On the one hand, it was decided to abolish industrial customs duties for imports into Switzerland, and on the other hand, it was decided to simplify the customs tariff structure [1] in Switzerland.

This means that industrial products [1] , which were previously still subject to customs duties, can now in principle be imported into Switzerland duty-free, i.e. without using a preferential agreement [2]. However, this exemption does not apply to agricultural products.

What are the advantages for suppliers and importers in the future?

In fact, suppliers of industrial products to Switzerland could now have the opportunity to reduce their sales price. This applies in any case if they were not already exempt from customs duties or if the exemption from customs duties could only be obtained through the use of preferential agreements of Switzerland or EFTA (free trade agreements or agreements with developing countries). In the latter case, the costs/risks for the preparation of the preferential proof of origin itself (e.g. EUR.1) or the authorisation as an approved exporter applied for for this purpose could possibly be omitted.

In addition to the customs amount itself, the advance payment fees of the customs service provider/freight forwarder are also omitted.

You emphasise the “could” – are there also challenges or stumbling blocks?

It should not be forgotten, also by suppliers both abroad and in Switzerland itself, that a large proportion of Swiss companies and thus of their customers subsequently export their products abroad themselves. These target markets, for their part, still have no plans for further tariff reductions.

If Swiss exporters have previously required proof of preference for subsequent imports into these foreign markets in order to benefit from preferential customs treatment (preferential origin), they will continue to do so.

Likewise, proof of so-called non-preferential origin will continue to be required if this was already currently necessary in order to access target markets at all or to avoid anti-dumping duties.

For these exporting companies, the preparation of the necessary proof of origin could now become more difficult and cost-intensive. In order to counter these difficulties, suppliers may also have to forego certain cost-saving potentials here.

(Depending on the constellation itself, this may also affect suppliers in Switzerland who in turn import input materials or goods and issue supplier declarations to Swiss customers).

The possible future challenges for the exporting company are based on the fact that for the calculation of origin required

• for the calculation of origin for these imported products
• now have to be procured and checked in a different or more complex way.

In any case, the exporting company should evaluate the need for action in this context in advance and in a timely manner.

Since the supplier is primarily responsible for providing these preliminary documents, this clarification should take place in consultation with him.

In addition, companies that export later may also have to coordinate with the customs service provider who makes the customs declaration for the input material. The latter recommendation is due to the following special feature (facilitation):

Quite a few companies in Switzerland belong to the so-called small or medium-sized enterprises (=SMEs). Not least for these, customs service providers have so far frequently, quasi “centralised”, taken over the verification of the preliminary documents (supplier’s preference certificates) upon import.

In the process, it was up to the customs service provider, in the sense of a point of entry for the most diverse types of proof of origin, to keep track of the very complex regulations of the possible proofs of origin in the context of the various agreements. He had to assess whether the type of proof of origin presented in each case and the form in which it was issued could be regarded as formally valid or not and, if necessary, provide assistance in requesting it from the supplier.

In the end, the later exporting company could, in the sense of facilitation

• the import declaration (eVV Import) created on this basis “with ticked preference
• as a preliminary document that is always the same in every situation, without any significant scope for checking, even for both types of origin mentioned above (preferential and non-preferential).

The same applies to importing companies in Switzerland that do not export later but issue supplier’s declarations to their customers.

In practice, this service was and is often associated with considerable risks for the customs service provider, both in terms of civil law and fines.

In addition, this service requires a valid proof of origin from the supplier at the time of the customs declaration, which makes such a “pre-service” by the customs service provider possible at all.

It is already becoming apparent for the future that many suppliers will now question the necessity of issuing such a proof of origin in view of the fact that imports are duty-free anyway. In view of the additional costs and risks involved, this does not seem incomprehensible. On the other hand, this would make the future provision of this pre-service by the customs service provider even more difficult.

What does this mean for existing clients or other companies? What should they pay attention to?

First of all, it must be noted that the obligation to declare customs will remain in place and, in our opinion, will not really become any easier. The declaration of the so-called preference concerns only one of 24 necessary fields.

Irrespective of customs duties, other duties such as VAT, VOC duties, mineral oil and automobile taxes will continue to be incurred and errors in the declaration can and will also lead to considerable fines in the future.

The obligation for proper tariff classification also remains in principle, even if the need for tariff elimination beyond the 6th digit no longer applies.

In addition, the Swiss Customs Administration is not bound by a tariff decision of a foreign authority. It is therefore advisable in future to at least compare this with the local understanding and, if necessary, to obtain binding tariff information from the Swiss customs administration as a safeguard.

The significance for the individual company in the form of an advantage or need for action cannot be answered in a blanket manner due to the initial situation described above. Our customers are both the suppliers, the recipients in Switzerland, but also the subsequent exporters and it therefore always depends on the individual situation.

However, with reference to the explanations given above, the following questions can perhaps be roughly outlined, depending on the respective role of the company.

For suppliers: 

Check cost-saving potential for imports, if applicable

• Customs duties,
• prepayment fees
• Costs for preparing proof of preference (for authorisation as an approved exporter, EUR.1, securing know-how of staff for declaration of origin)

For suppliers and exporters/creators of supplier’s declarations, the following must also be taken into account:

(as supplier see right side of table, as exporter see left side of table)

Finally, it remains to be said that Gerlach AG is happy to support you as well as your customers in this regard, also within the framework of the consulting offer.

Are there any valuable informative website links for this?

Yes, I can recommend the website of SECO – State Secretariat for Economic Affairs here: https://www.seco.admin.ch

[1] With a few exceptions from Chapters 25 to 97 of the Harmonised Tariff.

[2] Free trade agreements or so-called GSP agreements with developing countries, either bilaterally with Switzerland or as part of EFTA.

Due to the political uncertainties, we are unfortunately observing a trend towards the development of trade barriers. Companies must prepare themselves better at an early stage and act accordingly by identifying possible risks – especially with regard to transport and customs.
Brexit is a relevant topic for our industry of course – but it is less relevant for us in Switzerland. The UK is an important partner for Switzerland. Switzerland-UK relationships are based on bilateral agreements signed between Switzerland and the EU. Switzerland and the UK had already agreed and identified solutions before the Brexit.

An important trend for our industry is the trend towards digitisation and automation. I see many opportunities for the customs industry in particular: When time-consuming, repetitive tasks are automated, experts can focus even more intensively on the challenging tasks.
This is why I think it is important, and this is how we do it in our area, to promote and facilitate digital transformation within the company and among our employees.

"It makes me proud to see that at Gerlach, we work fast and in an unconventional way – this way we offer exactly the flexibility that customers demand from us."

2. Are there any new regulatory events – customs related – happening in your environment that customers should know about?

In this context, I would like to address two key points: the DaziT transformation programme and the change in the VAT law in Switzerland.
What’s DaziT? Swiss customs launched the DaziT transformation programme on January 1, 2018. The aim of the programme is to digitise all customs processes by 2026 to further simplify and speed up border crossings. We were involved in this programme by the Swiss customs authority as part of the pilot project. Of course, I am very pleased that our team can participate and shape such future-oriented programmes.

Another important event is the change to the VAT rules in Switzerland: Foreign mail order companies are subject to value-added tax in Switzerland if they generate at least CHF 100,000 turnover per year with shipments that are not subject to Swiss import tax. This means that registration is mandatory for import shipments. At Gerlach in Switzerland, we can provide comprehensive advice on these issues.

3. What makes you very proud of your team right now?

It makes me proud to see that as a team at Gerlach, we work fast and in an unconventional way – this way we offer exactly the flexibility that customers demand from us.

Our strength is our knowledge and our many years of experience – over 135 years – in the field of customs. Especially in the age of digitalisation, knowledge becomes even more important, as robots can only be as intelligent as the humans who feed them with knowledge.