V. MARKETING U.S. PRODUCTS AND SERVICES - Distribution and Sales Channels The most effective method of importation into and distribution within Switzerland varies according to the type of product and location of manufacture and distribution sites. Capital goods manufacturers may find direct exporting most desirable when contracts with a limited number of customers represent an appreciable share of the market. However, a company new to the Swiss market, or one whose product requires training for use and after-sales service, would be well advised to engage the services of a technically-qualified Swiss agent with a good knowledge of the market. Swiss buyers of raw materials often use specialized importers. Large orders may be made directly from producers overseas, specialized trading firms, or transshippers. As the metals industries, except aluminum, tend to be less developed, imported materials are usually in the form of semiprocessed and processed products. A number of large international trading and transit companies operate in Switzerland. Parent companies in Switzerland carry out the transactions, while foreign affiliates or representatives may handle such aspects as shipping, receipt, and verification of the goods. In some cases, the imported goods never enter Swiss customs territory. These firms are members of the Confederation of Swiss Firms for World and Transit Trade (Verband Schweizerischer Transit- und Welthandelsfirmen). (Key Swiss associations, with address and contact person, are listed in Appendix C.) Manufacturers and exporters of consumer goods may deal with a wholesaler (who is in most cases also the importer), engage the services of a representative, or sell directly to buying offices of large retail chains (in the case of mass-produced items). Most often a representative or agent, who is usually a specialist in one or more product groups, is made responsible for distribution in the whole country. Import and Wholesale Trade: Many Swiss wholesalers are also importers, and they generally expect exclusive regional or national rights for the imported product. Wholesalers maintain stocks of a range of products, and provide quality control, transport, warehousing, and financing. Associations of wholesalers have been created for various sectors to protect sector interests and to compete effectively with other forms of distribution. Most wholesalers and importers also belong, either through their sector associations or individually, to the Federation of Swiss Importers and Wholesale Traders (Vereinigung des Schweizerischen Import- und Grosshandels - VSIG). (See Appendix C for address.) Retail Trade: The structure of retail trade in Switzerland has been changing. One trend has been a decreasing number of independent retailers, giving way to an increasing number of self-service and discount stores, supermarkets, and the like. The trend to concentration has been most noticeable among food distribution companies. Faced with an increasing number of large, vertically integrated retail establishments having nationwide operations, individual retailers have set up organizations to take care of wholesale purchasing, importing, and other services. Functioning as cooperatives, most of these retailers' buying groups and associations are in the foodstuffs business, but are also in such sectors as textiles, shoes, leather, goods, sports articles, pharmaceuticals, toys, and hardware. Vertically integrated retail firms account for a large part of the trade in Switzerland. These firms, many of which are department and other chain stores, consumer cooperatives, discount stores and supermarkets, do not specialize, but rather deal in a wide range of products. Their vertical structure and centralized buying give them competitive advantage over their independent retail competitors. Continued strong competition has pressured retail traders to continue rationalizing their operations. Scanner cash registers for bar-coded articles have been installed at checkout counters in many localities (although their prevalence is behind other European countries). The use of electronic cards to rationalize payment transactions is similarly growing, but also not as rapidly as elsewhere in Europe. Swiss retail groups joined forces in 1987 to form the Electronic Payment System Association (Verband Elektronischer Zahlungsverkehr - VEZ). Mail Order Business: The growing success and increasing acceptance of mail order business are due to the efforts of supplier firms to offer an up-to- date range of quality products. Market research has revealed that customers appreciate the wide choice, savings in time, and possibility of comparing prices at a glance offered by mail order firms. Swiss firms in the field belong to the Association of Swiss Mail Order Businesses (Verband des Schweizerischen Versandhandels - VSV). - Use of Agents/Distributors; Finding a Partner Two principal types of representatives are provided for by Swiss law: (1) Agents, who are independent, can work for several firms, and are compensated by commission. Their activities are governed by a 1949 federal law on agency contracts. Swiss law does not permit a principal to inspect the books of his Swiss agent. (2) Traveling salespeople (Handelsreisende), who are employees of the company they represent. Under a 1941 federal law, they are entitled to a fixed salary, with or without commission, and reimbursement of travel and entertainment expenses. Each salesperson is required to carry a card indicating whether he is selling to the wholesale or retail trade. For a company interested in entering the Swiss market, finding and selecting the right person or firm for representation is important and sometimes difficult. Favorable terms may be required to obtain good representation for a new product or an unknown firm. Commission agents are usually preferred over salaried representatives, as in the latter case the foreign firm has no direct control over the person concerned. U.S. firms seeking representation in Switzerland should contact their nearest U.S. Department of Commerce District Office about the Agent/Distributer Search service (ADS), a customized search conducted by Embassy US&FCS commercial specialists which helps identify agents, distributors and foreign representatives for U.S. firms based on the foreign companies' examination of U.S. product literature (a fee of $250 is charged). Other means of locating representation include visiting trade fairs, advertising in Swiss periodicals, and engaging the services of professional organizations in the United States or Switzerland. Once a potential partner has been identified, the U.S. Department of Commerce offers the World Traders Data Report (WTDR) service, to check the reputation, reliability and financial status of the foreign company. The fee is $100, and includes a recommendation from U.S. Embassy Bern's Commercial Section as to the suitability of the company as a trading partner. For the agricultural sector, the Office of Agricultural Affairs, U.S. Embassy Bern, is staffed by specialists who can make available contacts in specific agricultural sectors. The Office of Agricultural Affairs keeps a regularly updated list of Swiss agricultural importers organized by commodity group. - Franchising More than 200 franchisors are currently operating in the Swiss market, some 20 of them with more than ten outlets. Approximately 25 percent of all franchisors are of domestic origin, 20 percent are American, and over one-third are of French origin. Franchising is on a marked increase in the service and catering sectors. The French Accor and Wagons Lits group runs several restaurants (Eurest), catering systems, and hotels. Franchising has long been practiced by the automotive trade. It is a successful distribution and retail system in clothing and ready-made wear, and in baby and children items. Newly-successful areas are in beauty and personal care, home decorating, giftware, gardening, and the like. Body Shop (cosmetics) is very successful. Industry franchises (Coca-Cola, Pepsi, Yoplait, etc.) are well introduced and active. Good opportunities exist in the restaurant business, in the service sector, in management and career improvement, as well as in children's training and schooling methods. New retail concepts, home improvement services, computer training and systems are other areas of growth. McDonald's is a good example of local innovation of a global franchise. Its restaurants are very popular in several Swiss cities and in mountain resorts. McDonald's restaurants on selected Swiss train lines have become a legend all over the world. McDonald's success in Switzerland can be attributed to a formula adapted to local social and cultural habits and its emphasis on environmental consciousness. Franchise experts advise new-to-market franchisors and masters to adapt the franchise package or business format and message to the cultural traits and customs of specific regions and countries of Europe. This advice applies especially to a small, multilingual country like Switzerland, where franchise packages can be tested in different cultural environments (French in Geneva or Lausanne; German in Zurich, Basel or Bern; Italian in Lugano) -- and lessons learned in Switzerland can be applied in larger, neighboring countries. The availability of capital and Switzerland's highly-developed service, transportation and communications sector can be used by U.S. franchisors to control their franchise interests in Europe through a Swiss-based head office. Prospective masters and franchisees should be properly screened. It is advisable to make a feasibility study and invest in a pilot operation prior to implementing a business plan which has not been tested before in Europe. Franchising's penetration of Swiss retail trade is far from the 35 percent of all retail sales it now represents in the United States. The reason is that financing for one's own distribution or retail chain in Switzerland is readily available. Additionally, the Swiss have been accustomed to job loyalty and security, as well as fairly good compensation. However, now that unemployment stands at around 5 percent, executives and people disposing of start-up capital are more keen to consider becoming entrepreneurs on their own through franchising. Outplacement and executive counsellors often advise clients to consider franchising. The Swiss Franchise Association (address in Appendix C) is active in holding seminars and workshops on franchise opportunities. - Direct Marketing Direct marketing is holding its own in Switzerland, although it is not as developed as in other parts of Europe, and the advertising industry Europe-wide has been impacted by recession in recent years. In addition to mail order and consumer goods trade, direct marketing is used in such sales areas as company-to-company, financial services, insurance, and franchising. Electronic teleshopping and telemarketing are becoming more widely used. Montreux has been the host for the annual Direct Marketing Symposium and Exhibition each April since 1968, but the 1994 event was cancelled, and its future in Montreux appears dim. The problem, however, is primarily due to the fact that individual European countries, as well as the European Direct Marketing Association in Brussels, have become more active in organizing their own seminars, meetings and conferences. - Joint Ventures/Licensing Joint ventures: Joint ventures are possible in Switzerland, and are usually classified under Swiss company law as an ordinary partnership (Einfache Gesellschaft). Legally a joint venture consists of two or more persons (individuals or corporations) for the realization of a particular project. Its name is not protected by law, nor can it be registered in the Swiss Commercial Register (Handelsregistrar). Licensing: The Swiss often rely on licensing arrangements to acquire know how, and excel in adding value to imported raw goods and services, earning revenue through exports. Licensing can therefore be a successful and profitable market entry strategy for U.S. firms. Many U.S. firms have adopted this approach to the Swiss market. In most sectors U.S. licensors will readily find prospective licensees with the manufacturing and marketing skills to successfully handle the product not only in Switzerland, but also in other countries where the Swiss counterpart has marketing capability. Swiss expertise in exporting, flexibility in adapting to difficult markets and skill in precision-making and engineering will benefit a U.S. licensor. The pros and cons of adopting a licensing strategy must, however, be weighed against other methods of market entry. Swiss intellectual property legislation will usually protect adequately know-how and patent transfer arrangements; and the Swiss tax structure in some cantons allows for write-offs on intellectual property and tax free or preferential treatment of royalties earned through know how transfer and licensing. Appropriate legal advice can be obtained from competent Swiss-based patent and licensing attorneys. The Licensing Executives Society has an active chapter in Switzerland. The key to success in licensing lies in screening the selected licensee's capabilities, interest and motivation. - Steps to Establishing an Office The actual mechanics of forming and registering an office in Switzerland can be accomplished in two-three weeks, but the planning process can be much more time-consuming, and should take many factors into consideration. One of the most important is the location within Switzerland, because tax laws, availability of work permits, availability of labor force, and availability and cost of business facilities vary widely from canton to canton. Some cantons may also offer special incentives for foreign investors. Once a location is selected, the company must be registered in the Commercial Register (provided that the annual turnover amounts to at least SF 100,000; if less, the company may register if all other conditions are met, but is not required to do so). Registration documents contain the company name, amount of share capital, business purpose, names of directors and managers, and the names of those who have signatory powers. All documents must be legalized by a notary public and superlegalized by an "apostille" (legalization of the notary's signature), and if required by the particular canton, also translated by a recognized translator into German, French or Italian. The company's board of directors must consist of a majority of Swiss citizens resident in Switzerland; foreign controlled companies usually meet this requirement by nominating Swiss directors who hold their shares and perform their functions on a fiduciary basis. The manager need not be a Swiss citizen, but at least one person authorized to sign with a sole signature or two persons authorized to sign by joint signature must be Swiss residents. Registration also includes special wording that the company, if a branch of a foreign corporation, is relatively independent from the corporation's head office from an economic and noneconomic point of view, basically enabling the branch to exist as if it were a separate legal entity in Switzerland. The branch must have its own books of account, although they may be kept by the company headquarters or a third party. Once the company has been registered, the next major concern is employment. Foreign employees must have work permits, which are granted at the cantonal level (by quota) and approved at the federal level. Hiring domestic residents is more straight-forward, and there is no minimum wage, but the company is liable for a host of benefits and compensations, ranging from pension plan contributions to health and accident insurance. A final consideration is tax liability. As a rule, foreign companies are taxable in Switzerland on income attributable to a Swiss permanent establishment; on income from immovable property located in Switzerland, including gains on the sale of such property; and in some cantons, on income from debts secured by land there. Withholding tax is levied on dividends and certain interest. Sales of foreign companies to a Swiss resident (or sales through an independent Swiss agent) do not create Swiss tax liability. Switzerland and the United States have a Double Taxation Treaty. Income from industrial and commercial activities is not taxed in either country unless it is derived from activities of a permanent establishment in the taxing country. Switzerland taxes only those industrial and commercial profits of a U.S. permanent establishment in Switzerland attributable to its in-country activities. The same deductions are allowed in determining taxable income as for a Swiss corporation. More detailed information regarding setting up and staffing a business enterprise in Switzerland is available from the Swiss-American Chamber of Commerce (address in Appendix C), and from "doing business guides" published by such organizations as Ernst & Young and Price Waterhouse. - Selling Factors/Techniques New-to-market U.S. exporters are well advised to participate in established trade shows in Switzerland to give their products commercial exposure. Swiss buyers, agents and distributors use the medium of trade shows as a means of finding new products to a much higher degree than their U.S. counterparts. It is often more difficult to arrange personal meetings with prospective Swiss business partners if the U.S. product or company has not already shown its commitment to the Swiss market by participation in such events. Personal participation is not mandatory, since catalog and video displays at shows tend to draw an excellent response. Still, there is no substitute for establishing a personal relationship with one's Swiss business partner. In addition, for an exporter's offer to be taken seriously, it must be accurate and complete. Swiss buyers, who receive offers from all over the world, are generally not prepared to devote time to requesting additional details. These must be provided at the outset with objective and detailed information, including exact product description with technical specifications; price details (CIF or FOB) in U.S. dollars or Swiss francs; method of payment; quantities available; packaging; and transport and delivery terms. An offer should also include information on the exporting firm; production equipment available and quality control factors; and financial references. If minimum quantities for accepting orders are set, the exporter should take into account the relatively small size of the Swiss market. The first order given to a new supplier is often regarded by the importer as a trial order for testing the quality of the goods and service provided, as well as consumer reaction to the product. Commitments made should be scrupulously observed, or the likelihood of success on the market may be seriously compromised, as information travels quickly in Switzerland. The professionals in a given market sector are in fairly close contact with one another, and an exporter's reputation soon becomes common knowledge. Payment terms in Switzerland, as in the United States, are usually stipulated in the sales contract, can be negotiated, and depend upon the amount of funds involved. Most common terms are payment 30-60 days net (from the date of the invoice), payment within 10-15 days with a 2-3 percent discount, and payment after 30-60 days with an interest charge. Good customers may expect credit of up to three months. Except for single, one-time transactions, or first-time transactions where there is some doubt about the recipient's credit-worthiness, the costly letter of credit (LC) procedure should be avoided; it is perceived as depriving the recipient of the means to make deductions for faulty products or wrong shipments. - Advertising and Trade Promotion Despite its relatively small size, Switzerland's cultural and language diversity make it virtually impossible to apply a single advertising policy for the whole market. Regionally-targeted advertising is far more advisable. The creation of effective advertising requires an intimate knowledge of the country; approaches that succeed elsewhere may prove unsuitable to Swiss consumers' tastes. It is generally preferable to employ the services of a Swiss advertising consultant, or one of the several U.S. advertising firms with affiliates in country. Seriousness, unpretentiousness and impeccable presentation are the hallmarks of Swiss advertising. Consumers are influenced by the quality of the printing and graphic presentation, which attain high standards in Switzerland. Not surprisingly, and also in line with the country's high standard of living, advertising expenditure in Switzerland is one of the world's highest on a per capita basis. Print Media: Switzerland has an exceptionally large number of newspapers because of the different language and cultural areas. Most are oriented to particular regions or localities. Although the number of newspapers has declined from a pre-war high of 406 to 260 in 1992, Switzerland probably has one of the greatest per capita newspaper densities in the world. The number of dailies has risen from 114 in 1939 to 121 in 1992, but circulation in the same period has more than doubled from 1.14 to 2.30 million issues per day. Some of the dailies are regional editions (Kopfblaeter) of other newspapers. There are over 100 free-of-charge announcement bulletins published on a weekly or more frequent basis. The Swiss also publish an extensive range of periodicals, both general public magazines and special interest, including trade, publications. The latter cover such diverse topics as travel, gastronomy, medicine, environment, and hobbies. The following encompasses some of the major circulation print media. As noted, given the large diversity of publications and the regional or special interest character of many, it may be advisable to secure the services of a professional when planning a press campaign. Major Swiss Newspapers and Periodicals Der Bund Type: Daily Newspaper P.O. Box Language: German CH-3001 Bern, Switzerland Circulation: 62,368 Tel: (41-31) 385 11 11 Editor-in-Chief: Dr. Peter Ziegler Fax: (41-31) 385 11 12 Berner Zeitung Type: Daily Newspaper P.O. Box Language: German CH-3001 Bern, Switzerland Circulation: 125,228 Tel: (41-31) 330 31 11 Editor-in-Chief: Beat Hurni Fax: (41-31) 332 77 24 Basler Zeitung Type: Daily Newspaper P.O. Box Language: German CH-4002 Basel, Switzerland Circulation: 117,417 Tel: (41-61) 639 11 11 Editor-in-Chief: Hans-Peter Platz Fax: (41-61) 631 15 82 Neue Zuercher Zeitung Type: Daily Newspaper P.O. Box Language: German CH-8021 Zurich, Switzerland Circulation: 152,221 Tel: (41-1) 258 11 11 Editor-in-Chief: Dr. Hugo Buetler Fax: (41-1) 252 13 29 Tages-Anzeiger Type: Daily Newspaper P.O. Box Language: German CH-8021 Zurich, Switzerland Circulation: 273,466 Tel: (41-1) 248 44 11 Editor-in-Chief: Roger de Weck Fax: (41-1) 248 44 71 Blick Type: Daily Newspaper P.O. Box Language: German CH-8021 Zurich, Switzerland Circulation: 373,354 Tel: (41-1) 259 62 62 Editor-in-Chief: Fridolin Luchsinger Fax: (41-1) 262 29 76 24Heures Type: Daily Newspaper P.O. Box 585 Language: French CH-1001 Lausanne, Switzerland Circulation: 93,406 Tel: (41-21) 349 44 44 Editor-in-Chief: Jean-Marie Vodoz Fax: (41-21) 349 41 10 Le Matin Type: Daily Newspaper P.O. Box 1095 Language: French CH-1001 Lausanne, Switzerland Circulation: 54,476 Tel: (41-21) 349 49 49 Editor-in-Chief: Antoine Exchaquet Fax: (41-21) 349 41 10 Journal de Geneve Type: Daily Newspaper P.O. Box Language: French CH-1211 Geneva, Switzerland Circulation: 22,254 Tel: (41-22) 819 88 88 Editor-in-Chief: Antoine Maurice Fax: (41-22) 819 89 89 Le Nouveau Quotidien Type: Daily Newspaper 78, chemin de Montelly Language: French CH-1007 Lausanne, Switzerland Circulation: 35,000 Tel: (41-21) 626 25 24 Editor-in-Chief: Jacques Pilet Fax: (41-21) 626 25 23 Tribune de Geneve Type: Daily Newspaper P.O. Box 434 Language: French CH-1211 Geneva 11, Switzerland Circulation: 60,480 Tel: (41-22) 322 40 00 Editor-in-Chief: Guy Mettan Fax: (41-22) 781 01 07 La Liberte Type: Daily Newspaper P.O. Box 1056 Language: French CH-1701 Fribourg, Switzerland Circulation: 35,385 Tel: (41-37) 86 44 11 Editor-in-Chief: Jose Ribeaud Fax: (41-37) 86 44 00 Corriere del Ticino Type: Daily Newspaper Ai Mulini Language: Italian CH-6933 Muzzano, Switzerland Circulation: 36,521 Tel: (41-91) 58 31 31 Editor-in-Chief: Sergio Caratti Fax: (41-91) 58 29 77 Giornale del Popolo Type: Daily Newspaper Via San Gottardo 50 Language: Italian CH-6903 Lugano-Stazione, Switzer. Circulation: 23,166 Tel: (41-91) 23 22 72-75 Editor-in-Chief: Filippo Lombardi Fax: (41-91) 23 28 05 Die Weltwoche Type: Weekly Magazine Postfach Language: German CH-8021 Zurich, Switzerland Circulation: 106,511 Tel: (41-1) 207 73 11 Editor-in-Chief: Rudolf Baechtold/ Fax: (41-1) 202 61 27 Juerg Ramspeck Sonntags-Zeitung Type: Newsmagazine Postfach Language: German CH-8021 Zurich, Switzerland Circulation: 122,881 Tel: (41-1) 248 40 40 Editor-in-Chief: Kurt Zimmermann Fax: (41-1) 242 47 83 Sonntags-Blick Type: Newsmagazine Dufourstrasse 23 Language: German CH-8008 Zurich, Switzerland Circulation: 360,477 Tel: (41-1) 259 62 62 Editor-in-Chief: Fridolinx Luchsinger Fax: (41-1) 251 80 06 Schweizer Illustrierte Type: Weekly Magazine Dufourstrasse 23 Language: German CH-8008 Zurich, Switzerland Circulation: 196,265 Tel: (41-1) 259 63 63 Editor-in-Chief: Peter Rothenbuehler Fax: (41-1) 262 04 42 Cash Type: Weekly Newspaper Hohlstrasse 192 Language: German CH-8021 Zurich, Switzerland Circulation: 50,000 Tel: (41-1) 242 80 77 Editor-in-Chief: Markus Gisler Fax: (41-1) 242 90 41 L'Hebdo Type: Monthly Magazine P.O. Box 3153 Language: French CH-1005 Lausanne, Switzerland Circulation: 55,000 Tel: (41-21) 320 36 11 Editor-in-Chief: Jean- Claude Peclet Fax: (41-21) 320 36 17 Bilanz Type: Monthly Magazine Edenstrasse 20 Language: German CH-8021 Zurich, Switzerland Circulation: 70,000 Tel: (41-1) 207 72 21 Editor-in-Chief: Medard Meier Fax: (41-1) 201 59 16 Schweizer Handels-Zeitung Type: Weekly Newspaper Seestrasse 37 Language: German CH-8027 Zurich, Switzerland Circulation: 37,039 Tel: (41-1) 201 35 55 Editor-in-Chief: Dr. Kurt Speck Fax: (41-1) 202 01 26 Bilan Type: Monthly Magazine Av. de la Gare 33 Language: French P.O. Box 585 Circulation: 21,528 CH-1001 Lausanne, Switzerland Editor-in-Chief: Max Mabillard Tel: (41-21) 349 48 22 Fax: (41-21) 349 40 80 Radio and TV: The Swiss Broadcasting Company (SRG) holds a monopoly on production and broadcasting of Swiss radio and TV programming. It is private, nonprofit, and financed through compulsory listener/viewer fees. Matching the linguistic division of the country, Switzerland has three TV stations. An extensive cable system permits receipt of radio and TV programming from other European countries. Unlike the United States, but similar to the rest of Europe, Swiss TV advertising is grouped in blocks of time rather than interspersed throughout and between programs (although as of April 1992, programs over 90 minutes may have one commercial break). TV advertising is subject to certain restrictions, e.g., commercials for cigarettes, alcoholic beverages and pharmaceutical products are banned. There is no radio advertising in Switzerland, except by local radio stations. The Corporation for Television Advertising (AG fuer das Werbefernsehen, Postfach 610, Giacomettistrasse 15, CH-3000 Bern 31, Switzerland; tel: (41-31) 351-2221; fax: (41-31) 351-2310) takes order for television advertising. TV advertising prices are based on 1,000 contacts (targeted viewing audience), and vary by time of day from SF 20-27 per unit of contacts; seasonal and large contract discounts are offered. Trade Promotion: As noted in the section on selling factors/techniques, the Swiss place a high emphasis on participation in trade promotion events. Switzerland has major exhibition centers in Zurich, Geneva, Basel, Montreux, Lausanne and Bern, as well as a number of smaller show sites in other cities. All have a full calendar of regional, national and international events, taking place at intervals from twice a year to once every four years. Appendix E summarizes the major trade events, many supported by Embassy staff. A full list of all trade events taking place in Switzerland is produced annually by the Swiss Office for Trade Promotion OSEC (address also in Appendix E). - Pricing Product In determining the selling price of a product, particularly consumer goods, an exporter must take into account the considerable difference between the price an importer is prepared to pay and the prevailing retail selling price. The cost of distribution and the intermediaries' and retailers' margins may increase the selling price several fold. Markups in Switzerland generally range from 20 to 100 percent, but can be even higher. Price controls, part of Swiss competition law since 1986, are primarily aimed at reducing abusive prices for goods and services that are the result of a lack of competition, and apply only to enterprises that are members of a cartel or similar organizations subject to this law. There are, however, controls on some products whose price determination is influenced by protective or assisting measures from the government; these are primarily agricultural products, but also include some pharmaceutical goods. - Sales Service/Customer Support Finding a reliable means of providing rapid and efficient quality service and after-sales customer support is absolutely essential in Switzerland. Concluding a contract is usually dependent upon the ability to provide this follow-up. Means of accomplishing this aim include one or all of the following, depending upon the type of product in question: opening one's own office in Switzerland; finding a competent agent/distributor able to provide after-sales service; and/or keeping stock in a Swiss or European warehouse for rapid resupply. - Selling to the Government Swiss government agencies use competitive bids for procurement. In general, the Swiss comply with GATT rules regarding procurement by government entities (Switzerland implemented the GATT multilateral code Agreement on Government Procurement in 1981). Procurement at the federal level is generally limited to projects in the sectors in which it has primary responsibility -- transportation, communications, utilities, defense and construction. Total federal government procurement averages $6 billion annually. The Swiss Defense Ministry and the PTT (the public post, telephone and telegraph corporation within the government) have some restrictions on foreign purchases (small arms, clothing and boots, telecommunications equipment). Many of the public projects are carried out by the cantonal and communal governments. Procurement by cantonal and communal agencies is about two and one-half times the federal government amount. The federal government exercises a great deal of discretion in inviting bids, and selective, discretionary tenders are more common than public discretionary tenders. Contrary to cantonal and communal practice, federal authorities are not required to inform unsuccessful bidders of the tender accepted or the reasons for the choice. In general, quality and technical criteria appear to be more important than price. Cantonal and communal buyers usually prefer local suppliers. Foreign firms may be required to provide a Swiss bank guarantee, if they have no local office or representation. Notices of Swiss government tenders are published in the official trade journal Handelsamtblatt. Tenders of potential interest to U.S. companies are made known through the U.S. Department of Commerce Trade Opportunity Program (TOP). (TOP leads are printed daily in leading commercial newspapers and are also distributed electronically via the Department of Commerce Economic Bulletin Board.) Tender documents can be obtained free of charge from the Swiss government agency. While there is no requirement to have a local agent to bid, representation in country is advantageous, especially when equipment requiring training, service or spare parts is to be purchased. - Protecting Your Product From IPR Infringement Switzerland maintains an excellent system for the protection of intellectual property. Both foreign and domestic rights-holders are accorded equal treatment. The Swiss adhere to all major international intellectual property rights conventions, and were active supporters of forceful IPR provisions in the GATT Uruguay Round negotiations. Swiss law provides patent protection rights to inventors that are comparable to those available in the United States. Switzerland is a signatory to both the European Patent Convention and the Patent Cooperation Treaty, so an inventor can file a single patent application in the United States, or other PCT country, or any member of the European Patent Convention, once it enters into force, and receive protection in Switzerland. Switzerland, like many other European countries, does not provide patents on life forms and certain other areas of biotechnology, but in all other respects coverage is identical to that in the United States. The duration of a patent is 20 years. If concerns arise about possible patent infringement in Switzerland, court access is readily available and there is a pool of well-established and highly regarded patent attorneys. Trademarks receive equally good protection. Well-known trademarks are recognized, and there are simple procedures to register and renew all marks. Service marks also enjoy full protection. Trademark infringement is very rare; street vendors are not common in Switzerland, and even they tend to shy away from illegitimate or gray-market products. Switzerland instituted a new copyright law in 1993, designed to clarify and expand certain coverage. The new law explicitly recognizes computer software as literary works and establishes a system of remuneration for private copying of audio and video works which distributes proceeds on the basis of national treatment. Owners of television programming are fully protected and remunerated for rebroadcast and satellite retransmission of their works, and copyright holders have exclusive rights of rental. The term of protection is life plus 70 years. Swiss law also protects layout designs of semiconductor integrated circuits, trade secrets, and industrial designs. Protection for integrated circuits and trade secrets is similar to that available in the United States, while protection for designs is somewhat broader. The process of ensuring protection in each of these specialized areas is complex, so individuals or companies seeking coverage are advised to engage the services of a legal expert. - Need for a Local Attorney Where American citizens are involved in disputes (with private individuals or business enterprises) and the controversy cannot be settled amicably, the normal recourse is to seek remedy provided by the law of the appropriate cantonal jurisdiction. American diplomatic or consular officers may not act as attorney, agent, or representative in a fiduciary capacity in such matters. The Martindale-Hubbell Law Directory contains an extensive list of lawyers licensed to practice in Switzerland. The Embassy's Consular Section also maintains a list of local English-speaking lawyers. The fax number is (41-31) 357-7366. Please specify the canton for which you need the list. The only method for a non-Swiss court or lawyer to obtain testimony or service process in civil matters in Switzerland is through a letter rogatory. For information on this rather cumbersome legal process, contact either the Embassy Bern Consular Section or the Office of Citizens Consular Services in the Department of State (202) 647-3445.