Swiss Ease Weapon Export Rules to Bolster Domestic Defense Firms

(Bloomberg) — Switzerland is set to relax strict rules on weapons exports, a relief for its defense industry which has lost business in the wake of Russia’s full-scale invasion of Ukraine.

Thursday’s decision by lawmakers paves the way for a final nod on the amendment from parliament later this month. The change allows firms to send war material to a defined group of 25 mostly Western countries, even if they are involved in an ongoing conflict. Countries should also in principle be allowed to pass on weapons to other nations. Only deliveries to countries that systematically and seriously violate human rights should be excluded.

The government will retain a veto right if it considers Switzerland’s neutrality or foreign and security policy interests to be at risk.

Thursday’s decision paves the way for a final nod on the amendment from parliament later this month. Yet, it remains unclear when it will actually enter into force as left-of-center lawmakers have said they will challenge it in a referendum.

Swiss defense firms have come under pressure since the war in Ukraine, as the country’s rules — rooted in its neutrality stance — forbid the re-export of war material with more than 50% of domestically produced components. That led several European countries to exclude Swiss firms from procurement efforts, after requests to send arms and ammunition to Ukraine were blocked.

In 2024, exports war material fell for a second year, and was 30% below a 2022 high. A number of firms have started to shift production abroad to avoid missing out on lucrative contracts as European nations rearm and ramp up defense spending in the face of Moscow’s aggression and US demands for the region to spend more of its own money on security.

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