Based on the Principles of the Swiss Federal Council for the Armament Policy of the DDPS and the Armaments Strategy of the DDPS, armasuisse regulates the implementation and control of offset for the procurement of defence equipment abroad in the Offset Policy. In order to support the preservation and development of security-relevant key technologies and industrial core capabilities and capacities in Switzerland, despite procurements abroad, armasuisse obliges foreign armament suppliers to an industrial cooperation with the Security-relevant Technology and Industry Base (STIB) from a procurement volume of 20 million Swiss Francs. Usually, 100% of the purchase price must be compensated. A distinction is made between direct offset transactions which flow into the procured defence equipment and indirect offset transactions, for which no direct connection with the procured defence equipment exists.

armasuisse publishes the most important key figures on ongoing offset obligations in an offset register on a half-yearly basis. Among other things, the suppliers subject to offset obligations, the open offset obligation, the Swiss companies involved and the regional distribution are listed in this register.

Companies and research institutions that have expertise, skills and resources in the field of security and defence technology in Switzerland are approved for offset transactions. The permitted economic sectors are listed in Appendix 1 of the Offset Policy. What is relevant is not the company headquarters but the creation of value in Switzerland. The foreign supplier subject to an offset obligation always chooses its Swiss partners itself, based on their competitiveness and skills. Interested companies and research institutions can contact the foreign suppliers directly to present their goods and services. No registration, approval or association membership is necessary. The contact data of foreign suppliers can be found in the offset register. The Offset Office Bern is available for any queries. In addition, armasuisse, Swiss industry associations and foreign suppliers regularly organise information and networking events on the topic of offset. As subcontractors of Swiss system suppliers and technology partners, SMEs can also profit indirectly from offset transactions.

The foreign suppliers report to armasuisse on a half-yearly basis about their newly conducted offset transactions in Switzerland. The Swiss partners confirm placement of the order and correctness of the information. Using the documents submitted, armasuisse (for direct offset transactions) and the Offset Office Bern (for indirect offset transactions) check creditability and correct implementation. They also check compliance with the contractual conditions and perform on-site checks in the Swiss companies. armasuisse confirms the recognised offset value and justifies its decision to the foreign suppliers.

The main decision criteria that lead to the approval or rejection of an offset transaction are:

• Offset obligation: Does the applicant of the offset transaction have an offset obligation in Switzerland or is it a partner eligible for participation?
• Security relevance: Does the Swiss beneficiary belong to an economic sector defined as security-relevant?
• Report: Is the offset transaction reported within 12 months after the order date and does the report correspond to the formal requirements?  
• Transaction type: Is it a business activity permitted as an offset transaction?
• Additionality: Is it business motivated by the offset obligation (not “daily business”)?
• Order threshold: Does the offset transaction exceed the threshold value of CHF 10,000?
• Swiss added value: Does the offset transaction exceed a Swiss added value share of 20%?

The value of the offset transaction corresponds to the order value or to the resulting turnover of the Swiss beneficiary. With a Swiss added value share between 20% and 61%, only the actual share will be taken into account. With a Swiss added value share of over 61%, the entire order value will be taken into account (Swissness rule).

The value of the offset transaction can be multiplied with a factor between 1 and 3 by armasuisse, to better reflect the armament policy value. The main estimates that lead to the application of a multiplier are:

• Autonomy: Does the offset transaction reinforce the autonomy of Switzerland with regard to development, production, integration, life cycle management or MRO of the procured defence equipment or the operational readiness of the Swiss Armed Forces?
• Technology: Does the offset transaction support the security-relevant technologies in Switzerland (see Appendix 2 of the Offset Policy)? 

In order to ensure efficient and targeted implementation of the Offset Policy as far as possible, armasuisse maintains close collaboration with the STIB. The cooperation is regulated in an agreement between armasuisse and the association ASIPRO (Association for Swiss Industry Participation in Security and Defence Procurement Programs). ASIPRO consists of the industry associations Swissmem/SWISS ASD, GRPM, digitalswitzerland and Swissmechanic. The association runs the Offset Office Bern. The Offset Office Bern is the point of contact for Swiss companies for any offset queries and supports armasuisse in the control of indirect offset transactions. The Offset Office Bern is financed via an offset fee of 0.1% which Swiss beneficiaries have to pay on indirect offset transactions.