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introduction of reforms in the country's Stamp Tax on securities transactions. This measure will likely be

challenged in a public referendum. The Federal Council is also discussing a 30 percent tax on gasoline. Switzerland has a bilateral tax treaty with the United States.

4. Debt Management Policies

As a net international creditor, debt management policies are not relevant to Switzerland. Switzerland participates in the Paris Club debt reschedulings and is an active member of the OECD. Switzerland will join the International Monetary Fund and the World Bank in 1992 if a threatened referendum against membership is unsuccessful.

5. Significant Barriers to U.S. Exports

It

Switzerland has practically no tariff barriers. imposes no countervailing duties and has concluded no restrictive bilateral agreements. The only trade-impeding, non-tariff barriers affecting to some degree U.S. exports continue to exist in the areas of technical standards and testing requirements for industrial products, in particular for telecommunications equipment. However, these liberal trade policies do not apply to agriculture, a sector with extensive barriers.

Import licenses:

Swiss licensing procedures do not hinder imports from the United States. Switzerland issues a general import license which in the case of manufactured goods is granted freely and serves basically for statistical purposes. However, this liberal attitude does not extend to imports of agricultural produce. Agriculture is the country's most protected sector. A variety of restrictions shield it from foreign competition, as described below.

Services barriers: Under a film law in force since 1962, Switzerland imposes annual quotas on the number of foreign films allowed entry into the country. The system is handled liberally and quotas granted to U.S. and local distributors are said to be generous and rarely fully used. However, the film law can prevent an accumulation of the quotas when two or more U.S. film producers wish to merge their distribution networks in Switzerland. New firms attempting to break into the Swiss market must operate through a Swiss company, and U.S. firms may not own and operate cinemas here. New legislation, in preparation since 1989 and now expected to be in place by 1993, will abolish the quota system and completely deregulate the Swiss feature film business.

In 1989, Switzerland became a signatory to the Council of Europe's Convention on Transfrontier Television. Although the Convention is not yet formally ratified, Switzerland has put its provisions into effect. An article among the provisions stipulates that signatories "wherever practicable" will use material of European origin for at least 50 percent of their programming. The effect of the Convention on purchases by Swiss television stations of U.S.-origin programs remains to be seen.

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Foreign banks wishing to set up a business in Switzerland must obtain prior approval from the Swiss Banking Commission. This is granted if the following conditions are met: reciprocity on the part of the foreign state; the foreign bank's name must not give the impression that the bank is a Swiss one; the bank must adhere to Swiss monetary and credit policy; and a majority of the bank's management must have their permanent residence in Switzerland. Otherwise, foreign banks are subject to the same regulatory requirements as domestic banks. Swiss stock exchanges have had foreign members for many years. However, personal licenses to represent professional securities traders and to trade on the floor are available only to Swiss nationals.

Insurance is subject to an ordinance which requires the placement of all risks physically situated in Switzerland with companies located in this country. Therefore, it is necessary for foreign insurers wishing to write business in Switzerland to establish a subsidiary or branch here. Government regulations do not call for any special restrictions on foreign insurers establishing in Switzerland. However, Swiss insurance companies are allowed to impose restrictions on the transfer of their registered shares to block unwelcome takeovers.

Swiss corporate shares are issued as registered shares (in the name of the holder) or bearer shares. Under current company law, Swiss corporations may impose restrictions on the transfer of registered shares. These restrictions can, and often do, include restrictions on foreign cwnership. However, this practice will largely be eliminated as a result of a modification of Swiss corporation law passed by Parliament in 1991 and effective in 1992.

According to Article 711 of the Code of Obligations, the board of directors of a joint stock company (with the exception of holding companies) must consist of a majority of members permanently resident in Switzerland and having Swiss nationality.

Attorneys and lawyers, like all other members of professional classes (physicians, veterinarians, pharmacists, therapists, engineers, and architects), must pass a federal, in some cases a cantonal, examination and obtain appropriate certification before they may set up a business of their own.

Standards, testing, labelling, and certification: A large number of standards and technical regulations in force in Switzerland are based on international norms. Thus most technical equipment approved, for example, in Germany is automatically accepted in Switzerland. However, electrical household appliances must be tested and approved by the Swiss Electrotechnical Association, a semi-official body. Telecommunications terminal equipment is subject to approval by the Swiss PTT, a procedure which is often expensive and time-consuming. All drugs (prescription and over-the-counter) must be approved and registered by the Intercantonal Drug Agency. Labelling requirements in multiple languages (German, French, and Italian) also pose difficulties. These handicaps do not represent formidable barriers and can be taken care of by local distributors.

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Investment barriers: The Swiss generally welcome foreign investment and accord it national treatment. Federal and local government attitude is in principle one of detached non-interference. Investments by foreign nationals are neither actively encouraged nor hampered by significant barriers. Legislation exercising some control on foreign investment is confined to the following areas: prohibition on the purchase of real estate without prior government approval; limits on the number of foreign personnel; licensing of foreign banks and insurance companies; and restrictions concerning the number of foreign directors on the boards of corporations. There are legal restrictions on foreign participation in the hydro-electric and nuclear power sectors, the operation of oil pipelines, the transportation of explosive materials, the operation of Swiss airlines, and marine navigation.

The

Purchase of property by foreign nationals (and non-resident Swiss) is subject to the provisions of the Federal Law of December 16, 1983 on the Acquisition of Real Estate by Persons Residing Abroad. All property sales to non-residents (foreign or Swiss) are subject to government approval and to a quota system fixed every two years. quota system principally applies to holiday resort apartments and houses in the country's tourist areas. The system is imposed by the Federal Government, but cantons are free to enact stricter legislation. Property sales to foreigners for commercial or industrial purposes are also subject to a permit, but provisions are far less restrictive and no ceilings are imposed. Foreigners who have settled in Switzerland are not subject to any restrictions regarding purchase of real estate after ten years' residence.

A law designed to discourage real estate speculation and stop escalating property prices was introduced in 1989. It provides for a minimum holding period of five years on the resale of residential real estate by Swiss and foreigners. Parliament is currently debating a motion to reduce this period to three years. Under existing legislation, the purchaser may not borrow more than 80 percent of the purchasing price, and pension funds and insurance companies may not invest more than 30 percent of their assets in real estate in Switzerland. By eliminating speculators from the market, the government hopes to contain housing prices and rents. (Over 70 percent of Swiss live in rented housing.)

The high percentage of foreign laborers (close to 30 percent in 1991) forces Switzerland to severly restrict the admission of foreigners seeking work. It is unclear whether Swiss authorities will be able to liberalize policies that affect managerial staff of subsidiaries of U.S. companies. While the high number of foreigners in the country is a very sensitive political issue, the Swiss obviously also have an economic interest in keeping U.S. companies in Switzerland.

Government procurement practices: Swiss authorities carefully comply with the GATT rules regarding procurement by government entities. In bidding for government contracts, foreign suppliers are treated on the same basis as local companies and are subject to the same criteria and conditions. Certain restrictions exist for defense related

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items, railroad stock, and telecommunications equipment. However, steps have recently been taken toward a gradual liberalization of the Swiss telecommunications market.

Customs procedures: Although Switzerland may be the only country which applies customs duties on weight rather than value, customs procedures are not burdensome. If expressed in ad valorem terms, tariff levels on industrial products are among the lowest in the OECD area, ranging between two and ten percent for most items.

Switzerland has a highly subsidized agricultural economy that is rigidly protected by a variety of import restrictions: licensing, quotas, supplementary import charges, variable levies, conditional import rules, import calendars, etc. According to press reports, the OECD has calculated that 75 cents of every dollar of income of Swiss farmers is attributable to subsidies, import restrictions, or other government measures. On national security grounds, the Swiss Government also seeks a high level of self-sufficiency in domestic food production.

6. Export Subsidies Policies

Except for agricultural products, the Swiss government does not finance or subsidize Swiss exports. Financing of export credits is the sole responsibility of the private sector. Swiss Government support for export transactions is limited to coverage of non-commercial risks under an official export risk guarantee program, jointly funded from government and private sources. Approximately 15 percent of total Swiss exports receive such coverage. Risks covered include foreign exchange transfer difficulties, payment moratoriums, insolvency and inability to pay of private corporations due to political revolution, civil strife, and nationalization.

In agriculture, the federal government subsidizes the export of dairy products (primarily cheese) by covering the losses of quasi-governmental export organizations. Exports of processed food products (chocolate products, grain-based bakery products, etc.) are subsidized by compensating exporters for the difference between world prices and high Swiss prices for inputs (i.e., for the grain, milk butter, sugar, etc., content of the exported product). The export of temporary surpluses of domestic products is also subsidized by the government (e.g., beef, concentrated apple juice).

7. Protection of U.S. Intellectual Property

Switzerland is a member of the World Intellectual Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Universal Copyright Convention, and the Patent Cooperation Treaty.

Patents: If filed in Switzerland, a patent application must be made in one of the country's three official languages (German, French, Italian), and must be accompanied by detailed specification and if necessary by technical drawings. According to Articles la) and 2) of the Swiss Patent Law of

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1954, as amended, the following items cannot be covered by patent protection: species of plants and animals and biological processes for their breeding; surgical, therapy and diagnostic processes for application on humans and animals; and inventions liable to disturb law and order and offend "good morals." Drugs, foodstuffs, and alloys are not excluded from patent protection.

Trademarks: Foreign individuals or companies engaged in trade or manufacture in Switzerland may apply for the registration of trademarks. Trademarks are protected for periods of 20 years and may be renewed for like periods. Counterfeiting has become a problem, especially counterfeiting of Swiss trademarks which enjoy an international market and reputation. This applies in particular to watches, chocolate, textiles, and apparel. Counterfeiting of foreign products in Switzerland does not appear to be widespread.

Copyright: Copyright protection is adequate, and enforcement of copyright law is efficient and prompt.

New Technologies: Provision for protecting new technologies is made under the Unfair Trading Act, revised in May 1988. Without listing specific products or processes, Article 5 of the law stipulates that efforts and achievements of others in the field of new and marketable technologies shall not be exploited commercially through technical procedures by third parties. Furthermore, the Swiss Government is interested in collaboration with other countries within the framework of WIPO to work out an international convention for the protection of new technologies. With respect to computer software protection, the Swiss Government is revising the Swiss Penal Code to include legislation dealing specifically with computer criminality and abuse of credit cards.

Lack of reliable data does not permit a definitive analysis of the impact of Swiss intellectual property practices on U.S. trade. It can be assumed that serious problems would have attracted attention and, therefore, that Swiss intellectual property practices have not significantly affected U.S. trade with Switzerland. In the context of the GATT negotiations, Switzerland is working to strengthen intellectual property rights worldwide.

8. Worker Rights

a. The Right of Association

All workers, including public sector workers and foreign workers, have the freedom to associate, to join unions of their choice, and to select their own representatives. There are no limits on the right to strike, but a unique labor peace agreement between unions and employers in existence since the 1930's has resulted in fewer than 20 strikes per year since 1975.

b. The Right to Organize and Bargain Collectively

Swiss law gives workers the right to organize and bargain