SWISS TRADE ASSOCIATIONS REJECT OFFSET REPORT’S RECOMMENDATIONS

Two Swiss trade associations have released a statement rejecting key parts of a report on offsets commissioned by the country’s Federal Department of Defence, Civil Protection and Sport (DDPS). Le Groupe Romand pour le Matériel de Défense et de Sécurité (GRPM) and Swissmem stated that the new report suggests the DDPS wants to “throw overboard” the long-standing practice of offsets in the country.

They dismissed its concerns as “innuendo.”

Most importantly, Swissmem and GRPM rejected the idea of limiting the offset quota to 60 percent of contract value (currently 100 percent) for the purchase of new fighter jets. This, they said, would exclude a large number of indirect offset transactions. It was not until the end of 2018 that the Federal Council decided that a 100 percent offset quota would apply to the purchase. Trade associations believe it is bad faith to question this decision after just a few weeks. Talks with contractors have already begun, and the associations believe that local industry would be able to absorb the expected offset volume of CHF5bn ($4.92bn) Swissmem and GRPM also stressed that the regional distribution of offsets must be maintained. Currently, offsets must be divided between the country’s German, French, and Italian-speaking areas based on set percentages. The two bodies stated that they believe that the population would only approve the Air 2030 procurement project in a plebiscite if this distribution remains.

Swissmem and GRPM also rejected attempts to link offset-related corruption scandals in other countries, such as Austria, to the situation in Switzerland. “There is no reason... to suggest there is a corresponding threat,” the associations wrote. Swissmem and GRPM stated that they expect the Federal Council to leave no doubt about the offsets rules it has adopted so that Swiss industry can plan its activities without “jolts.”

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