Annual Report

2020

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Annual Report

2020

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ISSN 1421-7384
The annual report is also available in French and German in paper or electronic format, upon request.
© Fédération de l’industrie horlogère suisse FH, 2021

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Table of contents
The word of the President

4Highlights of 2020

6

Pandemic - The FH’s response to Covid-19

8AdIntelligence - New program to combat counterfeiting on the internet

10

The fight against counterfeiting - Seizures in the Middle East and South Asia

11

Free-trade agreements - Legal certainty and stability

13

Regulatory affairs - FH guides and other activities

14

Panorama of the 2020 activities

16

Improvement of framework conditions18

Information and public relations20

The fight against counterfeiting

22Standardisation27
Legal, economic and commercial services28

Relations with the authorities and economic circles29

FH centres abroad

30

The Swiss watch industry in 2020

32

Watch industry statistics

34

Structure of the FH in 2020

38

The FH in 2020

40

The General Meeting41

The Board

42

The Bureau and the Commissions

43

The Divisions and the Departments

44

The network of partners

45

The word of

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the President
January 2020 marked an
excellent start to the year
but was swiftly followed by
the devastating effects ofthe pandemic, with exports
falling by 81% in April and
68% in May. Later in theyear, the declines wereless sharp and by theend of December, theannual drop was 21.8%.
This result is not surprising, given that businesses stopped production, shops were closed for a significant
portion of the year, tourism was halted, with highly negative
consequences for the travel retail sector and the Swiss franc
strengthened further. Overall, it was therefore a very difficultyear for the watchmaking industry in Switzerland, as it wasfor other sectors.
Although the pandemic commanded attention and resources,
and prevented the world from proceeding as normal, the FH
continued with its usual activities. First, on the domestic front
in Switzerland, it provided the federal authorities with a steadystream of information on the state of the sector in order to support measures aimed at helping businesses. Secondly, turning
to the outside world, we were faced with a resurgence of protectionist measures in various countries, making imports moredifficult in a number of markets. Such measures included anincrease in customs duties, more complex customs clearance
procedures, and additional product checks.
Apart from the effects of Covid, regulations on the environment and human health once again required our attention
and involvement. While the aim of such regulations may belaudable, they still have an effect on the watchmaking sector
and may even have consequences that are the opposite ofthose intended. An example is the review of the European

directive on batteries, which could have negative effects forthe watchmaking industry but also for the environment, which
the revised directive is supposed to protect more effectively.
The fight against counterfeiting, which is a constant concern
in our sector, took on a new dimension. I am delighted by thelaunch of our new AdIntelligence software, which is helping
to improve our efficiency in detecting advertisements for fakewatches online, as well as our case management. I would also
like to highlight our increasing efforts to combat counterfeiting,with numerous seizures of copies in new strongholds for fakegoods, such as the Middle East, in particular Egypt, Saudi
Arabia and Pakistan.
All of these areas are covered in this report, along with information on many of our other activities over the past year.
Finally, I would like to express my gratitude to FH members
and the association’s governing bodies for their support andassistance, which have been particularly precious during thisturbulent period, and to FH staff, who have shown commitment
and flexibility in pursuing our objectives successfully, despite
the challenging circumstances.

Jean-Daniel Pasche

Highlights

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of 2020
While the last year was marked by the pandemic, the FH
worked to represent the interests of the watch industry in thepolitical management of the crisis, through regular contact
with the authorities, publishing position statements andparticipating in round tables and consultations. At the sametime, the fight against counterfeiting remained a priority, particularly in the Middle East and South Asia. Digital activities
in this area were also strengthened, with the launch of new
surveillance software for e-commerce platforms and social
media. 2020 again saw the FH make efforts to strengthen
free-trade agreements, which are essential for the sector.
It also expressed its views on several technical regulations
and standards with which watch products must comply, andwhich are increasing number on a regular basis.

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Pandemic
The FH’s response to Covid-19

Watchmaking is one of the sectors that will have been mostaffected by the Covid-19 pandemic. The global spread of thevirus led to a series of total market shutdowns, first in Asia
and later in Europe and America. Global tourism and travel
retail literally evaporated in just a few weeks, as the usual
large numbers of Chinese customers deserted Lucerne, Paris,
Milan, London and New York. During the second quarter alone,
watch exports plummeted by 62%.
Initially, firms in Switzerland decided on their own initiative
to suspend their activities temporarily to protect the health oftheir staff. Soon, however, the whole sector had no alternative
but to comply with the emergency measures decreed by the
Swiss Federal Council and later, as the months went by andthe pandemic evolved, with federal and cantonal decisions.
In the end, watch exports for the year fell by 21.8%.

The FH worked particularly hard to promote the interests ofthe sector in the political management of an unprecedented
health and economic crisis. From February onwards, it wastherefore in direct and permanent contact with the federal
authorities and with economiesuisse, to coordinate the assessment of the situation and take stock of economic concernsand expectations. It also published regular position statementson the various sets of measures implemented to support business, keep people in work and maintain production facilities.
Several detailed updates coordinated by economiesuisse were
supplied at regular intervals, on levels of business activity,
employment and investment trends, the suitability of support
measures and short- and medium-term prospects, to provide
the political authorities with as much detail as possible toinform their decision-making.

9

The FH also took part in various round tables convened by
Guy Parmelin, and in two discussions led by the Economy
Committee of the State Secretariat for Economic Affairs.
In some cases, the Economics Committee of the FH andother employer, sectoral or regional associations were also
approached to further refine the analysis of the situation andidentify desirable measures for the sector.
Several letters, co-signed by the FH, were also sent to the federal authorities to explain economic expectations in responseto the various sets of measures decided as the months went
by. Among other things, it communicated its disappointment
concerning the delay in reopening Swiss watch and clock
shops at the end of the first wave of infections. Later, when thesecond wave began and in light of the difficulties encountered,in particular in the subcontracting sector, it emphasised theimportance of the Federal Council refraining from any further
lockdown measures on any scale whatsoever.
The last survey of the year conducted by economiesuisse
pointed to a difficult winter, as the partial recovery in thesummer was followed by a further deterioration in firms’ economic situation. Overall, the difficulties have continued in all
sectors that export goods. All sectors combined, investment
has been reduced or deferred in one firm in two, particularly
among SMEs. The prospects for a return to normal suggest
it will not be before the third quarter of 2021 at the earliest,
a view that is largely shared in the watch industry.
The disruption has had a severe impact on the sector. Nonetheless, its capacity for resilience has helped keep the production system intact. In particular, the vast majority of jobs havebeen maintained thanks to the use of shorter working hours.
Turning to the markets, the only marked recovery in the summer was in China, however others are not far from returning
to a normal level of activity. In the meantime, the godsend ofinternational tourism is still missing and everything suggeststhat a return to normal in the travel retail sector, which is
intrinsically linked to air travel, will not be seen for several
months, or even years. Working to tackle the consequencesof the health crisis will therefore remain a priority for the FH.

10AdIntelligence
New program to combat counterfeiting on the internet
After just over a year in development, the new surveillance
software for e-commerce platforms and social media, AdIntelligence, came on stream during the summer of 2020. The
purpose of this large-scale project was to replace the previous
tool and raise the level of surveillance and automation to awhole different level.
The steady growth of e-commerce over the last decade has
resulted in a sharp increase in the number of counterfeit
goods sold online. Today, it is no longer unusual to find 10,000
counterfeits of one watch brand on a single sales platform.
Given the quantities involved, it was becoming imperative
for the FH to equip itself with a tool that could automate
not only the process of searching for items on sale, but alsoclassify them.
AdIntelligence is therefore a flexible, digital investigation toolthat can generate automatic searches based on key words
and prices, on any sales platform. The system runs thesesearches at regular intervals to identify all the items being
sold on these sites. Each product is then analysed individually. The numerous operations involved including extracting
important textual information, such as price, title, description, location and quantity, but also downloading images of
the item offered for sale. The information gathered is used
to produce a detailed analysis (classification) of whether theitem is an original or a fake. Object and text recognition in
the images is also used to provide additional information. In
most cases, the system can therefore answer the following
questions entirely autonomously:◆

Is the product a watch?

◆

Is it a fake?

◆

Which brand or brands are affected?

◆

Does the seller have other items for sale?

◆

What is the seller’s history (repeat offender or not)?

Once all the items on a platform have been analysed, an
employee from the Internet Unit checks the results and notifies the platform about the products in question. Again, thesystem provides significant assistance, for example with automated form creation or filling out the fields in an online form
automatically. All necessary brand certificates are recordedin the database and used at this stage on the basis of reliable
information. Notification, which was previously a cumbersome
and time-consuming task, has thus been made much simpler.

Moreover, like its big brother WebIntelligence (a surveillance
tool for sites selling counterfeits), AdIntelligence allows members of the Internet Unit to view notified products at any timeand download detailed statistical reports.
Based on its experience of investigation and development
acquired over the Internet Unit’s 15 years of existence, the FH
designed the tool in-house, ensuring a close match between
its specific needs and the software’s functionalities. Together,
these various aspects make AdIntelligence a comprehensive,high-performance tool that is making a significant contribution to the effectiveness of the FH’s efforts to combat counterfeiting online.

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The fight against counterfeiting
Seizures in the Middle East and South Asia
The range of actions to combat counterfeiting taken by the
FH changed significantly in 2020 in response to the Covid-19
pandemic. The consequences of border closures and thechange in priorities for many authorities, particularly customs, impacted movements of counterfeit goods. To a large
extent, customs authorities were mainly interested in checks
on health products. Seizure notifications therefore became
increasingly rare, while consumers turned to digital sales
channels. In response, several FH employees lent a hand to
the Internet Unit, which is responsible for fighting counterfeiting on the internet.
Tourists became increasingly rare as an inevitable consequence of border closures and the cancellation of large numbers of flights. This was particularly marked in February, when
the first police action prompted by the FH in Egypt targeted
two stores in Hurghada and El Gouna. Although the numbers
involved were fairly small – 190 fake Swiss watches were
found – this was the prelude to a ramping-up of operationsin the Middle East and South Asia.
After several months of calm resulting from government measures to curb the spread of the virus, a number of operations
were carried out at the end of July, including at the Al-Attaba
souk in Cairo, which seems to be one of the main hubs for thecirculation and sale of counterfeit watches. Around 13,000
fake watches were seized during an initial operation in one
shop and its storage premises. A further 6,500 would befound during a second operation scheduled in August. The
police landed a fine catch in early November, seizing 19,000
fake watches after tracking down the members of a counterfeiting ring. At the end of the year, FH service providers carried out a final operation at a store in the capital that had been
identified as selling fake goods: 153 items were discovered.
Further east, following complaints filed by FH agents in four
separate cases in Jeddah and Riyadh, the Saudi customs
authorities confiscated 7,500 fake Swiss watches.
The FH also continued its actions in the United Arab Emirates,
first with the destruction of some 200,000 counterfeits seized in2018 and 2019. It took workers at the recycling plant three days
to remove all the batteries, a necessary prelude to the crushing
operation because of the harmful substances they contain.
Between mid-August and early November, based on the investigations carried out by the FH agent, the police in Dubai
carried out searches at 20 apartments used for selling coun-

Recycling and destruction of almost 200,000 fakewatches in the United Arab Emirates

terfeits. These were highly successful and resulted in 94,000
fake Swiss watches – copies of the brands of 18 FH members– being withdrawn from the market. Criminal complaints werefiled and the suspects questioned by the police. Their passports have been temporarily confiscated until the cases havebeen heard in court, a process that can take several years.
Standing on the new silk road, Pakistan, and particularly the
port of Karachi, one of the largest in South Asia, ideally placed
between South-East Asia and the Suez Canal, seems to be a
strategic location for trafficking counterfeit goods.

12However, the first seizure of the year, in February, took placeat the dry port in Peshawar. Following complaints filed by theFH agent, some 6,700 fake Swiss watches were confiscatedfrom the importer, who decided to abandon his goods.
In the middle of the summer, a police operation prompted by aJapanese brand targeted a warehouse in Karachi and revealed
large numbers of watches. After further complaints had been
filed on behalf of FH members, the police carried out a second
search, seizing 40,000 counterfeit Swiss watches.
A similar scenario played out in December. Following an initial
operation, the police discovered an assembly workshop. Oncethe necessary formalities had been completed and complaints
filed on behalf of the two FH members concerned, a second
visit by officers resulted in the confiscation of over 140,000 components ready to be assembled to produce fake Swiss watches.

Seizure in Dubai

Seizure in Karachi

The FH is continuing its efforts in this part of the world to theextent that it can in light of the health crisis and the various
government measures adopted to address it.

13Free-trade agreements
Legal certainty and stability
Free-trade agreements are extremely important for supporting Switzerland’s commercial interests on world markets in a
globalised economy and at a time when the need to reinvent
multilateralism is clear. This is exacerbated by the fact thatthe recession caused by the Covid-19 pandemic has further
strengthened economic nationalism and revived protectionist
instincts almost everywhere in the world, particularly in Turkey
and Saudi Arabia. Faced with both monetary and budgetary
problems, both countries moved quickly to introduce measuresthat drastically reduced imports.
In mid-2020, the Turkish president, for example, decreed
an immediate increase in customs duties on a whole array of
products from a wide range of sources, including watches andrelated components. In practice, customs duties increased fromone euro per watch to 45% of the value of the same item overnight. This was supposed to be reduced to 25% at the beginning of October, but in practice was not. As soon as it becameaware of the decrees, the FH checked their exact content andwas pleased to note that products of preferential origin were
explicitly excluded from the scope of these unilateral measures.
This is a direct benefit of the free-trade agreement between theEuropean Free Trade Area (EFTA) and Turkey, which stipulates,in this case, that no new customs duty or tax with an equivalenteffect can be introduced into trade deals. It goes without saying that the FH, along with the Swiss authorities, would haveintervened swiftly if this provision had been ignored.

The Saudi authorities took similar steps in June, by increasing
import duties on around 575 products from all third countries,
including leather, textiles, machinery and electrical equipment,
among others. The increase in tariffs varied between 5 and 25
percentage points for different categories of goods. Again, theFH was initially pleased to see that watches were not included
on the list of products concerned and in addition, that products of preferential origin (under the EFTA – Gulf Cooperation
Council free-trade agreement) were excluded from its scope.
Conversely, VAT increased to 15% on all products on 1 July,up from the previous rate of 5%.
Alongside favourable conditions for market access, these two
examples underline the importance of the legal certainty andstability that free-trade agreements offer. Too often, watches
and particularly luxury watches are among the first products to
attract additional tax decreed by governments facing temporary
or long-term budget issues, a lack of structural equilibriumin their balance of trade or the need to protect their foreignexchange, as well as simply defending domestic production.
The use of these types of measure is even more marked inperiods of crisis. From this perspective, 2020 will have beena period of increased vigilance for the FH.

Agreements in force
Agreements in negotiation

Swiss free-trade agreements

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Regulatory affairs
FH guides and other activities
The number of technical regulations and standards applicableto watch products is increasing all the time and changes inthis area are rapid. It was therefore important for the FH toadapt the ways in which it communicated with its members,
to improve the speed and efficiency of information sharing.
A new, ad hoc information bulletin was therefore launchedin November and emailed to almost 600 subscribers. This
service is available to any FH member who requests it, bearing in mind that it is possible to register several recipients inthe same company. As well as improving communications
between the FH and its members, the new information bulletin is also more environmentally friendly than its predecessor,
which used to be sent as a hard copy.
FH regulatory guides are another new way of sharing information with its members. These are produced simultaneously in
two languages and are designed to provide an overview of themain information FH members need in order to understandand apply certain regulations. Guides have been written firstfor the regulations that generate the most questions. The subjects covered to date are Proposal 65 in California, REACH
and RoHS, and the SCIP database. The guides are available
on the FH Extranet or can be sent to members on request.

As well the publication of a guide, drafted in conjunction with
the FH legislative monitoring committee, the SCIP database
prompted a number of other actions in 2020. In order toensure uniform application of the procedure across the sector,
the FH shared information with its partners abroad, including
the Standing Committee of the European Watch Industry andthe Comité Colbert French luxury goods association. Special
courses were also set up in conjunction with the Swiss Foundation for Research in Microtechnology, along with various
bilateral meetings with FH members.
Numerous other regulatory issues also required the FH totake a stance in order to protect its members’ interests. No
fewer than seven targeted reports on the subject of batteries
were sent to the authorities, on the draft European Batteries Regulation, the draft Australian standard on the safetyof button batteries and the draft international standard IEC
60086-5 ED5 Primary batteries - Part 5: Safety of batteries
with aqueous electrolyte.
The positions taken by the FH have helped to secure several
concessions from the authorities. While the draft European
regulation was planning to eliminate non-rechargeable bat-

SCIP database
SCIP is a database intended to provide information on certain items marketed in the European Union, under the Waste Framework Directive. The
requirements apply to a very large number of items. The simple presenceof free-cutting brass containing lead in a movement, for example, is sufficient for the requirements to apply. But this is not the only material
affected, of course, and numerous plastics, textiles, glues and a range ofother materials are likely to contain substances included on the REACH
Candidate List.

15

teries, the intervention by the FH meant that the European
Commission’s memorandum ultimately did not recommend
the complete – or even partial – elimination of non-rechargeable portable batteries. Turning to the draft Australian standard on the safety of button batteries, the work undertakenby the FH helped recognise a lower level of risk for upmarket
watches, as well as securing a degree of flexibility in the selection of the parts tested and the tests to be carried out. These
results are particularly important for watches in the luxury
jewellery market. Essentially, it will be possible to carry out
the tests without removing the stones from their settings andusing representative samples rather than a very high-value
finished product.
In 2019, the FH published its position on the plan to restrict
skin-sensitising substances in leather and textiles in contact
with skin. The European Chemicals Agency’s Committee forSocio-Economic Analysis issued its report on this subject inJune 2020. The report adopts the main proposal put forward
by the FH, namely raising the threshold for hexavalent chromium from 1mg/kg to 3mg/kg. Without this amendment, thefuture of straps made from leather tanned with chromium– which is the case for most leathers – would probably havebeen compromised. This was therefore a real success story,
demonstrating the benefits of intervening with the authorities to protect the interests of the watchmaking industry. A
second position statement was issued in August 2020 toprotect other aspects of the planned restriction, among otherthings to ensure that the threshold for formaldehyde in leather
straps was increased from 30mg/kg to 75mg/kg. The latter
figure would be in line with other existing regulations aroundthe world.
A draft Chinese standard on chemical substances in watches
was also presented to the World Trade Organization (WHO), withthe country’s authorities hoping that it would come into effectshortly. However, the draft required adult watches exported toChina to comply with requirements that are normally reserved
for children, in particular the risk of swallowing small jewellery
components. The FH therefore collaborated with Switzerland’s
State Secretariat for Economic Affairs to intervene with the
WTO and request that the standard be amended. Following
the intervention, the Chinese authorities decided to suspend
the standard and request a full review of the draft.

The FH also took a stance on a number of other topics:
◆
◆

◆
◆

A plan to restrict perfluorohexanoic acid in REACH;
The Swiss ordinance on the recovery, reuse anddisposal of electrical and electronic waste;
The revision of the Federal Act on Protected Species;
A proposal to classify silver as a skin sensitiser in
relation to the European regulation on the classification,labelling and packaging of substances and mixtures.

Finally, it was also necessary to take a number of specificactions with the authorities or find particular pieces of information. One example was the case of defending the transition
period linked to the TAREKS system – designed to allow Swiss
watch brands to export their products to Turkey more easily– which was initially due to end in February 2020. Thanks
to active lobbying in partnership with the Swiss embassy inAnkara, the transition period is currently still in effect, over a
year after its theoretical end. Similarly, there were numerous
contacts with the Italian authorities and FH partners in the
country, in order to clarify the obligations associated with the
new marking regulations for leather bracelets.
The number of topics to be dealt with under regulatory affairs
has grown sharply in recent years and, given the issues thesecan represent for brands and their suppliers, it is not surprising to find that a growing number of FH members are interested in these questions. Over the past year, the legislative
monitoring committee that deals with these issues registeredno fewer than seven new members, not counting members
who were replaced during the course of the year.

Panorama of the172020 activities
As the leading organisation for Switzerland’s third-largest
export industry, the FH has many objectives: improving theunderlying conditions in the sector in Switzerland and therest of the world, dealing with the challenge of counterfeiting
and, for example, supporting its members and keeping
them – as well as the media and consumers – fully informed.
The following pages present a selection of actions carriedout by the Federation in 2020.

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Improvement of framework
conditions
The FH continued in its efforts to protect the interests of thesector internationally. It was active in numerous markets, forexample in relation to negotiations on entering into new freetrade agreements or revising existing agreements, attending
official meetings (such as various joint bilateral commission
meetings) or in response to requests from members.

imports of illegal products remain highly cumbersome. In
fact, rights holders have to provide a bank guarantee for the
products concerned to be seized. Officially, this guarantee
is designed to protect the importer from unfair requests by
the rights holder, however the latter clearly has no interest inauthentic goods being seized.

As a result, it took action in around a dozen markets, including
Argentina, Colombia, India, Indonesia, Mexico and Russia.

Moreover, the amount of the guarantee is over 110% of thevalue of the goods and the significant sums involved areretained until the end of the process which can, in somecases, take several years. The FH has obviously lobbied for a
simpler procedure and asked for the bank guarantee requirement simply to be removed.

Market access conditions, technical or administrative regulations, technical barriers to trade, the organisation of distribution, the protection of intellectual property rights and eventemporary imports were among the main areas of intervention.
Several bilateral meetings were postponed because of thepandemic, while others were able to take place by video conference. Whenever necessary, the FH submitted its requests
to the ministries concerned as memoranda, including in thefollowing countries.

Saudi Arabia
Numerous administrative complications on imports remain
in Saudi Arabia, in spite of the provisions of the free-trade
agreement with the Gulf Cooperation Council. There are particular issues around shipments that combine preferential andnon-preferential goods (the Saudi customs authorities require
these to be physically separate), recognising declarations oforigin on invoices and the obligation to legalise invoices.

Colombia

It has also reiterated its complaints in light of the persistence ofnumerous cases of abuse related to geographical indications
and the very – indeed overly – long timescales for enforcement
procedures, which it pursues every year to protect the ‘Swiss
made’ designation for watches.

RussiaThe Russian authorities have officially confirmed that Swiss
watches will be exempt from future legislation on marking
products made from precious metals for identification andtraceability purposes in Russia (involving an additional laserprinted QR code) on several occasions, notably in June 2019,
when Minister Marie-Gabrielle Ineichen-Fleisch visited thecountry. This exemption is unique and based on the bilateralagreement on mutual recognition of official hallmarks on Swiss
watches, which came into effect in 2013. Despite this, theFH was informed in December 2020 that the exemption wasin doubt both in the draft order and its interpretation by theauthorities responsible for its application. The FH immediately

Websites selling counterfeits have increased rapidly in Colombia, with more and more of them now being run by the counterfeiters themselves. Unfortunately, it has to be said that closing down the sites concerned has become extremely difficult
without the proactive cooperation of the Colombian authorities.

India
Protecting intellectual property rights and the fight against
counterfeiting remain problematic on the vast Indian market.
While it is important to acknowledge the successful raids
carried out by the Indian police during the summer, it mustalso be said that customs procedures aimed at preventing

On the right, the QR code that the Russian authorities
want to impose

19requested an official intervention by the Federal government,
asking Russia to respect the provisions of the aforementioned
agreement and the commitments made on several occasions.

Brexit
It was not until 24 December that the United Kingdom andthe European Union finally reached an agreement, settingout the terms of their future trading relationship. At the sametime, this outcome signified the entry into force of the newbilateral trade agreement between Switzerland and the United
Kingdom from 1 January 2021.
Throughout the year, the FH took part in numerous working
meetings and information sessions organised by economiesuisse in conjunction with various departments in the Federal
administration, to monitor the progress of the negotiations. FH
members were sent information in early November to clarify
some of the new provisions and allow them to anticipate, as far
in advance as possible, any administrative pitfalls in their trading relationship with the United Kingdom from 1 January 2021.
While, happily, the bilateral agreement between Switzerland
and the United Kingdom contains the vast majority of traderelated rights and obligations included in agreements between
Switzerland and the European Union, some technical andlegal provisions were still dependent on the outcome of thenegotiations between the European Union and its British partner. Although some changes have been swiftly confirmed –for example, the provisions in respect of cumulation of origin,other aspects still need to be fully resolved, for example, thetransposition into UK law of certain European regulations,such as RoHS or REACH. Monitoring the application of the
new bilateral agreement will evidently remain a priority for
the FH.

20

Information and public relations
Media relations
Almost all media relations in 2020 focused on the economic
situation. The consequences of the Covid-19 pandemic for
the Swiss watch industry prompted numerous interviews anda multitude of articles. All Swiss media (television, radio andpress) but also foreign publications, such as Le Figaro andLes Echos (France), as well as the New York Times (UnitedStates), focused considerable attention on developmentsin the sector Another highlight was the article published in
the magazine “Vie économique”, which is run by the State
Secretariat for Economic Affairs.
As at the end of every financial year, the media year ended
with a wide-ranging interview with the agency ATS/AWP in theform of an annual review, presented by the FH and shown
during the festive season.
What was missing, however, were the traditional interviews
that have taken place in previous years during watch industry
trade shows.
All the planned conferences involving the FH were cancelledor postponed, with the exception of those that took placeat the Ecole supérieure en Arts appliqués and the Centre
d’enseignements professionnel in Vevey, and at the Gymnasefrançais in Bienne.

Every quarter, the business magazine Tendances summarises
the trends in the watch market on the basis of export statistics
and numerous other decisive factors. In 2020, Tendances
focused on the consequences of the Covid-19 pandemic but
also the new shape of the luxury goods market, consumer
expectations, e-commerce, tourism and connected watches,among other things.
The fourth quarter saw the launch of the Tendances newsletteron trends in the watch market. The latest news on topics relevant to the sector is therefore now sent directly to interested
FH members every week.

Berner Dictionary
The FH completed a new stage in its work on updating theIllustrated Professional Dictionary of Horology, widely referred
to as the “Berner Dictionary”. This was the final proofreadingof all the new and revised definitions, a titanic undertaking
that required external resources. The FH was able to embark
on the work of translating the dictionary at the end of the year.

Revue FH

Given the circumstances and the impossibility of meeting inlarge numbers, the FH’s 2020 General Meeting took placein written form, overseen by a notary. All the points on theagenda were approved by a large margin.

Throughout a year marked by the pandemic, the Revue FH
continued to keep both members of the Federation and othersubscribers up to date. Many businesses closed their doors forseveral weeks during the semi-lockdown in the spring. Quickly
finding another way to disseminate information was therefore
essential. The electronic version of the document therefore
took priority and was promoted through several dozen emails
sent on each publication. Digital distribution continues in
response to the health crisis and remote working.

Watch industry statistics

WebsiteThe statistics published by the FH are a quantified, regular andreliable source of data and are essential for monitoring trends
in the watch market. They also provide a basis for comparison for the brands. Export declarations are compiled by the
Swiss customs authorities and provide a monthly breakdownof performance in the sector by market, material and pricesegment. Modelling these trends can be used to produce
medium-term forecasts.

The FH website welcomed numerous visitors in 2020, withmillions of pages viewed. As a leading information source
for issues in the watch sector, the site provides all the latest
news from the FH and watchmaking companies, along withdetails of new product launches, statistics, the ‘Swiss made’label and the scourge of counterfeiting, among other topics.

General Meeting

21

watch.swiss
The FH promotes the sector through watch.swiss, a themed
travelling exhibition aimed specifically at the general public. A
wealth of other content is provided on its dedicated website,www.watch.swiss.
Since 2016, watch.swiss has been touring the world andmeeting consumers, explaining the inseparable ties between
Switzerland and watchmaking. Although an extensive programme had been planned for 2020, exhibition dates unfortunately had to be postponed and ultimately cancelled as the
pandemic spread.
That said, the unprecedented situation prompted the FH toaccelerate its digital promotional activities. In the autumn,
watch.swiss set off to conquer both Facebook and Instagram,with the aim of communicating with consumers and chatting
to them wherever they were. The new digital promotion concept obviously places significant emphasis on all the FH’smember brands throughout the year, carefully targeting audiences with relevant, high-quality content.
Most of the FH’s member brands are already active on social
media, and a number of ad hoc joint ventures have alreadybeen set up based on various key areas of communication.
The digital promotion strategy is initially aimed at creating anorganic community in certain markets, before broadeningout to the key markets of China and the United States. The
content strategy is to provide information to consumers byproviding regular coverage of a wide range of topics, such as
products, watchmaking regions, know-how, the latest news
from the brands and online competitions.

22

The fight against counterfeiting
Scope of activities
In 2020, the FH pursued many activities to prevent counterfeiting on behalf of members of the Anti-Counterfeiting
Group (GA) and the Internet Unit. We are reporting only themost salient points here, since a separate report is available
to interested readers on request. There is also an article in
the Highlights section of this report.

Seizure operations on the markets
Spain
The FH has been organising an annual programme of actionin Spain for more than 10 years, with the aim of identifying the most problematic areas for the sale of counterfeit
watches, and then carrying out raids in conjunction with thelocal authorities.
These recurring operations have resulted in a marked decline
in the visibility of counterfeit watches on the vast majority of
Spanish markets. Some areas remain highly sensitive, however,in particular the Canaries, the Balearic Islands and the small
town of La Jonquera, on the French border.
It was therefore perfectly logical to target these areas as partof the 2020 action programme, which was able to take placein spite of the health situation, although on a reduced scale.
In total, around 1,600 fake Swiss watches were seized andlarge-scale actions with good media coverage took place in
La Jonquera.

TurkeyThe year started well in Turkey, with 34 new seizures notified
to the FH in the first quarter and almost 18,000 fake watches
confiscated. The arrival of the pandemic prompted the government to implement restrictions that slowed customs and police
activities significantly.
The local REACT office continued to operate, however, making
use of the lockdown to track sellers who are active on social
media. A test purchase was carried out and, on the basis of
the information gathered, a physical sales outlet was identified. The Instagram account used to sell the counterfeits was
closed down and the case referred to the courts for a search
to be conducted.
In addition, the FH’s usual activities were finally able to resume
at a steadier pace in the second half of the year, when there
were 74 seizures notified and over 14,500 watches confiscated.

Training for the authorities
Although travel was severely restricted for a large part of theyear under review, the FH managed to continue to deliver
training for customs authorities and the police. Thanks to
the responsiveness of its partners, it was possible to organise
online courses delivered by video conference in numerous
countries, enabling rights holders to continue their awareness-raising efforts, which were all the more important giventhat e-commerce soared as the health crisis intensified.
The FH was able to train over 500 customs and police officers
from Spain, Portugal, the Benelux countries, Mauritius, Lithuania, Slovakia and Great Britain in recognising fake watches.

Participation in Stop Piracy activities
The FH is one of the founder members of the Swiss platform tocombat counterfeiting and piracy – Stop Piracy – and therefore
plays an active role in its awareness-raising activities.

Raid in La Jonquera

The association launched a new education programme for Swiss
schools in 2020, in conjunction with an agency that specialises
in educating the public, to ensure that the information wasappropriate to the audience. In concrete terms, this involved
developing a website aimed at raising awareness among 15 to
20-year-olds, with practical questions and answers on intellectual property and educational resources for teachers.

23

From a legal perspective, Europe began examining new legislation on digital services, which will bring a range of advantages and disadvantages in combating counterfeiting online
over the next few years. The roles and responsibilities of theplatforms are, of course, covered. Pre-existing cooperative
relationships with the platforms are essential, insofar as they
establish a relationship of trust and enable more efficient
prevention and notification procedures.
In terms of dedicated counterfeit watch sites, the FH continued to run efficient surveillance activities through its
WebIntelligence platform. Hosting companies that fail to
respond to the usual notices to remedy are identified andinvestigated. A cross-cutting consultation with other industrial
sectors was launched to identify common targets and unleash
a more significant strike force.

Training for the police and customs authorities took placeby video conference in 2020

Actions on the internet
The FH’s Internet Unit managed to remove over a million
counterfeit watches from e-commerce platforms and social
media for the fifth year running. At the same time, it built
on its experience in this field to develop an in-house tool
to tackle the task even more efficiently. The tool, called
AdIntelligence, went into production in the summer of 2020and has already exceeded expectations, in particular by bringing all surveillance operations on Asian platforms and social
media back in-house, when they were previously outsourced(see Highlights section, page 10).
The contacts established with Asian platforms meant bestpractices could be adopted swiftly. The Internet Unit is inclose contact with the Alibaba legal team and was therefore
able to deliver a comprehensive training course telling themmore about the Swiss watch industry and its products, andthe dilemmas it faces, particularly with the Alibaba and AliExpress websites. American platforms were also targeted, withgood progress made with Amazon and its efforts on targeting“bad brands” resulting in the withdrawal of an entire seriesof products that were harming registered trademarks. The
main platform in Latin America, MercadoLibre, sought help
from the FH to publish documents online to help sellers on
the platform learn more about watch brands and thus avoid
selling products that could infringe their rights.

Alongside its operational activities, the FH continued withmeasures to seize the assets of seller accounts using PayPal,
which resulted in freezing significant sums of money derived
directly from the sale of counterfeits.
Finally, the FH continued an investigation, which began in
2019, of a large network reselling high-quality counterfeits.
The items listed made unlawful use of 15 different marks(compared with 22 in 2019). It filed a formal complaint in
China and is in regular contact with the Swiss, French andChinese authorities in pursuing this important case.

Technical analyses
During the year under review, watchmakers in the anti-counterfeiting department carried out a technical analysis of 105 samples, i.e. 166 fewer items than in 2019 (-61%). The outcomeof these analyses was recorded in 104 reports on origin, one
fewer than in the previous year (-1%). The items listed madeunlawful use of 15 different marks (22 in 2019). The samples
examined in 2020 were seized or acquired in 20 countries(22 in 2019). The watches and reports were forwarded to therights holders, as well as to the bodies that had originated theconfiscation actions.
Reading these key figures, it is not surprising to note that Covid-19
had – and will continue to have – marked effects on the FH’swatchmakers. It is also worth remembering that the statistics forbatches analysed have been in decline since 2016, when thelegal basis applicable to Swiss seizures changed. As readers
may recall, the move from the Federal Act on the control of24

precious metals to one on the protection of brands has had asignificant structural effect on the technical work carried out,
resulting in a sharp drop in the number of samples received
for analysis. The pandemic has added its weight to the underlying trend, further reducing the number of batches examined.

Strong demand for assessments
At the same time, and in contrast to technical investigation
activities, there has been a high level of demand for expert
assessments carried out by the FH’s specialists. The trend
began to be noticeable in 2018 and became more marked
in the year under review, increasing from 1,600 requests in2019 to 2,589 in 2020, an increase of 62%. The change
reflects the increase in requests for intervention by the customs authorities in Switzerland and worldwide, combined witha systematic requirement for confirmation based on an expert
opinion to ensure that seizure/destruction procedures can becompleted smoothly. In other words, for every seizure, the aim– as far as possible – is to avoid the inappropriate destructionof products that have been wrongly identified as counterfeits
by an authority. Should it occur, it falls to the brand concernedto assume all the legal (and financial) consequences of mistaken identification. This is not only a problem for watches
but is made particularly acute in this sector because of thehigh value of Swiss watch products. FH watchmakers are
therefore under strict instructions to recommend that a watch
is released unless they are convinced it is a fake. In principle,
an email confirmation is sufficient, but some national legislation is more stringent and requires a formal certificate on
FH headed paper (40% of cases), which naturally creates anadditional administrative burden.
Turning more specifically to joint requests for intervention in
Switzerland, 2020 was marked by an expansion of the range ofbrands under surveillance (with a further +11 added), resulting
in an “automatic” increase in seizure procedures. The numberof notifications in 2019 was just over 600. In 2020, it rose to886, an increase of 48%. Admittedly, we are still well below
the 973 cases reported in 2016. Readers may recall that the“stabilisation” programme implemented by the Swiss customs
authorities (DGD) reduced this number to around 200 in 2017.
Intense lobbying by the FH has borne fruit and the DGD seems
to be returning gradually to more effective arrangements interms of checking goods at the Swiss border.

4th quarter3rd quarter2nd quarter
1st quarter

Joint request for intervention in Switzerland: trend in seizures (source: FH)

25

In total, combining certificates from the Federation’s joint
requests and those from subcontractors, 1,831 Swiss consumers – or five individuals a day – were reminded to staywithin the law after ordering a fake watch on the internet in2020. Has everyone learned their lesson? The low level of
reoffending suggests that things are moving in the right direction. Ultimately, although requests for intervention generate
a significant amount of administrative work, the results seemto suggest that the procedure is not in vain.

Broader opportunities for analysis
Watchmakers in the anti-counterfeiting unit took advantage ofthe highly unusual circumstances of the year under review andused the periods of full or partial lockdown to improve theirskills in analysing materials. The year was also an opportunity
to follow up, in practical terms, on the research carried out
in close collaboration with the School of Criminal Justice at
the University of Lausanne. Accordingly, the FH purchased
an analytical tool that uses X-ray fluorescence spectrometry,

more commonly known as an “XRF gun”. This device can beused to determine the metallic composition of watch components quickly and without damaging the item. How does it
work? In simple terms, the sample is irradiated by a sourceof X-rays. In response, the sample emits its own X-rays withdiscrete forms of energy characteristic of the elements foundin it, to establish its chemical profile. In more vivid terms, it israther like throwing a stone against a wall and finding out what
type of wall it is based on the noise you hear at the momentof impact. The device is not only essential for assessing thefineness of alloys made from precious metals but can also
determine the quality of steel and galvanised coatings and,to an extent, the precise nature of imitation leather straps ormineral glasses. Watchmakers are thus able to add important objective information to the criteria used for identifying
a counterfeit.

“Swiss made” still highly desirable
As usual, the vast majority of the samples analysed during theyear under review involved counterfeit brands and/or models.
The remainder were all the items that are copies of neither
brands nor models but use a Swiss indication of geographicalorigin in a way that is either misleading (“SWISS MADE” or“MADE IN SWITZERLAND” or a derivative such as “GENEVA”
or “INTERLAKEN”) or breaches the regulations in effect in
Switzerland. The anti-counterfeiting department produced
eight reports on this issue during the year under review(compared with 17 in 2019). The eight samples came from
Hong Kong (6), Taiwan (1) and Turkey (1). These were test
purchases carried out to bolster existing cases and provide
evidence for ongoing proceedings. It can sometimes also bea question of checking that a company is complying with thecommitments it has signed.
Alongside copies of brands or models, we also find unlawful
technical indicators, mainly the “CHRONOMETER” label and
the Geneva hallmark, as well as fake precious metals hallmarks. In recent years, the “CHRONOMETER” label, which
nowadays enjoys high prestige, has proved attractive to thecounterfeiters. In 2020, the FH recorded 28 cases of unlawful
use of this label or its derivatives on both watches and thecommercial documents that accompany them (100 in 2019).

XRF gunAfter processing in the database, all the information gathered
during the year was used to produce eight summary reports(compared with six in 2019) to supplement individual reports
on origin. These reports provide a statistical panorama of

26

counterfeiting by brand and model, offering further points
for consideration that can be incorporated into the preventive
strategies developed by the companies concerned. The FH
now has access to a huge volume of data (91,000 records
of fake watches, 107,000 examples of illegal marking, 6,700
records of seizures and 17,000 samples). In the era of big data,using and summarising these data is gradually gaining groundon traditional technical investigations, but will not replacethem. A counterfeit watch will always constitute incontrovertible physical proof of an illegal activity. This reveals physicaland chemical data that can be observed at several analyticallevels, combined with spatio-temporal data. Combining allthese data is a crucial step towards a detailed understandingof the structure of the criminal networks involved. Gaining abetter understanding of counterfeiting means analysing itfrom multiple perspectives and exploiting the full potentialof any traces of any kind whatsoever. As a result, a “clinical”
examination of a counterfeit watch is still essential.

.

27Standardisation
With the help of its Standardisation Committee (SC), the FH
coordinated and contributed to the progress of several national(NIHS), European (CEN) and international (ISO) projects. The
health situation meant that working meetings were mainly
held by video conference, a tool that is clearly not a perfect
replacement for face-to-face meetings, but which nevertheless provides an excellent way of continuing to work effectively.
In terms of national standardisation, the main projects involved
the finalisation of a new standard on gauges for miniature
threads (NIHS 06-12), the development of a standard on quality control of small diamonds (NIHS 67-01), and a revisionof the standards on the shocks absorbed by watches during
wear (NIHS 91-30 and NIHS 93-20). Two so-called “strategic”
meetings were organised by the SC to define priorities interms of standardisation over the next few years. Among otherthings, this will involve focusing on three main areas: providing
more information to the supply chain, creating new consumeroriented standards and supplementing current ISO standards
with more stringent NIHS standards. The SC also took into consideration the fact that the content of a standard must reflect
the state of the art and current industry practices, to reorganise
the collection of standards documents and therefore convert
into NISHG guides any standards that no longer meet thesecriteria, but which it is useful to retain for teaching purposes.
The FH has been asked by the Swiss Association for Standardisation (SNV) to provide the secretariat for the interdisciplinarycommittee INB/NK 164 - Jewellery and precious metals, aninstitution that mirrors the five corresponding committees at
European and international level. Working in cooperation withthe appointed experts, it is therefore responsible for acting on
the votes initiated by these committees and then forwarding
a representative position statement for the whole of the Swiss
industry to the SNV. Over the past year, over 20 votes werecoordinated and two plenary meetings held, in January and
September. The main topics discussed were the roles andresponsibilities of working group facilitators, delegates andexperts, as well as reports by the heads of delegation of themirror committees. Updating the action plan will also ensure
better follow-up of tasks and activities handled by the
INB/NK 164 committee.
The FH continues to have an excellent relationship with theEuropean Committee for Standardization, mainly on draft
standards with an indirect link to watchmaking. This relationship has been further strengthened with the appointment as
the chair of the Technical Committee CEN/TC 347 - Methods

for analysis of allergens of Patrick Lötscher, the head of the
NIHS service. Several meetings were held during the year on
revising standards relating to the release of nickel.
In terms of international standardisation, 2020 saw the finalisation and publication of several projects, namely the standards on magnetism ISO 764 - Magnetic resistant watches,
anti-reflective coatings ISO 14368-4 - Mineral and sapphire
watch-glasses - Part 4: Anti-reflective treatment, watches
made from hard materials ISO 18684 - Timekeeping instruments - Watch external parts made of hard material - General
requirements and test methods, and the clocks standard ISO
23346 - Radio-controlled clocks - Signal receiving measurement method. Other work focused on ISO 17514 - Time-measuring instruments - Photoluminescent deposits - Test methods
and requirements. In addition, the working group examining standard ISO 22810 - Water-resistant watches continued
its work with the establishment of an experimental plan forimproving condensation testing.
Finally, we should note that four standards considered as partof the systematic examination process were confirmed for five
years. These were the standards on wrist chronometers (ISO3159), horological vocabulary (ISO 6426-1 and ISO 6426-2)
and part 2 of the standards on watch-glasses (ISO 14368-2)

28

Legal and economic services
Several services are available on the FH extranet site. These
are reserved for its members, giving them access to privileged
information and useful working tools. Topical news items linked
to FH activities or matters of direct concern to its members are
updated regularly.

Legal services
Numerous legal cases were dealt with at the usual pace in 2020,in spite of the pandemic. One important project was brought
to a successful conclusion concerning the registration of the“Swiss” collective mark in the European Union. This was finallycompleted in class 14, which covers watch and clock products,
on 16 July 2020. The mark will help the FH to protect Swissmade watches within the EU, as it does with the “Swiss” and“Swiss made” certification marks in the United States and HongKong. The FH will use the collective mark not only in proceduresto oppose the registration of EU or national marks that include
the term “Swiss” unlawfully in either an identical or similar form,
but also in respect of web-based sales platforms, which often
require a protective title before they will delete non-compliant
products from their sites.
The FH also took part in several consultation procedures anddrafted position statements aimed at the Swiss authorities.
Examples included the revision of the Swiss VAT Act and its
implementing order, and the revision of the Customs Act. In
both cases, the FH pinpointed the administrative shortcomings of the new planned procedures and drew the authorities’attention to the importance of the fight against counterfeiting
for the industry, an activity that can sometimes seem to be
relegated to the background.
Another project that occupied the legal services team throughout 2020 was the French Act on combating waste and promoting the circular economy, and its implementing decrees. The
Act’s aim is laudable, namely stopping the use of disposable
plastics by ending the marketing of single-use plastic products
by 2040. Targets on waste reduction, reuse and recycling will
be set by decree to achieve this. The project also aims to provide better information to consumers, particularly on the presence of hazardous substances. From 1 January 2022, manufacturers will have to list any hazardous substances used, andspecifically endocrine disruptors. The more ambitious objective
is to combat planned obsolescence. Accordingly, sellers ofelectrical and electronic equipment, including online sellers,
will be obliged to show repairability and sustainability indicators.
The general decree requires producers and importers to inform

retailers and other interested parties of the indicator and show
how it has been calculated, free of charge, in an electronic
form. Retailers and sellers, including online sellers, must display the indicator and show how it has been calculated, freeof charge, at the point of sale, according to the conditions andmarking requirements set out in a specific order. It must be
clearly visible, either on the item or in its immediate vicinity, or
next to the price for online sales. It will obviously be important
to monitor how this legislation evolves in terms of the implementing decrees and inform FH members of any requirements
they may need to meet.
The FH also took part in the review of the Swiss Data Protection
Act (LPD). The bill had been the subject of fierce debate in the
Swiss parliament since it was presented by the Federal Council
in 2016. It was not until September 2020 that the parliament
finally adopted a definitive version of the LPD, which is designed
to respond to the new requirements of the digital era and thetechnological changes that have occurred in recent years. In
particular, the changes include a broadening of data defined assensitive, the obligation for the controller and processor to keepa record of their processing, and more stringent requirements
in terms of the information provided to data subjects. Oncethe new Act comes into force, probably in 2022, Switzerland’sdata protection law will satisfy the standards set by, among
others, the EU, in the context of the General Data Protection
Regulation. The LPD and the planned changes are currently
being examined by the European Commission; any failure toissue an adequacy decision could have adverse effects oncross-border movements of data for Switzerland.

Economic services
FH members have access to extensive statistical and economic information, particularly through the extranet site. This
provides access to the complete database of watch export
statistics, quarterly analyses of trends in the market in themagazine Tendances and information on exports from othermajor global players. Members can also sign up to receive theweekly Tendances newsletter, which focuses specifically on
the watch market.

29

Relations with the authorities andeconomic circles
Watchmaking associations
The usual watchmaking association meetings in various partsof the world were cancelled as a result of being unable to meet
anywhere from Basel to Hong Kong.
Conversely, the FH intensified its contacts with the Swissauthorities to provide detailed, regular updates on the sector
in light of the measures taken by the Confederation and thecantons as part of their efforts to combat the effects of thepandemic (see Highlights section, page 8).

economiesuisse
The FH is an active member of economiesuisse and is represented on the following bodies: General Meeting (Jean-Daniel
Pasche, FH), Committee (Thierry Kenel, Swatch Group,
Me Theda Koenig Horowicz, Rolex, and Cédric Bossert,
Richemont), Executive Committee (Thierry Kenel, Swatch
Group), Board of Association Managers (Jean-Daniel Pasche,FH), Legal Commission, WTO Working Group, Working Groupon questions of origin and customs issues, Expert Group on
intellectual property, Working Group on short-term economic
issues, Expert Group on relations with the European Union,
Competition Commission.
It was heavily involved in discussions within economiesuisse toensure that the efforts of the watchmaking sector were taken into
account in the messages sent out by the umbrella association
for the Swiss economy, particularly those aimed at the federal
authorities. Almost all meetings were held by video conference.

Standing Committee of the European Watch
Industry (CPHE)
Members of the CPHE (Germany, France, Italy and Switzerland)
held their annual meeting online on 16 October 2020. Chairedby Jean-Daniel Pasche, the discussions focused mainly on
current technical and legal issues.
The European delegation was first informed of the FH’s registration of the “Swiss” certification mark in class 14 in the European
Union. As in the United States and Hong Kong, the regulation
governing the mark is based on the Ordinance governing theuse of the word “Swiss” for watches. Initial enforcement proceedings were able to be launched very quickly following theregistration date.

The next item was an update on the French Act on the circular
economy published at the start of the year, whose requirements are particularly relevant to quartz watches (availability ofspare parts, repair times, repairability indicators and consumer
information). Since legislative work had been stopped by the
pandemic, the FH was unfortunately still unable to provide
useful information on the practical obligations the Act would
entail for manufacturers.
The FH also highlighted the importance of the issues associatedwith the revision of European Directive 2006/66/EC on batteries and accumulators. This could enter into force in 2022 andprovides that primary (button) batteries should be replaced byrechargeable batteries. Both the FH and the CPHE have played
an active role in the various European consultations to highlightthe technical, energy-related and environmental inefficiency ofsuch a measure and accordingly, explicitly request the removalof the ban on primary batteries. It goes without saying that manyother industrial sectors are also directly affected by the revision.
CPHE members also shared a significant amount of information
on changes to other European regulations directly affecting thewatchmaking industry, such as RoHS or REACH (including a
proposed restriction on skin-sensitising substances in leathers
and textiles and the new SCIP database, among others).
Finally, the fundamental changes impacting trade shows in thewatchmaking sector, which have been significantly accelerated
by the pandemic, were the subject of a detailed discussion.

30

FH centres abroad
FH Centre in Hong Kong

FH Centre in Tokyo

2020 was a particularly difficult year in Hong Kong becauseof both the political situation and the health crisis. The economic consequences, dominated by the collapse of the local
watch trade, severely affected business development with thespecial administrative region throughout the year.

On the Japanese market, the FH Centre in Tokyo provided
support to FH members and their local agents, by supplying commercial information, establishing business contacts
and providing linguistic assistance, among other things. It
also acted on requests from the media and maintained aclose relationship with local professional organisations anddiplomatic representations, as well as responding to specificrequests received on a daily basis from Japanese consumers
or companies.

Nonetheless, the FH Centre in Hong Kong resolutely pursued its activities to support the sector as a whole and theassociation’s members in particular. First, it provided regular
information updates to the central office and to members on
the changes in the market situation as the months passed.
It also continued to offer practical support to several subsidiaries or local representatives of brands in areas as varied
as introducing commercial or industrial partners, in Hong
Kong, China and elsewhere in the region, identifying new
employees or providing personal support for visits to markets
in south-east Asia.
The Hong Kong Centre also responded to numerous requests
from FH members, especially in the legal field and on preventing counterfeiting throughout the region. In particular, it
provided assistance to many brands to facilitate their registration with the Chinese and Korean customs authorities.
Similarly, it conducted several dozen investigations of local
companies and filed a number of objections each monthagainst the registration of marks in Class 14 (watch industry),
both in Hong Kong and elsewhere in the region.

Seminar organised by the FH Centre in Tokyo

The FH centre also provided regular assistance to consumers
in the form of after-sales services, as certain brands no longer
offer maintenance for older models. This is one of the reasons
it also manages an after-sales service pool for a number of
Swiss brands.
During the summer, the FH centre provided association members and their Japanese representatives with the long-awaitedresults of its survey on watch consumption in the Japanesemarket (2020 Consumer Survey on Wristwatches). On thisoccasion, a large part of the survey was dedicated to analysing purchase locations, selection criteria and the secondary
market, as well as the consumption of connected watches.
The conditions under which the FH centre organised its fourth
information seminar for FH members and their local representatives were obviously unusual. The event was initiallyscheduled for two days but had to be extended by a day toaccommodate the 60 or so registered participants – many
more than had been anticipated in the circumstances. Eachseminar offered private sessions for a limited number of people, providing a secure and comfortable environment as wellas creating a more interactive experience. The topics covered
this year included the FH’s statistical services (analysis ofwatch exports to Japan), its promotional support for brands
via the travelling exhibition watch.swiss aimed specifically at
the Japanese market, and a detailed analysis of the resultsof the most recent survey on watch consumption in the local
market. It is interesting to note that many participants once
again praised the relevance of the two-yearly survey, which
they see as a highly useful supplementary working tool thatoffers an overarching, cross-cutting analysis of the market.
Finally, in spite of the health restrictions, the FH Centre in Tokyo was still able to host the travelling exhibition
watch.swiss Japan as part of two watch fairs organised regularly
by some of the main Japanese stores. Now enhanced with a31watch.swiss Japan at the World Watch Collection organised by Daimaru Shin-saibashi in Osaka

touch table that allows visitors to assemble a watch movement
virtually (many thanks to the Vallée de Joux watch centre for its
kind and successful cooperation), watch.swiss Japan travelled
to Osaka in late October and mid-November for the “World
Watch Fair” at the Abeno Harukas Kintesu Honten department
store and later, the “World Watch Collection” created by Daimaru Shin-saibashi. The FH was thus able to provide promotional support to numerous Swiss watch brands which, in linewith Japanese tradition, took part in the two events.

Latin America
At the end of the year, the FH said goodbye to Philippe Widmer,
its representative in Latin America, following his decision totake a well-earned retirement. Philippe had represented theFH in Latin America for eight years, mainly focusing on thefight against counterfeiting.
From 2021 onwards, the operational aspects of activities tocombat counterfeiting in the region will be managed directlyfrom the FH head office in Bienne, which coordinates actionsin close cooperation with local lawyers and investigators.
Awareness-raising and training for the authorities, which
require a physical presence, are provided by representatives
from Switzerland Global Enterprise (SGE) in Latin America.

The Swiss watch

33

industry in 2020
The statistics processed, distributed and analysed by the FH
are a key indicator for the sector. Prepared by the Federal
Customs Administration on the basis of declarations madeby firms, they constitute the main official, regular and reliable
source for monitoring the development of watch exports.
Through a wealth of detailed information concerning markets,
products and price segments, the FH can pinpoint recent or
historic trends in the Swiss watch industry.

34

Watch industry statistics
General situation

Swiss watch exports

2020 was marked by the unparalleled events and particularly severe consequences of the Covid-19 pandemic. The
lockdowns and drastic measures imposed in most countries
in the spring and again at the end of the year, as well as the
temporary halt to production and distribution during the second quarter, had a particularly damaging effect on businessthroughout the sector. The shutdown of international tourism
also proved highly problematic, depriving numerous Europeanand Asian markets of a traditionally very important clientele.

The value of Swiss watch exports fell to 17 billion francs compared with 21.7 billion a year earlier, a decline of 21.8%. Thisis comparable to the fall recorded in 2009 (-22.3%) during
the financial crisis, which reduced the value of exports totheir 2008 level. Following a historically poor second quarter(-61.6% compared with April-June 2019), the trend gradually recovered, resulting in just a 4.3% decline in the fourth
quarter, in spite of the still highly unfavourable circumstances.
The relative improvement in the situation was due almost
entirely to China, which recovered sharply from June onwards(+50.1% in the second half of the year) because of domestic
sales of goods that had previously been purchased abroad.

The changes that have been underway for some years haveaccelerated sharply in response to the problems caused by
the crisis, allowing the sector to adapt more rapidly to newmarket characteristics. The digitalisation of customer relations
and particularly, an increasing share of sales, has created
new opportunities and partially offset the difficulties facedby traditional distribution channels. Initiatives in the area ofsustainability are also responding to current and future consumer expectations.

Swiss watch exports (in billion francs)

Swiss exports of watches
Exports of wristwatches were valued at 16.1 billion francs, a
reduction of 21.4% compared with 2019. At the same time,
the number of items exported fell by a third. Switzerland therefore shipped 13.8 millions watches abroad, 6.9 million fewer(-33.3%) than the previous year.

35

the board, pushing it down to third place in the ranking of
Swiss watch exports, after 12 years in first place. Among other
Asian markets, Taiwan (-9.9%) held up better.
In Europe, France (-37.9%) and Italy (-33.3%) sufferedparticularly badly, while the United Kingdom (-24.6%) andGermany (-21.4%) were closer to the global average.
The United States (-17.5%), which absorbs 80% of watch
exports to the continent, saw a slightly less marked decline
than the world as a whole, given a stronger recovery in thethird quarter.

Exports of wristwatches (in billion francs)

Other exported products
Exports by price range
Declines were seen in all price segments, by both value andnumber of items. Watches priced at less than 500 francs(export price) saw the sharpest declines, further accentuating the negative trend that has been seen for several years.

Exports by material
Steel watches, which represent over 60% of total volumes,
set the tone in 2020. The value of exports of these watches
declined by 20.2%, while the number of items fell by 31.8%.
The decline was even more marked in the Other materials
category, where volumes were cut by 43.3%.

Other products exported by the Swiss watch industry in 2020
were valued at 860.4 million francs, a fall of 29.2% comparedwith 2019. These are mainly watch-parts (dials, hands andmovement components) and movements, as well as finishedproducts such as pocket watches, alarm clocks and othersmall and large clocks.
As with wristwatches, exports of movements fell by 18.7% byvalue and 35.9% by the number of items. Overall, watch-parts
witnessed a 27.2% decline in export sales.
Exports of watch cases and straps are dependent on the finishing sector, which also suffered a marked slowdown.

Main markets
All the main regions were severely impacted by the decline
in 2020. Asia accounted for 54% of Swiss watch exports
by value and fell by 20.2% compared with 2019. Europe(-25.2%) was even more heavily affected and saw its market
share decline to 29%. America, with a 15% share, recorded
a 20.4% fall.
China proved an exception in 2020 and became the leading
direct destination for Swiss watch exports. Less affected by
the health crisis and with a very marked recovery in domestic
purchases during the second half of the year, it was the only
market to show growth (+20.0% compared with 2019). All theother main markets saw a very sharp decline. In Asia, Hong
Kong posted one of the most negative performances acrossExports by price segment (variation compared with 2019)36

Europa4,958.3-25.2%

America
2,512.2-20.4%

Asia
9,177.7-20.2%

Africa118.2-34.8%

Oceania217.7-14.8%
World
16,984.1-21.8%
Total value of exports in 2020 (in million francs)

Watch imports
Swiss watch imports recorded a decline of 31.1% in 2020, to
2.6 billion francs. All products fell sharply, especially watches(-26.4%) and watch-parts (-25.7%).

37

Main export markets in 2020

Swiss watch imports (in billion francs)

Structure of

39

the FH in 2020
An organisation representative of the Swiss watch industry as
a whole, the FH has the following main tasks and objectives:
helping to defend and develop the sector, establishing a permanent link between its members in order to promote theirshared interests, representing the Swiss watch industry in its
dealings with Swiss and international economic authorities andorganisations, asserting the interests of its members duringconsultation procedures preparing the ground for nationaland foreign legislations, defending its members’ interests inthe legal arena, and fighting actively against infringements
of intellectual property rights and acts of unfair competition.

40

The FH in 2020
On 31st December 2020, the FH included 463 companies,
associations and institutions (approximately 90% of the Swiss
watch industry manufacturers), including 160 firms in the fin0ished products sector. In terms of products, markets andbusiness size, the Swiss watch industry is characterised by itsvery great diversity. The FH is therefore structured with a viewto harmonising the different interests of its members throughthe balanced composition of its statutory organs.

General Meeting
60 delegatesCouncil20 delegates

Bureau4 members

Presidency

Commissions

41

The General Meeting
Governing body of the association, the FH General Meeting
comprises a maximum of 60 delegates totalling 60 votes. Lasting three years, terms of office are renewable.

bers to the Board, as well as the president of the association,
and appoints the auditor; it discusses and approves the annual
report and the accounts, as well as the scale of subscriptions.

The General Meeting takes decisions on issues submitted to
it by the Board concerning the interests of the Swiss watch
industry and the association’s general policy; it elects mem-On 31st December 2020, the FH General Meeting was composed of the following delegates (some with more than
one vote):

Grégory Affolter
Pignons Affolter SA

David Guenin
Gimmel Rouages SA

Karlheinz Baumann
Richemont International SA

Jean L. Guillod
Guillod-Günther SA

Sébastien Roche

Denis Bolzli
Aéro Watch SA

Philippe Gurtler
Rolex SALVMH Swiss Manufactures SA

Cédric Bossert
Richemont International SA

Lars Kästle
Breitling SA

Patrick Brandelet
Joray & Wyss SA

Thierry Kenel
The Swatch Group SA(FH Vice President)

Pascal Bratschi
Manufacture des Montres Rolex SA

Flavio Pellegrini
MGI Luxury Group SA

TAG Heuer, Branch of

Alain Sierro
Fraporlux SA
Manuela Surdez
Goldec SA
Alberto Tellan

Pierre-André BühlerETA SA Manufacture horlogère suisse

Aurélien Le Bigot
Zenith, Branch of
LVMH Swiss Manufacture SA

Jérôme Cavadini
Richemont International SA

Giuseppe Maesano
Universo SA

Dino D’Aprile
Rubbattel & Weyermann SA

Alain Marietta
Métalem SA

Pierre Verdière

Pascal Dubois
Dubois Dépraz SA

Pierre-André Meylan
Piguet Frères SA

Andreas Voll

Joris EngischJean Singer & Cie SA

Corine Neuenschwander
Neuenschwander SA

Branch of Richemont International SA

Christian Feuvrier
Nivarox-FAR SA

Marianne Pandiscia
Multitime Quartz SA

Arianna Frésard
Victorinox Swiss Army SA

Jean-Daniel Pasche
FH President

Manufacture des Montres Rolex SA
François Thiébaud
Tissot SA

La Montre Hermès SA

IWC Schaffhausen,

Eric Yersin
Raymond Weil SA
Vladimiro Zennaro
Bergeon SA

42

The Board
Comprising twenty members elected for three years by theGeneral Meeting, the FH Board, which meets four times a year,
has the following main attributions: it defines the association’s
policy and monitors its application; it rules on the admission ofmembers; it gives its opinion on issues to be submitted to theGeneral Meeting and executes the latter’s decisions; it elects the
Bureau and appoints the vice-president(s); it appoints headsof division and commission members; generally it assuresa permanent link between members of the association, theauthorities and third parties; it approves agreements concluded
between the association and its members or third parties; etc.

Raynald Aeschlimann
Omega SA

Christian Klever
Breitling SA

Karlheinz Baumann
Richemont International SA

Sébastien LangLouis Lang SA

Denis Bolzli
Aéro Watch SA

Massimo LongoRoventa-Henex SA

Cédric Bossert
Richemont International SA

Alain Marietta
Métalem SA

Pierre-André BühlerETA SA Manufacture horlogère suisse

Sébastien Roche
TAG Heuer, Branch of LVMH Swiss Manufactures SA

Christian Feuvrier
Nivarox-FAR SA

Alain Sierro
Fraporlux Swiss SA

Arianna Frésard
Victorinox Swiss Army SA

Peter Steiger
The Swatch Group SA

Philippe Gurtler
Rolex SA

Alberto Tellan
Manufacture des montres Rolex SA

Thierry Kenel
The Swatch Group SA

Andreas Voll
IWC Schaffhausen, Branch of Richemont International SA

On 31st December 2020 the Board was composed of the following members:

43

The Bureau and the Commissions
Comprising the president, the two vice-presidents and one or
two members, the Bureau examines issues delegated to it by
the Board and, exceptionally, questions of an urgent nature.

The FH also has six permanent Commissions responsible
for examining issues of general interest dealt with by the
association.

At the end of 2020, its composition was as follows:

The Commissions and their presidents:

Jean-Daniel Pasche
FH

Economic Commission
Thierry Kenel

Carole Décosterd
Rolex SA

Financial Commission
Pascal Bratschi

Thierry Kenel
The Swatch Group SA

Legislative monitoring Commission
Olivier Blanc

Alain Marietta
Métalem SA

Legal Affairs Commission
Jean-Daniel Pasche

The president of the Financial Commission is regularly invited
to attend the Bureau’s meetings.

Standardisation Committee
Silvano Freti
Anticounterfeiting Group
Jean-Daniel Pasche

44

The Divisions and the Departments
At 31 December 2020, the FH employed 32.5 full-time equivalent staff in Bienne (32.0 in 2019). Its organisation chart isas follows:

Presidency
Jean-Daniel Pasche

Communication
Philippe Pegoraro

Information Department
Janine Vuilleumier

Economic Division
Maurice Altermatt

Legal Division
Yves Bugmann

Adminstrative Division
Alain Guillaume

External Affairs
Department
Maurice Altermatt

Legal Department
Yves Bugmann

Administration
Department
Alain Guillaume

Economic and Statistical
Department
Philippe Pegoraro

Anticounterfeiting
Department
Michel Arnoux

Information Technology
Department
Fabrice Erard

Promotional Affairs
Department
Hélène Leonardi

NIHS Department
Patrick Lötscher

FH Hong Kong Centre
Thierry Dubois

Internet Unit
Yves Brouze

FH Japan Centre
Ayako Nakano

FH Latin America
Delegate
Philippe Widmer

45

The network of partners
The FH would be nothing in the globalised world without asolid network of partners, which can be found both within andoutside the sector on all five continents. Non-exhaustive, thelist below provides a summary of this network.

Watchmaking partners◆

All India Federation of Horological Industries◆

Hong Kong Watch Manufacturers Association◆

American Watch Association (AWA)◆

Infosuisse Information horlogère et industrielle◆

Japan Clock and Watch Association◆

Japan Watch Importers’ Association

◆

◆

◆

◆

Association des fabricants de décolletages et detaillages (AFDT)
Association patronale de l’horlogerie et de la
microtechnique (APHM)◆

Association patronale des industries de l’Arc-horloger
apiah

◆

Korea Watch and Clock Industry Cooperative◆

Société suisse de chronométrie (SSC)

Association pour l’assurance qualité des fabricants debracelets cuir (AQC)◆

Association suisse pour la recherche horlogère (ASRH)◆

Associazione Ticinese Industria Orologiera-ATIO◆

Assorologi (Italy)◆

BV Schmuck + Uhren (Germany)

◆

◆

◆

◆

Centre suisse d’électronique et de microtechnique(CSEM)
Centredoc Centre suisse de recherche, d’analyse et desynthèse d’information◆

Joyex - Asociación Espagñola de Fabricantes y/oExportadores de Joyería, Platería y Relojería

The Federation of Hong Kong Watch Trades &Industries Ltd
Union des Fabricants d’Horlogerie de Genève, Vaud etValais (UFGVV)
Verband deutschschweizerischer Uhrenfabrikanten(VdU)

Federal administration◆

Bureau central du contrôle des métaux précieux◆

China Horologe Association◆

Commission des experts douaniers◆

Comité permanent de l’horlogerie européenne (CPHE)◆

Direction générale des douanes (DGD)◆

Contrôle officiel suisse des chronomètres (COSC)◆

Swiss Federal Institute of Intellectual Property (IPI)◆

Convention patronale de l’industrie horlogère suisse (CP)◆Office fédéral de la santé publique (OFSP)◆

Fédération de l’horlogerie (France)◆◆

Fédération romande des consommateurs (FRC)◆

Fondation de la Haute Horlogerie◆

Fondation Qualité Fleurier◆

Fondation WOSTEP◆France Horlogerie Industries du Temps et desmicrotechniques

Office fédéral de la sécurité alimentaire et des affaires
vétérinaires (OSAV)◆

Présence suisse◆State Secretariat for Economic Affairs SECO

46

Chambers of commerce◆◆

Alliance of Swiss Chambers of CommerceArab-Swiss Chamber of Commerce and Industry(CASCI)◆

International Chamber of Commerce international (ICC)◆

Swiss-Chinese Chamber of Commerce◆

Swiss-Indian Chamber of Commerce◆

Joint Chambers of Commerce (Russia, Ukraine,
Kazakhstan, Belarus, Kyrgyzstan, Moldova)

Customs and police organisations◆

Agenzia delle Dogane, Roma◆Commandement général de la Guardia Civil (Espagne)◆◆

Commandement général de la Guardia di Finanza(Italie)
Direction générale des douanes et Droits indirects dela République française

◆Europol◆

Federal Bureau of Investigation (FBI)Interpol◆Swiss-Asian Chamber of Commerce◆◆

Swiss Business Council Abu Dhabi◆

Police cantonale de Neuchâtel◆

Swiss Business Council Dubai◆

Police cantonale du Jura◆

Swiss Chamber of Commerce in Japan◆

U.S. Customs and Border Protection◆

World Customs Organization

Economic organisations◆

BUSINESSEUROPE◆

economiesuisse◆

Switzerland Global EnterpriseTechnical organisations

Organisations involved in standardisation◆

Association française de normalisation (AFNOR)◆

British Standards Institution (BSI)◆

Bureau of Indian Standards (BIS)◆

Comité européen de normalisation (CEN)
Deutsches Institut für Normung (DIN)◆

Comité FRANCECLAT◆

Ecole d’ingénieurs ARC◆◆◆

International Electrical Committee (IEC)◆Tokyo Watch Technicum

Federal Agency on Technical Regulating and Metrology(GOST R)◆International Organization for Standardization (ISO)◆Japanese Industrial Standards Committee (JISC)◆

Korean Agency for Technology and Standards (KATS)◆

Standardization Administration of China (SAC)◆

Swiss Association for Standardization (SNV)47

Anticounterfeiting organisations
◆
◆

◆
◆

◆

Anti-Counterfeiting Group (ACG)
Brandowners Protection Group (Gulf Cooperation
Council)Ecole des Sciences Criminelles, UNIL
INDICAM - Associazione italiana per la Lotta alla
Contraffazione
STOP PIRACY – Plate-forme suisse de lutte contre lacontrefaçon et la piraterie◆

The Anti-Counterfeiting Network (REACT)◆

Union des fabricants

Legal organisations◆

Association internationale pour la protection de la
propriété intellectuelle (AIPPI)◆Association suisse du droit de la concurrence◆

Association suisse du droit européen◆

Commission européenne, DG Environnement◆

International Trademark Association (INTA)◆

Ligue internationale du droit de la concurrence◆

Organisation for an International Geographical
Indications Network (Origin)

Rue d’Argent 62502 Biel/Bienne
Switzerland

info@fhs.swiss
www.fhs.swiss
Tél. +41 32 328 08 28