Neutral Swiss propose relaxing arms exports restrictions

By John Revill

ZURICH (Reuters) - The Swiss government on Wednesday proposed relaxing restrictions on arms exports to try to bolster its domestic industry and security policy, a sensitive move for the neutral country which has blocked the re-export of its weapons and ammunition to Ukraine.

The cabinet said it sent a proposal to parliament to allow it to deviate from current restrictions "in extraordinary circumstances", seeking leeway to adapt its arms export policy in accordance with changing geopolitical circumstances.

Despite its long-held neutrality, Switzerland has traditionally been one of the world's biggest arms suppliers, selling ammunition and armoured vehicles abroad.

However, arms exports fell by more than a quarter in 2023, with critics blaming blocks on Spain, Denmark and Germany re-exporting Swiss-made guns and ammunition to Ukraine.

"This would make it possible to safeguard Switzerland's foreign or security policy interests," the cabinet proposal said.

"In addition, it would make it possible to maintain an industrial capacity in Switzerland adapted to the needs of Swiss national defence."

Still, any changes will not allow Swiss weapons exports to Ukraine because of the Swiss war materials laws and neutrality laws.

Switzerland does not allow arms exports if the destination country is involved in an internal or international conflict, or if it seriously violates human rights.

Arms exports are also banned if there is a high risk that they will be used against civilians or passed on to an "undesirable" final recipient.

Switzerland's arms industry includes multinationals Lockheed Martin (LMT.N) and Rheinmetall (RHMG.DE), as well as a host of smaller companies.

The government's planned relaxation did not go far enough, said Swissmem, the association representing Swiss industry.

"In principle, the export of war materiel is still prohibited in the event of a crisis," said Swissmem. "Other countries do not want to rely on the government's goodwill when it comes to their security."

The Group for Switzerland without an Army (GSoA), an anti-militarist group, called the plan "completely unacceptable."

"Swiss weapons will more easily turn up in civil wars or countries committing grave human rights breaches," said GSoA political secretary Roxane Steiger. "This proposal goes against the Swiss tradition of neutrality and humanitarianism."

It is unclear whether parliament might agree to the proposal, which could still face a referendum if it is approved.

(Reporting by John Revill; Editing by Dave Graham and Aidan Lewis)