03. May 2019 | News, Views & Markets

Switzerland: Import of yarns, twines and fabrics will be duty-free

Ab dem 1. Juli 2019 können Garne, Zwirne, Gewebe und Gestricke zollfrei in die Schweiz importiert werden.
From July 1, 2019, yarns, twisted yarns, fabrics and knitted fabrics can be imported duty-free into Switzerland.
Source: Frankfurt Exhibition GmbH / Thomas Fedra
The Swiss textile industry is highly specialized and integrated into the global value chains. Companies are dependent on imports of primary and intermediate materials. Compared to other sectors, their procurement is subject to high customs duties. These make production more expensive and thus gnaw on the competitiveness of the sector. At the request of Swiss Textiles, the Ordinance on the Temporary Reduction of Customs Duties for Textiles entered into force on January 1, 2016. This includes the suspension of customs duties on 60 textile tariff headings. With regard to their scope and extent, the Federal Council set a unique example of duty suspension in Switzerland at the time.

For Swiss Textiles, the suspension of customs duties on January 1, 2016 was an important first step, but not an auspicious one, towards improving the framework conditions for the sector. With 60 out of 665 tariff numbers, the coverage area is too small. The duty suspension also applies arbitrarily to the various products. However, companies must be as flexible as possible in their procurement. For quality reasons, a weaving mill that uses very fine and long-fiber cotton yarns to produce fabrics cannot switch to the thicker and shorter duty-free cotton yarns. Swiss Textiles therefore demanded a broader duty suspension from the Federal Council, especially on yarns, fabrics and knitted fabrics. At its meeting today, the Federal Council decided to suspend customs duties for chapters 50 to 55 and 60 of the customs tariff for a limited period until December 31, 2023. At the same time, it extended the current tariff suspension.

"With the second suspension, the industry is saving an additional CHF 3 million per year," says Jasmin Schmid, Head of Economics and Statistics at Swiss Textiles. The advantages are not limited to the elimination of import costs. The costly customs procedures, such as inward or outward processing, will no longer apply to all goods in chapters 50 to 55 and 60. The prohibition of duty drawback will also no longer apply to tariff numbers suspended by customs. However, preferential proof of origin still has to be obtained in most cases.

The aim of the Federal Council is to replace the temporary suspension of customs duties with the complete abolition of all industrial customs duties on  January 1, 2022.

edited by Petra Gottwald

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