Offset Obligations In Swiss Military Procurement Projects

• Law Firm: Loyens & Loeff
• Subject Matter: Government, Public Sector, Strategy, Terrorism, Homeland Security & Defence, Government Contracts, Procurement & PPP, Technology
• Author: Mr Marco Toni and Remo Wagner
• Published date: 03 April 2023

Switzerland has a long history of requiring offset obligations in its military procurement projects. In fact, the country was one of the first in Europe to introduce offset obligations. The Swiss government uses offset obligations as a tool to ensure that the country's defence industry remains competitive and innovative, and that the military has access to the latest technologies and equipment.

Definition

Offset obligations are requirements imposed by governments on foreign companies that win contracts to supply military equipment or services. These requirements usually require the foreign supplier to undertake certain activities, such as investing in local industry, transferring technology, or providing training and education to local personnel.

Significance

The significance of offset obligations in Swiss military procurement projects cannot be overstated. These obligations are an important way to ensure that the country's defence industry remains healthy and competitive. By requiring foreign suppliers to invest in local industry and transfer technology, the Swiss government is able to encourage the development of local expertise and knowledge. This, in turn, helps to ensure that Switzerland's military forces are equipped with the latest technologies and equipment, which is essential for maintaining readiness.

In addition to ensuring the long-term sustainability of the military capability, offset obligations also provide economic benefits to the country. By requiring foreign suppliers to invest in local industry, offset obligations can help to create jobs and boost the economy. This is particularly important in Switzerland, which has a small population and a relatively high cost of living. By encouraging the development of local industry and expertise, offset obligations can help to ensure that Switzerland remains competitive in the global...