Switzerland announced today that it is adopting European Union sanctions on luxury goods in response to the war in Ukraine, acknowledging that some companies could be hit in this country, famous for its watches.
On Tuesday, the European Union decided on a fourth package of measures, extending sanctions against luxury goods, something that the Swiss government will adopt in turn, according to a press release. At the end of February, Switzerland, despite its traditional neutrality, aligned itself with EU sanctions.
The new series of sanctions will take effect “in the coming days”, the Swiss government clarifies.
The ban on exports of luxury goods “concerns only a small proportion of Switzerland’s global exports,” the government said. “Some companies, on the other hand, could be greatly affected,” he admits.
Watchmaking is the third largest export sector for Switzerland, behind pharmaceuticals and electrical machinery and equipment.
Russia is the 17th largest export market for Swiss watchmakers. In 2021, their exports amounted to 260 million Swiss francs (252 million euros), according to statistics from the watchmakers’ federation, a figure that represents about 1.1% of Swiss watch exports.
Exports are, however, a partial indicator of watch sales to affluent luxury watch enthusiasts in this sector, where part of the shopping takes place during tourist trips. Wealthy Russians are big fans of watchmaking, with President Vladimir Putin posing for a photo wearing expensive Swiss-brand watches.
Even before the sanctions, many large Swiss companies had already taken action and suspended their exports, for example Rolex. Last week, the Swatch group, which owns Tissot, Omega and Breguet, closed its boutiques in Russia after cutting off exports a week earlier.
Luxury giant Richemont, owner of Cartier jewelry and luxury watches such as the IWC and Jaeger-LeCoultre, has also suspended its business in Russia since March 3.
Source: Capital
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