The Sino-Swiss free trade agreement (FTA) is having only a limited effect on the fight against fake watches, according to a Swiss official. Steps taken by Beijing to counter fraud are often not being enforced by courts.

Speaking to Swiss public broadcaster SRF, deputy director of the Swiss Federal Institute of Intellectual Propertyexternal link Felix Addor, said judges in rural areas of China are sometimes loathe to issue unpopular verdicts against local companies.

“The involvement of a major Chinese employer can have an inhibiting effect,” Addor told SRFexternal link. “For political reasons, the courts weighs up the protection of intellectual property against jobs.”

“The administration in China is so large that most companies don’t even know which authority is responsible for hearing their concerns,” Addor added.

However, there is evidence that the situation is better in big Chinese cities, which are home to large local manufacturers who also face losses from counterfeit goods. The Sino-Swiss FTA, which came into force in 2014, has also helped Switzerland engage with Beijing about the problem, Addor said.

Swiss manufacturers produce around 30 million timepieces every year, but this is exceeded by the number of counterfeit watches produced illegally worldwide.

The vast majority of Swiss watch exports go to Hong Kong, from where many are assumed to reach the Chinese mainland. Direct Swiss watch sales to China took a nosedive following Beijing’s 2012 crackdown against corruption, but the market has gradually recovered.

Between January and November last year, total Swiss watch exports were up 10% at CHF19.5 billion ($19.6 billion). Sales to China rose 37% and to Hong Kong by 27%.

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