On 29 of November 2020, Swiss voters will vote on whether to ban the financing of weapons makers.
As are many nations, Switzerland is involved in the arms industry. Swiss companies produce weapons and parts for weapons, while Swiss investors finance weapons manufacturers both in Switzerland and abroad.
In Switzerland, weapons manufacture is subject to strict regulations. A licence is required to manufacture and export such products. Nuclear, biological and chemical weapons, cluster munitions and anti-personnel mines are banned, both their manufacture and their financing.
However, the initiative committee thinks the current restrictions do not go far enough. It wants to make it illegal to finance any form of weapons production. The ban would not only cover granting loans but also owning shares in such companies or funds that contain their shares. Companies that make 5% of their revenue from weapons would be included in the ban. This would exclude, for example, a civilian aircraft manufacturer that also built fighter jets.
The ban would affect the investments of the Swiss National Bank, foundations and pension funds. In addition, Switzerland would be required to take action around the world to enforce the ban against banks and insurance companies. The economic effects would be felt not only by arms manufacturers, but also by their suppliers, which include many small and medium-sized businesses, said the government.
Those behind the plan argue that weapons are harmful and it is therefore unethical to fund their manufacture that such a ban would reduce wars. In addition, they argue pension funds can make sufficient returns investing in other sectors.
Those against it, including a majority of government, think the plan goes too far. A majority of the Federal Council, Switzerland’s executive branch, parliament (125 yes, 72 no, 0 abstentions), and the Council of States, Switzerland’s upper house (32 yes, 13 no, 0 abstentions) reject the plan.
For the Federal Council and parliament, the current restrictions are sufficient. They believe going further will not avoid wars. Instead it will reduce the financial health of the pension system and weaken Switzerland financially, including small businesses that supply parts to larger manufacturers.