Swiss weapons exports plunge as neutral stance hurts trade

By John Revill

BERN (Reuters) - Swiss weapons exports fell by more than a quarter last year, the government said on Tuesday, with critics blaming the country's neutral stance which has blocked the re-export of Swiss-made guns and ammunition to Ukraine.

War material exports fell 27% to 696.8 million Swiss francs ($788.06 million), the State Secretariat for Economic Affairs (SECO) said, down from 955 million francs in 2022.

Despite its long-held neutrality, Switzerland is a big arms supplier, the 14th biggest globally in 2022, according to data from the Stockholm International Peace Research Institute.

In 2023, Switzerland exported war materials to 58 countries, down from 60 a year earlier, with Germany the biggest customer followed by Denmark, signing big orders for ammunitions and wheeled armoured vehicles.

SECO did not give a reason for the downturn in exports last year, but industry association Swissmem said Switzerland's ban on the re-export of weapons had played a role.

Under the country's neutrality law, Bern cannot approve requests for the transfer of Swiss-made war material to Ukraine as long as it is involved in an international armed conflict.

"Some companies have lost orders because of concerns about the Swiss regulations, while others are considering investing less here," Swissmem director Stefan Brupbacher told Reuters ahead of the release of the figures.

In 2022, Spain, Denmark and Germany were denied permission to re-export armaments to Ukraine, straining relations and raising concerns in the Swiss arms industry, which includes multinationals Lockheed Martin and Rheinmetall, as well as a host of smaller companies.

Swissmem said Switzerland's arms industry depended on exports and could not rely on demand from the Swiss military to survive.

Brupbacher said a "dogmatic interpretation" of neutrality was blocking re-exports of Swiss weapons and ammunition which other countries had bought years earlier, with many countries not understanding Switzerland's stance.

"We want the need for re-export permit for all countries which adhere to similar international conventions on weaponry as Switzerland to be lifted," he said.

"It has nothing to do with the legal definition of neutrality."

($1 = 0.8842 Swiss francs)

(Reporting by John Revill; Editing by Sharon Singleton)