The duty-free status of Samnaun

Special privilege for over 120 years

As mentioned earlier, in the early Middle Ages Samnaun was part of the county of Vinschgau along with the Lower Engadin. As such, it was under the sovereignty of the counts and then the princes of Tyrol and the dukes of Austria. At the same time, the diocese of Chur also had sovereign and property rights. Only the so-called buy-out ("Auskauf") of 1652 brought independence to the Lower Engadin and therefore also to Samnaun. The buy-out also meant that new customs rules applied. As far back as the beginning of the 14th century, the counts of Tyrol maintained customs posts throughout the Engadin region. With the buy-out, the people of Engadin were assured a more favourable rate of duty for essential goods.

When the Swiss customs system was centralised in 1848, a customs office was also set up in Compatsch. A civilian customs collector worked there and border control was the responsibility of a border guard stationed in Samnaun.

Until the 19th century Samnaun was largely self-sufficient. They even grew tobacco. Any trading was done with Tyrol. Samnaun's farmers found a profitable market: they bought young Austrian cattle in Tyrol, fed them for one or two years, and then exported them duty-free into Austria and sold at a profit. The new customs borders of 1848 soon proved to be of great disadvantage for the Samnaun people. They had no trade relations with the Lower Engadin at all, since the only halfway passable way from Samnaun to the outside world led to Austria. For this reason, the Samnaun municipal authority requested exclusion from the Swiss customs territory in 1888. This request from the furthest corner of Switzerland was rejected by the Swiss Federal Council in Bern and was only granted when it was resubmitted. At that time it was supported by the District Office of Ramosch and the Small Council of the canton of Grisons, on 29 April 1892.

They gave the following reasons: The high valley is almost exclusively dependent on commerce with Austria, as the transport costs for goods from Switzerland are too high. The expenses for the customs office in Compatsch were greater than the customs revenues.

Now goods from abroad could be imported into Samnaun duty-free. Goods imported from Samnaun into the Swiss customs territory, on the other hand, were subject to duty. And so the announcement of the municipal executive committee at the municipal assembly on 22 May 1892 is not surprising; the citizens were informed of the decision of the Federal Council with the proviso that "no abuses of any kind may occur with regard to the customs administration". In accordance with this, the municipality commissioned the board to work with the local council to prepare and draft a strict ordinance to prevent smuggling and to submit this to the municipality for approval.

And indeed, these fears were justified. The disadvantage of the poor transport connections became more and more obvious. What is more, the fact that the only ties were with Tyrol was not without political risk. For this reason, generous subsidies were made available to build a road between 1907 and 1912, which now directly links Samnaun and the rest of Switzerland.

With this new road, the main reason that had once persuaded the Federal Council to exclude Samnaun, had become redundant. While the road was still built, the customs administration pondered the question of whether the municipality of Samnaun should perhaps become part of the customs system again.

However, the municipality of Samnaun, the Ramosch district office and the Small Council advocated for the special status to be retained. The costs for border guards and facilities were enormous compared with the expected customs revenue, they said. While the Swiss confederation would not have derived any advantage from this, it would have increased the cost of living for the people of Samnaun. And so the customs administration decided that it was better to maintain the exclusionary status

The direct road to Engadin now proved to be an excellent source of income and an excellent market. However, the customs border with Switzerland now turned out to be a disadvantage. Now import duties had to be paid for goods from Samnaun. However, the people of Samnaun were granted customs exemptions. The relevant businesses were given quotas for the import of goods from Samnaun into Switzerland.

Now tourism, the economic sector of Samnaun which was never mentioned when the customs status was granted, has become the mainstay of their income. After the opening of Samnaun road it did not take long before the first hotels appeared in Samnaun-Dorf. The first guests visited Samnaun in the twenties, and the village soon became an important winter sports resort. At the end of the thirties, Samnaun-Dorf and Compatsch already had eight hotels with 300 beds.

During the Second World War, tourism waned. However, a new era was born with the foundation of the Samnaun-Compatsch spa and tourist association in 1951. The first ski lift was built in 1954, and soon more followed. By 1971 the number of beds had increased to 800. At the beginning of the seventies tourism slumped again. It was the construction of the cable car in 1977/78 and the opening up of the Silvretta Arena with Ischgl that brought a revival.