Duty to report the Support of Foreign Armed or Security Forces
Trade & Commerce
In autumn 2020, the Ordinance on Private Security Services Provided Abroad was revised.
In autumn 2020, the Ordinance on Private Security Services Provided Abroad (OPSA; SR 935.411) was revised. With the revision, the terms used in the Federal Act on Private Security Services Provided Abroad (PSSA; SR 935.41) were more clearly defined and - where possible and appropriate - aligned with the terms used in the War Material Act (WMA) and the Goods Control Act (GCA). As of January 1, 2021, the federal government has now published a new Guidance to the PSSA. The aim was, in line with the revision of the OPSA, to make the PSSA more comprehensible for the companies concerned and at the same time to define the scope of the PSSA more clearly. The purpose of the PSSA is, among other things, to ensure Switzerland's internal and external security and to achieve its foreign policy objectives. The new Federal Department of Foreign Affairs (FDFA) guidance on the PSSA (https://www.eda.admin.ch/dam/eda/de/documents/aussenpolitik/sicherheitspolitik/wegleitung-PSSA-ausland_DE.pdf; hereinafter ""PSSA Guidance"") contains some peculiarities, which are examined in more detail below.
II. Scope of the PSSA
Material and Territorial Scope
The PSSA applies to companies that are involved in the provision of private security or related services in Switzerland or abroad or control a company from Switzerland that provides such activities (Art. 2 PSSA). This does not apply to companies that provide personal protection, guarding or security services from Switzerland in the territory of EU/EFTA member states (Art. 3 PSSA).
If a company awards the provision of a private security service or a related service (under a contractual relationship) to another company, it must ensure that this other company performs the service within the barriers that apply to the awarding company itself, even if it is located abroad (Art. 6 PSSA). The concept of security services covered by the PSSA includes, among other things, operational and logistical support as well as consulting and training of armed or security forces as well as the operation and maintenance of weapon systems (Art. 4 lit. a item 6-8 PSSA).
Operational support of armed or security forces is defined as activities that a company performs for the benefit of these forces in connection with their core tasks within the framework of ongoing or planned operations (Art. 1a para. 1 OPSA).
According to Art. 1a para. 2 OPSSA, logistical support of armed or security forces includes activities that a company provides for the benefit of these forces in close connection with their core tasks, in particular:
The maintenance, repair, or upgrading of war materiel under the WMA or goods under the GCA;
the conversion of goods into war material according to the WMA or into goods according to the GCA;
the construction, operation or maintenance of infrastructure;
the transport, storage or transshipment of war material under the WMA or of special military goods under the GCA; and
the transportation of members of armed or security forces.
The defined activities are very similar in content, but they differ in meaning. Maintenance of an asset includes, among other things, its upkeep, repair, inspection and revision. This also includes spare parts management in connection with the asset. Repair then means correcting existing and newly occurring damage. And finally, upgrading describes the performance enhancing modification of functions or capabilities of goods. All these activities must be closely related to the core tasks of the armed or security forces in order to qualify as logistical support within the meaning of Art. 4 lit. a item 6 PSSA (PSSA Guidance, p. 15).
Operation of weapon systems is understood to mean the operation of war material according to the WMA with a view to exercises by armed or security forces (Art. 1b para. 1 OPSA). Maintenance of weapon systems is understood to mean the maintenance or repair of war material according to the WMA for the benefit of armed or security forces (Art. 1b para. 2 OPSSA). According to existing practice, the term weapon system is equated with the definition of war material in the WMA. Operation of a weapon system is defined as the provision of personnel for its use (PSSA Guidance, p. 15).
Advisory and training services are understood to include instruction or training of a technical, tactical or strategic nature of members of armed or security forces (Art. 1c OPSA). These services must be provided in close connection with the core tasks of the armed and security forces in order to be covered by the scope of the PSSA. The demonstration of products in the context of sales talks is not considered training even if the armed or security forces receive certain information on the function of the product how to manipulate a weapon) (PSSA Guidance, p. 16 f.).
Goods According to GCA and War Waterial According to WMA
For a service to fall within the scope of the PSSA, it must be performed on an item that is covered by the GCA or the WMA. This is justified by the fact that the classification of goods provides a good indication of which services are closely related to the core tasks of the armed or security forces (PSSA Guidance, p. 12).
Goods within the meaning of the GCA are those that can be used for both civilian and military purposes (so called dual-use goods, i.e. goods, technologies and software) and special military goods (goods designed or modified for military purposes, but which are neither weapons, ammunition, explosives nor other means of combat or warfare, as well as military training aircraft with suspension points) that are the subject of international agreements (Art. 2 para. 1 GCA). The Goods Control Ordinance (GCO) contains a detailed list of the goods covered in its Annexes 1-5.
Weapons, weapon systems, ammunition and military explosive devices as well as items of equipment that have been specifically designed or modified for combat use or for battle management and that are not normally used for civilian purposes are deemed to be war material under the WMA. In addition, individual parts and assemblies (including partially machined parts) are considered to be war material if it is evident that these parts cannot also be used for civilian purposes in the same design. The Federal Council has drawn up a detailed list of goods covered by the WMA in Annex 1 to the War Material Ordinance (WMO).
In particular, companies that sell dual-use or military goods, or have other contractual relationships with foreign armed or security services, are advised to conduct a detailed analysis in this regard.
Delimitation of Warranty Obligations under Private Law
Contrary to the foregoing, ""repair services that are provided on the basis of the usual warranty obligations (cf. Art. 197 et seq. of the Swiss Code of Obligations)"" are generally not services within the meaning of the PSSA (PSSA Guidance, p. 12).
In addition, according to the Guidance, the customer service usually associated with a sales contract (e.g., answering general technical questions from customers by telephone or e-mail) is generally not considered a service subject to reporting.
It should be noted that the warranty under the law of sale according to Art. 197 ff. OR does not even provide for rectification (""repair service""). Accordingly, for the assessment of the service quality of a product or a (partial) service, not only what is provided for by law is relevant, but also the concrete products themselves, the customary practice in the industry as well as the expectations of the customers of the products.
III. Duties from the PSSA
Companies that provide private security services abroad from Switzerland are required to notify the authorities. The obligation to report includes information regarding the company, its management personnel and each individual intended private security service to be provided abroad (Art. 10 PSSA).
In principle, Art. 4 lit. a PSSA lists private security services that are subject to a reporting obligation regardless of the recipient of these services. However, Art. 4 lit. a item 6 and 8 PSSA specifically cover services for armed or security forces. Art. 4 lit. a item 7 PSSA places the operation and maintenance of weapon systems under a reporting obligation, because such systems are usually used in the environment of armed or security forces.
If a company exports war material in accordance with the WMA or goods in accordance with the GCA, i.e. it has the corresponding authorization from SECO to do so, and carries out maintenance, servicing or repair in close connection therewith, the company is not obliged to declare these activities, provided the export would still be permissible at the time the activities were carried out (Art. 8a OPSA).
Companies subject to the reporting obligation also have a duty to document and cooperate with regard to their activities. The Political Directorate of the Federal Department of Foreign Affairs, as the competent authority, initiates an investigation procedure, among other things, if there are indications that the reported activity conflicts with the purposes of the PSSA.
IV. Legal Prohibitions and Penalties
The PSSA prohibits companies covered by the scope of application from directly participating in hostilities, i.e. recruiting, training, placing or making available personnel in Switzerland for this purpose (Art. 8 para. 1 PSSA).
An additional prohibition exists with regard to the provision of security services or related services from Switzerland, where it can be assumed that their recipients use them in the context of the commission of serious human rights violations (Art. 9 PSSA).
Violation of either of these prohibitions is punishable by imprisonment of up to three years or a fine (Art. 21 para. 1 PSSA). Violation of the reporting obligation is punishable by imprisonment of up to one year or a fine (Art. 23 para. 1 lit. a PSSA).
Companies that supply products and services to armed or security forces should therefore examine very carefully whether they may fall within the scope of the PSSA.
MME Compliance AG supports companies in the analysis of possible PSSA reporting duties as well as the implementation of necessary compliance programs.