Abolition of industrial tariffs

Industrial tariffs will be abolished from 1 January 2024 (Federal Gazette 2021 2330). This decision was made by the Federal Council at its meeting on 2 February 2022, after the necessary amendment to the Customs Tariff Act was passed by Parliament on 1 October 2021.

By choosing 1 January 2024, the Federal Council selected a date for the entry into force that keeps transitional costs as low as possible for economic actors and administrative authorities. All concerned therefore have sufficient time to make the necessary technical and organisational preparations.

Goods and services cost significantly more on average in Switzerland than in neighbouring countries. A number of factors make the country particularly expensive compared with its neighbours. One is its high wages and costs, which drive up prices. Another, however, is the variety of tariff and non-tariff trade barriers that have the effect of isolating the Swiss market, allowing companies to charge higher prices here than abroad. SECO previously examined the impact of these barriers in a series of studies. With a view to reducing trade barriers, the Federal Council adopted a package of import facilitation measures on 20 December 2017. One of these is the lifting of tariffs on industrial goods.

Removing industrial tariffs will strengthen Switzerland's position as a business and industrial location. The potential welfare gains are estimated at some CHF 860 million. Whereas customs duties once served to protect domestic industry from foreign competition, today they make it more expensive to procure materials from abroad. With the lifting of customs duties and the associated simplification of administrative procedures, businesses in Switzerland will benefit from cheaper inputs and thereby also from lower production costs. Given that the Swiss economy is highly integrated in global value chains, this will also improve its international competitiveness. Trade ties will become more efficient overall and competition will improve. Consumers also stand to benefit from the measure as import duties are still currently levied on various consumer goods such as cars, bicycles, personal care products, household appliances and clothing. In sectors with functioning competition, the savings will be passed on to consumers. This will be monitored.

In addition to the lifting of industrial tariffs, the bill provides for a streamlined tariff structure for industrial products, which will further reduce the administrative burden.

Abolition of industrial tariffs: questions & answers

Which products are concerned by the lifting of industrial tariffs?

In Switzerland, all goods with the exception of agricultural products (including processed agricultural products and animal feed) and fishery products count as industrial products. The lifting of industrial tariffs thus concerns goods under Chapters 25–97 of the Swiss customs tariff, with the exception of certain products under Chapters 35 and 38 classified as agricultural products. This means that these products will no longer be subject to customs duties when imported into Switzerland from 01.01.2024, regardless of the origin of the goods.

Further information (available only in German, French, and Italian): Botschaft zur Änderung des Zolltarifgesetzes (BBl 2019 8479)

Likewise, the simplification of the tariff structure applies only to industrial products under Chapters 25–97 of the customs tariff.

An overview of the tariff lines concerned can be found in the Excel document 'Simplification of the customs tariff': Changes to 1.1.2024 - Abolition of industrial tariffs

What should businesses do to prepare for the lifting of industrial tariffs on 1 January 2024?

Along with the lifting of industrial tariffs, the Swiss customs tariff for industrial products is also being simplified. The highly detailed breakdown currently used to levy differentiated customs duties will no longer be required in the industrial sector, and so the 9,114 tariff numbers will be cut to 7,511.

The lifting of customs duties for industrial products and the streamlined tariff structure will therefore result in changes to the Swiss working tariff Tares). Businesses concerned will have to incorporate the updated master data from the Federal Office for Customs and Border Security (FOCBS) in their systems. The FOCBS will publish the necessary information online in fall 2023. Various documents (Excel tables) can be consulted here. This page is constantly being expanded and updated.

What changes can be expected regarding the import customs declaration after industrial tariffs are removed?

The lifting of industrial tariffs does not change the customs clearance processes. There will still be an obligation to declare imports (Declaration companies), including the correct tariff numbers for the goods in question.

However, there are plans to simplify the import customs declaration with the launch of the new 'Passar' goods traffic system as part of the FOCBS's DaziT transformation programme. More information about this on the following web page.

Regarding adjustments for industrial products concerning origin cumulation and special procedures, please refer to the questions and answers below.

Who will still need a certificate of preferential origin for industrial products after industrial tariffs are removed?

From 1 January 2024, the normal (non-preferential) rate of duty for industrial products imported into Switzerland will be zero. If importing industrial products which at the time of import are expected to remain or be consumed in Switzerland, there is no longer a need to apply any free trade agreements (FTAs) or the Generalised System of Preferences (GSP) in favour of developing countries. This means there is no need to submit preferential proofs of origin for such imports. When importing merchandise or input materials that are to be further processed in Switzerland and re-exported, a distinction is made as to whether or not origin cumulation applies to the re-export, e.g. under the Pan-Euro-Mediterranean convention (PEM convention). In order to apply cumulation of origin on the export side, a supplier's proofs of origin (so-called preliminary documents, "preuves d'origine préalables") is required when importing the goods concerned.

Purpose of import of industrial products	Preferential proofs of origin required upon import?
Final destination Switzerland: Goods for which it is certain at the time of import that they will not be re-exported from Switzerland (e.g. consumer products).	No
Processing and re-export without preferential tariff treatment: Imports that are further processed in Switzerland and exported either to countries with which there are no FTAs or to countries with which there are FTAs but preferential treatment is not being claimed.	No
Unaltered re-export without preferential tariff treatment: Import of goods to be exported in an unaltered state to countries with which there are no FTAs or to countries with which there are FTAs but preferential treatment is not being claimed and there is no preferential proof of origin serving as a basis for a certificate of non-preferential origin.	No
Sufficient processing and re-export with Swiss origin: Import of goods that are considered sufficiently worked or processed in Switzerland without applying rules of cumulation under the relevant FTA and which are to be re-exported under that FTA as goods with Swiss preferential origin.	No
Export-side cumulation: Import of goods that are considered sufficiently worked or processed in Switzerland only by applying rules of cumulation under the relevant FTA and which are to be re-exported under that FTA as goods with Swiss preferential origin.	Yes
'Through trade' operations: Import of goods that are to be re-exported unaltered to free-trade partner countries with which cumulation of origin is possible, as goods with preferential origin ('through trade' operations).	Yes
Preferential proof of origin serving as a basis for a certificate of non-preferential origin upon re-export: Import of goods which are to be re-exported unaltered and for which a preferential proof of origin is to serve as a basis for a certificate of non-preferential origin.	Yes

How to continue to apply cumulation of origin?

From 1 January 2024, Swiss importers of industrial products can in any case benefit from the zero-rate duty without a preferential proof of origin.

For origin cumulation, e.g. under the PEM convention, preferential proof of origin will still be required as supporting documents for export. Already today, businesses concerned have to present valid proofs of origin (preliminary documents) or a preferential assessment decision if they wish to issue a proof of origin when exporting products (cf. only available in German, French, or Italian: Circulaire D30, Preuve d'origine préalable; simplification). This practice will not change after industrial tariffs are lifted.

As a reminder: Preferential customs clearance on import, i.e. a preferential assessment decision, is not mandatory in order to be able to issue a proof of origin when exporting products. The existence of valid preliminary documents, i.e. the supplier's valid proof of origin (movement certificate or origin declaration; supplier declarations are not valid in this context), is sufficient.

These proofs of origin must be issued according to the correct form (cf. Fact sheet on determining the correct form of preferential proofs of origin).

What obligations for archiving preferential proofs of origin (e.g. the EUR.1 movement certificate) will remain in place after the industrial tariffs are lifted on 1 January 2024?

The lifting of industrial tariffs does not affect the requirement to archive preferential proofs of origin, which remains in place.

Preliminary documents for export proofs of origin must be kept for at least three years from the date of issuance of the export proof of origin, and for at least five years when applying the free trade agreement with South Korea.

What will happen to the ATA Carnet after industrial tariffs have been lifted?

The ATA Carnet will remain in place for temporary entry of goods, i.e. the goods must leave the customs territory on time and unaltered. The ATA Carnet is designed to enforce these conditions and, if necessary, provides a guarantee covering the relevant import duties (in particular VAT). Another advantage is that the ATA Carnet eliminates the need to obtain national customs documents for each country (i.e. one customs document applies for several countries).

After industrial tariffs are lifted, traders who are entitled to full input tax deduction, in particular, may still choose the option of duty-free import together with the export procedure as an alternative to the ATA Carnet.

Will there still be special procedures for industrial products, such as processing traffic, or customs relief for goods according to their intended use?

With the abolition of industrial tariffs, there will generally be no need for special procedures for industrial products from 1 January 2024. In exceptional cases, e.g. for VAT exemption in the case of temporary import of goods (inward processing), such special procedures remain relevant.

Which tariff lines will be merged when the tariff structure is simplified? What will then happen to the statistical keys?

Along with the lifting of industrial tariffs, the Swiss customs tariff for industrial products will also be simplified; this does not affect the tariff structure for the agricultural sector.

The 9,114 tariff numbers of the Swiss customs tariff will be cut to 7,511, as such a detailed breakdown will no longer be needed. Also, national subdivisions of tariff numbers will not change in the industrial sector if these are still necessary for enforcing certain non-customs legislative instruments, e.g. for export controls.

An overview of the tariff lines affected can be found in the Excel table 'Simplification of the customs tariff': Changes to 1.1.2024 - Abolition of industrial tariffs

The statistical keys (three-digit suffixes serving as control elements) are additional divisions of the eight-digit tariff numbers. They will be transferred to the new tariff structure if they are necessary for enforcing non-customs legislative instruments. The FOCBS has provided necessary information for this.

What will happen to those non-customs legislative instruments affected by the simplification of the tariff structure?

The ordinances containing tariff numbers and which refer to non-customs legislative instruments will be adapted by the Federal Council by January 2023. Existing non-customs legislative instruments will be transferred to the new tariff structure. The FOCBS will provide the necessary information.

What will happen with the binding tariff information affected by the simplification of the tariff structure?

In principle, binding tariff information is no longer valid after six years at most or if the legal basis applied is changed. After the entry into force of the industrial tariff dismantling (amendment of the Customs Tariff Act), tariff information which is affected by the accompanying simplification of the customs tariff structure (adjustment of the last two digits of the customs tariff number to "00") will continue to be recognised as valid by the FOCBS within the validity period.

What will happen to decisions issued on the tariff classifications of goods and tariff explanatory notes that are affected by the simplification of the tariff structure?

The relevant decisions and explanations will be adapted to the new tariff structure by the FOCBS by 1 January 2024 and published in the Tares.