Swiss arms makers using loopholes to get around export rules

Controls on the exports of Swiss munitions are ineffective with arms makers using loopholes in the law to get around restrictions, an explosive new report suggests.

Swiss arms makers using loopholes to get around export rules
A soldier at the Swiss Air Force Base of Payerne. File photo: AFP

The report from the Swiss Federal Audit Office (FAO) has hit the headlines in the middle of debate about a proposed relaxation of rules for the export of war materiel to countries engaged in civil conflict.

Under the planned new rules, munitions could be shipped to such countries “if there is no reason to believe that the war materiel to be exported will be used in an internal armed conflict”. The change has the backing of the Swiss government.

But the heavily redacted FAO report released on Tuesday suggests that weapons makers are already managing to circumvent the current legislative framework using “alternative export possibilities”.

A section of the redacted report.

One of the ways companies do this is by taking advantage of the assembly package rule. Under this rule assembly packages of up to a maximum of 50 percent of the production cost of a finished product can be exported on without a non-re-export declaration.

This means companies in Switzerland can ship to “intermediate countries” they would otherwise not be able to.

Swiss munitions firms also get around the rules by acting as brokers between two other countries or granting licenses for production in a third country, according to the FAO which cited the example of pistol components that were shipped to Saudi Arabia from Switzerland via the United States.

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In another instance, a Swiss company in 2007 exported telescopic sights to Iran via Italy after arguing the components were intended for civilian use. This was later found to be partly true.

In its report, the FAO strongly criticized the Swiss State Secretariat for Economic Affairs (Seco) audit regime saying that the organization should focus on on-site inspections of arms makers in Switzerland rather than ineffective post shipment verification overseas.

The audit office also said the federal control network for war materiel was “too weak” and “insufficiently coordinated”.

SECO slammed the report as “carelessly edited” and “full of errors”. But the report took on a life of its own during the day on Tuesday.

Speaking to national broadcaster SRF, Socialist deputy Priska Seiler Graf said a cross-party alliance now planned to launch a popular petition to prevent any relaxation of current rules on the export of weapons to countries engaged in civil conflict.

Supporters of the planned popular initiative include the Socialists, the Greens, the Conservative Democratic Party of Switzerland (BDP) and the Group for a Switzerland without an Army (GSoA), according to SRF.

Read also: The female politicians taking on the Swiss arms industry