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Legal framework

The aim of Switzerland's policy on foreign economic affairs is to safeguard the interests of the Swiss economy abroad (Art. 101 § 1 Federal Constitution, FC; SR 101). Switzerland's economic system is based on the principle of economic freedom (Art. 94 FC). Economic freedom takes the form of an individual right that is guaranteed as a fundamental right (Art. 27 and 36 FC); from an institutional point of view, it serves as a guiding principle for action taken by the Confederation and the cantons (Art. 94 FC). Cross-border trade also falls within this economic system. The main objective of the policy on foreign economic affairs is to open up foreign markets to Swiss goods, services and production factors or to improve market access conditions. Conversely, this policy must make it possible to react appropriately to foreign measures or extraordinary circumstances abroad that are harmful to vital Swiss economic interests. In addition, the policy has to provide instruments facilitating the realisation of primary foreign policy objectives (supportive function).

Foreign economic law regulates the implementation of the framework conditions laid down by the policy on foreign economic affairs. The law is largely based on the international treaties by which Switzerland is bound. These treaties contain rules on world trade (such as the WTO), on regional free trade or bilateral trade in goods and services and on investments. International treaties become Swiss law when they come into force in Switzerland. In addition, foreign economic law also includes all of Switzerland's own legislation on economic measures that regulate foreign relations.

The constitutional foundations of Swiss foreign economic law are primarily to be found in Articles 54 and 101 FC. Article 54 FC gives the Confederation comprehensive powers in the area of foreign affairs and forms the basis for the foreign economic law derived from international treaties. But the powers based on Article 54 are not limited to the implementation of international treaties; they are also used to implement measures that relate in particular to international solidarity (e.g. embargo measures, non-proliferation measures, development aid, debt rescheduling, etc.). Under Article 101 § 1 FC, the Confederation must safeguard the interests of the Swiss economy, which also involves promotional measures (Export Promotion Act). In terms of Article 101 § 2, the Confederation may in exceptional cases take measures to protect the domestic economy and in doing so may deviate from the principle of economic freedom, if this is necessary (protective measures mainly based on the Federal Act on Foreign Economic Measures and the Customs Tariffs Act). In the area of foreign relations, the Federal Council is - irrespective of the Embargo Act - authorised to issue temporary ordinances in its own right and on the basis of Article 184 § 3 "where safeguarding the interests of the country so requires" (direct constitutional ordinances). Finally, reference should also be made to Article 103 (structural policy), which forms a partial basis for the guarantee relating to export and investment risks and for the legislation on technical barriers to trade.

From a systematic point of view, it is difficult to decide which legal fields fall within the ambit of foreign economic law. For example, measures to improve Switzerland's attractiveness as a business location also strengthen its competitiveness vis-à-vis foreign competitors. Furthermore, international law not only has an influence on the general conditions for foreign trade, but also affects the domestic market. Nonetheless, the foreign economic task fields of the State Secretariat for Economic Affairs may be used as a guide. It is clear that a connection with cross-border transactions (import, export, transit) cannot be the only criterion. Where there is a foreign economic connection, an economic orientation towards foreign markets, and an international reason and motivation for a legal provision that is substantial and thus decisive, then any legal provision may be regarded as part of foreign economic law, irrespective of the constitutional basis. This concerns all legal fields that deal with market access for Swiss goods (goods and technology), services and investments and the promotion of Swiss business abroad (investment risk guarantee, export risk guarantee, export promotion as well as, to a certain extent, the legislation on technical barriers to trade). Measures dealing with trade distortions that can be attributed to discrimination originating abroad (counter-measures) can be included as well as measures implementing international sanctions (embargo measures) and preventive decisions by international bodies on the control of dual-use goods (non-proliferation measures). Finally, primarily foreign-oriented economic support measures taken by Switzerland (development cooperation and support for Central and East European countries) should also be added.

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