¹ A movement is considered to be a Swiss movement if:⁶

a.⁷

at least the following elements of its technical development are carried out in Switzerland:

1.

for exclusively mechanical watch movements: the mechanical construction and prototyping of the watch movement as a whole,

2.

for watch movements that are not exclusively mechanical: the mechanical construction and prototyping of the watch as a whole, as well as the design of the printed circuits, the display and the software;

a^bis.⁸

it is assembled in Switzerland;

b.

it is inspected by the manufacturer in Switzerland;

b^bis.⁹

at least 60 per cent of the manufacturing costs are incurred in Switzerland; and

c.¹⁰

the constituent parts made in Switzerland, excluding the cost of assembling them, represent at least 50 per cent of the value of all of the constituent parts.¹¹

² To calculate the value of the constituent parts made in Switzerland in accordance with paragraph 1 letter c, the following rules apply:

a.¹²

…

a^bis.¹³

the cost of the dial is included if the dial:

1.

performs an electronic function for the watch, and

2.

is used to equip the watch with an electro-optical display or a solar module;

b.

assembly costs may be taken into consideration if a certification procedure provided for in an international treaty ensures that, as a result of close industrial cooperation, foreign and Swiss constituent parts are equivalent in quality;

c.¹⁴

the assembly costs taken into consideration may not exceed the value of the foreign constituent parts recognised as being equivalent that are incorporated into the Swiss movement concerned.

³ The provisions of the Additional Agreement of 20 July 1972¹⁵ to the Agreement concerning products of the clock and watch industry between the European Economic Community and its Member States and the Swiss Confederation applies.¹⁶