Duty free trade in Switzerland
The abolition of industrial tariffs BBI 2021 2330 results in the elimination of industrial customs duties.
The abolition of industrial tariffs BBI 2021 2330 results in the elimination of industrial customs duties.
16. May
The abolition of industrial tariffs (BBl 2021 2330) will come into effect on January 1, 2024. This decision was made by the Federal Council at its meeting on February 2, 2022, after the necessary amendment to the Customs Tariff Act was passed by the Parliament on October 1, 2021.
The Federal Council has chosen January 1, 2024, as the date for the implementation of the measure in such a way that conversion costs for economic operators and administration can be kept as low as possible. All actors have sufficient lead time for the necessary technical and organizational adjustments.
On average, prices for goods and services in Switzerland are significantly higher than in neighboring countries. Various factors contribute to the "high-price island Switzerland": on the one hand, the high level of wages and costs drives up prices. On the other hand, a number of tariff and non-tariff trade barriers contribute to the insulation of the Swiss market, allowing companies to charge higher prices in Switzerland than abroad. SECO has examined their effects in a number of studies. On December 20, 2017, the Federal Council approved the package of measures "Import Facilitation" with the aim of reducing trade barriers. The abolition of industrial tariffs is part of this package of measures.
The abolition of industrial tariffs strengthens Switzerland as a business and industrial location. The realized welfare gain is estimated to be around 860 million CHF. While domestic industry was previously protected from foreign competition by tariffs, they now make it more expensive to procure primary materials from abroad. Thanks to the abolition of tariffs and the associated administrative simplifications in customs procedures, companies in Switzerland benefit from cheaper upstream services and can thus reduce their production costs. As the Swiss economy is highly integrated into global value chains, the measure strengthens its competitiveness. Overall, trade relations become more efficient, and competition is enhanced. Consumers also benefit from the measure, as imports of various consumer goods such as cars, bicycles, personal care products, household appliances, or clothing are still subject to tariffs today. In sectors with functioning competition, the savings are passed on to consumers. The transfer is monitored through monitoring.
In addition to the abolition of industrial tariffs, the proposal also simplifies the tariff structure for industrial products, which can further reduce administrative costs.
Abolition of industrial tariffs: Questions and Answers
Which products are affected by the abolition of industrial tariffs?
In Switzerland, industrial products include all goods except agricultural products (including processed agricultural products and animal feed) and fishery products. Therefore, the abolition of industrial tariffs applies to goods in chapters 25-97 of the customs tariff, with the exception of some products in chapters 35 and 38 that are classified as agricultural products.
The simplification of the customs tariff structure also exclusively applies to industrial products in chapters 25-97 of the customs tariff.
What preparations do companies need to make before the abolition of industrial tariffs on January 1, 2024?
Along with the abolition of industrial tariffs, the Swiss customs tariff for industrial products will be simplified. The tariff positions will be reduced from 9114 to 7511, as the detailed sub-division, which currently allows for the collection of differentiated tariffs, will no longer be necessary to a large extent in the industrial sector.
The abolition of industrial tariffs, along with the simplification of customs tariffs, will lead to an adjustment of the Swiss tariff schedule. The adjusted master data from the Federal Office of Customs and Border Security (BAZG) must be adopted by the affected companies. BAZG will provide the necessary information for this on their website before autumn 2023.
What changes can be expected when the reduction of industrial tariffs takes effect in the import customs declaration?
The abolition of industrial tariffs does not require any adjustments to the customs clearance processes. The obligation to submit a customs declaration (declaration for businesses), including the correct indication of tariff numbers for the goods to be imported, remains.
Simplifications of import customs declarations are planned with the introduction of the new freight transport system Passar as part of BAZG's DaziT transformation program. More information can be found here.
https://www.bazg.admin.ch/bazg/de/home/themen/dazit.html
For adjustments regarding cumulation of origin for industrial products and specific processes, please refer to the following questions and answers.
Who still needs a preference proof of origin for industrial products after the reduction of industrial tariffs has taken effect?
Industrial products can be imported into Switzerland duty-free from January 1, 2024. For the import of industrial products, for which it is certain at the time of import that they will remain in Switzerland or be consumed here, there is no longer a dependence on the application of Free Trade Agreements (FTA) or the Generalized System of Preferences (GSP) in favor of developing countries. This means that it is no longer necessary to present preference proofs of origin for these goods.
When importing goods or primary materials that are further processed in Switzerland and then re-exported, a distinction needs to be made whether there is origin cumulation involved, for example within the framework of the Pan-Euro-Mediterranean (PEM) agreement, to facilitate re-export.
If you want to use origin cumulation for export, you still need to rely on the supplier's proof of origin, known as a pre-origin proof, when importing the respective goods.
| Is a valid prior proof of origin required? | |
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Destination Switzerland: Goods for which it is clear at the time of import that they will no longer be exported from Switzerland (e.g., consumer products). |
NO |
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Processing and re-export without preferential tariff treatment: Imported goods processed in Switzerland and exported to countries with which there are no free trade agreements, or to countries with which there are free trade agreements, but preferential treatment cannot be claimed. |
NO |
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Unchanged re-export without preferential tariff treatment: Import of goods to be re-exported without changes to countries without free trade agreements, or to countries with free trade agreements but without claiming preferential treatment, and no proof of origin for preference should serve as the basis for a non-preference proof of origin. |
NO |
|
Sufficient processing and re-export of Swiss origin: Import of goods considered sufficiently processed in Switzerland without claiming cumulation under the relevant free trade agreement, and to be re-exported under that free trade agreement as goods of preferential origin, Switzerland. |
NO |
|
Export-side cumulation: Import of goods considered sufficiently processed in Switzerland through the use of cumulation under the relevant free trade agreement, and to be re-exported under that free trade agreement as goods of preferential origin, Switzerland. |
YES |
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Through trade: Import of goods to be re-exported without changes to free trade partner countries, with which origin cumulation is possible as goods of preferential origin. |
YES |
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Proof of origin serves as the basis for a non-preference proof of origin upon re-export: Import of goods to be re-exported without changes, and a proof of origin for preference should serve as the basis for a non-preference proof of origin. |
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How can the original cumulation continue to be used?
From January 1, 2024, importers of industrial goods to Switzerland can benefit from zero tariffs without a proof of origin.
For cumulation of origin, such as within the framework of the PEM Convention, proof of origin as preliminary documents for exports is still required. The respective companies must already be able to present a valid proof of previous origin or alternatively an assessment decision with a preference slip in order to issue a proof of origin for the export of products (Circular D30, proof of previous origin; simplifications). This practice will not change with the abolition of industrial tariffs.
As a reminder, preferential customs clearance upon import, i.e., the import assessment decision with documented preference assessment, is not required to issue a proof of origin for the export of products.
It is sufficient to have proof of previous origin, i.e., a proof of origin from the foreign supplier (goods transport certificate or origin declaration on the invoice; supplier declarations are not valid in this context).
The proof of origin must be formally valid (see: Information sheet on determining the formal validity of proof of origin).
What obligations to archive proof of origin (e.g., EUR.1) will still exist after the abolition of industrial tariffs on January 1, 2024?
The abolition of industrial tariffs has no impact on the obligations to archive proof of origin. These will continue.
Preliminary documents for export proof of origin must be kept for at least 3 years from the date of issuance of the export proof of origin, in the case of the application of the free trade agreement with South Korea for at least 5 years.
What happens to the ATA Carnet when the reduction of industrial tariffs takes effect?
The ATA Carnet for temporary use remains in place. It is crucial that the goods leave the customs territory on time and unchanged. The ATA Carnet serves to enforce these conditions and allows, if necessary, the possibility of drawing on security covering the import duties concerned (especially VAT). The ATA Carnet also has the advantage that national customs documents do not need to be applied for in all countries (one customs document for multiple countries).
Especially for economic operators entitled to full deduction of input VAT, the route via import to free circulation and export procedure after the reduction of industrial tariffs can also be chosen as an alternative to the ATA Carnet.
Will special procedures such as processing traffic or duty relief for goods still exist depending on the intended use for industrial products?
With the abolition of industrial tariffs from January 1, 2024, the use of special processes for industrial products can largely be dispensed with. In special cases, such as VAT exemption as part of temporary importation of goods (active processing), the special procedures remain relevant.
Which tariff positions will be merged as part of the simplification of the customs tariff structure and what happens to the statistical keys?
Along with the abolition of industrial tariffs, the Swiss customs tariff for industrial products will be simplified; the tariff structure in the agricultural sector remains unchanged.
The 9114 tariff items of the tariff will be reduced to 7511 as detailed subdivision is no longer necessary. National subdivisions of the tariff numbers will also remain unchanged in the industrial sector, where they are used for the implementation of non-customs provisions, such as export control.
You can find an overview of the affected tariff lines in the Excel table "Simplification of the customs tariff": Abolition of industrial tariffs on January 1, 2024.
The statistical keys (known as control elements, three-digit special selections) are further subdivisions of the eight-digit tariff numbers. They will be transferred to the new tariff structure if they are necessary for the implementation of non-customs legislation. BAZG will provide the necessary information.
What will happen to the non-customs decrees affected by the simplification of the customs tariff structure?
The regulations containing tariff numbers and relating to non-customs legislation will be amended by the Federal Council before January 2023. Existing non-customs legislation will be transferred to the new tariff structure. BAZG will provide the necessary information.
What will happen to the binding tariff information affected by the simplification of the customs tariff structure?
Binding tariff information expires no later than after 6 years or if the applicable legal basis changes. The binding tariff information will therefore lose its validity when the reduction of industrial tariffs (amendment of the Customs Tariff Act) comes into effect.
What happens to the decisions on goods classification and the explanations of customs tariffs affected by the simplification of the customs tariff structure?
The corresponding decisions and explanations will be adapted to the new tariff structure by BAZG on January 1, 2024, and published in Tares.
