existing offset practice for armaments transactions, as it strengthens the competitiveness of the Swiss security and defence industry. As a founding member of the Offset Office, Swissmem supports the implementation of the industrial holdings strategy and plays an active role in offset controlling.